Innovation Trio: SwapRent, FARJHO & TARELV

Shared Appreciation through Shared Cash Flows – the New Economic Owning, Renting and Own-Rent Switching Concepts as well as Business Methods for Managing Real Estate Properties – http://www.SwapRent.com

1203 2011 The new innovative economic stimulus application using equity sharing methods, not debt and not tax credit, to prop up the housing market

Further to my 1126 2011 blog post and many other earlier posts on this issue, taking expedient economic stimulus measures to prop up the national economy as a concept is a bi-partisan issue and supported by all kinds of economists, even the most libertarian ones. The question is really on what methods to use to implement the economic stimulus activities so that the money provided could indeed stay in the local communities on Main Street long enough to create local jobs instead of immediately flowing to investment opportunities in foreign emerging markets for the Wall Street riches to further enrich themselves.

So economically

1. the need for economic stimulus activities to revive our national economy is agreed and accepted by all, although not agreeable on what methods.
2. the linkage between a robust local property market, i.e. increased home equity hence wealth for home owners, and local economic prosperity on Main Street is well recognized by academics and politicians.
3. using more debt to blow up more property, stock and bond market bubbles again will only be another temporary fix similar to kicking cans down the road to build up bigger problems down the road.
4. lowering interest rates further will not benefit the home owners and small businessmen on Main Street since the credit distribution channel has been impaired during most depressed time periods of the economy.
5. pumping more money and liquidity into the system will only benefit the rich further since only the rich has access to even more credit.
6. the rich top 1% in our society, their financial advisors, hedge funds, private equity firms and even US based multi-national corporations will use the excess dollar liquidity to invest in high GDP growth countries such as China, India, Brazil, Russia, Australia, … etc. to further enrich themselves.
7. the dollar liquidity created by current monetary policies conducted by Ben Bernanke and his cohorts at the Fed to date has created more jobs for foreigners than for us Americans on Main Street.

and politically

1. the bailout of big banks and Wall Street firms is both unpopular and unwise to the 99% of our population.
2. more Quantitative Easing (the various QEs) has proven to be toxic to everyone but the Wall Street professionals.
3. raising taxes could be detrimental or even fatal to the remaining careers in Washington DC for most politicians.
4. ramping up more budget deficits hoping to kick the can down the road to the next administration has become more obvious and unpopular to the public.
5. creating jobs for foreigners through pumping out more dollars while providing low cost of fund to and making the hedge fund and private equity investment gurus richer at our country’s expense has been understood by even the most economically illiterate citizens has discredited the Fed’s reputation day by day.
6. destroying American jobs and killing small businesses on Main Street through a lack of competence in the current economic policy makers has created extreme inequality and has been turning our country more and more towards the left and will further the causes of many variations of the Occupy Wall Street (OWS) movements.

Perhaps it is time for the economic policy makers and their technical staff members to learn something new and take a serious look at how our country could use the property equity sharing concepts and the various free market based business methods developed to date as a new set of economic stimulus tools?

It seems to be easier said than done. For one thing, why the economic policy alternatives using the new equity sharing concepts and made possible by FARJHO and SwapRent have not made an impact so far? Without pin-pointing where the problems are these repeated suggestions could just be further waste of efforts.

1. the equity sharing related subject matter may be deemed too technical by policy makers and their technical staff since it is new.
2. suspicion of any new innovations created by other people.
3. resistance to learn something new in order to change.
4. those people who have first spent the time to learn these new concepts and methods are still at a stage of thinking about equity sharing’s micro level application for foreclosure avoidance for distressed home owners only.
5. few people so far until this date have realized the importance of connecting these new property equity sharing concepts and methods with the macro level application to perform massive economic stimulus on either a national or a local level that would, on a free market basis without government’s monetary assistance, cover distressed home owners, big and small property speculators as well as any other free market based investors alike.

As a case in point, here is an example. Back in 2008, the respectable Founder and Chairman of the Peterson Institute Pete Peterson had forwarded the SwapRent solutions to the Republican presidential candidates and had been very supportive of the causes represented by FARJHO and SwapRent. However, David Walker, his staff and appointed CEO for the institute who was supposed to an expert on economic issues, advised him instead that

“Pete,
This proposal does not seem to differentiate between individuals who are deserving of help and those who aren’t. I don’t think that second homes, investment properties or individuals who entered into irresponsible primary residence mortgages should receive taxpayer assistance.
Dave

David’s failure to understand the basic principles of how free market capitalism could operate without having to rely on tax payer’s money is both surprising and lamentable.

That kind of attitude and lack of economic common sense is exactly what is stopping our government from seriously adopting property equity sharing concepts and methods as new innovative economic stimulus measures to create local jobs, revitalize local economies on Main Street in order to help save our country’s economic future.

The Obama Administration had similarly been informed with these proposals since before the election in 2008. Other than those primitive shared appreciation methods with unsuccessful results in the October 2008 Hope for Homeowners plan, there have not been other efforts in this regard. The H4H fiasco will be discussed in an upcoming article to be published this month and will be reviewed in the next blog post towards the end of the month.

Let’s hope the presidential candidates for 2012 would take a more serious consideration of using these new innovative economic policy applications of the equity sharing concepts and methods to solve our country’s economic problems in order to acquire a timely political advantage for themselves in the up-coming election.

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Filed under: Economic Viewpoints, Equity Sharing, FARJHO, Federal Government, Housing, InvestorsAlly, Mortgage, Occupy Wall Street, PeoplesAlly, SwapRent, , , , , , , , , , , , , ,

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