The Obama administration has put its foot down and major changes are taking place in our auto industry. General Motors CEO "resigned" to make changes in the company top management. For those that aren't aware or not interested in the talking heads opinions on TV, the real reason Wagner resigned was the union-which really runs the company, was not going to be the only losers in the deal. Backroom negotiations have always been based upon the union to take drastic pay cuts and benefit cuts to stabilize the companies debt load. Obama has an energy policy that fits right in with changing the very face of the auto industry. GM and Ford will survive, maybe not Chrysler-only because it is privately held. The administration wants the industry to stop making cars that are gas only. The basic fact is that to get money from the fed, the industry will be told to make hybrids and changes the basic playing field for many industries in America
The oil and gas industry should be scared. Obama literally can change the way our country uses energy on a dime. The administrations plan, though not politically viable yet to tell the masses is to give the Treasury power to take over companies that the government deem important to national security. Since the constitution doesn't mean much to theses guys (see 90% tax on bonuses) a take over of our domestic companies might be something the administration would do when gas prices start to rise-and they will rise, based on a growing economy. So the future has you buying expensive hybrids, spending more money on items that still have not been priced for the average consumer. The new cars may also have a "smart meter" which will tell the government how much you drive, hence how much to tax you.
There will be winners. Big union will win because many of the existing companies will go out of business. New start ups will be able to receive government subsidies if they agree to certain terms.
How does this affect real estate you ask? Since HUD has a primary focus of creating affordable housing, it will support any agenda that moves the ball forward. The Highway Dept and HUD have already begun a partnership to help create a highway system that works well for HUDs focus. So look for more money being spent in the inner cities of our country, not development in the suburbs. It is not the wasting of government dollars on massive inner city projects that has fueled the growth of real estate over the past decade. It was the risk taking developers and builders that provided the average citizen with housing where and how they wanted it. For the foreseeable future we will pay for growth back to our cities.
Can you now see the connection? If it is more expensive to drive, or better yet if the new hybrids can't work for long commutes, guess what, you better move closer to the power sources.
Think of the county in which you live, There will be store closings from lack of business because there is no growth in the rural areas. Big business-like GE will continue to push the green agenda and soon we will have a country that looks pretty, smells great, but where everyone is out of a job.
Finally, don't think that it stops here. If you have thought that the world runs on oil, you would be correct. Wait until we tell other countries that they need to go green-are they going to listen to us? What is the difference in government policy if it promotes the old way or the new way. We are still trying to influence other countries with our agendas.
This, in the end is about a change in power. It is to restrict your freedoms and to increase control over your decisions. So as Realtors, we need to stop blindly following of NAR which supports any affordable housing policy regardless of its viability. And as Realtors we need to educate ourselves. We need to speak out about the transfer of wealth from our current customers-taxpayers, to those that pay little or none. Do you really think that we as a group will not be in the crosshairs of government hacks when they talk about affordability. Look for commissions to drop on those deals. May not be today, but it will happen.
