An article I just read in the Atlanta Business Chronicle reveals once again the real key to the recovery of the real estate market - jobs. Just why top officials, industry experts, or even the savvy investor cannot grasp this simplest of economic indicators - this is the mystery of the Great Recession which never seems to end.
Slow employment growth, according to the rocket scientists over at the Federal Reserve Bank in Atlanta, is the "biggest hurdle to Atlanta's commercial real estate sector." Now there's a revelation! Doesn't it make you feel secure just knowing that the CEO and President of Atlanta's Federal Reserve, Dennis P. Lockhart (below), is so astute? But wait, there's more razor's edge criticism from this "peanut gallery" reporter.
Lockhart is evidently not alone atop his ivory tower of economic knowledge. His comments about unemployment came during an address to someone or something called "Atlanta's Council for Quality Growth." The ACQG, according to their "who we are" page, is made of up the following, and I quite: "a diverse membership of developers, contractors, engineers, architects, planners, law firms and bankers."
Now I know the average Realtor or potential home buyer in and around Atlanta feels more secure in knowing a non-profit like this has got our backs in as far as turning the economy around. Really. Don't you feel better? Okay, just knowing bankers and lawyers are out there sweating the load may not be enough, let's look at some more ACQG dogma:
"...Committed to the mission of promoting balanced and responsible growth, the Council is proactively involved in the formulation of policy and legislation critical to the growth and development industry. We address, head-on, strategic economic planning, infrastructure needs and tough quality-of-life issues throughout the metro Atlanta region and state."
I think you are getting the point, now to the crux of the matter. You know, that unavoidable truth that eventually arrives when a disaster of monumental proportions is finally understood. Here is a news flash. "With no jobs and no money, people find it hard to do much of anything, let along funnel their dough into commercial or other real estate coffers." No jobs and no money - the biggest hurdle to Atlanta's "Quality Growth" equation! Brilliant. But why are there no jobs?
Time to get down to brass tacks here. Atlanta and America allowed politicians and business entities sell out for more profit. Those jobs that Atlanta citizens so desperately need got sub-contracted during a PR boondoggle called "globalization." China has all those manufacturing jobs, India the IT and tech ones, and you can split what's left of them out where NAFTA and a few other agreements passed you by. Toss in Walmart killing off "Mom and Pop" and you have your recipe for economic disaster. Oh, I forgot to mention the wars in Iraq and Afghanistan. There is your picture.
If you read this far, and your head is not too full of mutton form listening to Federal Reserve Bank geniuses, factor in that Asia (the place we sent America to) is now buying your country lock stock and barrel. United State securities are being gobbled like lettuce, even our closest friends like Japan hold roughly $1 Trillion worth of them.
With America off the gold standard, now the stuff is worth many times what is was in 2000. The risk of US default on its debts is, from the outside, a huge possibility. And you begin to see I am right. No fun for me, and not nuclear physics either - no arguing - there's no technology job out there for your kids, like they said there would be (you know?).
You can ponder whether or not this gibberish means anything to you, if you read this far that is. But maybe you should be thinking like me. Ask yourself a few questions here. "Is America's debt to China a national security risk?" Do experts like Dennis P. Lockhart up there, or his fellows at Atlanta policy making understand the real impact of job losses? Maybe even consider; "Did America really win the Cold War?" Conspiracy theory stuff for sure, but something to think about. So you think those leaders in China want democracy still? Wise up.
Atlanta's market, America's market is gripped alright, but by what and whom. Want to see a bit more about how the WTO, NAFTA, and Chinese manufacturing affect you? Click on the image below. More later on the "hurdles" to you selling and buying property.
Heard on NPR yesterday that some U.S. retail firms are having serious trouble due to steep rise in Chinese labor costs.