All Things in Moderation

Why you never see the black & white Flinstones episodes in the synidcation packages:

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The last real estate bubble couldn’t have been bigger than the Great Depression, could it?

Actually, it was – about twice the size

The following chart compares an index of real estate prices for the 10 years leading up to the peak and then the behavior 5 years after. The Great Depression bubble ran from 1915 – 1925. The US bubble ran from 1995 – 2006.

For those wondering, the Great Depression bear market bottomed out 3 years later down 21% from the end of this chart.

Food for thought…..

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August Case-Schiller came in at 142.84, down 3.8% from a year ago. Home prices are back to Summer 2003 levels. Certainly the chart gives no indication of gathering strength, if anything it looks like we have had a meager (at best) dead cat bounce off the bottom, and are now in a decling channel with lower highs and lower lows. Detroit and Washington DC were the only MSAs that were up while the worst performers were Portland, Phoenix, and Minneapolis. June and July numbers were revised down as well.

Certainly there is nothing to indicate strength in the housing market. We are going into a seasonally weak period and the consumer is in a foul mood as evidenced by the Conference Board Consumer Confidence reading of 39.8, which takes us back to late 08 / early 09 levels.

Obama’s new housing plan will probably be as successful as his earlier ones at stanching the decline in the housing market. It may help a few marginal homeowners stay in their home, but it isn’t going to do anything for troubled homeowners as they have to be current in their payments to refinance. As I discussed before, we have a demographic issue here, with the older first time buyer prematurely entering the market and the younger first time homebuyer not in a position to buy. That leaves the professionals, and they aren’t going to get interested in housing until prices are dirt cheap and we are not there yet. Against that, we have an army of baby boomers who need to downsize empty nests, or simply bought too much home and need to get out. The government is probably powerless to change this dynamic – all they can do is try and redistribute the losses.

Chart: Case-Schiller:

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In  IUOE, Local 513 v. NLRB, 635 F.3d 1233,  the Court stated the facts as follows:

Overton, one morning, noticed that a piece of machinery was not properly deployed (an outrigger was not fully extended), which was a safety violation. Ozark’s safety rules — which are incorporated into the National Maintenance Agreement — oblige any employee to report to a supervisor safety violations. Indeed, an employee who does not do so is subject to discipline. Overton did report the safety violation  [***3] and sought to determine who was responsible. After an investigation, another employee and Local 513 member was suspended for three days.

That led the union’s business agent to file charges against Overton for gross disloyalty and conduct unbecoming a union member. (Apparently the union also objected to Overton’s desire to bring in other experienced operating engineers rather than train the union’s members.) The union fined Overton $2,500, which prompted Ozark to file an unfair labor practice charge against the union. The Board’s general counsel issued a complaint alleging that the union violated section 8(b)(1)(A). HN1That section precludes a union from “restrain[ing] or coerc[ing]” an employee in the exercise of his section 7 rights, with the proviso that a union may continue to “prescribe its own rules with respect to the acquisition or retention of membership therein.” 29 U.S.C. § 158(b)(1)(A). And section 7 protects an employee’s right to “to engage in . . . concerted activities” [or] “. . . to refrain from . . . such.” Id. § 157.

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From this background, the case proceeded not on section 7, but on 8(b)(1)(A) grounds.  The NLRB has held for thirty years that  a union violates that provision if a union disciplines an employee member for reporting a safety violation, which he has a duty to report.  The DC Court says that without tying this to section 7 rights the NLRB cannot keep a union from disciplining a member for reporting a safety violation he is under a valid duty to report.  

We are thus on the brink of creating a union workplace where an individual employee dare not report a safety violation he is under a duty to report, save through the channel of his union foreman.  I think this is messy and bad, and may take the Supremes to reverse.

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GAO is out with a report on the difficulty of making health care pricing transparent to consumers. I haven’t ready it yet, but I know this is of interest to several of you, so I’d thought I’d pass it along. I also know I’m way late on a MedPAC post, which I’m working on simultaneously with my client work.

GAO Report on Health Care Price Transparency

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