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

[Michael Huber]

Shivas,

Can't you make that same sort of arguement about any generation?

[PThomas]

Paul:  you're a good Midwestern example.

How many TVs were in your house growing up?  How many are in your house now?

When you were a kid, how many people did you know that had only one car ?  How many people do you know now that have three?

Did you know anybody who had two refrigerators when you were a kid?  How many people have at least two today?

How many winter coats did you have as a kid?  How many do your kids have today?

See what I mean?  We all have way too much stuff!  The concept of getting by without has been a buggywhip for about 20 years now, but it's soon to become "the new normal", if it hasn't already.

agree...Cable TV is no longer a luxury for many/most....

i think a lot of the too big houses that were built are great examples....every kid does NOT need his/her own bedroom, they dont all need their own TV.......i alos think its such a waste when houses have those giant foyer areas, oftne two floors big, that are basically dead air ...also, rooms with walls that are 15 feet high..talk about dead space that also increases your heating and cooling costs

i think the "thrifty" way of life has alreaddy caught on with many people and will continue to do so..

[mike_malone]

 25 years ago it took $1 and change of debt to get $1 of GDP. A couple of years ago we needed $5 to get that $1 of growth. We kept spending beyond our means supported by asset inflation. This is now done. I have a chart that shows the growth of financial profits and debt over the last 25 years. What do you know ? They track together. I have  two other charts that are shaped like big "U" 's  that show the deregulation of the financial system from the 20's until 2008 and the wages as a % of the population for the financial industry.  In the 20's the dereg was high and the wages were high then this fell and stayed down until the 90's when the right side of the U was formed. The second "U' is the % of income from the .01% of the population.


    My observation is that it is much easier to make people rich at the tops of bubbles by moving pieces of paper around then by actually creating something. This paper wealth is really an illusion that ends up being shattered. Usually when the end comes the first response is to save the financiers. This fails and eventually and hopefully we try to save the country.

     Expensive golf gets crushed.

  

[Phil McDade]

Paul:  you're a good Midwestern example.

How many TVs were in your house growing up?  How many are in your house now?

When you were a kid, how many people did you know that had only one car ?  How many people do you know now that have three?

Did you know anybody who had two refrigerators when you were a kid?  How many people have at least two today?

How many winter coats did you have as a kid?  How many do your kids have today?

See what I mean?  We all have way too much stuff!  The concept of getting by without has been a buggywhip for about 20 years now, but it's soon to become "the new normal", if it hasn't already.

 

Shivas:

You must be one heckuva parent if you can get your kids to actually wear a winter coat. I'm long on sweatshirt manufacturers and short on coat makers.

But seriously, isn't there some law of economics out there that suggests consumer consumption follows pricing? TVs were incredibly expensive, relative to household income, back when I was growing up (born in 1961). I'm guessing cars were, too (although I think gas was probably cheaper back then relative to household income than today). Heck, I remember when it was a really big deal when my Dad brought home his first Texas Instruments calculator (I think he still uses it...); now calculators are key chains. More to the point, in my teens, I remember having to buy -- at probably four different stores -- a set of speakers, a turntable, a receiver, a needle, and a tape deck -- all so I could listen to my LPs and tape them for friends. I distinctly remember -- in the 1970s! -- spending well north of $200 for all that. My I-pod cost less than half that, and I don't have to get up and change the freaking record every 25 minutes! That strikes me as the free market system working nearly ideally.

I'm not sure we've bought too much stuff, of the kind you cite. If you go into too much debt to buy it, yes. But if not, I'm not sure I see the harm. Then again, as the great Bernadette Peters said in "The Jerk" when she realized she and Steve Martin were about to go broke: "I don't care about losing all the money. It's losing all the stuff."

[Mike Sweeney]

Corporate America is sitting on almost $1 trillion in cash:

http://finance.yahoo.com/news/US-companies-hoarding-almost-rb-2687745036.html?x=0&sec=topStories&pos=1&asset=&ccode=

Maybe things are not quite as bad as some people think.

