Active Rain November 25, 2009

“But That’s Not Capitalism”

As happy as most of us seem that the housing stimulus was extended, I have heard and read a number of individuals express an opinion to the contrary. There are two main objections to the stimulus, and both are, in my view, fallacious. Let me preface my words by stating I am a free market entrepreneur who doesn’t really like government involvement in commerce, but I am also a pragmatist. Here are the objections the “purists” offer:


  • The Stimulus is artificial. Fine. Let me ask you a question: If you were about to go out to a formal affair with your better half, and she came downstairs in sweats with her hair in curlers, you wouldn’t like that, would you? You were kind of looking forward to that little black dress, weren’t you. But there she is, in sweats and curlers. Just her. No make up. None of that Eau De Whatever that drives you nuts. No artificial accouterments. No fake anything, that’s her with no external additions. Disappointed? Why? It’s the same with the economy. Don’t sit there and tell me you’ve ever said no to a legitimate sale because you didn’t like what motivated the people. You don’t object to cashing a check. The point of a stimulus is to stimulate. People buying homes now and not later because they want to take advantage is real commerce, with real revenue, and circulates real money. They are going to buy real washing machines, real lawnmowers and real rugs. And that’s the point. Money flowing sparks the recovery the same way the cocktail dress and fab perfume get your mojo going. 
  • The stimulus is really Socialism. I’ll admit it is a provocative word, but as much as the USA is built on free enterprise and free markets, we are not an unfettered free market by design of the founding fathers. A few examples and the non-free market institutions we espouse and hold dear which are actually socialized are: The US Military, Public Schools, our System of Roads and Highways, and the Postal System. And in times of crisis, I see no issue with us as a collective society doing what can be done to adjust, improvise, and adapt to weather the storm, and ultimately overcome. Free Enterprise is not a suicide pact where we eschew solutions because they don’t conform with our philosophical preferences. We have to do what must be done to get through, solve and get better. If part of the solution is collective, so be it. I’m about getting there and not what car I drive.  
In my view we as housing professionals should embrace whatever can be done to stimulate home sales, because the more we sell, the closer a recovery is at hand. As Mark McKenzie so aptly stated, when we fix the housing market, we fix the whole economy. In a very real sense, the more home we sell, the more money circulates, the more related commerce benefits, and more companies hire. And when companies start hiring again, we’ll have this thing in the rear view mirror.  

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