Are homes affordable yet?

From the Huffington Post:

Buying A House Costs As Much As It Did During 2007 Housing Boom, Study Says

In spite of falling housing prices, it still is as unaffordable to buy a house as it was during the height of the housing boom, according to a new study.

Even though housing prices and mortgage interest rates have hit record lows, buying a house still is as expensive as it was in 2007 — when housing prices were astronomical — because banks are requiring heftier down payments and have stopped letting borrowers make low initial payments, according to a recent study by Andrew Davidson and Alexander Levin of Andrew Davidson & Co., a financial research firm. (H/t the Wall Street Journal.)

Among non-agency loans, the total cost of buying a house (as a percentage of property value) has barely fallen since peaking in 2008 because the “equity cost” — that is, the down payment — has spiked since 2006 and stayed elevated, according to the study. Among non-agency loans, the “equity cost” of buying a house (as a percentage of property value) cost more between 2009 and 2011 than at any other time since the new millennium. The “equity cost” for all borrowers has more than doubled since 2006, according to the study.

So much for housing affordability.

This study demonstrates that the reality of the housing market is more complicated than it seems. Previous studies have found that homeownership now is cheaper than renting — if you can afford it. Renting cost 15 percent more than homeownership at the end of last year, according to recent research by Deutsche Bank cited by the Wall Street Journal. Buying a house is also cheaper than renting in 98 of the 100 largest metropolitan areas, according to research by Trulia, a real estate website.

The 30-year mortgage interest rate hit record lows in May, according to Freddie Mac. That is largely thanks to efforts by the Federal Reserve to bring down interest rates to boost the economy. Housing prices also have continued to fall across the country, according to the S&P/Case-Shiller Home Price Indices. But homeownership still is a distant dream for many.

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45 Responses to Are homes affordable yet?

  1. grim says:

    I really don’t buy into the premise for this piece, there is plenty of 10% down conventional money available, and FHA in the low single digits is still a huge player in the market.

  2. grim says:

    That and the fact that the “affordability” provided by I/O and Option ARM loans was illusory, and shouldn’t ever be compared against.

  3. phoenix says:

    You can make them affordable with a $1 down payment and a 50yr note. Affordability is one part. The question is whether or not it is a good investment. Just like a college degree, housing has now been lumped the same way (maybe it’s not for everyone) (housing should not be looked at as an investment). Big changes from the past thinking.
    Now go ask an older seller if he will sell you his house for 10% more than he paid for it. “Nope, housing and college were a good investment for me, just not for you.” Young people are better off moving to the city to rent, cohabitating, or moving down south where housing prices are closer to what a home costs to build vs funding someone’s lavish retirement plans.

  4. Mike says:

    Good Morning New Jersey & Happy Father’s Day

  5. grim says:

    From the Real Deal:

    Rents in Brooklyn up 10 percent annually

    Brooklyn rents ticked up 2 percent in May and now sit 10 percent higher than they did during May 2011, according to a rental market report released today by brokerage MNS. Studio apartments in the borough now cost an average of $1,791 per month, a 10.8 percent annual increase, one-bedrooms go for $2,354 on average, an 8.3 percent jump from May 2011, and two-bedroom units average $3,077 per month, up 11.6 percent year-over-year.

  6. Essex says:

    Here’s to all the fellas with the courage to reproduce — Sa Lute!

  7. grim says:

    Also from Real Deal:

    Manhattan apartments tip furthest in favor of buyers in last six years

    Amid rising rents, buying a Manhattan apartment hasn’t looked this sensible since 2006. Citing data from appraisal firm Miller Samuel, Bloomberg News reported that in the first quarter the average cost of buying was 20.8 times more expensive than the annual cost of renting, the smallest spread since the end of 2006, when buying was 20.4 times the cost of renting. In the second quarter of 2008, the multiple was 26.7.

    Miller Samuel said the median price of buying a Manhattan condo or co-op in the first quarter fell 0.9 percent year-over-year to $775,000, whereas the median monthly rent jumped 7.1 percent to $3,100. The analysis factors in real estate taxes and maintenance charges, but doesn’t account for mortgage interest tax deductions that would reduce the burden.