Yes, but they are SITTING on it. From the article:

Technology companies held the most cash as a sector, at $207 billion, followed by pharmaceuticals with $124 billion, energy at $105 billion, and consumer products with $101 billion, Moody's said.

I was at a BioMedical conference last week and the question was raised about Big Pharma partnering with small start-ups trying to get through the FDA approval process.

There were probably 6-8 Big Pharma bodies there out of 150 or so, and non of them wanted to be on record for anything. Basically they want to be sales and marketing machines. Until they get direction from Washington/Obama/economy, they would rather pay a premium for an approved drug than risk capital on a drug in the FDA process.

I think we are seeing that in many industries. We can talk about economic theory all day long, but confidence in leadership would go a long way right now, and I don't see that really changing next Wednesday after Midterms.

[Terry Lavin]

Let's face it. The experiment needs to be tweaked.

Over turn Marbury v. Madison and make the Judicial branch carry their weight before a bill becomes law. Ending the influence peddlers in congress, or at least extending that influence peddling to the judges, too.

I'd love to hear all the Lawyers tell me why the above is nutz?

What a pearl of wisdom!  Thanks for sharing!  Where do you get your lessons in Constitutional Law?  Glenn Beck?

[David_Tepper]

"Yes, but they are SITTING on it."

Mike -

Yes, you are right. The money is sitting on corporate balance sheets and is earning about 0.25% or less. At some point, granted it may be a little later than sooner, corporate boards are going to realize (and shareholders are going to demand) that money has to be put to work, either on capital expenditures, acquisitions, dividends or share buybacks. It will happen.

DT    

[Jeff Goldman]

Noel,

Good, real response based on economics.  However, except to the extent that the true "austrian" (Hayek) favored national health insurance, they have been wrong, wrong, wrong wrong in every prediction about the current predicament we find ourselves in, and in most of their prior claims about economics.  Recall their dire predictions that the Clinton tax increase would result in an immediate depression.  I suppose that doesn't matter because times have changed.  Recall Milton Friedman's prediction that all Japan had to do was expand the monetary base.  They doubled it, and nothing happened (same for us in the Depression).  Austrians are essentially ideologues, and don't care much at all for models or real analysis.  I assume that's why you refuse to credit any past evidence as indicative of anything.  I also think that very few Americans would say that the market should be unfettered, and that the answer to Thalidomide is that once enough kids were born without arms or legs, the drug would be taken off the market.  With Tort Reform, certainly there would not be much economic incentive to stop selling the stuff.

I got a meeting, but maybe I'll toss in more later.  Or talk about architecture, which would be more fun here.

Pat,

I don't disagree with the fact that many clubs are in trouble, but the mortgage interest deduction and government debt is an interesting bugaboo to put it on.

Finally, anyone remember the movie "The Verdict" where Newman wants to turn down a big settlement and try a case, and says to Jack Warden -- "you said to me, if not now, when?"  Warden replies, "I know I said not now, but NOT NOW."  Eventually we got to cut the debt, but NOT NOW (don't forget, borrowing a trillion costs the gov't $20 billion a year, at most, which, oddly, is not a big number)
 

[Adam Clayman]

Let's face it. The experiment needs to be tweaked.

Over turn Marbury v. Madison and make the Judicial branch carry their weight before a bill becomes law. Ending the influence peddlers in congress, or at least extending that influence peddling to the judges, too.

I'd love to hear all the Lawyers tell me why the above is nutz?

What a pearl of wisdom!  Thanks for sharing!  Where do you get your lessons in Constitutional Law?  Glenn Beck?

No, I make this shit up myself.

I specifically was hoping to get a cogent response, especially from YOU. (Just like your last PM to me)

Face facts, your branch of this experiment does neither check or balance, these lawmakers.

Thanks for not disappointing.

