Are First-Time Buyers Left Out of Real Estate Rebound?

Nicholas Retsinas @ HBR:

The United States housing market is no longer the boat anchor dragging down economic growth. Data from the S&P/Case-Shiller Home Price Indices show that average home prices in an assortment of American cities have been on the upswing, increasing by almost 7 percent across the country in 2012. Recent reports that sales of new single-family homes rose in March are proof points that “the housing market recovery remains on track.”

We asked Nicolas P. Retsinas to reflect on the re-emergence of the housing industry, what it means to the rental market, and the future of the mortgage interest tax deduction. Retsinas is a senior lecturer in real estate at Harvard Business School, director emeritus of Harvard University’s Joint Center for Housing Studies, and former Federal Housing Commissioner.

Q: What factors have been contributing to the housing recovery?

Our drone delusion

Steve Coll:

In the summer of 1960, Sidney Gottlieb, a C.I.A. chemist, flew to Congo with a carry-on bag containing vials of poison and a hypodermic syringe. It was an era of relative subtlety among C.I.A. assassins. The toxins were intended for the food, drink, or toothpaste of Patrice Lumumba, Congo’s Prime Minister, who, in the judgment of the Eisenhower Administration, had gone soft on Communism. Upon his arrival, as Tim Weiner recounts in his history of the C.I.A., Gottlieb handed his kit to Larry Devlin, the senior C.I.A. officer in Léopoldville. Devlin asked who had ordered the hit. “The President,” Gottlieb assured him. In later testimony, Devlin said that he felt ashamed of the command. He buried the poisons in a riverbank, but helped find an indirect way to eliminate Lumumba, by bankrolling and arming political enemies. The following January, Lumumba was executed by the Belgian military.

For Eisenhower, who had witnessed the carnage of the Normandy landings and the Battle of the Bulge, and later claimed to “hate war as only a soldier who has lived it can,” political assassinations represented an alluring alternative to conventional military action. Through the execution or overthrow of undesirable foreign leaders, the thinking went, it might be possible to orchestrate the global struggle against Communism from a distance, and avoid the misery—and the risks of nuclear war—that out-and-out combat would bring. Assassination was seen not only as precise and efficient but also as ultimately humane. Putting such theory into practice was the role of the C.I.A., and the agency’s tally of toppled leftists, nationalists, or otherwise unreliable leaders is well known, from Mohammad Mosadegh, of Iran, in 1953, and Jacobo Árbenz Guzmán, of Guatemala, in 1954, to Ngo Dinh Diem, of South Vietnam, in 1963, and Salvador Allende, of Chile, in 1973. Not all the schemes went according to plan; a few seemed inspired by Wile E. Coyote. The C.I.A. once planned to bump off Fidel Castro by passing him an exploding cigar.

The Annual Versailles Cotillon

Charles Pierce:

There is no clearer example of the uselessness and essential decadence of our courtier press than the annual White House Correspondents Association dinner, which will be fouling the reputation of the craft of journalism this very weekend. Putative journalists pretend they’re Academy Award nominees while squiring around actual Academy Award nominees, many of whom can’t tell one red carpet from another, and everybody acts as though there’s seemingly nothing wrong with journalism-as-celebrity, and with journalists claiming the same sort of celebrity as the people they cover. This is a medieval papal court for whom its Luther never was born. It’s Versailles without Robespierre.

Figure on paying big time for a semi-glamorous locale; an embassy will do (but only one for a major country). Then, add in food and booze – about $100 a head. Plus entertainment, security, cleanup, insurance. Valet parking for a few hundred could cost roughly $6,000. Want a celebrity at your event? Of course you do. First-class flight to Washington, a hotel suite and limo for the weekend: Count on $4,500 or so more per glamourpuss, not including his or her posse, which you may have to include.Add it up. When all is said and paid for after all the parties surrounding the White House Correspondents’ Association Dinner this weekend, some media organizations will drop as much as $200,000 each to entertain an elite list of guests.
These would be the same “media organizations” that are laying people off by the carload, slashing the benefits of those they don’t lay off, and making people do more work in less time for smaller salaries. But, that aside, the annual competition in the category of Best Performance By A Media Outlet In The Role Of A Corporate ‘Ho is likely to be spirited again this year, but The Atlantic’s David Bradley is making a strong run at it.

