Time Out! Rethinking Homeownership? Or Rethinking Newsweeklies?
The people that bring you People have too much spare Time on their hands, or so it seems. Maybe it’s just the month of August, but it strikes us that the editors at the nation’s remaining significant and viable newsweekly go off their rockers each summer as they pick their dog days issue cover topics.
This one, for instance.
This cover ran August 17, 2009. The story tells Time’s audience of millions that the widely held belief, or myth, that exercise and cupcakes lead to weight loss is untrue. “It’s what you eat that really counts” is the contrarian, myth-busting revelation of this story. This really goes to prove that hell hath no fury–for an editorial staff of a news weekly–like a slow news month in an off election year.
This year, of course, it’s not an off election year. It’s a big-time mid-term election year, when every seat in the House is up for election, and important Senate seats are in play, and very likely, a politically unbalanced equation in Washington will wind up more balanced after the first week in November.
Still, in August, here’s what Time’s editors came up with as their thought-leading cover idea for the month’s last week:
Now, it’s not exactly news that 1) people who should not have bought houses bought them, 2) bankers who should not have lent money to those people who should not have bought houses lent it, 3) GSEs that should not have securitized those mortgages securitized them, and 4) Wall Street firms that should not have structured investment vehicles full of those securitizations did that, and 5) AIG should probably have not insured credit default swaps at such huge profits either.
What we’re missing here, is the same thing we’re missing when Time informs us that cupcakes, exercise, and weight loss don’t go together. The editors suggest that lots of exercisers are getting fat because they don’t know they can’t overeat, and in the same way, they implicate Americans’ long-held dream of homeownership in the monstrous mess that our economy is in. That’s logic befitting the people who bring us People, so we can hardly blame them.
We have been reporting for months now that home building company managements were really nervous in anticipation of the end of the tax credit’s run on April 30, but they are mostly in favor now of a clear and definitive statement from our elected officials that there will be no further federal tax credits for home buyers.
As a raft of negative headlines that ended August gives way to a sputtering smattering of positive tidings this week–PMI, weekly unemployment claims, retailers same-store sales, existing home inventory decline, and signs of stabilization in pending home sales–some building managements remain nervous about two key drivers.
One–which will get clearer tomorrow after the Bureau of Labor Statistics releases its month of August jobs report–is the most important factor affecting those who might want to join the ranks of homeownership. The other is access to credit, which will remain in the thrall of considerations and deliberations on the fate of the government sponsored enterprises and their role in home finance.
We don’t believe–despite the rhetoric of lobbyists who are out to debunk the myth of homeownership the way some folks feel they need to destroy the myth that exercising and eating dessert with impunity should still result in weight loss–that people will ever heed the people that bring them People when it comes to suppressing their desire for the benefits of owning their own home.
The trillion-plus-dollar problem with household finance gone amuck that sits on our collective balance sheets did not occur during the slow news month of August. It was a decade in the making.
The big question for all of us is how to get people, as in the people who People goes to, to save money and spend money in ways that don’t come back at them in the form of new taxes. That balance–saving and spending–needs to occur even as so many Americans repair their household balance sheets, and the U.S. repairs its own.
Clearly, as the behavior of households increasingly mirrors that of companies, we’re going to go through a limbo period for home buying trends that will last through the mid-term elections. Yale economist Robert Shiller explains this as can’t-help-it psychologically driven behavior when elections are imminent. “People just like to know” before they commit to a big-ticket item like a home, he says.
So, when the re-balancing of the political spectrum occurs, and corporations stop parrying on whether to reinvest their troves of cash into their businesses, we may begin to see home buying demand enter its next phase.
So far in 2010, we’ve seen “surprising” turn to “choppy” turn to “sluggish.” What comes next will queue up what may be the long-awaited return of housing’s prodigal child, a Spring Selling Season in 2011, and better yet, unabetted by Uncle Sam.
So, what’s the over under on what Time will have as its cover story in August 2011?
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