America 3.0 [bumped]

James C. Bennett, author of The Anglosphere Challenge (Rowman & Littlefield, 2004), and Michael J. Lotus (who blogs at Chicagoboyz.net as “Lexington Green”), are proud to announce the signing of a contract with Encounter Books of New York to publish their forthcoming book America 3.0.

America 3.0 gives readers the real historical foundations of our liberty, free enterprise, and family life.  Based on a new understanding of our past, and on little known modern scholarship, America 3.0 offers long-term strategies to restore and strengthen American liberty, prosperity and security in the years ahead.

America 3.0 shows that our country was founded as a decentralized federation of communities, dominated by landowner-farmers, and based on a unique type of Anglo-American nuclear family.  This was America 1.0, as the Founders established it.  The Industrial Revolution brought progress, opportunity and undreamed-of mobility.  But, it also pushed the majority of American families into a new, urban, industrial life along with millions of unassimilated immigrants. After the Civil War, new problems of public health, crime, public order, and labor unrest, on top of the issues of Reconstruction, taxed the old Constitution.  Americans looked for new solutions to new problems, giving rise to Progressivism, the ancestor of modern liberalism.

America 3.0 shows that liberal-progressive solutions to the challenges of America 2.0 relieved some problems, and kicked others down the road.   But they also led to an overly powerful state and to an overly intrusive bureaucracy.   This was the beginning of America 2.0, the America we grew up with, which dominated the Twentieth Century.

America 3.0 argues that the liberal-progressive or “Blue State” social model has reached its natural limits.   Even as it continues to try to expand, it is now dying out before our eyes.   We are   now living in the closing years of the 20th Century “legacy state.”  Even so, it has taken the shock of the current Great Recession to make people see the need for change.  As a result, more and more Americans are calling for a return to our founding principles.  Freedom and individualism are on the rise after a century-long detour.

America 3.0 shows that our current problems can be and must be transcended with a transition to a new America 3.0, based on modern technology, decentralized communities, and self-reliant families, and a reassertion of fiscal responsibility, Constitutionally limited government and free market economics.   Ironically the future America 3.0 will in many ways be closer to the original vision of the Founders than the fading America 2.0.

America 3.0 gives readers an accurate, and hopeful, assessment of our current crisis.   It also spotlights the powerful forces arrayed in opposition to the needed reform.  These groups include ideological leftists in media and the academy, politically connected businesses, and the public employees unions.  However, as powerful as these groups are, they have become vulnerable as the external conditions change.   A correct understanding of our history and culture, which America 3.0 provides, shows their opposition will be futile.  The new, pro-freedom, mass political movement, which is aligned with the true needs and desires of Americans, is going to succeed.

America 3.0 provides readers a program of specific “maximalist” proposals to reform our government and liberate our economy.  America 3.0 shows readers that these reforms are consistent with our fundamental culture, and with our Constitution, and will make Americans freer and more prosperous in the years ahead.

America 3.0 provides a “software upgrade” for the Tea Party and for all activists on the Conservative and Libertarian Right.  It provides readers with historical evidence and intellectual coherence, to channel the energy and enthusiasm of the rising mass political movement to renew America.

America 3.0 shows that our capacity for regeneration is greater than most people realize.  Predictions of our doom are deeply mistaken.   We are now living just before the dawn of America’s greatest days.  Within a generation, positive changes beyond what we can currently imagine will have taken place.   That is the America 3.0 we are going to build together.

(Cross-posted from the America 3.0 blog.)

The Next Bubble

I know a lot of people who rent and recently overheard how difficult it is to find an apartment. This is anecdotal but they said that you needed to sign a multi-year lease and / or offer MORE than the requested rent to guarantee that you get one as soon as it is open.