  8. Anon E. Moose says:

    Grim [2];

    The ‘heroes’ of that story really stepped up to the bar and put a whole 5% down, rather than taking the coward’s way out and getting a 3.5% FHA loan. We really learned our less from the bubble, huh?

    *BARF*

  9. Comrade Nom Deplume says:

    [7] Essex,

    sometimes I wonder if it was courage or stupidity that made me reproduce. only time will tell.

    in the meantime the girls were very pleased with themselves for my father’s day treat. it included a book on beer and 3 special beers. I guess everyone thought I needed a drink.

    will relax on this father’s day it’s only because I am sore as hell from having done so much work yesterday

    As if. Gotta now the lawn, rip up linoleum, take down a basketball net and backboard, and finish replacing some cedar shakes on my garage. All before monday

  10. Shore Guy says:

    “I am sore as hell from having done so much work yesterday ”

    Well, that and the fact that you were carrying several other families on your back while you were doing it, and those families were berating you the whole time because you still had “more than you need.”

  11. gary says:

    Are homes affordable yet?

    If the monthly property tax payement equals the monthly mortgage payment, ask yourself that question again.

  12. Comrade Nom Deplume says:

    [12] shore,

    It really is that simple, unfortunately.

  13. Mikeinwaiting says:

    Gary 13 We can fix that just rise the rates on the mortgages, at 6 or 7% it should work out. Dripping sarcasm.

  14. Mikeinwaiting says:

    rise = raise, more coffee.
    Oh and happy Fathers Day boys!

  15. The Original NJ ExPat says:

    [1] grim – LOL! I don’t buy into the premise of the “Buying a house is also cheaper than renting in 98 of the 100 largest metropolitan areas”. Do you know when buying will really be cheaper? When you hear people say, “We really, really, wanted to rent, but we just couldn’t afford it. So here we are stuck buying every couple years. We have to keep selling at a loss and buying a cheaper and cheaper house because we can’t afford the taxes. One of these days, maybe when we win the lottery, then we’ll be able to rent.”

    I really don’t buy into the premise for this piece, there is plenty of 10% down conventional money available, and FHA in the low single digits is still a huge player in the market.

  16. Housing will be affordable when me, my armed posse, my kids and my dogs can commandeer any abandoned McMansion we see fit in any part of the Northeast. Alas, this will probably only occur after a year or two of sleeping in the open.

  17. Can’t we all just learn to swim?

    “Rodney King, whose videotaped beating by police in 1991 sparked the L.A. riots, was found dead at his California home on Sunday. He was 47.

    Police said King’s fiancée discovered him at the bottom of the swimming pool at their Rialto, Calif., home, about 55 miles east of Los Angeles.”

    http://news.yahoo.com/blogs/lookout/rodney-king-dead-swimming-pool-160339712.html

  18. Guess Rodney just took a Whitney Houston bath.

  19. Ditto whatever jj said about women who’d rather drink today than be with their dads.

    It’s a friggin’ clownshow in here.

  20. Neanderthal Economist says:

    I dont agree with article either. I was going to put down 20% in 2006 and im going to put down 20% in 2012. The difference for me between those two time periods are 25% lower prices and 100bps lower mortgages. Homes and mortgages are way cheaper for non sub prime buyers. But if they said property taxes are 15-25% over the same period then i couldnt argue.

  21. In the near future, whoever controls highway overpasses and interchanges will control Amerika.

  22. njrereport.com will be the perfect blog for anyone who wants to know about this subject. You know a lot its practically difficult to argue with you (not that I really would want). You absolutely set a whole new spin on a topic thats been written about for years. Fantastic things, just excellent!

  23. chicagofinance says:

    By the way, you missed the part about the King versus Jose Canseco PPV boxing match scheduled for this summer (no joke)…….Vigoda lives!

    New Improved Meat says:
    June 17, 2012 at 1:43 pm
    Can’t we all just learn to swim?

    “Rodney King, whose videotaped beating by police in 1991 sparked the L.A. riots, was found dead at his California home on Sunday. He was 47.

