With ads promoting offers like this …

… can speculators be far behind? And if speculators get back into the real estate market, the end of the pricing downturn shouldn’t be too far over the horizon.

At least that’s my optimist’s view of this builders desperate highly creative way to move standing inventory.

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If things go according to plan, tomorrow’s LA Times letters section will carry a brief letter from me responding to an LAT editorial that ran last weekend, No Water, No Development.

Because letters to the editor are necessarily brief, I decided to spend some time today to do a more complete fisking of the editorial — even though many of my readers may not find this overly interesting. I do because my business handles public affairs assignments for land developers and water districts.

As background, supplying enough water to all the folks who like calling SoCal home has always been a dicey affair at best, and it’s getting worse.

• California’s population is growing fast — it’s expected to grow from its current 28 million to 38 million by 2030 — and more mouths need more water.
• There’s been a prolonged drought in the Colorado River basin, along with a lot of growth in Arizona, and that’s put pressure on our Colorado River resources.
• The Sierra snowpack’s about average this year, but this is the first time in a few years that it has been, so that supply source is not too reliable.
• Aquifers need replenishment they tend not to get in dry years, so they’re getting over-drawn.
• Global warming advocates read their tea leaves computer models and forecast hotter, drier weather for SoCal.

Then there’s the Greenies. Strip it all away, and their core mission is to stop the growth of the human presence on the planet, and if possible, dial it back some. They’ve discovered that water is one powerful way to do this. As Kieran Suckling, founder of the environmental litigation mill Center for Biological Diversity put it in a 1998 interview with Range Magazine,

Walley: “But what about those people who are suffering during this change?”

Suckling: “As I say, it is not a simple thing. We have entire communities that have grown up in this system of land-based government subsides. To change that is not a painless thing.”

Walley: “You, are creating rural refugees!”

Kieran’s ego finally shows, his speech picks up speed and emphasis: “It’s more than rural. I’m dealing with the Grand Canyon, Hoover Dam and Los Angeles. Thirteen million people are used to getting their water this way, I say that’s great, but we are going to show them a different way to do it!“

Walley: “You are forcing change on society and you are aware of it?”

Suckling: “Yeah! Isn’t that what an activist is! What do you think an activist is? We change society!”

Walley: “Can’t you do this in a humane and gentle way?”

Suckling: “It is sad, but I don’t hear you put that in a direct relationship to the effect on the land. I hear you talk about the pain of the people but I don’t see you match that up with the pain of the species.”

Walley (dumbfounded): “What?”

Suckling: “A loach minnow is more important, than say, Betty and Jim’s ranch-a thousand times more important. I’m not against ranching, it is a job. My concern is the impact on the land.”

A loach minnow is a thousand times more important than Betty and Jim’s ranch — not the loach minnow species, but a single loach minnow.

Backing up this extreme belief with litigation, the Center used the Endangered Species Act to sue to stop the pumps that bring water to SoCal from the San Joaquin/Sacramento Delta, our primary water source. They triumphed, and the result is a 30% reduction in the amount of water coming from NoCal to SoCal.

The fix is a re-tooling of the Delta, which it needs if it is going to survive its current ecologically tenuous condition. Combined with that would be a canal that would bring water south without impacting the Delta — a proposition the Greenies are fighting tooth and nail, natch.

Against that background, the LAT opined that because water is in short supply, development should stop in the suburbs.

During the 20th century in Southern California, city founders made a religion out of building bounteous — and sometimes boundless — suburbs in the most unlikely locations. They assumed that the water their new communities needed to thrive would somehow flow to them.

For the most part, if they made their claim early enough, they were right. Because the state and federal governments poured billions of dollars into dam and canal systems that carried water over vast distances, past far-flung burgs, engineers could almost always find a way to get a little more of it to thirsty towns. In tract after tract, water followed development, rather than the other way around.

Left unsaid in this little history lesson is that there was no greater champion of these programs than one Harry Chandler, the publisher of a little rag called The Los Angeles Times. He had the good sense to realize that if he was ever going to have a world class media empire, he was going to have to get water to LA.