[PThomas]

Noel,

Good, real response based on economics.  However, except to the extent that the true "austrian" (Hayek) favored national health insurance, they have been wrong, wrong, wrong wrong in every prediction about the current predicament we find ourselves in, and in most of their prior claims about economics.  Recall their dire predictions that the Clinton tax increase would result in an immediate depression.  I suppose that doesn't matter because times have changed.  Recall Milton Friedman's prediction that all Japan had to do was expand the monetary base.  They doubled it, and nothing happened (same for us in the Depression).  Austrians are essentially ideologues, and don't care much at all for models or real analysis.  I assume that's why you refuse to credit any past evidence as indicative of anything.  I also think that very few Americans would say that the market should be unfettered, and that the answer to Thalidomide is that once enough kids were born without arms or legs, the drug would be taken off the market.  With Tort Reform, certainly there would not be much economic incentive to stop selling the stuff.

I got a meeting, but maybe I'll toss in more later.  Or talk about architecture, which would be more fun here.

Pat,

I don't disagree with the fact that many clubs are in trouble, but the mortgage interest deduction and government debt is an interesting bugaboo to put it on.

Finally, anyone remember the movie "The Verdict" where Newman wants to turn down a big settlement and try a case, and says to Jack Warden -- "you said to me, if not now, when?"  Warden replies, "I know I said not now, but NOT NOW."  Eventually we got to cut the debt, but NOT NOW (don't forget, borrowing a trillion costs the gov't $20 billion a year, at most, which, oddly, is not a big number)
 

very interesting stuff Noel and Jeff...pls continue!

[Phil McDade]

One of the things that's missing from all those to-ing and fro-ing is this question:

Is Pat's central premise wrong?

Are clubs in trouble for reasons other than what Pat cites (essentially, federal tax-code changes)?

I think they are, and although it's seemingly so obvious it hardly bears mentioning, it hasn't been for seven pages of this thread.

Who has time for a country club anyhow these days?

Shivas -- my opinion of whom dropped noticeably when he went and joined a country club recently -- famously once replied on a similar thread that he didn't have time for a weekend game at a club because he was taking his kids to a water park in Sheboygan, e.g., families just work differently than they did in Pat's generation.

This is a guess, and an incredibly broad generalization (and I've never met Pat), but I'll make it anyway -- families in which the Dad worked, Mom stayed home, Dad played the weekend game at the club, and the family all joined for Saturday dinner and the occasional Sunday brunch at the club, are few and far between. I'm guessing Pat grew up in a family like that. I don't know anyone like that. Now, both parents work, the Dads (and Moms) are helping to coach the kid's soccer/baseball/softball team, they're running around to games and tournaments 30 weeks out of the year, and when the family has a free weekend, the kids want to go to a waterpark (who can blame them?).

And that's not all -- look at what's become successful (relatively so) in the golf industry in the past two decades -- the high-end public course/resort, based largely on the premise of giving golfers the kind of experience they could previously only get at a private club (see Kohler, see Bandon, see any public course built by Fazio and Nicklaus...) So if my time is limited for a good game, why bother with the minimums and yearly assessments to finace the club's pool -- I'll just splurge on a nice weekend at Kohler.

What's a private club to do? Some have done the big clubhouse/swimming pool/tennis-squash court route, to attract families and income (weddings, parties), and my guess is that only the well-endowed (meaning those able to do this relatively debt-free) will make it through this. Some just focus on golf (Blackhawk CC, in my backyard here in Madison) and try to lure new golfers with discounted entry fees, hoping to weather this storm.

But the demise of private country clubs -- although I don't think Pat overstates his concerns -- doesn't strike me as tied exclusively or even closely to federal tax codes. It's much more tied to how families -- good or bad -- work and play these days.

[JC Jones]

Let's face it. The experiment needs to be tweaked.

Over turn Marbury v. Madison and make the Judicial branch carry their weight before a bill becomes law. Ending the influence peddlers in congress, or at least extending that influence peddling to the judges, too.

I'd love to hear all the Lawyers tell me why the above is nutz?

What a pearl of wisdom!  Thanks for sharing!  Where do you get your lessons in Constitutional Law?  Glenn Beck?

Terry,

Hilarious.

[Carl Nichols]

Let's face it. The experiment needs to be tweaked.

Over turn Marbury v. Madison and make the Judicial branch carry their weight before a bill becomes law. Ending the influence peddlers in congress, or at least extending that influence peddling to the judges, too.