    Police said King’s fiancée discovered him at the bottom of the swimming pool at their Rialto, Calif., home, about 55 miles east of Los Angeles.”

  24. A Home Buyer says:

    I see nothing wrong with a low down payment percentage. We are putting 5% down on a conventional loan (FHA fees dissuaded me from 3.5%).

  25. Mikeinwaiting says:

    AAH…….. Son just came home from work with a bottle of Scotch for me for Fathers Day!

  26. chicagofinance says:

    Check out the Little League home run….
    http://mlb.mlb.com/video/play.jsp?content_id=22349415&c_id=mlb

  27. chicagofinance says:

    Occupy mom and dad’s house
    By MAUREEN CALLAHAN

    Last Updated: 4:27 AM, June 17, 2012

    Posted: 10:12 PM, June 16, 2012

    When Jason Siegel, 23, graduated from Lafayette College two years ago, he was in a better position than most people his age: He had a job lined up in Manhattan (he works as an energy engineer), a decent starting salary of $50,000 a year and a stable relationship with his long-term girlfriend.

    Siegel is still at the job and still with his girlfriend, and — as he was two years ago, upon graduating college — still living at home in Westchester with his mom and dad.

    To which the average functioning adult would say: Why?

    “I didn’t want to start a new job and move at the same time,” Siegel says. “It was too much transition, two huge changes at once.”

    So, as he has since 2010, Siegel commutes 45 minutes each way on Metro-North, averages about nine hours a day at the office, then heads home to the suburbs, where he goes to the gym, has some dinner and hangs around the living room with his folks.

    It’s not quite the romantic, bohemian ideal of being young in New York that’s prevailed for decades, but Siegel and his peers don’t care. They’re not interested in sharing in a tiny walk-up in Long Island City with two other people or sacrificing premium pay-cable packages or dinner at Babbo to pay the cellphone bill.

    “Living at home contributes to a much higher quality of life for me,” says another gainfully employed 23-year-old. He’s not ashamed of his situation, he insists, though he asked to remain anonymous. “I can travel without worrying about money. I go out to not the cheapest dinners, often. It’s especially good. I don’t have to think, ‘Is this dinner next week’s rent?’ ”

    “I don’t have to cook my own meals or shop for clothes — my mom picks up stuff for me,” says personal trainer Amanda Shugar, 23. She works in Rye and has a 12-minute commute. “I’ve been mentally preparing myself for moving out. It’s a scary thing.”

    “I have a very good home environment,” Siegel adds. “My parents let me come and go as I please.”

    Lest you think Siegel is an outlier, he reports that the majority of his friends — all college-educated, all from wealthy backgrounds, all gainfully employed right out of school — moved back in with their parents upon graduating.

    Siegel’s older sister, now 29, also spent her first year post-college living at home. Their father owns a small business, and their mother, a former ballerina, is a dance instructor. Again, not unusually, Siegel wasn’t asked to contribute to the household — no rent, no chores, no running of errands.

    “I don’t think any of my friends were asked to contribute,” he says. “I would’ve been fine either way. I think a lot of it depends on a family’s financial situation. Westchester’s relatively wealthy.”

    At no time since the 1940s have more 25-34-year-olds lived with their parents. According to a 2010 Pew poll, 21.6% of people in this age group are living in a multi-generational home, compared with 11% in 1980 — and since then, those numbers have been rising steadily. Among 18-39 year-olds, 57% get some form of financial help from their parents.

    Most mainstream coverage of this so-called “Boomerang” generation — and the coverage has been copious over the past few years — draws a direct causal link to the recession. This isn’t wrong. But what has been largely ignored is another aspect that’s wholly new: the utter reluctance of people in their early-to-mid-20s to separate from their parents, emotionally and psychologically, and their parents’ refusal to subject them to the real world, so rough with its vicissitudes and general indifference.

    What’s more, according to experts who have studied the phenomenon, these young adults don’t see themselves as forfeiting autonomy by moving back home, nor do they equate financial self-sufficiency with self-esteem. In fact, Boomerang kids who spoke with The Post are quite certain that they, too, are doing their parents a favor — so loved and liked are they, their parents can’t get enough of having them around. It’s an emotional double-helix that, to most anyone over 35, sounds sad and ridiculous.