In the 21st century, this ethos of expansion must come to an end. …

It’s a matter of common sense: It is time for development in California to follow the water. Even as our state continues to grow, sprawl can no longer be our birthright. Hydrologically remote regions cannot depend on new sources of imported water for human needs, much less for verdant lawns.

The statement is absurd. If we are to follow the water, then all of the development in California would be along the northern coast, in the northern Central Valley, and in the Sierras — all of which are sparsely populated.

“Follow the water” is an utterly ridiculous concept also because we have the capacity and infrastructure to move water. Any development that is near existing water infrastructure — say the city of LA in its semi-arid desert environment — is as well situated, if not better situated, than one along a natural water source.

Calling for an end to suburban development to fix our water problems is no more a solution than would be a call to have the clouds drop more rain. Neither is realistic.

The LAT then goes through a three-paragraph exercise in diminishing the consequence of environmental and anti-growth laws it lobbied hard for itself. Thanks in part to the LAT’s support, we now have laws in CA that require new development to prove that there is a 20-year supply of water sufficient to meet the community’s dry weather demand.

This water can’t be “paper water,” i.e., contracts for water that isn’t there; it must be provable as real water that isn’t committed elsewhere. Yet the LAT forgets what it lobbied for:

Individual water districts generate the estimates. And some of these districts, in preparing reports for land-use planners, may rely too heavily on “paper water,” flows that exist in legal allocations but aren’t really on hand and may never be. As one former state legislator explains, “If people point to paper water, there’s always enough for everybody.”

But that’s already been litigated, and the case law says the water has to be real. Water districts know this and know they will be sued if they allow development for which there isn’t sufficient water, so they’re serious about their water management plans.

Still, the LAT is negative:

Put bluntly, it makes little sense to depend on new water imports — even if they “exist” as allocations — when planning thousands of new homes in an isolated region. But depending instead on more secure local water supplies — responsibly managed groundwater, gains from conservation, wastewater recycling and reuse — is anomalous to California culture and will be a hard sell.

It is correct that relying on the Colorado River aqueduct and the State Water Project for new water imports isn’t wise; the Hell has been allocated and litigated out of that water.

But what is this about responsibly managed groundwater, conservation and recycled water being a hard sell? The LAT simply does not know what it’s writing about; it’s making things up to create dread instead of optimism.

The dread comes from a fundamentally negative view of authority, which is pretty much a prerequisite for being an editorial writer.

Critics of building-friendly local governments frequently complain that water and land-use officials are controlled by developers, who have long been enthusiastic contributors to political campaigns. Whether that is true or not, it’s almost certainly the case that California water agency culture is loath to say no to developers for a less-pernicious reason: Water districts are in the business of delivering water to local communities — they don’t see their job as determining water use policy — and they don’t like to say no to their customers.

If developers are so powerful, how come the homebuilding industry is one of the most heavily regulated in the country? When I speak on the subject, I usually start with the line, “Did you know it’s easier in California to get permission to cut open someone’s chest and stick a new heart in there than it is to get permission to build a house?”

Builders’ whims are summarily crushed by the Endangered Species Act, the Clean Water Act, the Clean Air Act, the environmental quality acts of the federal government and various state governments, and regulations that require no runoff to leave construction sites, no grading during bird nesting season, no construction noise near nesting birds, strict building limits in fire zones, and that they fund roads, parks and schools.

Clearly, the idea that developers buy influence has plenty of proof against it and precious little for it.

And as for water districts, their mission is to provide a reliable source of safe water and an environmentally sound treatment of wastewater; it is not to grow. They have done wondrous things to account for growth, applying specialized engineering expertise creatively to bring water to people who need it, and to conserve it as much as possible.

In district after district throughout California, an emphasis on conservation and water recycling has allowed them to meet growing demand with the same amount of water. That goes for LA too, by the way.

But the LAT thinks it’s all a wasteful game, especially when it comes to how the editorial writer thinks we should live; not with the suburbs’ safety, cleanliness and recreation, but as the editorial writer him/herself no doubt lives, in a dirty and dour urban setting that oozes with “more green than you” snottiness. (More in a bit on why that’s false snottiness.)

