“The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed, lest Rome becomes bankrupt. People must again learn to work instead of living on public assistance.” ~ Cicero, 55 BC
In the political heat of election rhetoric, the tendency is to focus on those issues that are close at hand. On the local level, it is schools, parks, streets, fire and police, public works, pensions, and shrinking revenues. Statewide it is much the same. On a national level, the ills run much deeper.
The financial pickle the US finds itself in did not start two years ago with the current administration, although Washington has exasperated it. No, it started with the post-WWII boatload of entitlement programs placed on the economy. They might have been well-meaning but they were ill-conceived with no limitations or bailouts put in place. Subsequent politicians from all parties can share the blame for the present economic conditions.
No entity, be it a household, investment property or governing body can expect to survive if they ignore a major portion of their liabilities. In the case of our national government, it is the unfunded liabilities that they have kept off budget for years and years. These line items now are beginning to fester. And Washington’s answer has been to pile more programs/liabilities on the economic ship. Well, the ship won’t/can’t carry much more and stay afloat.
The most accurate barometer of the health of the real estate industry is hiring trends, and it appears that we are in full swing toward a recovery based on the fact that SelectLeaders had its best month since September 2007. SelectLeaders is a job posting site for the real estate industry and clearly the best indicator of the mood of the real estate industry at professional levels, and over the past few months, jot postings on the site have been on the rise across all sectors. More important, development jobs hit an all-time high since the downturn. The rise in hiring activity coincides with a market view that there is a sea change as real estate is receiving higher allocations of intuitional investment dollars.
Once again the data points to an economy that hangs in a balance. The bottom line is that more jobs and economic certainty will accelerate the pace of occupancy gains (i.e. less vacancy!). On the other hand, despite some growing optimism, small business owners are still paralyzed.
President Obama and Mitt Romney both say they’ll reduce the burden on small businesses and help them create jobs. But as campaigns head into their final days, more owners believe the reverse will happen. More than three-quarters, 77% of small businesses believe their taxes will increase, and that’s one reason 67% of them don’t plan on hiring next year, according to a study released by The Hartford. Additionally, just 33% of them are optimistic about the economy – down sharply from the 61% that were upbeat six months ago.
The biggest threat to the US economic recovery and therefore the commercial real estate recovery is the “fiscal cliff,” which encompasses the expiration of the Bush-era tax cuts as well as mandated federal spending cuts scheduled to take effect at the beginning of 2013. Left unchecked, the combination could deliver a blow to the U.S. economy equivalent to 4% of GDP. One can only assume or at least hope that the severity of the potential impact to the global economy will motivate lawmakers to act in a different and more progressive manner than the failed handling of the U.S. debt ceiling. One can also assume that our politicians (even in a lame duck session) will propose short term extensions and kick the can down the street for the next elected team to pick up.
If you are one of those still undecided’s in the Presidential election or you just want to see how you match up on the issues with the candidates, you will find this Interactive selector interesting and useful;
Regardless of whom you vote for or who wins the election, we will have a Harvard grad as our President (Both Candidates have degrees from Harvard.). Because of this and the fact that all politicians lie, I thought you would enjoy this month’s story.
Whether it is politicians or real estate brokers, it ultimately comes down to a matter of trust. Trust is something you can not buy at any price, but slowly you can earn it for free. We are facing significant headwinds, however, after my 28 years in the business, I remain extremely grateful to work with so many owners, tenants and yes even politicians who continue to strive to deliver on the promise of the American Dream.
Don S. Zech
CDC Commercial, Inc.
The Three Lies of Harvard
In front of the university hall at Harvard University stands a bronze statue of John Harvard. Danial Chester French sculpted the statue in 1884. The statue of Lincoln in the Lincoln Memorial is one of Mr. French’s better-recognized works. It had been originally placed on a granite pedestal to the west of Memorial Hall but was moved to its present location forty years later. It had been unveiled for the University’s 250th birthday in 1885.
There is an inscription on the statue that reads, “John Harvard, Founder 1638.” Though it may come as a surprise, none of it is true. All across campus, the students refer to this monument to a great man as “the statue of three lies.”
When the statue was created, there were no pictures of John Harvard known to exist. A student named Sherman Hoar was chosen randomly by French and dressed in the style of the seventeenth century so he could model for the statue. So, this is not a statue of the late John Harvard; secondly, John Harvard was not the founder of the college. The Massachusetts Bay Colony had established the college. It was only later named after John Harvard, who had been an early financial contributor to the college. The 3rd lie is that the college was actually founded in 1636 not 1638 as the inscription claims.
There are few other odd things about this strange bronze figure. On the left of the granite pedestal is the former seal of the college. Harvard’s current seal has the motto, Veritas, written on three open books. On the statue there is a single book inscribed “TAS” and it is cast page-side down. Some claim that this symbolizes that not all knowledge was accessible through the printed word. However, a more reasonable explanation is that metal casting at the time was not advanced enough to produce the image of an “A” over the crack of the open book. To resolve this problem, the book was turned over so that the “A” could be cast. As for the seal on the right side of the granite block, that is the seal of Emmanuel College in Cambridge, England. John Harvard had graduated from Emmanuel College before immigrating to America. Finally, if you visit the statue you’ll notice that the brass of the left shoe appears polished clean. It doesn’t bear the dark brown color caused by oxidation as the rest of the statue. This is due to the fact that students have been carrying on the tradition of rubbing John Harvard’s shoe. (And urinating on it after late night parties!) It is believed to bring good luck. Careful when you shake a Harvard man’s hand!