    But is it?

    “The pattern of leaving and returning to home has changed surprisingly little since the 1990s, even though the economy has gone up and down,” says Jeffrey Jensen Arnett, psychologist and author of “Emerging Adulthood: The Winding Road From the Late Teens to the Twenties.” “What has happened is the emergence of a new life stage. It’s not just tied to the recession.”

    “Emerging adulthood” — an appellation credited to Arnett — is, he maintains, a new stage of human development, one born of social and scientific advances of the last 60 years. We live longer, marry and have babies later, are more educated and less likely to work at the same company — let alone have the same career — over a lifetime. (According to a Pew study, twentysomethings average seven job changes over the course of that decade.)

    “I think it’s a thoroughly modern thing,” Arnett says. “This is the first time that people in their late teens to mid-20s are living a very unsettled life, and it’s normative.”

    This existential limbo may, in fact, have a biological basis: A longitudinal study by the National Institute of Mental Health, which began in 1991, found that the brain doesn’t fully develop until at least age 25, with the maturation of the cerebellum and the prefrontal cortex — the area that regulates emotion — coming towards the end of neurological development.

    “This,” Arnett says, “is the new reality.”

    Yet there’s resistance to Arnett’s theory, both within and without the psychological community. Unlike adolescence, “emerging adulthood” isn’t a stage of human development that affects everyone and therefore can’t be classified as such. It’s more likely more situational and environmental: If you have parents who are highly involved and protective, it makes sense that a young adult might, in turn, be overly reliant on their parents.

    Technology, too, has helped collapse traditional boundaries: Parents friend their kids on Facebook, can stay in constant conversation via Twitter or text, have access to areas of a young adult’s life that were once considered not for parental consumption.

    All of this leaves older generations a bit queasy. America, after all, is a country founded on the dire necessity of independence, the place where the axiom “pull yourself up by your bootstraps” originated. And this makes the kids who choose to work in New York City, yet live plumply and plushly at home, even more curious: What is the point of attempting to make it in New York — the most difficult, competitive, expensive, filthy and gloriously aggravating city in the world — if your game’s rigged, if there’s no real consequence to failing?

    ‘This is a strange country,” says Carl Pickhardt, psychologist and author of “Boomerang Kids.” “We pride ourselves on independence, and yet we’ve protracted dependence. It’s a two-sided deal. It would be different if we had parents who said, ‘Hey — you hit 18 and you’re out the door.’” He laughs. “But that’s not what we’ve got.”

    He’s right: Boomerang kids are the product of what’s been called “c-ckpit parents,” so named because they’re co-piloting, step-by-step, the trajectory of their child’s life, cheating them of the opportunity to develop resourcefulness, self-reliance, the ability to balance a checkbook.

    Pickhardt traces this all back to the publication of Dr. Spock’s “Baby and Child Care” in 1946, which he says introduced the concept of “professionalized parenting,” the notion that there was an algorithm to raising a brilliant, successful child that would be an adequate reflection of the parents themselves.

    “As we increasingly put parenting front and center,” he says, “we ended up protracting dependence in a way we didn’t anticipate.”

    Pickhardt doesn’t subscribe to Arnett’s theory of “emerging adulthood,” but he does believe that adolescence lasts longer than we think, and that the last stage occurs from ages 18-23. And because it takes longer for young people to mature than previously thought, “it creates complications for parents about how much to hold on, and how much to let go.”

    Lena Dunham, the 26-year-old creator and star of the HBO show “Girls” — which features four twentysomethings in varying states of parental dependence — recently told Rolling Stone that she had just bought her first apartment, even though she had been very happy living with her parents in their TriBeCa loft.

    “I understand now that I can always come to my parents,” Dunham said, “or spend the night if I have an emergency.”

    As childish as that might sound, Dunham is also a highly successful and accomplished showrunner who made her first feature film, the critically acclaimed “Tiny Furniture,” when she was just 23. Records show she purchased her Brooklyn Heights apartment for $500,000. Clearly, for her, living at home for a good chunk of her 20s contributed to self-sufficiency in other areas.