The editorial wants us to “follow the water” to these environments, shunning the suburbs because they have, horror of horrors!, lawns.

Even as our state continues to grow, sprawl can no longer be our birthright. Hydrologically remote regions cannot depend on new sources of imported water for human needs, much less for verdant lawns.

What silliness. First, there is no development in hydrologically remote regions. If there’s an aqueduct or pipeline serving an area, it’s not hydrologically remote. That goes for downtown LA, which steal its water from the Owens Valley and pipes it down to what was a rather hydrologically remote area.

Second, let’s look at what’s going on with those “verdant lawns.”

First, of course, they get played on and lived on, and they help diminish the asphalt heat island effect of the city. But more than that, they are watered in ways the LAT feels is a “hard sell,” but is not.

California’s water providers and community developers are far ahead of the Times in recognizing the water shortage and creating solutions, and many of these solutions focus on landscape irrigation. In fact, solutions the Times refers to as “potential” already exist, thanks to the cooperative efforts of water districts and land developers.

For example, we helped win approvals for a new planned community that tripled the size of the town of Calimesa, on the eastern edge of the LA metropolis. The developer worked with the local water district to receive permitting for a water recycling plant that will deliver reclaimed water to the front yards of homes, where it will be used for irrigation.

In South Orange County, both the Irvine Ranch Water District and Santa Margarita Water District (the county’s largest and second largest) have been recycling water and using it for irrigation since the 1970s. At IRWD for example, recycled water:

• Irrigates 5,650 acres of parks, golf courses, school playfields, athletic fields, and many common areas,
• Irrigates over 1,000 acres of crops,
• Is used in industry, where one application at a carpet mill saves 500,000 to one million gallons of drinking water per day,
• And now is being introduced into office buildings for toilet flushing.

SMWD, which also provides millions of gallons of recycled water a year for irrigation use, recently launched a program that captures urban runoff and recycles it for irrigation use. Its runoff capture facility near Dove Canyon not only makes about 100 acre feet of water available for irrigation use, it also has successfully eliminated much of the environmental damage the runoff was causing in the Starr Audubon Ranch, a nature preserve.

Innovation like this is happening all over California. Districts in the Central Valley with brackish groundwater are putting in desalters. Orange County just launched a toilet-to-tap program which required no “hard sell” to area residents because it’s safe and will protect our aquifer. And on and on.

To the LAT, this innovation appears to be a thing of the future, something speculative, something not to be counted on. They would rather mandate how we live:

Californians’ devotion to the easy suburban lifestyle (or at least, the easy suburban lifestyle as we know it). Thirty-nine percent of residential water use in California occurs outdoors, mainly when homeowners water their lawns. One way to secure “additional” water for growth is to cut yard sizes and impose landscaping restrictions on new and existing neighborhoods.

Apparently the LAT hasn’t toured a model complex lately and seen the small yards, the common areas landscaped in drought-tolerant plants, and the sophisticated irrigation systems that measure ground moisture and only water as necessary.

No new regulations are required to accomplish this. Land prices have forced the private sector to respond with smaller yards, the environmental review process brings in water conservation methodologies, and the regional water quality control board mandates runoff controls, so landscape is irrigated sparingly.

But the LAT knows none of this. The editorial writer sits in downtown LA, surrounded by concrete and asphalt, and thinks the worse, as he/she should, because the environment there is the worst. Buildings are stuffed with inefficient toilets and fixtures. There is no runoff control. There is no recycled water. There is no toilet to tap program. There is infrastructure that’s undersized and in need of major upgrading — and we’re supposed to move there?

Surrounded by the urban stupidity that is LA, the writer lashes out at the suburbs in some sort of tribal battle of urbanites against suburbanites. Sorry, though; we’re not picking up this club because there’s a better, two-fold solution.

