Seeking Solutions in an Age of Division, Despair and Donald Trump

  
Take a look at this slide. It’s all about hope and building a better future.

The 7 P’s were for podcasters who gathered recently at Podcast Movement, an annual industry conference held in Texas. As I’ve written before, the event was a rally: a celebration of what we do in podcasting. The message was overwhelmingly positive.

But have you ever wondered why the language used to discuss business and politics are so different?

When company profits or sales are down, ideas are shared about how to change course.  At the best institutions and firms, innovation and fresh thinking are encouraged, especially when times are tough.

Not politics.  Outage and disgust are Donald Trump’s currency.  

Instead of offering a detailed, well-thought out vision for the future, what we get are furious outbursts and personal put-downs. Much of the news media only make it worse by feasting on controversy and highlighting the day’s most outrageous comments.

That’s why my friend, Jim Meigs and I decided to do “How Do We Fix It”. Both of us spent decades as mainstream media journalists, and we thought there was room for a show about solutions. So far we’ve done 14 weekly podcasts on matters that matter: From parenting and personal debt to politics and identity theft.   

The latest show came this week in response to the turmoil on Wall Street, when words like “fear”, “pandemonium”, and “panic” were being used to describe the stock market.

We were lucky when Redfin Senior Economist Nela Richardson promptly said “yes”, to our invitation to be the guest on our latest show. With rich experience in the private sector, academia, think tanks, and as a regulator, Nela is an economist who knows her stuff and can talk about it in an engaging way.

  
While she told us that the stock market turmoil was “shocking”, Nela also said “it’s important to remember that the stock market is not the economy.”

“The economy hasn’t changed. It’s still slowly humming along, and a lot of the fear and panic came from overseas markets. It wasn’t home-bred like the financial crisis eight years ago. There’s a big difference between now and back then.”

One takeaway from our interview was “keep calm”. Compared to most overseas economies, the U.S is doing reasonably well. This week’s volatility was largely caused by fears of a sharp slowdown in China.

Nela’s special focus is real estate and young home buyers. The outlook for 2015 “looks really good,” she says. “The housing market is going to out-perform last year’s level.”

But what concerns her is that incomes are flat and that many college graduates have much big student loans to pay off. “Wages are really stagnant and yet we see every month that house prices keep grow a little a bit higher.”

On the other hand, interest rates are very low and inflation shows no sign of being a threat soon. Most millennials are patient, says Nela, and don’t appear to be in a hurry to buy their first home.

But there are signs that more young adults are responding to the housing crunch in the most expensive markets on the coasts by moving to cheaper areas.

“There are some places where we still see a lot of affordability… Places like Oklahoma, Texas and South Carolina, where you can still get a good job make a good living, provide for your family, and buy a home.”

As for solutions, Nela says: “I think we need to get smart about home ownership policy.”

Because of rising income inequality, “the next generation of homeowners are going to be less wealthy, more ethnically diverse and without the same resources as previous generations. We need to figure out how to extend credit without tanking the financial system.”

“I think there are ways to acknowledge the new forms of households that we’re seeing growing up all around us.” Nela suggests that banks should be more creative about lending money to baby boomers and millennials who buy property with friends.

“There is really no banking product that takes account of three or more household incomes.” Multi-generational households with more than two wage earners are quite common among Hispanics and some Asian communities.

 “Why not create products that make sense for the new types of families and households that we are seeing pop up.”

 Another way for homebuyers and banks to respond to the changes in the economy is view rental income from spare rooms in a positive light.

But many people may never be able to afford a mortgage. “We are going to see more renters in the next ten years that homeowners. We have to make sure people have a place to live.”

As urban areas expand, says Nela, local and federal home building policies should reflect the these changes. And better data collection will be needed to show where the needs and demand for housing will be greatest.

Next week, we’ll be looking at another part of our rapidly changing economy: the jobs market. We’ll focus on fixes and real-world ideas for change.  Want to find out more about “How Do We Fix It?” Head to our web page and sign up for “The Fixer”, our newsletter.  

Smiley Face for a Troubled Economy: Why Housing Helps Build The Case

ap housing report jc 140828 16x9 608 Home Sales Bouncing Back When Economy Needs It Most

  (Photo Credit: Michael Dwyer/AP Photo)

from my abcnews,com money blog

Happy days are here again for housing … sort of.

After more than a decade of boom and bust, a vital part of the U.S. economy may be finally returning to normal. That could be very good news for growth. Signs of stability include slower price rises and fewer sales of distressed properties.

“Home prices look roughly in line with their long-term norms and, very importantly, far fewer people are falling behind on their payments,” Jed Kolko, chief Economist at Trulia, the online real estate firm, says. “More and more the housing recovery depends on what happens in the jobs market.”

Foreclosures dropped sharply in July, falling more than 21% in the past year, says data firm CoreLogic. On a month-over-month basis, completed foreclosures were down by 8.5%.

“The stock of distressed debt continues to rapidly decline, especially in western states,” economist Sam Khater said.

True, the housing bust resulted in years of misery and broken dreams for millions of people.  But others are starting to see their recent investment pay off.

“Based on current trends, the overall foreclosure inventory could trend down to as low as 500,000 homes by year-end, which is very positive news for the housing market,” Anand Nallathambi, president and CEO of CoreLogic, said.

After a slow climb back from the financial crisis of 2008-9, growth may be revving up.

After a bleak start to the year,  the Commerce Department increased its previous estimate of U.S. output in the April-June quarter. The economy grew at a brisk annual rate of 4.2%, , slightly faster than expected. f

The upward revision supported expectations that the second half of 2014 will prove far stronger than the first half.

And there’s a little good news for motorists. Labor Day will be the cheapest holiday travel weekend in four years: “Mildly cheaper than last year, quite a bit cheaper than in 2012,” Tom Kloza, chief oil analyst at GasBuddy.com, told me.

Despite unrest in the Middle East, “We are producing about 3.1 million barrels a day more domestic crude in the United States than when the first Arab Spring took place,” he said.

U.S. gasoline demand has also been reduced by more fuel-efficient vehicles.