Income inequality is putting more and more houses into the hands of the wealthy 1 or 2 percent, raising prices and making it more difficult for regular people to buy a house. Stories in the Washington Post and the New York Times document this phenomenon. The big investors buying the homes are counting on regular people not being able to buy and having to rent the homes the investors are buying. The New York Times says that the investors are taking a risk, because renting a large number of single family houses is a new undertaking that is difficult to manage. The investors say that computer technology will allow them to keep up with the numerous records, repairs, etc., that have to be kept for each house.
The Washington Post says that in the formerly depressed Florida market, big investors are buying as much as 70% of the houses sold, perhaps inflating the figures indicating a revival of the housing market. These are houses that had been owned by individuals until they were foreclosed. Now they will be rental units being rented by the rich to regular people, who used to own their homes. The Washington Post says the percentage of Americans owning their home has fallen from 69.2% to 65.4% since 2004.
The attraction for big investors is that very few assets these days pay any significant return. Bond and stock yields are low and the risk is relatively high for the low return of 1 or 2%. Buying cheap, foreclosed properties that can yield an 8% return quickly is inviting.
Both articles point out the risks for investors if there is another housing downturn, but the problem with income inequality is that for the rich, an investment that turns sour is not the end of the world, while for a regular person, losing his only home to foreclosure is something like the end of the world.
Monday, April 22, 2013
Saturday, April 13, 2013
Foreign Service Losing Ground at State Department
The op-ed in the Washington Post about the State Department's Foreign Service losing ground even within the Department struck a nerve with me. One of the authors was Susan Johnson, whose parents I knew in Washington; her father was a Foreign Service officer. Another was Amb. Tom Pickering, whom I worked with as a junior officer and whom I looked up to during my whole career in the Foreign Service.
The issue is an old one, the fact that political appointees are taking over more and more jobs at the State Department. It also highlights the Foreign Service's loss of prominence to the State Department's Civil Service employees.
When I was the Science Counselor at the American Embassy in Warsaw, Poland, the State Department asked me if I would be willing to transfer to the American Embassy in Rome, because the Science Counselor in Rome was leaving, and Italy was taking over the Presidency of the European Union, which meant a big increase in the workload for Rome, since it would have to deal with the usual bilateral issues, plus EU-wide issues that came up to Italy as the EU President. I agreed to go, since I thought the State Department needed me there.
When I arrived, however, I found that Embassy Rome had been fighting with the State Department personnel system for some time over this position. The incumbent Science Counselor, who was being forced to leave was a political appointee, one of the problems pointed out in the op-ed. He had come in with Ambassador Reginald Bartholomew, who was then the American Ambassador in Rome. The political appointee had been in the State Department for eight years, which was the limit for "Schedule C" political appointments. Bartholomew had tried to get the Science Officer accepted into the career Foreign Service, but for whatever reason, the Foreign Service personnel system had refused; so, he was had to leave. Apparently Amb. Bartholomew was angry and the system, and was determined to get his own man, apparently someone other than a Foreign Service officer, if only the spite the system. The odd thing to me was that I knew the Civil Service officer they wanted. In a previous job, he had worked just across the hall from me. His office was partly responsible for assigned science officers overseas, and had had a role in my assignment to Warsaw, but apparently not to Rome. When I had worked with him, I thought he had been a nice enough guy, but under the circumstances I felt that I had been stabbed in the back. My immediate boss, the Economic Minister in Rome, obviously wanted to replace me to please the Ambassador. Since I was eligible to retire, I decided to retire rather than try to work for two people who did not want me there.
I was ready to retire anyway. In Warsaw, the budget for the American-Polish science cooperation that my office supervised had been cut to zero by Newt Gingrich and the Republicans, although we had formally agreed to fund it for several more years. Then, the day I was to transfer from Warsaw to Rome, Gingrich shut down the entire US Government. My wife and I had moved out of our house in Warsaw, shipped all of our household effects to Rome, and just had a few suitcases in the car, ready to start to drive to Rome that night. At about 5:00 pm, Rome called and said, "Don't come." We had nowhere to live. I finally got Rome to agree that we could leave and go to Rome, but the idea that the US Government would put my wife and me on the street in the winter in Warsaw was abhorrent to me. It was like sending soldiers into battle and then abandoning them. It soured forever my opinion of the US Government.
When I got to Rome, one of my jobs was working with the Italians on North Korea. The US had agreed to supply North Korea with certain things if the North Koreans would give up their nuclear bomb building program. However, as part of the budget cutting, the Republicans were refusing to appropriate the money necessary to meet America's obligations under the agreement. Thus, one of my jobs was to go hat in hand to the Italians and ask them as Italians and as the European Union if they could put some money into the pot to pay for what we had to send to North Korea to meet our obligations. After what had happened in Warsaw and during my transfer to Rome, I was very unhappy to be representing a government that refused to pay its bills.
