The White House will soon make golf/country clubs extinct if

[Jeff Goldman]

Well, I was going to ask Noel what he thought about Adam Posen's analysis of Japan, but apparently he has found better things to do (not really that tough on this one, so I'll just post a link to one of Posen's more accessible pieces about Japan:

http://www.bankofengland.co.uk/publications/speeches/2010/speech434.pdf

Patrick, you mentioned gov't debt and spending very early on as a hindrance to recovery.  Let me ask you this:  If getting rid of the home mortgage deduction and substituting something else, along with other good policies, leads to strong economic recovery and an increase in GDP across the board (the rich, and corporations, are doing fine right now), won't that be good for clubs?

Second, why should we use gov't policy to favor any specific industries or groups?  I would think that most of the folks here, who claim to be economic conservatives, would abhor such practices.

I am well aware of the financial burdens on many private clubs around the US, as well as public recreation place, and that includes some of the best known, formerly wealthiest etc. etc.  It's not a fun situation for most.

[David_Tepper]

"Archie Bunker didn't have a Cayman Islands account or a GRAT and he didn't get food stamps, but he sure as hell took the mortgage interest deduction."

Shivas -

1) Can you reference or cite any credible source that expects the mortgage interest deduction to be eliminated entirely? The information I have seen raises the possibility of gradually reducing the deduction of mortgage interest on loans of $1.1 million to loans of $500,000. How many Archie Bunkers have a mortgage of more than $500,000?

2) Given that you can get a 30-year fixed rate mortgage for under 5.0%, home ownership is currently as affordable as it has been decades. 

3) Despite Pat Mucci's intent to cast the Obama administration as the villain in this drama, the commission that is reviewing the tax code is about as bi-partisan and milquetoast as you can get. Erskine Bowles is the lead Democrat on the commission and that should tell you how middle of the road their recommendations will be.

DT

[Noel Freeman]

NFreeman writes
They used creative accounting and let zombie banks and companies live.

But what did they do about the zombie golf courses?

Cheers,
Dan King

Did you ever think that making a speech on economics is a lot like pissing down your leg? It seems hot to you, but it never does to anyone else.
 --Lyndon B. Johnson

Goldman Sachs bought those golf courses--true story.. they did okay at first then got slaughtered.

[Noel Freeman]

Jeff- Adam Posen? Wow did you do a google search b/c there is no way you know about a US educated economist who is an uber dove (that means loves lower rates/keynesian) but yet sits on the Bank of England governing board.  If you really want extra credit, go read The Holy Grail of Macroeconomics (about Japan) by Richard Koo..

Tokyo is the most dynamic city in the world in my opinion (I've not been to Shanghai)---if you went there you'd have no idea there was a recession. But I will say this, this past May I actually saw bums in public something I didnt see on tours of duty in that fine city in 2000-2001.  But they are going broke slowly and will face massive depopulation which is coming--we all dance with the reaper.

Dan King has reminded me this is not a site where anyone cares about my economic philosophy suffice to say is this, do you believe in the placebo effect?  It solves most of our health issues but we actually believe popping a pill does it--tricking your brain really does the work.  What Posen argues is the fact that Central Bankers have to do something when things get bad.. No one likes to sit on the fence eh? But I posit that letting the natural course of events fixes problems much quicker when it gets to the depth we are on.  The government can try and act responsibly in order to let the natural economic cycle work or it can mettle.. But we never get to see how that works out.. I'm beat, just into hotel and like I said, I really dont think people here want me to get  into economic theory or start drawing IS/LM models.

[Michael Dugger]

I care.  The Naffer is spot on.

[Patrick_Mucci]

A.G.,

I didn't forget about you.

I'm hoping to have the time to post an extended reply this weekend.
Stay tuned.

http://online.wsj.com/article/SB10001424052748704361504575552080488297188.html

Regarding your comment about my watching FOX News, you should know that I read three papers a day, the New York Times, the Star-Ledger and the Wall Street Journal.  Two Liberal and one Conservative newspaper.

In addition, I watch, MSNBC, CNN, CNBC and FOX, three Liberal and one Conservative station.

Then, if you haven't noticed, I make up my own mind irrespective of what they all have to say.

