The Editor's Back Fence

If you're confused by sloppy reporting and political propaganda about "the California housing crisis", two recent articles by Bob Silvestri at the Marin Post, complete with excellent graphics, should help you understand what's happening. Here are links—read them and learn what's up with development politics.

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The Dow Jones, CalPERS, and Us

Economic theory suggests that central banks can stimulate consumer demand, business lending, and the economy in general by lowering interest rates in bad times. At the same time, the stock market is generally considered a reflection of the health of the economy, i.e., if the market is booming it portends good times, ahead.So, then why has the Federal Reserve been cutting interest rates when the stock market is making new all-time highs, almost daily? They have usually only done that when they see the markets faltering. As a casual observer, you start to wonder if they are afraid of what might happen if the markets did fall, even just a little.

Assuming that the Fed hasn't totally lost its way and isn't being guided by the tweet of the day, the question is what is their reasoning? And most importantly, why should you care?

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When the housing “crisis” meets a financial crisis, who will pick up the tab?

The Governor of California recently signed a slew of housing incentive laws, designed to wrest control of planning, zoning, and project permitting approval away from locally elected governments by imposing top-down, state-mandated control. These laws will add significant infrastructure cost burdens on local taxpayers, to accommodate the growth being incentivized. These laws also remove many environmental protections and in some cases completely eliminate existing public-process protections under the now tattered California Environmental Quality Act.

As explained in recent Marin Post articles, the premise that supports these dramatic changes is based on faulty and politically motivated “need analysis,” not demonstrable facts. And, the end of this appears to be nowhere in sight.

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