I'd love to hear all the Lawyers tell me why the above is nutz?

Adam:
You wouldn't want to overturn Marbury. . . .

[Peter Pallotta]

For 60 or 70 years, our standard of living in North America has been propped up/subsidized by the countries and people of Asia/South East and South America.  Those subsidies are now over.

[David_Tepper]

Just some of the financial news headlines today:

- Potash profit soars, 3Q earnings nearly double
- Starwood posted better than expected 3rd quarter earnings
- Exxon Mobil 3Q income jumps 55%
- Bunge profit tops estimates
- Pinnacle's 3Q adjusted earnings surprise Street (in a good way )
- Mead Johnson profit climbs 9%
- Chemical giants post strong Q3 results
- Lubrizol 3Q profit rises 24%
- Colgate-Palmolive's 3Q net income rises
- Artic Cat share jump on 20% higher profit
- Kodak shares soar on earning surprise

There is still plenty of bad news out there, but maybe, just maybe, things are getting better. Whatever, you do, don't let the facts get in the way of your opinions.  

  

[Patrick_Mucci]

Jeff  Goldman,

Government debt, other than the need to fund it by raising taxes was never a part of my original question, which dealt with the interest deduction on home mortgages, child tax credits and the loss of all deductions with respect to employee premium payments for health insurance.

My point was that local clubs are already in very, very serious trouble with no relief on the horizon and that the elimination of those three items would substantially reduce disposable income resulting in resignations from clubs, further exacerbating an already tenuous situation.

I suspect that if those items were lost, a good 10 % of members would resign, maybe more.

Once a club starts a financial death spiral it's hard to stop it and it won't be long before there aren't enough remaining members to sustain the club.

What I'm surprised at is  that you, more than any of us, should know the financial facts, the number of marginal members and the impact that additional financial adversity would have on a club.

[David_Tepper]

Pat M.

Per this article: http://finance.yahoo.com/news/Byebye-tax-breaks-1-cnnm-3195718100.html?x=0

The deduction of mortgage interest on primary residences is not likely to be eliminated. The limit of the deductible amount of the mortgage loan is likely to be lowered over time from $1.1 million to $500,000. This article does not imply that the deduction for mortgage interest will be eliminated entirely.

Here is something you have not mentioned and you should consider. Mortgage interest rates have come down substantially over the past 2 years. The interest rate on our mortgage went from 5.50% to 4.25%.

An enormous number of households have refinanced at lower interest rates and actually now have more disposable monthly income than they did just a year or two ago.

DT     

[Noel Freeman]

Jeff-

Governments manipulating asset prices never works, that is what the Austrian school says, we can argue economic theory if you want but all schools get it wrong at some level and intuition and common sense (which is not very common) tells you when someone manipulates the price of an item, it isnt good for the underlying economics--DeBeers and diamonds is another story.. Long term analysis of economic data suggests that higher debt levels are not correlated with higher GDP growth rates.  Lowering interest rates which the Fed in concert with the treasury has done is useless if it encourages more debt b/c it doesnt expand GDP.  People are nuts and or stupid even pensioners if they think that having an interest rate of say 5pct is good for them.. If rates are 5pct but inflation is 7pct it is the same as rates at 0% with inflation at 2pct but most people are too uneducated to realize what real interest rates (adjusted for inflation) are.  There is no moral hazard any more, no more sacred cows and no personal responsibility, the govt will solve all your needs.  Sure!  Here is how a free market libertarian would want things..If a bank elects to write a mortgage and not do their due diligence and check out if the buyer can repay the loan and they do this enough times, they won't be bailed out.. If depositors dont do that same due diligence with where they put their money they can be out their savings outside of FDIC limits (that is if the FDIC is properly capitalized).  That is how it should work, but people are lazy and want to suckle upon someone's largess to solve all their problems.  Electing a politician does what? Honestly what?  The government should provide safeguards, promote the national defense and pursue prudent economic policies with a minimum of intervention.  Instead our lovely country decides to promote wars that make no sense other than to those who believe it protects good americans and lets us go to target or wal mart and buy chinese goods.  Great, long live the consumer and who cares about that Iraqi or Afghan family that has to see some alpha male US soldier armed to the teeth walking in their towns.  I'm reminded of Chevy Chase in Spys like Us--We're Americans!.. Would any American in say Oxford Miss. be happy with an Afghan platoon walking around to help their rights-- So my point is the defense budget is nuts and is not a sacred cow in my view but Eisenhower was he on to something in that damn military industrial complex..

