I Wonder Why People Mistrust the Government?

Maybe because some governments (Multnomah county, Oregon) threaten 7 year-old girls with a $500 dollar fine for running a lemonade stand without the proper permit.

Darn kids, always flouting regulations, that's what's wrong with young people today . . .

But, you say, "the county apologized, and no real harm done, right?" (except for fixing permanently in that girl's mind a terrifying first impression of government - oh, wait, that's not harm, sorry). Yes, this was a mere county government worker just acting "by the book." It was easily cleared up by Jeff Cogen, chairman of the Multnomah County Board of Commissioners.

(By the way, when you need a board to manage all your commissioners, doesn't that tell you something?)

But this was one smallish county in a meduim sized metro area in a smallish state. Very few levels between the health department employee and Mr. Cogen. Imagine the same quick corrective action happening in LA county, or New York City . . . yeah, I can't either.

County regulations are simple when compared with State regulations, and nothing compared to the massive and ever-expanding river of regulations continually spewing from Federal agencies.

The photo above is of titles 12 to 26 out of 50 titles of the Code of Federal Regulations. Yes, that's only about one fourth of the Federal Regulations out there - and this is before agencies start creating regulations for "Health Care Reform." (the bill itself was 2000 pages, but it left most of the rule-making to Federal agencies. 2000 pages? That's nothing compared to the regulations that will come out of it - wait and see).

This site gives some scope to the problem:

According to the Office of the Federal Register, in 1998, the Code of Federal Regulations (CFR), the official listing of all regulations in effect, contained a total of 134,723 pages in 201 volumes that claimed 19 feet of shelf space. [Note: 10% or 13,458 pages are IRS regulations alone]. In 1970, the CFR totaled only 54,834 pages.

The General Accountability Office (GAO) reports that in the four fiscal years from 1996 to 1999, a total of 15,286 new federal regulations went into effect. Of these, 222 were classified as "major" rules, each one having an annual effect on the economy of at least $100 million.

134,723 pages?!?! A person could literally be crushed by the weight of Federal regulations, ha ha . . . . sorry bad joke. But seriously, if you could read 1 page a minute, 24 hours a day, you'd finish reading it in a little over 93 days.

There are entire paid publications dedicated entirely to informing industry attorneys that a single Federal agency is going to change regulations. There are currently about 14,800 notices, rules, or proposed rules open for comment on regulations.gov. According to that site, "On average, federal agencies and departments issue nearly 8,000 regulations per year." (Double what they issued in 1996 - 1999).

But why fear the government? Those 134,723 pages of regulations (plus 8000 new regulations per year) plus all the state and local regulations would never affect the average person, would they?

Lets ask the little girl from Oregon . . .

Can Anyone Still Take the U.N. Seriously?

No, it is not April Fools Day, and this story is not a joke.

Without fanfare, the United Nations this week elected Iran to its Commission on the Status of Women, handing a four-year seat on the influential human rights body to a theocratic state in which stoning is enshrined in law and lashings are required for women judged "immodest."

Just days after Iran abandoned a high-profile bid for a seat on the U.N. Human Rights Council, it began a covert campaign to claim a seat on the Commission on the Status of Women, which is "dedicated exclusively to gender equality and advancement of women," according to its website.

Apparently this move was unopposed by everyone, including the United States. Nice job standing up for human rights.

Never Thought I'd Say This...

...and get ready for Hell to freeze over ... but Keith Olbermann makes an excellent point.

Yes, you read that right. The guy is a raving left-wing loon, but he is right about the senate healthcare bill, specifically the requirement that all Americans purchase government approved insurance. He lays out what it will cost the President:

[T]his bill costs you the [support of the political] left —and anybody who now has to pony up 17 percent of his family’s income to buy this equivalent of Medical Mobster Protection Money.

Olbermann continued:

The mandate in this bill … must be stripped out...It is above all else immoral and a betrayal of the people who elected you….

And this sounds awfully rebellious:

I am one of the self-insured, albeit by choice. And I hereby pledge that I will not buy this perversion of health care reform. Pass this at your peril, Senators, and sign it at yours, Mr. President.
I will not buy this insurance.
Brand me a lawbreaker if you choose.
Fine me if you will.
Jail me if you must.

Wow, I couldn't have said it any better myself. What a weird feeling to agree with him...

Granted his reasons for opposing it are much different than mine, as you can see reading the entire post. He's ticked that it is not fully socialized. But I understand his dislike of the mandate. The enemy of my enemy is my friend? . . . well, maybe not quite yet.

Why Trying the 9/11 Terrorists in NYC is a BAD Idea

An excellent analysis of why trying Khalid Shiekh Mohammud in New York is a colossal mistake. The legal jargon is a little dense, sorry.