First, we need to address the infrastructure issue with bonds that will fix the Delta and provide new conveyance and storage systems. Second, we must continue to let people choose where they wish to live, and let water districts and developers respond to existing conditions and regulations with ever more innovative approaches to acquiring and conserving water.

Just because the LAT says we need a state-controlled system that subjugates free will to the whims of urbanists doesn’t mean we have to be so thick-headed and so uninnovative as to follow them.

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Adam Smith, cover your eyes. I’m about to reveal something that would be very upsetting to Mr. Invisible Hand, were he still with us.

AP, the world’s largest news distribution service, and therefore, one would think, one of its best, led off a story on the housing market today with this gem:

After falling for six straight months, sales of existing homes posted an unexpected increase in February. But the median home price tumbled by the largest amount on record.

“But?!” Obviously, “because” is the right word. Anyone with even a modest understanding of economics knows that government programs and bailouts aren’t going to be what starts bringing the housing market back. But lowering prices (and making more mortgage money available) will. In February we saw that: Prices dropped and people bought.

Meanwhile, Ms. Change (seen here signaling for eight more Clinton years), showed off that she’s right there in the dunce’s corner with AP, as she called for an “emergency working group on foreclosures” led by — here’s a new face — Robert Rubin, her hubby’s econ czar who helped the Clinton administration skate by on Reagan’s robust economy almost until the end of Bill’s second term, when it all collapsed.

Such a panel would recommend legislation and other steps to “help re-establish confidence in our economy,” Clinton said in prepared remarks for a speech on the economy in Philadelphia. She and Sen. Barack Obama are campaigning heavily in Pennsylvania, which holds its presidential primary April 22.

Clinton also proposed greater protections for lenders from possible lawsuits by investors, a version of so-called tort reform more often associated with Republicans than Democrats.

Uh-huh. Washington DC can re-establish confidence in the economy; we all believe that … just let us find our WIN buttons. And we’re all sooo behind Hillary on her bright idea to stiff investors — what do they do besides fuel the economy, anyway? — in order to bail out financially dumb or greedy people who are stuck in bottom-of-the-barrel mortgages.

The failed mortgages are made up, in large part, of claimed income mortgages, and most of the failed claimed income mortgages are ones in which the relationship between the claimed income and the real income is tenuous at best.

In other words, they lied and Hillary cried.

Being used to covering for liars, Hillary wants to take care of these people so they can live to lie again. Why teach them a lesson when you can bail them out again and again, ensuring that they’ll continue to vote Democratic?

Here’s a better solution, and it’s already done without the help of the junior senator from New York and her know-it-all buddies:

Government regulators are reducing capital requirements on Fannie Mae and Freddie Mac in a bid to add liquidity to the troubled mortgage market.

The Office of announced Wednesday that it has cut the government-sponsored mortgage investors’ surplus capital requirement to 20 percent from 30 percent.

The office estimates that this reduction, in combination with the release of portfolio caps announced last month, should provide up to $200 billion of immediate liquidity to the mortgage-backed securities market, and allow Fannie Mae and Freddie Mac to purchase or guarantee about $2 trillion in mortgages this year. (source)

Unlike Democratic senators running for president, the housing market economists at the Federal Housing Enterprise Oversight understand that making more money available for mortgages will make mortgages cheaper and more plentiful. They also understand that this is a temporary fix, and capital reserve levels should return to 30% once things straighten out.

I am a part of the housing industry. I have seen many friends laid off and am watching as a couple friends hold on by their fingernails to their companies. It is not a good time for us — but we all know that the last decade, which was incredible for the industry, would not have been possible if the already heavy hand of government were any heavier in our industry. So we also know that letting Hillary and her big government ilk have her way is not going to help in our recovery.

We were drunk in the good market and we’re hung-over today. And no thanks, Hillary — keep your snake oil hangover solution to yourself.

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Ever heard of John Paulson? Me neither, but George Washington sure has, since Paulson made three or four billion Washingtons last year — and his hedge fund made $15 billion — by betting against housing. While others wallow in misery as their over-leveraged houses go into foreclosure, or as they look for new jobs outside the mortgage industry, Paulson is luxuriating in their misery.

