{"id":3019,"date":"2022-04-12T16:13:14","date_gmt":"2022-04-12T16:13:14","guid":{"rendered":"https:\/\/preprod.realtrends.com\/blog\/2022\/04\/12\/opinion-will-todays-leaders-wreck-the-housing-market\/"},"modified":"2025-03-13T02:41:22","modified_gmt":"2025-03-13T02:41:22","slug":"opinion-will-todays-leaders-wreck-the-housing-market","status":"publish","type":"post","link":"https:\/\/preprod.realtrends.com\/blog\/2022\/04\/12\/opinion-will-todays-leaders-wreck-the-housing-market\/","title":{"rendered":"Opinion: Will today&#8217;s leaders wreck the housing market?"},"content":{"rendered":"\n<p>I didn\u2019t get an Ivy League education, but I did get a business degree that included some economics education.&nbsp;More importantly, I started my career in the housing industry in the mid 1970s and lived through what happened to the economy and housing market since then.<\/p>\n\n\n\n<p>In the 1970s, Federal and state governments raised taxes, greatly increased business regulation and basically killed the supply side of the economy \u2013 strangled it.\u00a0The business community stagnated, investment declined and the stock market went nowhere for over a decade.\u00a0Meanwhile, the Feds began printing money, running larger and larger deficits, to make people \u2018feel\u2019 better and cover up the challenges of a sluggish economy.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-the-1970s-was-a-miserable-economic-time\">The 1970s was a miserable economic time<\/h4>\n\n\n\n<p>The result was hyperinflation and \u2018stagflation\u2019 which was evidenced by high inflation, high unemployment and sluggish growth.\u00a0In short, the latter half of the 1970s was a miserable economic time in our country.\u00a0<\/p>\n\n\n\n<p>It began to get sorted out under President Carter when he began the process of deregulation of the airlines, trucking and railroads.\u00a0He appointed Paul Volker to head the <strong>Federal Reserve<\/strong>, and Volker began the process of killing inflation by raising interest rates.\u00a0This ultimately killed the economy and resulted in the deep recession from 1980 to 1982.\u00a0 <\/p>\n\n\n\n<p>President Reagan continued with Volker and his policies and added both significant tax reduction and regulatory relief, which resulted in a strong and growing economy for the next five years. Another milder recession from 1987 to 1989 interrupted what would become over 25 years of a growing economy.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Why does this matter to us?\u00a0 <\/h4>\n\n\n\n<p>The government under President Obama began once again to increase the regulations on the supply side of the economy.\u00a0While President Trump ceased some of this, the current administration is right back at increasing regulations across wide swaths of the economy.\u00a0 The pandemic wrecked the notion that global supply chains always work well and delivered jammed supply lines \u2013 which persist two years after COVID-19 shut down the economy. As a result, we have supply shortages of many things, among them <a href=\"https:\/\/preprod.realtrends.com\/blog\/as-mortgage-rates-soar-sellers-are-increasingly-chopping-prices\/\" target=\"_blank\" rel=\"noreferrer noopener\">houses<\/a>, oil and autos.<\/p>\n\n\n\n<p>Meanwhile, over the past 20 years, the U.S. and the world\u2019s bankers have been printing money and providing massive stimulus \u2014 to try and &#8216;make everyone feel better.&#8217;\u00a0 The amount of deficit spending in the U.S. alone is well over $20 trillion.\u00a0<\/p>\n\n\n\n<p>Just like in the 1970s, supply is constrained while the government prints money.\u00a0So now we have hyperinflation.\u00a0It makes one wonder if anyone at the Fed, the Treasury Department or the White House ever took an economic course, or has any sense of history.\u00a0[That was a rhetorical question!]<\/p>\n\n\n\n<p>Should the leaders of the country become serious about the welfare of its citizens and the economy, rates will have to rise far more and far faster than they are discussing.\u00a0 <\/p>\n\n\n\n<p>Unemployment will rise as a result.\u00a0Mortgages will get more expensive.\u00a0Credit of all kinds will get more expensive.\u00a0The economy will slow and <a href=\"https:\/\/preprod.housingwire.com\/articles\/what-would-it-take-to-crash-the-housing-market\/\" target=\"_blank\" rel=\"noreferrer noopener\">take housing sales down<\/a> with it.\u00a0<\/p>\n\n\n\n<p>How far and how fast this happens is unknown.\u00a0However, it could well be that the current economic leadership of the U.S. will choose to dither about inflation, and the impact of too much money chasing too few goods will create the conditions for something much worse than a shallow recession.\u00a0<\/p>\n\n\n\n<p>In a quote attributed first the Spanish philosopher George Santayana and later on paraphrased by Winston Churchill, &#8220;Those who fail to learn from history are condemned (doomed) to repeat it.&#8221;\u00a0 <\/p>\n\n\n\n<p>Why is it that today\u2019s leaders have learned nothing from what happened less than 50 years ago?<\/p>\n\n\n\n<p><em>Steve Murray is a brokerage consultant and a senior advisor for HWMedia.<\/em><\/p>\n\n\n\n<p><em>This column does not necessarily reflect the opinion of RealTrends\u2019 editorial department and its owners.<\/em><\/p>\n\n\n\n<p>To contact the author of this story:<br>Steve Murray at <a href=\"mailto:smurray@realtrends.com\">smurray@realtrends.com<\/a><\/p>\n\n\n\n<p>To contact the editor responsible for this story:<br>Tracey Velt at <a href=\"mailto:tracey@hwmedia.com\">tracey@hwmedia.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Should our leaders become serious about the economy, rates will have to rise far faster than they are now.\u00a0Unemployment will rise.\u00a0Mortgages will get more expensive.\u00a0The economy will slow and take housing sales down with it.\u00a0<\/p>\n","protected":false},"author":15802,"featured_media":4822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3255],"tags":[],"coauthors":[27],"class_list":["post-3019","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archive"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.4 (Yoast SEO v26.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Opinion: Will today&#039;s leaders wreck the housing market? 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