Okay back to economics.. Let me let you all in on a little secret... Lower interest rates ALWAYS transfers wealth from retirees (debt owners) to corporations and to the financial industry. Right now there are a lot of americans who are aging due to baby boomers (and those people are the ones who Pat believes won't afford golf) and corporations have large balance sheets but are avoiding capital spending b/c 1) they don't trust the Fed nor Govt.. and 2) honestly they don't see demand rising so they hoard cash.. Just like banks do! Who are you going to loan to? Your consumer has HORRID balance sheets and has too much debt!  Household balancesheets are the opposite of corporate ones!

So here is it in a nut shell, the Fed prints money, the stock market goes up, people feel they are wealthier but $ goes down b/c foreigners are not buying US assets.  The artificial move in asset prices causes a misallocation of resources (dotcom booms) and housing boom.. The cycles go on and on and on like Journey's don't stop believing.  That is my point, cycles, the business cycle.. Govts make it worse and longer, if they let things go naturally it would be smoother.. Nature culls the weak, governments prolong it.

Dont get me started on a treatise on Japan, it is an area for me of expertise (Ive dealt tremendous amounts of their debt in my career).  Japan failed exactly b/c we are doing the same thing here. They used creative accounting and let zombie banks and companies live..

Lucky for me and you, I'm traveling so adios for now.

[Ted Kramer]

Again, Ayn Rand tells the story so well in Atlas Shrugged . . .
I promise, I won't say it again - in this thread anyway

Best,
Ted

[Dan King]

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

[Adam Clayman]

Let's face it. The experiment needs to be tweaked.

Over turn Marbury v. Madison and make the Judicial branch carry their weight before a bill becomes law. Ending the influence peddlers in congress, or at least extending that influence peddling to the judges, too.

I'd love to hear all the Lawyers tell me why the above is nutz?

Adam:
You wouldn't want to overturn Marbury. . . .

Carl, I'm no lawyer, don't know boo, other than things are not working the way our founders had envisioned.

I believe you when you say that, but, what needs to be changed is the way business is done as usual in Washington.

As I understand it, M. v. M. makes me spend my blood sweat and treasure to petition the court that any law is unconstitutional.

My thinking is that if we get rid of that aspect of the decision, and allow the Judicial Branch to edit the laws that are being passed, prior to becoming law, they would be able to cut out all the Pork and waste that get attached to laws, needed to garner votes. It speaks more to how the business of Washington is done, and that's my only suggestion.

Please tell me why I don't want it over turned?

I asked because I'm curious. Terry's comment, and JC's invaluable contribution, are unnecessary, and shows how easy these discussions can turn personal, and then less civil.

[Tim Martin]

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

Dan-I love the Lyndon Johnson quote. Politicians from that era could say a lot more in a lot fewer words.

[JC Jones]

Carl, I'm no lawyer, don't know boo, other than things are not working the way our founders had envisioned.

I believe you when you say that, but, what needs to be changed is the way business is done as usual in Washington.

As I understand it, M. v. M. makes me spend my blood sweat and treasure to petition the court that any law is unconstitutional.

My thinking is that if we get rid of that aspect of the decision, and allow the Judicial Branch to edit the laws that are being passed, prior to becoming law, they would be able to cut out all the Pork and waste that get attached to laws, needed to garner votes. It speaks more to how the business of Washington is done, and that's my only suggestion.

Please tell me why I don't want it over turned?

Adam,

Your beef is with Article 3 of the Constitution.  I know very little of M v M and haven't read it since first year of law school but if I remember correctly, very basically, M v M is the case that gave (through interpretation) the judiciary the power to render a law unconstitutional.  If you want the judiciary to have more law making power my guess is that you would not start with overturning M v M but rather, amending the constitution.