WSJ subscribers can read the story here (non-subscribers can read an NYT piece on Paulson here). Here are the basics:

In early 2006, while most thought the housing market and its closely affiliated mortgage market could suffer a downturn but not a collapse, Paulson saw things differently and decided to bet on a collapse.

In several interviews, Mr. Paulson made his first comments on how he made his historic coup. Merely holding a different opinion from the blundering herd wasn’t enough to produce huge profits. He also had to think up a technical way to bet against the housing and mortgage markets, given that, as he notes, “you can’t short houses.”

Among the ways Paulson accomplished this were to “short risky CDO slices” and to “buy the credit-default swaps that complacent investors seemed to be pricing too low.” Got it? I don’t.

Paulson’s been a successful investor for a long time, and he did what investors do. Most of us prefer folks who see a market need and fill it more than we like those who see a market weakness and exploit it, but it’s all capitalism.

As he has before with earlier, smaller, killings, Paulson will invest his winnings back into the market. I suggest he use a part of it to help lift the housing market back up. That won’t only benefit a lot of people, it will also allow him to pull off the nifty trick of profiting off a market as it falls, and again as it recovers.

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Yesterday, Incredible Daughter #1 — who’s off to Paris next week for a collegiate visit — and I did what we often do. We spent the day with some wonderful cars.

First we went to the Saturday morning meet at Irvine Spectrum, where every week a few hundred million dollars worth of some of most amazing automobiles you’ll ever see are there to be seen.

Like this one:

If you’re a BMW fan, you’re probably an ubber-fan of the Z8, the powerful two-seater BMW produced 5,703 of from 2000 to 2003.

Well, ever seen 13 of them all lined up together?

Unless you were in Irvine yesterday, too, you haven’t, at least not in the US.

Then we joined a few dozen BMW owners for a drive through OC’s canyons and along its coast to end up at Crevier Classic Cars in Costa Mesa, where we saw such beautiful sights as this:

That’s a Lincoln in the foreground and a Packard to the rear. American car makers have a gorgeous history. Speaking of history, this is one of several of Cong. John Campbell’s cars that was at Crevier.

Anyone care to hazard a guess why the Congressman’s Ferrari has a license plate with “NERO” on it? Fiddling while Washington burns? Not Campbell, who Hugh Hewitt listeners know well.

Update: On-the-ball Campbell staffer Janelle Froisland spotted my post and sent this clarification:

Congressman Campbell’s license plate reads: “NERO328” because “nero” is “black” in Italian, and 328 is the model number of that car (Ferrari 328 GTS). So, the license plate “NERO328″ means that it is a black Ferrari 328 and the word “black” is in Italian since it is an Italian car.

Could you ask for a more thorough explanation? No, so I thought I’d ask her if I could have Campbell’s red ’64 T’bird, also on display at Crevier. I haven’t heard back yet. (end of update)

Etymologically speaking, this photo of a Caddy from the 20s gave me a pretty good idea of why we call the place we stow our luggage a “trunk.” (The Brits call them “boots,” but the booty in matching blue to the … er, rear is purely coincidental.)

Later in the day, Incredible Daughter #3 and I took a drive to see another incredible machine. This one was a Giken, a $1.5 million Japanese number that uses hydraulics to generate gazillions tons of pressure to silently push 40-foot-long sheet piles into a deteriorating levee.

I feel good about this because my client, Shea Homes, is responsible for getting this done. Shea was prepared to spend $15 million repairing the levee and doing other significant flood control improvements, because the existing system didn’t even provide protection for a 25-year storm.

But as the Greenies fought us, years dragged by until we saw deterioration like this — thanks to the County redirecting levee repair funds to pay off the bonds that got us out of their stupid bankruptcy.

Shea brought the deterioration to the attention of the County and made enough noise that OC Flood Control District couldn’t ignore the problem — leading to the Giken silently shoving those long beams into the levee so it can be strong enough to survive a pretty significant storm.

