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Rex Peterson AIA
Baker & Associates
Scottsbluff NE
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This part of the message got my attention.
"Unfortunately, in light of the economic conditions and the AIA's seemingly lack of real proposals to influence Washington to do real positive changes in our economic growth"
Larry has practiced long enougn to remember the Savings and Loan bust. Arizona was one of the places impacted by it. The savings and loans got into trouble making construction loans to help people turn dollars into real property as protection against inflation. Inflation was brought under control and they suddenly lost their appitites for second and third homes especially since there was serious discussion about not allowing interest deductions on second homes. It took years to absorb all that housing before the economy took off again.
This recession is quite similar. This time the economy was super heated in part by the Chinese central bank shortchanging workers in currency exchanges and then using the accumulated cash to invest in US bonds. That made money for housing cheap and very easy to access. There were lots of other problems and now the money market is less subject to those other abuses. Now we have a lot of housing that people really couldn't afford that is selling for a loss compared to the original investments. Once again, it will be years until it is absorbed.
In their article on the American Recovery and Reinvestment Act, Wikipedia has a pretty good graphic and listing that shows less than 1/8th of ARRA was actually infrastructure investment. Not show is that it now has additional paper work and restrictions. Spending on buildings was about one percent --not much different from government as usual. The rest was pretty much government as usual with extra for unemployment benefits and local goverment jobs. The tax credits were mostly accelerating depreciation which costs in the short term but not the long haul. Some of us benefited from ARRA, but it lacked the power to make a noticable stamp on the country the way the Works Progress Administration did.
That brings me to the last consideration. Less that ten percent of the population in this country actually creates wealth by growing things, mining, timber, manufacturing or construction. The rest of us give advice, insure it, haul it around, sell it, regulate it or take care of it or the people in this country. Compare that to the WPA period when most folks created wealth and few were in the service sector. In my opinion, that makes it very difficult for the government to make an impact in the economy by buying more stuff. Our productivity is such that just a few people make a lot of stuf. As a result, a big expenditure is going to just tweak the unemployment rate.
Said another way, each of us has a very good chance of not seeing any direct benefit from any lobbying the AIA might do to stimulate govermnet spending in housing, hosptials, or schools. AIA proposals to affect the economy are absolutely irrelevant to my renewal of membershp. My appreciation of the AIA has to do with the opportunities to be colleagues rather than competitors.