    In pop culture, adults who live at home are still largely depicted as losers, and their ages are creeping ever upward (fear of contagion?). The syndicated comic strip “Dustin,” about an unmotivated, 23-year-old college grad who lives with his parents, runs in hundreds of papers nationwide, and it’s telling that Dustin is among the youngest of such current characters. Consider the older-than-twentysomething protagonists of recent films such as “Jeff, Who Lives At Home,” “Stepbrothers,” “Dark Horse,” and HBO’s series “Enlightened,” which stars Laura Dern as a New Age devotee who believes she has all the answers to life, yet lives with her mother and sees no real disconnect there.

    What was once unthinkable for most adults has become a go-to mainstream concept populated by characters so entitled and epically lazy that they can’t even muster up proper levels of humiliation. Compare these fictional scenarios to the infamous 1993 “Seinfeld” episode called “The Puffy Shirt,” in which a jobless George Costanza was forced to move in with his parents in Queens. The humor was propelled by George’s utter mortification and self-loathing. “How can I do this?!” he cries. “How can I move back in with those people? Please, tell me! They’re insane!”

    In the real world, the common reluctance of parents and kids to discuss finances with friends and family — how much they give and get — indicates, at the very least, discomfort. “It is a non-discussed subject,” says Sally Koslow, author of the new book “Slouching Toward Adulthood: Observations from the Not-So-Empty Nest. “I think there’s a residual feeling that it’s not OK.”

    Indeed, if this trend were primarily driven by the economy, the preponderance of a living arrangement so common in other cultures would provoke less anxiety. But the increasing reluctance of twentysomethings to commit to jobs or partners or apartments of their own, to rely on their parents emotionally and financially well into (at least) their late 20s, generates anxiety for the future: that this new generation — the first unwilling to brook any difficulty without parental buffering — will change the very character of the country, and not for the good.

    It’s not just limited to America. In China, for example, where adult children have traditionally lived with their parents until marriage, this current crop of young adults has been dubbed “the strawberry generation” — a pejorative reference to how easily they’re bruised. In Japan, they’re called “parasite singles.” A 2012 study by Australia’s Melbourne Institute found that fewer than two-thirds of middle- and lower-class young adults rely on their parents in any way, while 75% of those from wealthy families are still living with their parents.

    Author Koslow says she was happy, perplexed and concerned when her 25-year-old son, Jed, announced that he’d be leaving San Francisco and moving back home.

    “And then it got interesting,” Koslow says, “because he didn’t seem particularly psyched to get a new job.”

    Koslow found herself grappling with competing impulses: the desire to help her son, which she was financially and emotionally capable of doing, and the fear that she had somehow failed if her 25-year-old was happy to be living rent-free, partying at night and sleeping half the day, not helping with the laundry or the grocery shopping or willing to make the bed, declining job offers that he found unsatisfactory.

    All of which happened.

    “Let’s admit it,” Koslow writes. “Whether we could afford to or not, we’ve spoiled kids to an unprecedented degree in human history . . . Today’s students enter college on a cloud of narcissism.”

    (She forced her son to take the unsatisfactory job and move out.)

    Koslow spoke with numerous experts and parents for her book, and she’s still unsure as to whether c-ckpit parenting is helpful or harmful. Children and young adults raised this way tend to lack “soft skills,” which, not too long ago, were considered rudiments of functional behavior: how to do laundry, balance a checkbook, schedule a flight or call for roadside assistance. One anecdote in Koslow’s book involves a twentysomething young woman who called her father in tears after her car broke down; she did not know to call AAA because she did not know such a thing existed.

    “I think our children are younger than we were at their age,” Koslow says. “Today, 25 seems extremely young. It creates a very tricky parent-child dance.”

    A little over a week ago, Jason Siegel had an announcement: He’d just come from looking at an apartment on First Avenue and 39th Street with two possible new roommates, both of whom work in finance. It’s a new building with “good finishes,” he reports. Though they’re not sure this is the one, whether he winds up here or somewhere else, Siegel says he is definitely, finally ready to move out.