The writer is an attorney who lays out how the trial will inevitably play out. I think he's exactly right. We've seen this already in the trial of Zacharias Moussoui (however it's spelled), the alleged 20th hijacker. In short it will be a massive media circus, cost incredible amounts of money, give the confessed terrorists an international platform and publicity, and require that the U.S. disclose our secret intelligence gathering techniques. Not to mention setting the defense attorneys up for life financially, and ruining the reputation of the U.S. legal system.

He also speculates on the President's motivations for bringing the trials here, and concludes that it is part of a sinister left-wing plot. On that point I think he gives President Obama too much credit. A plot requires competence and planning. I'm not sure it's a plot, so much as just plain stupidity, naivete, and a fundamental misunderstanding of the world and of human nature coupled with a disdain for any policy or measure enacted by President Bush.

I never thought I'd say this, but I'd rather see them tried at the International Criminal Court. It's reputation has no where to go but up, and when the terrorists are all freed, it would help cement public opinion against international institutions, and strengthen faith in America. All the opposite outcomes of a trial in NYC.

When Are You Moving?

WARNING: this is a LONG, dry, economics rant post. Beware!

"When are you moving?"

I get asked this question every time I mention that we live in Ogden, but I work in Provo. The people asking the question have a point. A 156 mile round-trip commute isn't the most pleasant part of my day, and on snow days I often can't get either down or back.

The short answer is . . . who knows!

Here follows the long answer:

I do know why we haven't moved yet. Besides the wonderful generosity of family, for which we are very grateful, housing prices are not . . . shall we say . . . stable. MSNBC has an article today about the housing market. Apparently none of the measures being taken by the Federal Reserve have done anything to stem the tide of foreclosures or to increase the number of homeowners or the median price of a house. They have a spiffy graphic showing what housing prices have done since 1999:

Now, this raises two questions in my mind.

1. Why are homes worth more in the middle of every year and less at the beginning and end?
2. How does this track with median income changes over the same period?

I have no comment on the first question, and I only asked the second because I already knew the answer. That's why I'm writing this post.

So, as to question 2 - the amount a family can afford to pay for a house is related to their income. "Well. . . duh!" you say. Bear with me. It's more obvious when you think about housing prices in terms of years of income. In the UK, for example, the size of a mortgage you can qualify for equals 3 times your annual income (ignoring all other factors). Thus if you earn $50,000, then you can get a $150,000 mortgage. The ratio in the US is a bit more generous, but, same idea. With that in mind, let's look at another chart (thank you Wikipedia):

If you'll notice, median income peaked in 1999. Since then it has declined.

Everyone assumes the housing market was healthy in 1999. So, we'll start there. In 1999 median income was about $46,000, and the average home cost about $138,000 (just eyeballing the chart for the end of the year). That works out to . . . let's see . . . carry the 2 . . . oh, yeah, 3 times the median income. Those mortgage people were on to something. I'll call this 3:1 ratio a "healthy ratio."

Now let's look at 2005. Housing prices that year were $230,000 for most of the year, while median income had declined to $45,326. That comes out to over 5 times the median income. Not a healthy ratio.

When I look at the numbers that way, it's perfectly obvious why houses aren't selling. The latest income figures available are for 2007. They show that median income has risen slightly since 2005. It was about $50,000 in 2007. the housing slump was in full swing in 2007, so for that year the ratio declined from 4.6 times median income to 4 times median income.

What really gives me pause is this:

Looking at the income chart, median income starts to slide before every recession, and continues to decline till well after the recovery is underway. As every news outlet in the country recent told us, we are in a recession. Chances are good, therefore, that median income is falling, and has been for a while. (we don't get income figures till after the fact).

If this is one of the sharpest recessions ever, as we are reminded daily, chances are median income will fall steeply, and housing prices will continue to follow until well after the recovery is underway.

With that in mind, I'm going to make some predictions. Since they will be memorialized on the internet, we'll all see what my predictions are worth in a few years. (it's really win-win: if, as is most likely, I'm wrong, you'll all know to stop wasting your time reading my blog, and I'll know to keep my mouth shut on topics of which I am ignorant). These are also the reasons, in my mind, we aren't moving yet:

• I think housing prices will return to something much closer to the "healthy" 3:1 ratio they were at in 1999.
• Prices won't even begin to recover until unemployment starts to fall, and median income starts to increase at the earliest. (probably more like 6 months later).
• All the fancy things lenders did to make up for the increasing gap between income and housing prices are gone for good.
• I think the national median home price will easily fall below $150,000

I think the low prices will stay around a while because 1) All the speculators fueling shows like "Flip this House" lost their shirts (and good riddance), and 2) Lenders will be gun shy for a while, given the number of banks that went under from bad mortgages.

We'll see what happens, but I'm not optimistic for the next few years.


PS - Sorry for the abrupt ending, I tried to think of a good closing with a smooth transition and a hard-hitting conclusion, but I couldn't. The thoughts have stopped, hence so does the post.

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