The Real Danger of Copying Music (It’s Not What You Think)

Jaron Lanier:

When copying is easy, there is almost no intrinsic scarcity, and therefore market value collapses. There’s an endless debate about whether file sharing is “stealing.” It’s an argument I’d like to avoid, since I don’t really care to have a moral position on a software function. Copying in the abstract is vapid and neutral.

It would be unfair to demand that people cease pirating files when those same people are not paid for their participation in very lucrative networks.
To get ahead of the argument a little, my position is that we eventually shouldn’t “pirate” files, but it’s premature to condemn people who do it today. It would be unfair to demand that people cease sharing / pirating files when those same people are not paid for their participation in very lucrative network schemes. Ordinary people are relentlessly spied on, and not compensated for information taken from them.

While I would like to see everyone eventually pay for music and the like, I would not ask for it until there’s reciprocity.

What matters most is whether we are contributing to a system that will be good for us all in the long term. If you never knew the music business as it was, the loss of what used to be a significant middle-class job pool might not seem important. I will demonstrate, however, that we should perceive an early warning for the rest of us.

Copying a musician’s music ruins economic dignity. It doesn’t necessarily deny the musician any form of income, but it does mean that the musician is restricted to a real-time economic life. That means one gets paid to perform, perhaps, but not paid for music one has recorded in the past.

Korematsu and the dangers of waiving constitutional rights

George Will:

Two of the three most infamous Supreme Court decisions were erased by events. The Civil War and postwar constitutional amendments effectively overturned Dred Scott v. Sandford (1857), which held that blacks could never have rights that whites must respect. Plessy v. Ferguson (1896), which upheld legally enforced segregation, was undone by court decisions and legislation.

The third, Korematsu v. United States (1944), which affirmed the president’s wartime power to sweep Americans of disfavored racial groups into concentration camps, elicited a 1988 congressional apology. Now Peter Irons, founder of the Earl Warren Bill of Rights Project at the University of California at San Diego, is campaigning for a Supreme Court “repudiation” of the Korematsu decision and other Japanese internment rulings. Such repudiation, if it occurred, would be unprecedented.

An essay Irons is circulating among constitutional law professors whose support he seeks is timely reading in today’s context of anti-constitutional presidencies, particularly regarding war powers.

John Bogle: The “Train Wreck” Awaiting American Retirement


I’d like to cover some history, since you’ve covered some history yourself. You’ve seen a lot of things go by. Let’s just start with the mutual fund industry. Why do we have mutual funds in the first place? Who came up with the idea, and why?

… The first actual mutual fund, Mass[achusetts] Investors Trust, was started in 1924. What makes the industry go is the common sense behind it: I would say, number one, diversification — very underrated benefit; number two, efficiency; and number three, for those days, relatively low cost; and number four — I always put this last — management, because management cannot add value, but people somehow feel more comfortable with management looking over their investments.

In those days, by the way, the typical mutual fund was very much like an index fund. They were managed, but they tracked the market for years and years. …

… The first mutual funds were essentially index funds that allowed an investor that didn’t have a lot of money to buy into a fund and therefore diversify, because these were baskets of mini-stocks.

Right. And it was fairly efficient, and it was fairly long term, and it’s focused, the original mutual fund. So they weren’t doing all the trading like they’re doing today. They bought, basically, a basket of blue-chip stocks. …

It began also as a business of trusteeship. Many of the original mutual funds had nothing to do with the marketing of their shares. Firms were out there that sold mutual fund shares and made a commission on it, but they did the buying and selling. We didn’t even think about marketing.

You started a fund, middle-of-the-road fund. They all were in those days, in the late ’20s and early ’30s and into the ’40s and really up to the ’50s. And so they were run by trustees who felt a certain sense, I think, of fiduciary duty to their investors. Marketing was not in the middle of the picture. Marketing [was] peripheral, even if the manager controlled the marketer.

