Annual Holiday Breakfast

Join us for a delicious breakfast, and hear from our incoming president, Michael LeCorgne, on the future of the HBA. We will also be recognizing some of the charitable foundations our members have helped to support throughout the year.

Friday December 2 @ 8:30am
Email Philip@home-builders.org to RSVP. 

New Orleans Museum of Art,
Collins Diboll Cir, New Orleans, LA 70124

December Day of Education!

 

 

Wednesday, December 21st     JEDCO Building 700 Churchill Parkway Avondale, LA  70094    Cost Per 2-hr Class:   Members - $50 ($100 for 3) Non-Members - $75 ($150 for 3)       8:30-10:30:  Cloud Computing for Small Business Speaker:  Michael Wedge 10:30-12:30:  Crime Prevention Through Environmental Design Speaker:  Rolf Parelius 12:30-1:30:  Lunch - Provided by the HBA 1:30-3:30:  (tentative topic) Quickbooks for Builders Speaker:  TBD To RSVP, Contact: Philip Thomas @ (504) 837-2700 or philip@home-builders.org

NOEL would like to thank John Heald of One Man and a Tool Box, LLC, for donating their time to do site inspections for the Jefferson Joining Forces program.  

The Jefferson Joining Forces program remediates code violations for elderly, low-income and/or disabled home owners.  These repairs are done at no cost to the home owner, while being fully compensated to the contractor.  For more information on how you can donate your services or products to the Jefferson Joining Forces program, contact Philip Thomas @ (504) 837-2700.

A Recession Is Unlikely

Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at elliot@graphsandlaughs.net. His daily 70 word economics and policy blog can be seen at www.econ70.com.

The current US economic expansion is one of the longest on record, and, come March, will become the third longest in US history, dating back to the start of record keeping in 1854.  As such, there is increasing concern that we are due for a recession. That concern has only heightened, given that the last downturn was particularly nasty.  This fear is weighing not only on household spending, but, more importantly, on corporate spending on plant and equipment, holding back GDP growth and labor productivity.  Fortunately, this concern is misplaced.  

Simply put, age is not what kills expansions.  Rather, it is an overheating economy that generally results in a recession.  When wages start rising swiftly, investment activity starts taking off, debt levels grow rapidly, asset prices become untethered to reality, commodity prices remain high, and inflation rises rapidly, the Federal Reserve invariably intervenes.  In the attempt to cool things down, all too often the Fed raises rates too quickly or too much and accidently drives us into a recession.

However, there is currently little evidence of any pre-recessionary economic exuberance.  As a matter of fact, most of the economy is still behaving as if we were recovering from the recession rather than enjoying the boom times that come at or near the peak of an economic expansion.  Growth, be it domestic or international, is subdued.  Commodity prices are, with few exceptions, at or near cyclical lows, and bank lending is probably best described as solid.  Moreover, inflation, while slowly rising, remains below the official Fed target rate of 2%.  Lastly, while the unemployment rate is just 5%, wage gains are much weaker than they have been before previous economic downturns.  This suggests that there is still slack in the labor market and that the Fed will not have to start raising rates quickly anytime soon.  

Spending by households and businesses is also not signaling a recession.  Purchases of durable goods such as cars and dishwashers averaged 7.5% of GDP in Q2 2016, well below the 8.5% average that has persisted in years preceding recessions.  Private investment spending on new home construction, business related software and equipment and so on - is equally low.  Moreover, the household debt-service ratio, or how much after tax income Americans are devoting to debt payments, is near its lowest level ever and personal savings rates are near their highest level in twenty years.  Lastly, corporate profits are once again on the rise, reducing slightly elevated stock market valuations.     

The above notwithstanding, a recession is always a possibility due to economic shocks emanating from abroad that can dramatically raise energy prices, or a war or an election that can hurt household spending and business confidence.  However, other than that, it would probably take much stronger economic growth for a prolonged period before the Fed felt compelled to raise interest rates quickly enough to meaningfully slow down the economy and, in the process, possibly bring on a recession.  