Shea still has a lot of work to do to fulfill its commitments. It will still spend $15 million one way or the other … money the government should spend, but is forcing developers to pay instead since the levee protects thousands of citizen taxpayers. It looks like we’ll get about 125 homes to spread that $15 million over … or $120,000 per house.

If government took care of its own messes instead of forcing developers to fix them, the homebuyers would have enough additional money in their accounts for one of those beautiful Z8s.

And they say it’s greedy developers who makes houses expensive.

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News of a global effort to ease the credit crunch is welcome, indeed, and far superior to the President’s dangerous, unfair and inequitable proposed solution to the mortgage meltdown.

Over the last couple days, I have spent hours with the leaders of Southern California’s home building industry. (Although I can hardly drive a nail, I guess I’m a leader of the industry as well, as I serve as public affairs VP for the industry’s So Cal trade association, the largest and most watched in the nation.)

To a person, they are pessimistic for the short term and ebullient for the long term — from perhaps 2010 on. All of them predicted a downturn and were preparing for it, but none anticipated the precipitous drop created not by a lack of demand but by a lack of credit.

How precipitous? Last year, new home sales and remodels in So Cal had a value of $17.9 billion; this year, it will be $5.5 billion less, according to the Construction Industry Research Bureau.

Adversaries in the no growth movement (the Greenies, Warmies and NIMBYs) may be desirous of a crumbling economy, or they may be ignorant, but if they are celebrating housing’s stumble, they should know the price: The So Cal economy took a $12 billion hit in 2007 because of the drop.

Since the market adjustment started in 2004, SoCal’s economy has lost $38 billion in economic activity that were lost as the value of new homes, remodels and new business activity created by them shrunk, according to CIRB.

This is the largest new home market in the country, but numbers of such a scale are cropping up in nearly every market across the country. As goes housing, so goes America’s economy.

That’s why this news from WSJ is so encouraging:

The Federal Reserve has joined with four other major central banks to announce a series of measures designed to inject added cash into global money markets in hopes of thawing a credit freeze that threatens their economies.

The Fed said today it would create a new “term auction facility” under which it would lend at least $40 billion and potentially far more, in four separate auctions starting this week. The loans would be at rates far below the rate charged on direct loans from the Fed to banks from its so-called “discount window.” But the new loans can still be secured by the same, broad variety of collateral available that banks pledge for discount window loans.

The European Central Bank, Bank of England, Bank of Canada and Swiss National Bank simultaneously announced parallel measures.

Stock futures soared Wednesday on the news, a day after the Fed’s rate moves disappointed the market.

The Fed also said it had created reciprocal “swap” lines with the European Central Bank, for $20 billion, and the Swiss National Bank, for $4 billion. These will enable the ECB and SNB to make dollar loans to banks in their jurisdiction, in hopes of putting downward pressure on interbank dollar rates in the offshore markets, principally the London Interbank Offered Rate, or Libor, market. The inability of foreign central banks to inject funds in anything other than their own currency has been a factor creating the squeeze on bank funding in those markets.

Because home sales today are not so much for homes, but for deals, stabilization is the first step toward recovery. As long as buyers remain reticent to close a deal because they think tomorrow will bring a better deal, sales will continue to drop.

The Fed’s move, by freeing much-needed new sources of credit, can bring new buyers into the market, and builders were working to diminish their standing inventory over the last couple of years, it won’t take too many sales before supply and demand achieve equilibrium.

With all the expected disclaimer, investors might want to start looking for deals in homebuilder stocks. There are risks of bankruptcies in the short term, of course, but the companies that make it through should begin appreciating quite robustly in a few years, thanks to moves like the Fed’s today.

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Thomas Edison will have to do.

The couple that was staying in Henry Ford’s bedroom here in the Main House of The Ford Plantation decided to stay another day … as did the couple in Clara Ford’s bedroom. Yes, they are across the hall from each other.

I can’t complain about our room, however. The four windows look out over the lawn and oaks to the Ogeechee River and the rice marshlands beyond. The bed was amazingly comfortable, and the black marble bathroom was pretty darn indulgent.