I asked because I'm curious. Terry's comment, and JC's invaluable contribution, are unnecessary, and shows how easy these discussions can turn personal, and then less civil.

No, actually, it doesn't.  Your question is, by no fault of your own, far to complex to be answered sufficiently (I probably butchered  it in my attempt above) on a golf course architecture message board.  Terry's glib remarks were appropriately humorous and I acknowledged them as such (think of it as a lawyer inside baseball thing), speaking only to Terry and not to your questions.  Though I will admit that any comparison one were to make with me and Glenn Beck would also be enraging.

What makes these discussions turn personal and then, less civil is, from my observation, not giving the other guy the benefit of the doubt and a failure to see the humor in things.

You are a good man, Adam, many people I know and respect have great admiration for you and I'd be happy to continue a discussion about this via PM or off-line.

[Carl Nichols]

Let's face it. The experiment needs to be tweaked.

Over turn Marbury v. Madison and make the Judicial branch carry their weight before a bill becomes law. Ending the influence peddlers in congress, or at least extending that influence peddling to the judges, too.

I'd love to hear all the Lawyers tell me why the above is nutz?

Adam:
You wouldn't want to overturn Marbury. . . .

Carl, I'm no lawyer, don't know boo, other than things are not working the way our founders had envisioned.

I believe you when you say that, but, what needs to be changed is the way business is done as usual in Washington.

As I understand it, M. v. M. makes me spend my blood sweat and treasure to petition the court that any law is unconstitutional.

My thinking is that if we get rid of that aspect of the decision, and allow the Judicial Branch to edit the laws that are being passed, prior to becoming law, they would be able to cut out all the Pork and waste that get attached to laws, needed to garner votes. It speaks more to how the business of Washington is done, and that's my only suggestion.

Please tell me why I don't want it over turned?

I asked because I'm curious. Terry's comment, and JC's invaluable contribution, are unnecessary, and shows how easy these discussions can turn personal, and then less civil.

Without getting into all of the details, Marbury is the case that (among other things) established that the federal judiciary has the power to declare unconstitutional the actions of the other branches.

[JC Jones]

Let's face it. The experiment needs to be tweaked.

Over turn Marbury v. Madison and make the Judicial branch carry their weight before a bill becomes law. Ending the influence peddlers in congress, or at least extending that influence peddling to the judges, too.

I'd love to hear all the Lawyers tell me why the above is nutz?

Adam:
You wouldn't want to overturn Marbury. . . .

Carl, I'm no lawyer, don't know boo, other than things are not working the way our founders had envisioned.

I believe you when you say that, but, what needs to be changed is the way business is done as usual in Washington.

As I understand it, M. v. M. makes me spend my blood sweat and treasure to petition the court that any law is unconstitutional.

My thinking is that if we get rid of that aspect of the decision, and allow the Judicial Branch to edit the laws that are being passed, prior to becoming law, they would be able to cut out all the Pork and waste that get attached to laws, needed to garner votes. It speaks more to how the business of Washington is done, and that's my only suggestion.

Please tell me why I don't want it over turned?

I asked because I'm curious. Terry's comment, and JC's invaluable contribution, are unnecessary, and shows how easy these discussions can turn personal, and then less civil.

Without getting into all of the details, Marbury is the case that established that the federal judiciary has the power to declare unconstitutional the actions of the other branches, so you wouldn't want to remove that power from the judiciary.  Marbury also doesn't prohibit federal judges from doing what you are advocating, which is to amend laws on purely policy grounds, even before passage.  But I'm not aware of anyone who believes that the Constitution grants the federal judiciary that power--which would be remarkably undemocratic, since it would permit unelected judges to change duly enacted laws simply because the judges disagree with them.  (As JC notes, Article III of the Constitution would also pose a barrier to this approach, since it allows the federal judiciary to decide only actual cases and controversies, not to amend statutes.)

Thanks, Carl!

I guess a blind squirrel finds a nut ....