Each has valid and invalid points and perspectives.

However, the best channels for reporting what actually happens are ESPN and ESPN2, provided they employ extensive video replay so that I can make up my own mind on the calls and not listen to the talking heads.
I do confess to really liking Mike and Mike.

[A.G._Crockett]

A.G.,

I didn't forget about you.

I'm hoping to have the time to post an extended reply this weekend.
Stay tuned.

http://online.wsj.com/article/SB10001424052748704361504575552080488297188.html

Regarding your comment about my watching FOX News, you should know that I read three papers a day, the New York Times, the Star-Ledger and the Wall Street Journal.  Two Liberal and one Conservative newspaper.

In addition, I watch, MSNBC, CNN, CNBC and FOX, three Liberal and one Conservative station.

Then, if you haven't noticed, I make up my own mind irrespective of what they all have to say.

Each has valid and invalid points and perspectives.

However, the best channels for reporting what actually happens are ESPN and ESPN2, provided they employ extensive video replay so that I can make up my own mind on the calls and not listen to the talking heads.
I do confess to really liking Mike and Mike.

Patrick,
I hereby retract the Fox comment. 

I took the incomplete/incorrect/misleading info about the health care legislation to be a rehash of that esteemed network's talking points.  I stand corrected if corrected I should be.

BTW, you could delete both Fox and MSNBC from the lineup and save yourself some time for reputable news gathering AND more golf!

[Dan Herrmann]

Mike and Mike for President!

[mike_malone]

 From what I have read corporations have alot of cash but they have alot of debt as well. They refuse to get caught as they did at the end of '08 when lines of credit were pulled. They are trying to eliminate the need for banks.

   Corporations seem to be the only economic actors who have a grasp of the reality of our economic malaise. They hired the least amount of people since the great depression in the '02/'07 recovery. Do you think they knew the economic growth was a mirage of home equity withdrawals? I think they did. Now they are building cash, hiring sparsely, and investing little. It seems to me they are exhibiting depression behaviour as Robert Shiller has indicated ( lack of "animal spirits").

    Much of the population is currently just hanging on and hoping that Tim Geithner , the world's biggest con , is correct and recovery is right around the corner. Investors seem to be depending on the second biggest con man , Ben Bernanke, who says we are recovering while at the same time plans to buy every bond in the land.


    The lesson for golf clubs is that when massive debt gets delevered asset prices get deflated , budgets get squeezed , and consumption is severely reduced to essentials.

     Now, why am I going to return to my club after my medical leave

    

[Steve_ Shaffer]

Mike,

I think you've hit the nail on the head here: "...consumption is severely reduced to essentials." I think this is more plausible than the theme of this thread.

Those private clubs in our area and elsewhere that are experiencing declining memberships are doing so because people can't justify the expense in this economy ,let alone initiation fees,even if they have the money to spend! The "psychic  rewards" of belonging to a private club are expensive on a cost per round basis and many people are waking up to that reality and are resigning their memberships. For those of us who consider golf as an "essential" there are less expensive options. I can cite numerous examples of quality weekday public golf in this area for less than $40 including a cart. The cost of a cart at private clubs in this area is approaching $30! Weekend public golf is somewhat more costly and slower(unless you play very early.)

Nevertheless, I can understand why you will return to your  club after your leave. I am considering the same option because slow play on public courses is getting to me. 

[Brent Hutto]

Nevertheless, I can understand why you will return to your  club after your leave. I am considering the same option because slow play on public courses is getting to me. 

Not to mention the requirement to use a golf cart. There's pretty much no place in my area to play public golf, walking, on a Saturday morning in May or June. As much as I appreciate many finer points of my club and our course, the one thing that makes returning to public golf out of the question is my insistence on walking when I play even if it is a "prime tee time in season".

Nothing to do with the (illegitimate IMO) topic of this thread but I figure one good rant deserves another...

[JESII]

From what I have read corporations have alot of cash but they have alot of debt as well. They refuse to get caught as they did at the end of '08 when lines of credit were pulled. They are trying to eliminate the need for banks.

At the expense of their share price?