How I Escaped North Korea

Park Ji Woo:

One day, my sister and I had so much fun riding the sled that I didn’t realize my shoes fell off! I looked for them for a long time, but I couldn’t find them. I was freaked out because I knew my mother would be really mad at me. I walked home on bare feet in the snow. When my mother saw me, she said nothing and just wiped my feet because my left heel was bleeding. She put my feet into a container with cold water. That was a well known remedy for frostbite in North Korea because it made your feet warm up fast even though it was really painful. I screamed as the cold water became red with my blood. My mother cried. The next day, she gave me her winter shoes and she wore her flats, which were thin shoes meant for the summer. She didn’t have money to buy new winter shoes for me. That winter, her feet were frostbitten, too.

Since the summer of 1996, the famine went worse than expected. The government still didn’t give us any food. I vividly remember that many people died in the street because of hunger. I saw many children, who were my age, begging for food in Jang-ma-dang (North Korean Market), even stealing food. We only had one meal a day for three months. Even my 6-year-old younger sister, the youngest person in my family, wasn’t spared starvation. One morning, somebody knocked on our door quietly, when my younger sister and I were eating our only meal of the day. I thought that it was my mother, who went to the farm to look for food. I opened the door happily, but who I faced was a short, skinny girl. She looked about 8 years old, same as me. She had a pale and fearful face. Behind her, a little boy was smiling at me. He looked about five years old and had a red, dirty face. They wore ragged clothes. The girl finally said “Would you please lend us some food? We haven’t had anything to eat since two days ago. My parents went to Cheng-jin to get food and said they would be back in 3 days, but they haven’t come back yet. When they come back, we will have food to eat and I can give you back your food. I swear.”

I looked at her earnest face and said “I am hungry, too. I have no food to give you.” I closed the door coldly and locked it quickly. Even though the girl kept knocking the door desperately for a while, we ate all the corn porridge, which was all we had for the whole day. Now I feel sorry for them. Sometimes it makes me cry. I don’t know where they went and if anyone gave them food or not. I hope they met good people who were willing to give them food. However, at that time, sharing food was a crazy behavior for me, and for most North Koreans because everyone clearly knew that one day we would die in the street because of hunger if we didn’t look for and save food as much as we can. We had to compete for getting one more ear of corn. Sympathy was an extravagance for us.

Nikola Tesla’s Amazing Predictions for the 21st Century


In the 1930s journalists from publications like the New York Times and Time magazine would regularly visit Nikola Tesla at his home on the 20th floor of the Hotel Governor Clinton in Manhattan. There the elderly Tesla would regale them with stories of his early days as an inventor and often opined about what was in store for the future.

Last year we looked at Tesla’s prediction that eugenics and the forced sterilization of criminals and other supposed undesirables would somehow purify the human race by the year 2100. Today we have more from that particular article which appeared in the February 9, 1935, issue of Liberty magazine. The article is unique because it wasn’t conducted as a simple interview like so many of Tesla’s other media appearances from this time, but rather is credited as “by Nikola Tesla, as told to George Sylvester Viereck.”

It’s not clear where this particular article was written, but Tesla’s friendly relationship with Viereck leads me to believe it may not have been at his Manhattan hotel home. Interviews with Tesla at this time would usually occur at the Hotel, but Tesla would sometimes dine with Viereck and his family at Viereck’s home on Riverside Drive, meaning that it’s possible they could have written it there.

Senate Quietly Curtails STOCK Act Reporting for Political Class Staff

Niels Lesniewski

When the Senate took what was generally viewed as necessary action to scale back an overly broad provision of a federal transparency law Thursday, it did so without much transparency of its own.

With most of the Senate’s attention focused on guns and immigration, the Senate quietly acted to dramatically scale back the reach of the law’s most contentious provision. Absent Congressional action or a court order, the law known as the STOCK Act requiring online publication of financial information for a slew of federal employees would take effect next week.
The Senate bill passed Thursday by unanimous consent goes beyond a simple delay. If passed by the House and signed by President Barack Obama, the measure would exclude legislative and executive staffers from having their financial disclosure forms posted on the Internet. The new reporting requirements would still apply to the president, vice president, members of Congress, congressional candidates and individuals subject to Senate confirmation.

Congress has previously delayed implementation of pieces of the STOCK Act without much fanfare, but the earlier cases came before a National Academy of Public Administration report produced at the request of Congress and released last month showed serious national security risks with publication of the information in a more readily available format.

Senator’s insider trading yields above market returns.

More via the Financial Times.