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The Bush Baby Boom

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When all is said and done Little George Bush will not be remembered for his response to 9/11, the Iraq war, the two Supreme Court justices he appoints, or even hurricane Katrina. I predict in fifteen years Little Bush will be remembered as the president that ushered in one of the most important Baby Booms in American history. I have no statistics to back this up yet. But the anecdotal evidence for it is overwhelming. On my block alone there were 7 new babies in the past 18 months, after not seeing any for years. I have never seen so many pregnant women as I have this summer in Pittsburgh, and even the nurses I have interviewed at local hospitals have said they noticed it too. So if it is true that we have had a baby boom in the past two years, WHY?

Low mortgage rates for over four years. Thank you George W.

When home mortgages remain at such low rates, more people buy homes and more people upgrade their homes with home equity loans. And people who own homes and have larger homes can more easily raise children. Like bowerbirds who decorate their nests to attract mates, Americans who own homes can attract mates or influence mates to have children. First comes love, then comes Alan Greenspan’s mortgage rates, then comes baby in the baby carriage.

All this burgeoning home ownership has happened under the auspices of Little George Bush, whose 2000 campaign hinged on his promise to increased home ownership. And he kept that promise. So don’t be surprised if this baby boom goes down in history as the Bush Baby Boom. Since there is nothing that stimulates the optimism necessary to have children like owning your own home.

Wars, hurricanes, and gas prices are all quickly forgotten. But our kids stick with us for the long haul. In a decade or so the only Katrina anyone will know will be the cute girl who sits in the front row of the algebra class in Biloxi or Huntsville or Dallas. The big question though, is if Little George will keep good on his other promise to repair public education, so all these new kids have a chance to compete in our new high-science “flat” world, as Thomas Friedman calls it. If not, in twenty years today’s cute little babies will be working for the Red Chinese… cooking American takeout. Chop Chop.

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About carmine

  • http://www.viewpointjournal.com David Flanagan

    Dr. Carmine,

    As one who works in the housing industry, I can tell you that every President since probably Jimmy Carter has been able to boast of increasing home ownership in this country. The US record for home ownership, we are closing in on the 70% mark, has no equal in the world.

    Part of that is due to our own cultural values around land ownership, part of it is due to our unique secondary mortgate market system which other nations have begun to emulate. So, given our track record in regards to steadily increasing homeownership, I think that the baby boom/housing boom link may be more correlational rather than causal.

    I could be wrong, but it could be that many held off after 2001 because of economic and political uncertainties and now in the past few years are “catching up,” so to speak. Another causal link may simply be that the country has been gradually growing more conservative and conservatives have more children. A facet of James Taranto’s (Opinionjournal.com) “Roe Effect.”

    My wife and I have two young girls (ages 2 and 5) and I would love to have another, though we can’t at this point. But our friends are having more children. As a matter of fact, with just two children, I’m feeling a bit left behind. Two couples who are good friends of ours are getting ready to have child number four while two other couples are about to have their third.

    Anyway, my two cents on the issue. :-)

    Thanks,

    David

  • Nancy

    Altho I acquired my gorgeous deluxe condo (IMO, at least) during the Clinton years, I did refinance it for an all-time low even less than my father had on my childhood house back in the 60s! I was interested to note, BTW, that w/the value of the condo having skyrocketed from what I bought it for (and due to the location, unlikely to ever go down significantly, being within spitting dist. of DC) I am now worth more dead than alive, lol. ;)

  • http://www.elitistpig.com Dave Nalle

    This is one of the most fascinating things I’ve read in a while. I’d really be interested to see if it’s borne out statistically. Someone should start doing the research immediately.

    Dave

  • carmine

    David Flanagan,
    Excellent points I think. Do you know if the past four years really are some the lowest mortgage rates we’ve ever had? I am sure they are the lowest in my living memory. I also know one of the likely causal factors of the baby boom that produced me was the GI bill which among other things made home ownership affordable for millions of WWII GI’s. I am working on the assumption that we have a similar spike in home ownership now that we had in the late 1940’s and early 50’s. Perhaps you have some further insight on this. My parents’ generation bought a heck of a lot of homes and produced a heck of a lot of babies. Levittown NJ is a relavant example of the home boom/baby boom of those years. Theirs was also the generation that produced atheistic existentialism and embraced the frank atheism of Freud responses to that horrible war, which is why I am not convinced the conservative swing is as likely the most significant causal factor, if in fact a Bush baby boom is in the works. Jim

  • http://none.com Bob A. Booey

    I thought this was about the nocturnal prosimian Old World primates known as “bush babies.”

    What a disappointment.

    That is all.

  • http://viewpointjournal.com David Flanagan

    Dr. Carmine,

    I know that interest rates continue stay well below historical averages. This year, the interest rate is expected to hover around 6.0% while the historical average is about 6.3%.

    What we do know is that, during Clinton’s second term, as the economy grew red hot and interest rates pushed upwards, housing sales were still very healthy. But, as the economy slowed and the fed cut interest rates, interest rates for home loans fell to a 30-year low.

    Through 9/11, the “dot bomb,” and then the corporate scandals that all erupted within a couple years of one another, the housing industry continued to remain strong, with the entire industry bolstered tremendously by phenomenally low interest rates.

    Here is the interesting thing, and one to consider when looking at causal links between the baby boom and the housing boom… Yes, people bought their first home during this period, or upgraded from a smaller home to a larger one using their rising home value as leverage, but much more massively pronounced was a tremendous wave of refinances as current homeowners (like myself) took advantage of lower interest rates to save a LOT of money in terms of their monthly mortgage payments.

    Many even used their rising home values to take some equity out and spend it on home improvement projects and to pay off debt. That too helped the economy these past several years.

    Basically, we saw a very fortunate combo of rising home values, lower interest rates, and much more competition in the home loan market, which reduced the cost of buying or refinancing a home.

    And because home values are doing so well in the US and mortgage backed securities are such a safe bet for investors, people from all over the world are buying these securities, which means that billions of additional dollars from other countries comes to the US in the form of investments, which also bolsters our economy.

    A good deal overall, don’t you think? So, is there a causal link between the spike in homeownership and the baby boom? I’m not sure.

    One thing I would think you need to consider is the refi boom as well. The growth of home values may well have encouraged people to have MORE children than they otherwise might have had they not had such high equity through their homes.

    Just a thought.

    Thanks,

    David

  • carmine

    David,
    And a great thought at that! Refinace does seem less likely to encourage having first children. That seems quite likely to be so.
    Jim