So, between the Embassy's lobbying to replace me with a Civil Service officer, and the US Government asking me to plead for money from the EU that the US was obligated to pay, I decided that I had had enough and I retired. It's sad that I left the Foreign Service feeling so bitter. I suppose I could have stayed and fought the system. I had tenure and good efficiency reports up to that assignment; I could have stayed for at least a few years, but I didn't really want to work for an Ambassador and immediate boss who wanted me gone. It was unpleasant while I was there, and if I had fought the system, it would have become still more unpleasant. I was replaced by the Civil Service officer, but I never heard how his assignment worked out. I hope for America's sake that it went well.
It's interesting that the op-ed highlights today's problems particularly in "policy bureaus that deal with issues such as ... environment and disarmament." Both of these fell in my area of responsibility in Warsaw and Rome, as well as in many of the assignments I had during my career. Had I worked more on bilateral political and economic issues, perhaps my career would have gone better.
When I worked with Amb. Pickering, he was Assistant Secretary for the Bureau of Oceans, Environment and Science (OES). I gather that it would be unusual for a career Foreign Service officer like Amb. Pickering to have this job today.
The issue is an old one, the fact that political appointees are taking over more and more jobs at the State Department. It also highlights the Foreign Service's loss of prominence to the State Department's Civil Service employees.
When I was the Science Counselor at the American Embassy in Warsaw, Poland, the State Department asked me if I would be willing to transfer to the American Embassy in Rome, because the Science Counselor in Rome was leaving, and Italy was taking over the Presidency of the European Union, which meant a big increase in the workload for Rome, since it would have to deal with the usual bilateral issues, plus EU-wide issues that came up to Italy as the EU President. I agreed to go, since I thought the State Department needed me there.
When I arrived, however, I found that Embassy Rome had been fighting with the State Department personnel system for some time over this position. The incumbent Science Counselor, who was being forced to leave was a political appointee, one of the problems pointed out in the op-ed. He had come in with Ambassador Reginald Bartholomew, who was then the American Ambassador in Rome. The political appointee had been in the State Department for eight years, which was the limit for "Schedule C" political appointments. Bartholomew had tried to get the Science Officer accepted into the career Foreign Service, but for whatever reason, the Foreign Service personnel system had refused; so, he was had to leave. Apparently Amb. Bartholomew was angry and the system, and was determined to get his own man, apparently someone other than a Foreign Service officer, if only the spite the system. The odd thing to me was that I knew the Civil Service officer they wanted. In a previous job, he had worked just across the hall from me. His office was partly responsible for assigned science officers overseas, and had had a role in my assignment to Warsaw, but apparently not to Rome. When I had worked with him, I thought he had been a nice enough guy, but under the circumstances I felt that I had been stabbed in the back. My immediate boss, the Economic Minister in Rome, obviously wanted to replace me to please the Ambassador. Since I was eligible to retire, I decided to retire rather than try to work for two people who did not want me there.
I was ready to retire anyway. In Warsaw, the budget for the American-Polish science cooperation that my office supervised had been cut to zero by Newt Gingrich and the Republicans, although we had formally agreed to fund it for several more years. Then, the day I was to transfer from Warsaw to Rome, Gingrich shut down the entire US Government. My wife and I had moved out of our house in Warsaw, shipped all of our household effects to Rome, and just had a few suitcases in the car, ready to start to drive to Rome that night. At about 5:00 pm, Rome called and said, "Don't come." We had nowhere to live. I finally got Rome to agree that we could leave and go to Rome, but the idea that the US Government would put my wife and me on the street in the winter in Warsaw was abhorrent to me. It was like sending soldiers into battle and then abandoning them. It soured forever my opinion of the US Government.
When I got to Rome, one of my jobs was working with the Italians on North Korea. The US had agreed to supply North Korea with certain things if the North Koreans would give up their nuclear bomb building program. However, as part of the budget cutting, the Republicans were refusing to appropriate the money necessary to meet America's obligations under the agreement. Thus, one of my jobs was to go hat in hand to the Italians and ask them as Italians and as the European Union if they could put some money into the pot to pay for what we had to send to North Korea to meet our obligations. After what had happened in Warsaw and during my transfer to Rome, I was very unhappy to be representing a government that refused to pay its bills.
So, between the Embassy's lobbying to replace me with a Civil Service officer, and the US Government asking me to plead for money from the EU that the US was obligated to pay, I decided that I had had enough and I retired. It's sad that I left the Foreign Service feeling so bitter. I suppose I could have stayed and fought the system. I had tenure and good efficiency reports up to that assignment; I could have stayed for at least a few years, but I didn't really want to work for an Ambassador and immediate boss who wanted me gone. It was unpleasant while I was there, and if I had fought the system, it would have become still more unpleasant. I was replaced by the Civil Service officer, but I never heard how his assignment worked out. I hope for America's sake that it went well.
It's interesting that the op-ed highlights today's problems particularly in "policy bureaus that deal with issues such as ... environment and disarmament." Both of these fell in my area of responsibility in Warsaw and Rome, as well as in many of the assignments I had during my career. Had I worked more on bilateral political and economic issues, perhaps my career would have gone better.
When I worked with Amb. Pickering, he was Assistant Secretary for the Bureau of Oceans, Environment and Science (OES). I gather that it would be unusual for a career Foreign Service officer like Amb. Pickering to have this job today.