    “I’d like to start engaging with people, have more intellectual conversations,” he says. “My interactions with my parents have been very basic. It’s a lot of small talk, because they’re always there. I think we’ll have a deeper, more meaningful relationship when I move out.”

    Surely, a good knocking-about by the real world will also contribute to those deeper, more meaningful conversations.

    “Parents have to accept that they can do about 60% of the preparation,” Pickhardt says. “As for the other 40% — they have to turn the kid over to reality and let the school of hard knocks do its job.”

  28. Mikeinwaiting says:

    Greek Elections: Investors, Take A Moment To Cheer Pro-Bailout Party’s Victory
    http://www.forbes.com/sites/abrambrown/2012/06/17/greek-elections-investors-take-a-moment-to-cheer-pro-bailout-partys-victory/

    Rally on.

  29. gary says:

    But what has been largely ignored is another aspect that’s wholly new: the utter reluctance of people in their early-to-mid-20s to separate from their parents, emotionally and psychologically, and their parents’ refusal to subject them to the real world, so rough with its vicissitudes and general indifference.

    Boomerang kids are the product of what’s been called “c-ckpit parents,” so named because they’re co-piloting, step-by-step, the trajectory of their child’s life, cheating them of the opportunity to develop resourcefulness, self-reliance, the ability to balance a checkbook.

    I’m sure Mommy feeds them, tucks them in and tells them a story, too. This is f*cking priceless.

  30. cobbler says:

    chi [25]
    I think the whole pattern of young adults staying in the same geography but moving out of the parents’ house much earlier than getting married/starting a family, is fairly recent – and maybe related to the abundance of (using yesterday’s wonderful A. West’s phrase) unneeded and overpaid jobs. Now, that the historically short period of widespread prosperity in America is clearly over, the price of independent living became too high. When you have to pay in excess of $1000 a month for sharing a walk-up apartment, or over $2500 for a studio of your own, the unpleasantness from seeing your parents daily is treated as a necessary evil. From what I know, very few young employed college-educated adults live with their parents in places with cheap rentals/housing like Houston or say Twin Cities; it is mostly NYC/DC/Boston/SF phenomena.

  31. Phoenix says:

    chi [29]

    With a POS cape at 400k with a 9k tax bill, who in their right mind would leave home to buy into an investment that will be worth less money the second they sign the papers to own it? No use in putting down roots anywhere with an unstable job market like this. O% job security, and no gold watch with a pension after 30 years, along with house appreciation of astronomical proportion over the last 40 years. Smart kids today will stay mobile and keep debt to a minimum. JJ is right-housing is an over-leveraged illiquid debt inducing voracious tax parasite. Jack on Three’s Company had the right idea!

  32. Shore Guy says:

    “I think the whole pattern of young adults staying in the same geography but moving out of the parents’ house much earlier than getting married/starting a family, is fairly recent”

    Correct. As is the idea of Grandma and Grandpa living on their own in old age.

  33. Shore Guy says:

    http://www.nytimes.com/2012/06/15/opinion/brooks-what-republicans-think.html

    Democrats frequently ask me why the Republicans have become so extreme. As they describe the situation, they usually fall back on some sort of illness metaphor. Republicans have a mania. President Obama has said that Republicans have a “fever” that he hopes will break if he is re-elected.

    I guess I’d say Republicans don’t have an illness; they have a viewpoint. Let me describe it this way: In the 1950s, Dwight Eisenhower reconciled Republicans to the 20th-century welfare state. Between Ike and George W. Bush, Republican leaders basically accepted that model. Sure, they wanted to cut taxes and devolve power, but, in practice, they sustained the system, often funding it more lavishly than the Democrats.

    But many Republicans have now come to the conclusion that the welfare-state model is in its death throes. Yuval Levin expressed the sentiment perfectly in a definitive essay for The Weekly Standard called “Our Age of Anxiety”:

    “We have a sense that the economic order we knew in the second half of the 20th century may not be coming back at all — that we have entered a new era for which we have not been well prepared. … We are, rather, on the cusp of the fiscal and institutional collapse of our welfare state, which threatens not only the future of government finances but also the future of American capitalism.”

