Maggie's Farm

You know, that chart on employment looks somewhat similar to another:
http://www.streettalklive.com/images/stories/1dailyxchange/housing-totalactivityindex-022412.png

Difference is, apparently, the final bump in housing until 2006, but both 'stabilized' at roughly the same time.

Which is leading the other? My guess is housing, since it's an indicator of construction activity.

I agree, and I think your decision, for now (and possibly some time to come) was correct.

There is a bit of an issue with this, though. Actually 2 related issues.
First is the relationship of rental property rates to mortgage payments. People don't buy a house based on a 'price' but on the ability to make the monthly payments related to that price. A good example is when I purchased my condo (now a rental unit). I was paying rent in the NYC area, but discovered that buying a 2 bedroom and renting out one room would give me roughly the same monthly payment as my rent - while building equity. Many home buyers make a similar assumption. Someone in my office is asking me about my hometown because she has realized her rent is getting so high it makes sense to own.

The second, related, issue is that much of the current "recovery" in construction is in multi-family and rental units. Simply because renting is booming, the drive to add property is there. Makes sense. That's what price signals are designed to do - prices go up, find a way to increase supply. This, however, will have a dampening effect on rental rates over the longer term, and thus inhibit the ability of home ownership to occur......or at least keep home prices from rising.

If home prices don't rise, or at least if they don't remain where they are, the number of defaults will continue to rise. As defaults rise, bank liquidity decreases. Liquidity decreases, rates go up (unless the Fed buys up the bad debt until doomsday, as they seem intent on doing...which eventually has an impact at some time, just not today), and prices fall and people get laid off, etc.

I'm not against the rise in rentals, since I'm a landlord. It works for me. I'm just concerned about the long term effects of a non-recovery in construction and housing.

I'm no expert, but I agree to a point.

A non-profit should be engaged in something which is beneficial to society as a whole. A private educational institution, for example.
Or a group which is geared toward improving community or society through small social or community improvement projects (Boy Scouts or Girl Scouts).
Even religious organizations.

However, there is a line which is often crossed. As a former Knights of Columbus member, I was surprised to learn the organization started as a means to insure the poor and excluded Catholics who were being denied the ability to purchase insurance. These people banded together and formed their own insurance company under the arch of the Catholic Church, providing themselves a cover of the First Amendment, and started a non-profit insurance company.

The KofC do many excellent and good things for community in general. The money they doled out to non-Catholic families who were impacted by 9/11 is little known. But in many cases, the KofC provided the first checks to families who had lost a source of income.

On the other hand, their insurance arm offers extremely competitive rates simply because it is a non-profit. I still get my insurance through Northwest Mutual (whose rates are just as good), but I was shocked to learn just how many benefits the insurance arm received by being part of a religion based organization and being non-profit.

In the end, I wonder how much benefit you glean by 'taxing' a not for profit organization? Traditionally, you tax profits. If there is no profit to tax, then there is nothing to gain.
Property taxes, in the case of KofC insurance, probably should be something which is not exempt. On the other hand, I'd have a hard time justifying taxes on the Boy or Girl Scouts.

As for salaries, I agree wholeheartedly. When I was looking for work, several people encouraged me to find work at non-profits because the pay structure was so good. I know several people who have lived in different countries and are now working in home offices of worldwide non-profits. Their salaries, when they were mobile, were low. Today, working in the home offices, they are paid very handsomely. It could be related to the regions in which they live. The cost of living is very high. But if this is the case, non-profits have incentive to move to areas where costs are lower, because it would allow them to put more money at work.

It's an interesting thought. But, as I'm fond of saying, there are sometimes no solutions, just trade offs. I suppose if we trade off taxes and a regulation limiting non-profit salaries, we may see fewer of them and fewer 'good' works being accomplished.

Deciding where to draw the line is the key point. BillH, I completely agree that public and union pensions should not be tax-exempt unless all pensions are. On the other hand, if that's the case, then the pensions themselves should not be counted as part of a firm's balance sheet and used as part of decisions to buy and sell. I remember many of the purchase and break ups of corporations in the 1980's and 1990's was driven by overfunded pensions offering massive free cash to a highly motivated and leveraged opportunist.

These same pensions are facing difficulties now.

I should rephrase "a non-profit should be engaged in something beneficial".....

Let's say "An UNTAXED non-profit should be engaged in something beneficial"

You could start anything to be a non-profit. Even a business.

I think you mean, in the case of Y2K "staved off the POTENTIAL for worse consequences."

There is little evidence that anything at all would have occurred. I worked at a company which chose not to invest in any Y2K remediation, despite warnings of massive failures. I left before 2000, but stayed in touch with people there. Nothing happened.

Because so many companies did spend at least something on remediation, we can never know if the was any benefit from the money spent. All we know is that nothing happened so presumably it was money well spent.

That doesn't change what I wrote. I didn't say there wouldn't have been issues.

My company had a very large, and old, system in place. I know of some companies that may had some minor problems, despite remediation.

Point is, we'll never know how big a problem it may have been, or if it would've been one at all. The IT fellow at my old company was running around like Chicken Little screaming about Y2K, and everyone just humored him. No budget, no problem. He's still there, if a bit admonished.