In short, the current economic expansion that started in July 2009 looks increasingly likely to become the longest economic expansion ever.  Increasing this potential is that even though wages and inflation are finally rising, the Fed has communicated its interest in seeing wages and inflation rise further as they have been too low for too long.  So, enjoy the current expansion; it may well last a lot longer!

 

Louisiana Economic Development provides an employer/employee service called Louisiana Job Connection. They have reached out to the HBAGNO to be a resource for our members who are in search of employees to meet the current construction demands as much of the area is rebuilding. Below is a customize link for our association. Use this free resource if you are in need of new employees, or are a job seeker. 

POST A JOB

JOB SEEKER

LEARN HOW TO GET YOUR NEXT RENEWAL FOR FREE

 

  

Certified Aging in Place Designation Classes

 

 

CAPS I - Wednesday, November 16  CAPS II - Thursday, November 17  Business Management for Building Professionals -   Friday, November 18    All classes - 8:30am - 5:00pm JEDCO Building 700 Churchill Parkway Avondale, LA  70094    Cost Per Class (3 total):   HBAGNO & NAHB Members - $225 Non-Members - $275       To RSVP, Contact: Philip Thomas @ (504) 837-2700 or philip@home-builders.org

Tax Reform Done Right

Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at elliot@graphsandlaughs.net. His daily 70 word economics and policy blog can be seen at www.econ70.com.

 

 

With elections right around the corner, tax proposals are surfacing like mushrooms after a rainstorm.  While we can all agree that the current tax code is a disaster, the most recent proposals regrettably range from just bad to positively dreadful.  Why?  They are political documents designed to attract voters -- not tax policy experts and economists!  With this in mind, I offer several key principles that should be generally followed in any successful tax reform.   
    

The primary goal of taxation is to raise revenue while causing the least economic damage possible.  This means broadening the tax base.  Think about it; if the only thing we taxed was oregano, we would all stop buying oregano.  If, however, we taxed all spices equally, there would be no reason to avoid oregano, but there would be a strong incentive to eat bland food and smuggle in spices.  But if we tax everything equally, then you have no incentive to alter your behavior as you cannot reduce your taxes.  Better yet, as you broaden the base, you will be able to lower tax rates and still collect the same amount of revenue.  Of course, this means doing away with most deductions, credits and exclusions, including tax breaks for charitable donations, employer-provided health insurance and state and local income taxes.       
 

The next step involves simplification.  Most taxpayers resent the fact that the rich hire clever accountants and lawyers, thus reducing their tax payment to nothing or next-to-nothing.  This is corrosive behavior, creating distrust of the entire system across the political spectrum.  Moreover, simplifying our 75,000-page federal tax code would cause entrepreneurs to think harder about how to make more money and grow their businesses, not on which lobbyists and lawyers to hire and how many racehorses to buy, all of which are unproductive activities.  Tax simplification means doing away with the corporate income tax and all the insane rules regarding investment expensing, depreciation schedules, repatriation of profits, tax-deductibility of debt, R&D tax credits and so on.                 

Third, tax consumption -- not savings.  When the government taxes savings, income, interest payments, dividends, capital gains, wealth and even inheritances (but we can argue about that one), it reduces the incentive to save, invest in new plant and equipment, and, most critically, take financial risks.  Recognizing this, the government already allows for health-savings accounts, IRAs, life-insurance exemptions and a multitude of trusts that the rich use to shelter wealth and avoid inheritance taxes.  Why not let everyone do it without having to jump through any hoops?  While consumption taxes such as sales taxes or value added taxes may sound regressive, they need not be.  Consumption by the wealthy can be taxed at a higher rate than consumption by the poor.  In this way, the tax code can remain progressive.  Moreover, as the consumption tax will be based on the difference between what you earn and what you save, this plan will discourage hiding assets offshore, giving our economy yet another boost!

The last time the tax code was reformed was during President Reagan's second term; roughly 30 years ago!  We are clearly overdue.  While reaching a compromise that both ends of Pennsylvania Avenue will agree to will be tough, if done as outlined above, it will boost GDP growth and improve living standards.  Congress, get going!