    To Republican eyes, the first phase of that collapse is playing out right now in Greece, Spain and Italy — cosseted economies, unmanageable debt, rising unemployment, falling living standards.

    America’s economic stagnation is just more gradual. In the decades after World War II, the U.S. economy grew by well over 3 percent a year, on average. But, since then, it has failed to keep pace with changing realities. The average growth was a paltry 1.7 percent annually between 2000 and 2009. It averaged 0.6 percent growth between 2009 and 2011. Wages have failed to keep up with productivity. Family net worth is back at the same level it was at 20 years ago.

    In America as in Europe, Republicans argue, the welfare state is failing to provide either security or dynamism. The safety net is so expensive it won’t be there for future generations. Meanwhile, the current model shifts resources away from the innovative sectors of the economy and into the bloated state-supported ones, like health care and education. Successive presidents have layered on regulations and loopholes, creating a form of state capitalism in which big businesses thrive because they have political connections and small businesses struggle.

    The welfare model favors security over risk, comfort over effort, stability over innovation. Money that could go to schools and innovation must now go to pensions and health care. This model, which once offered insurance from the disasters inherent in capitalism, has now become a giant machine for redistributing money from the future to the elderly.

    This is the source of Republican extremism: the conviction that the governing model is obsolete. It needs replacing.
    snip

  34. Shore Guy says:

    Obama’s Drift Toward War With Iran

    The most undercovered story in Washington is how President Obama, under the influence of election-year politics, is letting America drift toward war with Iran. This story is the unseen but ominous backdrop to next week’s Moscow round of negotiations with Iran over its nuclear program.

    The basic story line, pretty well known inside the beltway, is simple: There are things Obama could do to greatly increase the chances of a negotiated solution to the Iranian nuclear problem, but he seems to have decided that doing them would bring political blowback that would reduce his chances of re-election.

    The good news is that Obama’s calculation may be wrong. The blowback he fears–largely from Bibi Netanyahu, AIPAC, and other “pro-Israel” voices–is probably less forbidding than he assumes. And the political upside of successful statesmanship may be greater than he realizes.

    But suppose Obama’s right about the politics. It’s still a little scandalous that he’s imperiling peace and America’s security in order to increase his chances of re-election by 1.5 percent, or whatever the imagined number is. And it’s even more scandalous how unscandalous this is, how people throughout the Washington establishment–in government, in NGOs, in journalism–are so inured to the corruption of policy by politics that almost nobody bothers to complain about it even when it could lead to war.
    snip

    http://www.theatlantic.com/international/archive/2012/06/obamas-drift-toward-war-with-iran/258433/

  35. The Original NJ ExPat says:

    [32] cobbler – I’d say this seems to be not so much the case in Boston, but Boston is a little different in that it is a College destination big town where lots of kids come from the West Coast and NY/NJ and other points. The kids I work with are definitely doing the musical room-mates rent-splitting dance as most of them went to school here, stayed here, but there parents aren’t from here. Also, the parents of college-aged kids I know up here tend to have kids that want to escape to NYC schools, West Coast schools, etc. The kids I work with are mostly engineers and IT types, so perhaps not a relevant sampling and the parents I know that have kids in school, the kids have not yet graduated so that jury is still out too.

    From what I know, very few young employed college-educated adults live with their parents in places with cheap rentals/housing like Houston or say Twin Cities; it is mostly NYC/DC/Boston/SF phenomena.

  36. cobbler says:

    shore [34]
    Not sure about the latter (grandparents). In a traditional society, older folks worked as long as they had strength to work, and kicked the bucket soon thereafter – so having them over at a younger generation’s house for a long while (as someone to take care of) was quite exceptional. Indian, etc. multigenerational families are different, but this is not what America had been 100 years ago.

  37. SRK says:

    32 Cobbler, 34 Shore and 38 Cobbler, Nice observations. Totally agree. Adult kids moving in and out of parents homes is one thing, but increased human longivity and elongated dependent-phase in old-age is an entirely new phenomenon. With enormous aging populations that is looming ahead of us in this century, plenty of questions and plenty of debates to come.

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