Ridiculous Statements from Realtors and Home Builders on First Time Homebuyer Credit

February 5, 2009

The Atlanta Journal-Constitution has an article today about the proposed amendment to the stimulus bill made by its home state senator Johnny Isakson (a former Realtor®, I should note).

The article of course only gives one side of the story, as if there is unanimity on the issue. But in the article, there are these nuggets of wisdom from a home builder association member in Georgia and from the president of the always rent-seeking National Assocation of Realtors:

Kurt Cannon, president of the Home Builders Association of Georgia, said he has been meeting with Isakson for months about ways to help the housing industry.

“We don’t want a bailout; we don’t want any money to buy a jet or go on vacation,” said Cannon, whose organization also is pushing for a state tax credit for home buyers. “This would go directly to the consumer to incentivize them to go out and do something good and invest in their future.”

A recent study by Cannon’s group found that the housing slump cost Georgia 196,000 construction-related jobs, $11 billion in wages and 2.8 billion in taxes and fees between the end of 2006 and October 2008 alone.

So they aren’t looking for a bailout? What a load of bull. Notice how Cannon tries to play it as if this provisioin would only benefit consumers, but then notes how it would affect the factors of production in the construction sector. If it only benefits consumers (i.e. 100 percent of the incidence is borne by consumers), then it shouldn’t affect the construction sector. Unfortunately, an ignorance of economics permeates those who report on these issues and don’t question this inconsistency.

Now we have this gem from the National Assocation of Realtors president:

“Real estate has always led this nation out of economic downturns,” National Association of Realtors President Charles McMillan said in a statement. “A renewed, revitalized and robust housing market is essential to generating commerce and helping families build wealth and stability.”

Hey, Charles, I thought the real estate market was always doing well and was going to do well forever? That’s what your organization told people every day from 2000 through 2007.

Moral of the story: when the lobbies of the housing industry speak, it would be best if members of Congress closed their doors. But I guess when they’re holding pockets full of cash in campaign contributions, that’s kind of hard to do.

As for the claim that real estate has always led the U.S. out of economic downturns, it’s such a moronic statement that is not factually based that it’s not even worth addressing.

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