Edison was a frequent house guest, so I’ve decided our room was the room he stayed in. It does have the best views, after all. Here’s riddle Henry sprung on Thomas one weekend. They were great riddlers and would work long and hard on one that would stump the other:

We saw it carved on a wooden sign over a little wooden shack they’d built one weekend. Can you solve it?

This morning while Incredible Wife slept, I walked for a bit over an hour out on one of the old rice dikes — “Built by Irishmen,” our guide of Irish ancestry Chip Dolan had told us, “because the slaves were too valuable.”

I was early enough to catch the sunrise and enjoy the penetrating silence of the dawn, broken only by the occasional bird cry or fish splash.

On the way back, I passed this house, which Chip referred to as “the Turner’s house.” I think he meant that Turner. Last night we met Olivia and Walker. Walker had come down five days ago to pick up a set of golf clubs his father had left behind. His dad would get around to building on their lot eventually … he’d been paying over $1,000 a month in dues for the last five years or so while he waited. Yeah, that kind of place.

Anyway, at the end of the walk, I went back up to Edison’s room for a clean-up in the black marble shower, and downstairs, where the staff was more than happy to cook me up some eggs, grits and bacon with a crunchy on the outside, moist on the inside biscuit.

Not a bad start to a day.

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Osama bin Laden might be one bad dude, but he’s not as tough as a crummy mortgage:

NEW YORK (AP) – Bad credit has supplanted terrorism as the gravest immediate risk threatening the economy, a key national research group reported Monday.

Borrowers’ withering ability to pay their bills and the subsequent fallout in the credit markets this summer topped the list of short- term risks on peoples’ minds, according to a survey of 258 members conducted by the National Association of Business Economics.

Of course, the key words here are “short-term risks,” which are certainly not good qualifiers for jihad-risk. Jihad-risk did rate number one when NABE last surveyed its members back in March when things were going along a bit more swimmingly in the economy.

Despite the economists’ pessimism about the current lending-fueled economic heebie-jeebies, they do believe it’s a short-term situation and things in the housing market should be back to normal in five years (my sources in the building industry say four years; I hope it’ll be less) .

Unfortunately, unless things take a miraculous turn, jihad will still be a threat to our economy and our safety then.

Very cool illustration: Jan Op de Beeck

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Meet Bill Duane, who epitomizes what happens when your belief systems hinge on relativity. He is also the quintessential NIMBY, a guy I run into in some permutation or another, with every development project I work to get approved.

Duane is a Marin County liberal (how redundant is that?) who lives in a $1 million bungalow and has given his time to liberal causes, including Habitat Humanity … that is, until the poor dared to come into his neighborhood, that is.

What’s particularly delightful about the portrait of Duane I read today is where I found it: Not in a conservative magazine or a building industry magazine, neither one of which would have bugged Duane, but in Mother Jones.

What a horror! A bitter, unflattering profile in one of the most prominent liberal journalis in America. How bitter?

Bill Duane knows most people can’t afford homes like his $1 million bungalow on a hill overlooking San Francisco Bay. That’s why the Marin County attorney volunteered for Habitat for Humanity. Until recently, that is, when the group announced plans to build two affordable duplexes just down the street from him. “Habitat usually goes into a blighted neighborhood and enhances it,” Duane says. “Here, they are coming into an enhanced neighborhood and blighting it.” …

Duane and I climbed into his Mercedes station wagon and drove to the project site, a hillside of chaparral and grass. He’d promised me it would be obvious that congestion was already bad. A lone Toyota Prius with a “Save Tibet” sticker silently cruised by. “Usually this whole area is packed with cars,” he insisted. And if I researched the matter, he hinted, I might learn that the endangered Tiburon mariposa lily grows here (naturalists doubt it), and that an Indian burial spear discovered nearby might have belonged to the county’s namesake, Chief Marin (a Marin anthropologist says Duane is “reporting things that are not there”). Duane next raised an environmental justice concern: Placing the affordable housing in the shadow of million-dollar homes fosters “a slave kind of mentality.”