Friday, April 12, 2013
Fear of North Korea Overblown
Yesterday Colorado Congressman Doug Lamborn disclosed a previously classified Defense Intelligence Agency (DIA) evaluation that North Korea could put a nuclear warhead on a missile, according to the New York Times. When I worked at the State Department, including in its Bureau of Intelligence and Research, people uniformly thought that DIA's intelligence analysis was poor, except in areas such as particular tactical weapons evaluations. In strategic areas, such as nuclear weapons development, DIA always tended to overplay the threat, presumable because it meant budget money. The Pentagon needed dire threats to justify spending the huge amounts of money it wanted for its various weapons programs. Thus, it needed to build up the threatening image of the enemy, whoever it was, the old Soviets, or the new terrorists, or North Korea.
I think there probably was some collusion between Congressman Lamborn and the Pentagon. It may not just be accidental that the sentence or paragraph that Lamborn quoted was unclassified, while the rest of the report was. Somebody at DIA probably wanted to get that analysis out, and worked out a way to do it through Lamborn. But the rest of the US Government has pretty much disavowed the statement as just the unfounded opinion some crazy DIA analysts.
I don't think that even next door neighbor South Korea needs to worry about being hit by a nuclear tipped North Korean missile, although it might need to worry about a nuclear weapons delivered by some more conventional means, such as aircraft, truck or ship. In addition, North Korea probably has few nuclear weapons. Despite their flouting restrictions on their nuclear program, over the years the international pressure has slowed down their program, meaning that they have relatively little nuclear material, either plutonium or enriched uranium. Just recently they have threatened to restart the plutonium production reactor which has been shut down for years.
I think there probably was some collusion between Congressman Lamborn and the Pentagon. It may not just be accidental that the sentence or paragraph that Lamborn quoted was unclassified, while the rest of the report was. Somebody at DIA probably wanted to get that analysis out, and worked out a way to do it through Lamborn. But the rest of the US Government has pretty much disavowed the statement as just the unfounded opinion some crazy DIA analysts.
I don't think that even next door neighbor South Korea needs to worry about being hit by a nuclear tipped North Korean missile, although it might need to worry about a nuclear weapons delivered by some more conventional means, such as aircraft, truck or ship. In addition, North Korea probably has few nuclear weapons. Despite their flouting restrictions on their nuclear program, over the years the international pressure has slowed down their program, meaning that they have relatively little nuclear material, either plutonium or enriched uranium. Just recently they have threatened to restart the plutonium production reactor which has been shut down for years.
Fear of North Korea Overblown
Yesterday Colorado Congressman Doug Lamborn disclosed a previously classified Defense Intelligence Agency (DIA) evaluation that North Korea could put a nuclear warhead on a missile, according to the New York Times. When I worked at the State Department, including in its Bureau of Intelligence and Research, people uniformly thought that DIA's intelligence analysis was poor, except in areas such as particular tactical weapons evaluations. In strategic areas, such as nuclear weapons development, DIA always tended to overplay the threat, presumable because it meant budget money. The Pentagon needed dire threats to justify spending the huge amounts of money it wanted for its various weapons programs. Thus, it needed to build up the threatening image of the enemy, whoever it was, the old Soviets, or the new terrorists, or North Korea.
I think there probably was some collusion between Congressman Lamborn and the Pentagon. It may not just be accidental that the sentence or paragraph that Lamborn quoted was unclassified, while the rest of the report was. Somebody at DIA probably wanted to get that analysis out, and worked out a way to do it through Lamborn. But the rest of the US Government has pretty much disavowed the statement as just the unfounded opinion some crazy DIA analysts.
I don't think that even next door neighbor South Korea needs to worry about being hit by a nuclear tipped North Korean missile, although it might need to worry about a nuclear weapons delivered by some more conventional means, such as aircraft, truck or ship. In addition, North Korea probably has few nuclear weapons. Despite their flouting restrictions on their nuclear program, over the years the international pressure has slowed down their program, meaning that they have relatively little nuclear material, either plutonium or enriched uranium. Just recently they have threatened to restart the plutonium production reactor which has been shut down for years.
I think there probably was some collusion between Congressman Lamborn and the Pentagon. It may not just be accidental that the sentence or paragraph that Lamborn quoted was unclassified, while the rest of the report was. Somebody at DIA probably wanted to get that analysis out, and worked out a way to do it through Lamborn. But the rest of the US Government has pretty much disavowed the statement as just the unfounded opinion some crazy DIA analysts.
I don't think that even next door neighbor South Korea needs to worry about being hit by a nuclear tipped North Korean missile, although it might need to worry about a nuclear weapons delivered by some more conventional means, such as aircraft, truck or ship. In addition, North Korea probably has few nuclear weapons. Despite their flouting restrictions on their nuclear program, over the years the international pressure has slowed down their program, meaning that they have relatively little nuclear material, either plutonium or enriched uranium. Just recently they have threatened to restart the plutonium production reactor which has been shut down for years.
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