A little over two months ago I wrote a long and ponderous post on the administration’s scheme to help homeowners in trouble and cure the housing crisis. I wasn’t very nice about it. I cruelly suggested that it might not help the 1 in 9 homeowners that the Treasury suggested might be helped. I feel bad about that. I even implied that the strong moral leadership provided by the Treasury’s guidelines would not be enough, that actual legislation would be required.
You must understand, this was in early March, back when things were really grim. Unemployment was rising and house prices seemed to be falling every month. I let my despair overcome my natural American optimism about all the good that government can do if we all chant “Yes, we can!”
Now that May has brought warmer weather and a buoyant stock market, let’s revisit the administration’s housing effort with all the optimism and cheerfulness that it deserves. So two months into it, how is it going? Great. Well, pretty good. Not bad. To be honest, fair. A little less than expected, but it’s still early days. Okay, really crappy, but we’re working on it.
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Free Money Finance had a post yesterday asking How Much of a Role Does Luck Play in Money Success? This was in turn inspired by a Wall Street Journal blog post similarly titled What Role Does Luck Play in Getting Wealthy?
(I have trouble making heads or tails of that blog, The Wealth Report. Sometimes it sounds like serious reporting on the world of the seriously loaded, e.g. Switzerland Ranks No. 1 as Home for the Rich, and sometimes sounds like The Colbert Report’s Colbert Platinum segment. e.g. Oprah: It’s Great to Have a Private Jet. Alas, I digress.)
The degree to which financial success is correlated with talent and hard work, which is to say the degree to which money is distributed justly in our society, is a fundamental question of great importance that I don’t have the energy to tackle today.
What I do want to consider is a smaller and related question: are rich people necessarily good at personal finance? It’s a basic premise of a large segment of the personal finance literature from The Millionaire Next Door to Secrets of the Millionaire Mind through Kiyosaki’s Rich Dad series.
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The other week I finished up a five part series of posts on Dave Ramsey’s Seven Baby Steps. It seems to have been well received and still gets a steady stream of clicks. But honestly, I was expecting a larger and more 
hostile reaction than I got, at least as measured by comments and emails. Ramsey has a very large and devoted following, particularly, it seems, in the blogosphere.
At least I thought so. Maybe I was wrong about that. Perhaps Ramsey is well liked but not, ultimately, taken all that seriously.
Or maybe I was just a little too subtle in what I wrote. Perhaps when I said that “His advice on higher level personal finance topics such as investing and taxes is weak and often misinformed because his knowledge in those areas is limited” my readers thought I was exaggerating for effect. And perhaps when I criticized him for giving advice “on topics such as investing, about which he should probably just keep quiet” those readers didn’t really think I meant that his listeners would be better off if he didn’t cover those topics at all.
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Today brings another dollop of data on the housing market. The Wall Street Journal carries a story about a drop in real estate listings in April. An outfit called ZipRealty reports that listings were down 3.6% from March. In general, April is an up month, with the average monthly increase since 1982 being 4.8%, so the down tick is significant. Listings were off 21% from April 2008.
This could be an indication that the number of sales will be down in the coming months, which as I have written before, is bad news if you are a real estate broker.
But what if you are an ordinary reader of the WSJ concerned about house prices, both because it’s a central issue in the current crisis and possibly because you may yourself own a house? Then this isn’t news at all. Fewer listings could mean that the supply of cheap houses is being exhausted and soon buyers will start bidding up the prices of what’s left. Or it could mean that sellers have become discouraged and have pulled their houses off the market, waiting for conditions to improve. Or half a dozen other reasonable scenarios.
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My post on Fuzzy Retirement Math made it into this week’s editor’s picks in the Carnival of Personal Finance. There’s lots of other readable stuff there, so have a click at it.
The carnival is hosted this week by Earn What You Spend, a blog I have to admit I haven’t visited before. Shame on me. It looks like a good one.
Government, Housing, Musings | Frank Curmudgeon | 
May 15, 2009 1:00 pm | 
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