[Jud_T]

Ok,

I will post again on this thread but will steer clear of the politics so as not to ruffle any more feathers and push cocktail hour forward by 7 hours   ...I think Steve is on to something.  It's not just the economics or the politics, it's the environment as well.  I have one close friend who's one of the only people I know who's actually doing better financially than he was before the bubble burst.  He put his membership on hold as he didn't feel it was appropriate to be dropping 20+ grand a year at the club in this environment, and he can easily afford it.  Granted he's not a "core" golfer like all of us here, but perhaps that's the point.  Only those who are passionate about the game AND can afford it will keep ponying up for the right to play the best courses with the best conditioning in a private club environment...

[JESII]

Jud,

I didn't see your earlier posts, but isn't this last one exactly Pat's thesis?

Removing those deductions (in a vacuum) will make that upper middle class of people less well to do. That class is the life blood of the country clubs. I didn't read his post as suggesting that group should get special consideration in the national discussion of pros and cons of tax reform...just that the result of those three items will undeniably have a tremendous impact on OUR (GCA.com) focal point.

[Jud_T]

Perhaps,

But I'm saying that even those who CAN afford to "keep up with the joneses" are keeping a low profile in an environment when what's cool is frugality not ostentatiousness...

[JESII]

Right. And changing those tax structures will reduce the number of those who can afford it.

[mike_malone]

 Jim,

    I think companies are focusing on profitability , survivability, and cleaning up their balance sheets and less so on growth.  Only the big banks and the auto companies got the bailouts. This does drive their stock price down since Wall Street has such a fixation on short term results.  I believe we are in a profound , long term bear market for stocks ,so it makes sense for businesses to do this since stock price appreciation will be difficult to sustain.

  Businees is way ahead of individuals and government in the balance sheet recession/depression.

[David_Tepper]

"So what?  Is that an excuse for the government to swoop in and confiscate the difference"?

Shivas -

Please try to avoid the hyperbole. Nothing I said implies anything of the kind.

I asked you to cite or reference a credible source saying the home interest deduction is likely to be eliminated entirely. Can you do so?

It sounds like the bi-partisan commission appointed by the President may recommend reducing (over time) the deduction of mortgage interest from $1.1 million to $500,000. Realistically, what percentage of homeowners (especially middle-class ones) would be effected by this change? 5%? 10%? Talk about "much ado about nothing!"  
  
Are you at least willing to admit/concede the Obama administration lowered taxes for income under $250,000?

Rant and rave all you like. But don't let the facts get in the way of your bias & opinions.

DT

[JESII]

Mike,

Do you think their "sitting on cash" to control credit risk is the significant contributor to the long term bear market?

[Michael Dugger]

On the local front here in the NW, window giant Jeld-Wen announces their intent to sell their stake in resorts Eagle Crest, Brasada Ranch and Running Y.

Can't be a good sign...

[Bill_McBride]

Jim,

    I think companies are focusing on profitability , survivability, and cleaning up their balance sheets and less so on growth.  Only the big banks and the auto companies got the bailouts. This does drive their stock price down since Wall Street has such a fixation on short term results.  I believe we are in a profound , long term bear market for stocks ,so it makes sense for businesses to do this since stock price appreciation will be difficult to sustain.

  Businees is way ahead of individuals and government in the balance sheet recession/depression.

How do you grow when demand is flat or declining, other than using your hoard of cash to buy other distressed companies?

Demand creation is the bottom line requirement.  Has no one here heard of the multiplier effect?

[David_Tepper]

"5 Reasons Why Americans Are So Wrong About Major Economic Facts" -

http://finance.yahoo.com/news/5-Reasons-Americans-Are-So-atlantic-870082825.html?x=0&sec=topStories&pos=3&asset=&ccode=

[JESII]

David,

Can you clarify for me what the $240B tax cuts have been. I'm serious, not being snide...just looking for a reminder of the policy.

[David_Tepper]

Jim S. -

I posted this back on page 4:

"From today's San Francisco Chronicle: Most Americans don't even realize their taxes went down since Obama became president. In a New York Times/CBS News Poll last month, only 8 percent of respondents said they thought the Obama administration has decreased taxes for most Americans."

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/10/26/BU4O1G1OP9.DTL#ixzz13VaIAzWZ

DT

[JESII]

Thanks David.