The New York Times today had an article titled “The Lease is up, and now so is the Rent” describing the situation in New York City:

Across New York, rents have not only rebounded from the depths of two years ago, but are also surpassing the record high of 2007 during the real estate boom, according to figures from Citi Habitats, a large rental brokerage, and other surveys. That means a perennially frustrating process has become almost frenzied. Brokers say prospective renters need to come prepared to close a deal on the same day — ready to write a check for thousands of dollars to cover the first and last month’s rent, and the broker’s fee. For desirable apartments, forget about open houses — the best places are snapped up within a few days, or less, through private showings by brokers.

In the comments section on that post they mention what the article (typically) fails to do; New York’s problems are exacerbated by their ludicrous rent-control laws, which distorts developers’ behavior and forces some renters to subsidize their neighbors and creates a “shadow economy” of sublets.

In Chicago it is (comparatively) easy to build new rental stock to take advantage of the situation; in my River North area there are giant new rental only buildings going up everywhere. At this site where a bank used to be there is another hole for a 20+ story apartment building at 501 N Clark.

I remember back in an economics class in college a professor discussed the real estate boom in Arizona in the ’80s… he said that since the builders were all small, they didn’t know when to exit the market. Individually they weren’t large enough to have market intelligence (such as in an industry with a few large players, like chemicals) so they just kept overbuilding and doubling-down their chips until they were wiped out. Only a few were smart enough to take their cards off the table rather than try to chase the last win, only to fall short and get caught when the market tanked.

It will be interesting to see who will take the brunt of the collapse in the higher-end rental market that is likely to occur in a few years. Someone is financing these rental projects; while they are not as subject to failing as a similar condo project (since sales are binary while you can adjust rents in a falling economy) they are still risky and require lots of up front debt financing as well as being hostage to rising real estate taxes (especially in Chicago, where we are in dire financial straits). A lot of the banks that funded the condo buildings went under and were taken down by the FDIC; perhaps the banks that are financing these new buildings will take the brunt, too.

As these buildings get constructed downtown, expect the more marginal rental units in the outskirts to take a big hit later when the number of renters falters. I anticipate that the big buildings would cut rents rather than remain empty (since it is essentially a fixed-cost operation, like an airplane, so getting any tenant is better than letting it sit vacant), and then they would prove to be tough competition for the less-modern rental buildings. Watch and see it all unfold.

Cross posted at LITGM

The Government is the Only Game in Town for Mortgages

Today the US government basically controls the US mortgage market for housing. Per this article in the WSJ “Government Stays Glued To Mortgage Market” in the WSJ:

The government took over Fannie and Freddie in 2008 to prop up the housing sector, and taxpayers are on the hook for $138 billion…Together with the Federal Housing Administration and federal agencies, Fannie and Freddie are behind nine in 10 new mortgages.

The US government increased the limit on the dollar amount that these agencies can issue in order to keep housing prices from collapsing; now, much to the bewailing of the real estate industry, they are looking to tighten those limits.

Unfortunately, if the US government stops supporting loans, there aren’t going to be many new loans at all. If you attempt to get a mortgage that isn’t covered by one of these Federal agencies, expect to see a very large down payment, a higher interest rate, and to have sterling credit in order to close the loan.

Some regions are moving to cash in order to “clear the market”. In Miami 64% of transactions were “all cash”, with foreign buyers comprising the majority of the sales.

Read more

Lake Arrowhead New Year

I thought I would add a photo of my house at Lake Arrowhead on New Years weekend. The road going down the hill is an access road, sort of an alley but the only access for some homes up here. My house is in the far distance in line with the road, which makes a left turn at my fence. I was walking my basset hound who loves the snow but has to jump like a sled dog breaking a trail in anything more than 6 inches of snow.

The main road is to the right and the house backs up to it but faces the access road. I have a third of an acre, all level, so the dog is content. It was 14 degrees that morning so he was not eager to go out until a bit later in the day. I’ve been coming up here for weekends for 35 years. It’s nice to be home now. It’s two hours to my previous home in Orange County and about two hours to the beach.