Let’s put this another way: Duane the liberal is covering racism and classism with phony liberal covers — the environment, Native American culture, and made-up concern for the mental state of the poor. None of it is true, but that doesn’t matter to someone with ungrounded morality — it makes him comfortable with a position that should be inherently counter to his core beliefs.

I see this all the time. Young activists who have never given a thought to having to ride an ambulance to a hospital are suddenly concerned that a new development will cause longer emergency response times. Moms fight projects because new students will cause school overcrowding, even though their kids go to private school.

What’s most interesting about this article isn’t the article itself, but how conservative some of the comments are, and how straightforwardly racist and classist the liberal Mother Jones readers are in the comments to the article. Sure, there are plenty of commenters who vilify Duane with typically nasty liberal-rant, but comments like these were a surprise:

• When did it become “required” that people get to live wherever they want without making the sacrafices or progress necessary to get there?

• The truth is that middle/upper-middle class people don’t want the poor, minorities, immigrants, or uneducated (read that “white trash”) living near them because of the damage these groups cause. Let’s be honest, these groups move into a neighborhood and, inevitably, they destroy the property and drive up crime (vandalism, drug dealing, gangs, etc.). They have no respect for themselves, much less anyone/anything else.

• I have worked hard all my life to live AWAY from people who require low-cost housing.

• Delayed gratification has been replaced by the “I want; therefore, I am entitled to have – NOW!” mentality. Why, as I am paying for my home, should I also have to subsidize the “below market” home of my neighbor?

• Anyone who disagrees must have a racist, bigoted cause and, because they do not agree, are obviously stupid. … Expecting people to actually work, save and sacrifice for what they want does, in your estimation I guess, make me a racist, bigoted, elitist bonehead.

• I simply don’t give a inch to project housing. I live next to it. It’s all trash and they’re still trash. Say the word “project housing”, I’ll roll over the floor, point at you, and laugh! It never works and it’ll doom to failure and more failure. It’s not about bigotry, try living next to it and you tell me what you think. Try living in a mobile home park and tell me what’s it like. Been there done that, all trash!

How can readers of Mother Earth, a magazine that rages against the machine and glorifies the causes of the Left, be comfortable espousing thoughts like these?

It’s simple. Liberalism is the ultimately flexible belief system. Just march in the next anti-war rally, vote for the pro-gay marriage candidate and be in the opening night crowd for the next Michael Moore movie, and be reconciled.

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No, Vegas’ green bust isn’t the latest titillating show on the strip; it’s the latest lesson in why we should let the market establish prices and buying decisions. Will politicians ever learn?

In one of today’s most-emailed WSJ stories, the tale is told of high-minded Nevada legislators who thought that the construction of green buildings — buildings that conserve energy and energy, and use earth-friendly building materials — should be incentivized.

Now, one would think that in a desert city where the temperature routinely reaches 300 degrees or so, developers would need no incentive beyond lower electric and water bills to build green buildings. But legislators didn’t get this, so here’s what they cooked up:

In 2005 the Nevada Legislature unanimously approved a measure that cut property taxes up to 50% for 10 years and lowered sales taxes for building supplies to 2% for energy-efficient construction. … Original estimates put state abatement costs at just $250,000, though no one can say how that figure was conjured.

The $250,000 cost was just a wee bit off — the ding to the state in lost tax revenues is approaching $1 billion. Green buildings already in the pipeline got meaningless incentives and new buildings got decked out in the greenest shades of green, when a lighter shade of green might have been sufficient.

Nevada has no income tax, so when its sales and property taxes flatten, there’s no back-up plan for funding schools, road and infrastructure projects except the General Fund. So, and I can’t say this any better than WSJ did:

… late last week the Nevada Legislature, already facing budget shortfalls, worked out a retroactive compromise and essentially asked for a mulligan.

The details of the roll-back aren’t important; the lesson of the roll-back is. If there’s a good product that offers benefits to the market, the market will buy it. The market is smarter than the legislators, every time.

But if the legislators followed this wisdom, how would they keep themselves busy?

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