Americans are becoming increasingly house poor.

Homeowners in every state but one spent more of their incomes on housing costs last year than at the start of the decade, according to data released Tuesday by the Census Bureau. Those in Alaska spent the same.

Nationwide, homeowners spent nearly 21 percent of their incomes on housing costs last year, up from just under 19 percent in 1999.

Housing analysts blamed surging home prices, higher interest rates and lower incomes for hurting affordability.

‘It is now much more difficult for first-time homebuyers to get into the market, and for existing homeowners to trade up,’ said Mark Zandi, chief economist at Moody’s Economy.com. ‘This decline in affordability is the catalyst for the current sharp decline in housing activity.’

The housing market has gone soft in many areas, but home prices are still much higher than they were at the start of the decade. Nationwide, median home values jumped 32 percent from 2000 to 2005, to $167,500.

Household incomes have not kept up, dropping 2.8 percent during the same period.

‘Until incomes catch up, the housing market is going to remain flat,’ Zandi said.

America’s home ownership rate is at a near-record 68.7 percent. But some housing advocates warn that declining affordability will make it difficult for low-income owners to keep their homes.

For example, the government says housing costs are excessive if they top 30 percent of household income. Nationally, 34.5 percent of homeowners with a mortgage had housing costs that topped that benchmark in 2005, an increase from 26.7 percent in 1999.

The percentage of homeowners exceeding the benchmark increased in every state but one during the period. In Hawaii, it stayed the same at 39.7 percent.

Housing costs are defined as mortgage payments, taxes, insurance and utilities.

‘Families want to become homeowners and they are willing to spend more to get there,’ said Jeffrey Lubell, executive director for the Center for Housing Policy, which advocates for affordable housing.

‘But as they spend more and more, they are taking on mortgages that could put their homeownership at risk,’ Lubell said.

The Census Bureau released 2005 housing data from the American Community Survey, which is replacing the ‘long form’ on the 10-year census. Starting this year, the annual survey of about 3 million households provides yearly data on communities of 65,000 or larger. By 2010, it will provide annual multiyear averages for the smallest neighborhoods covered by the 10-year census.

The Census Bureau previously released data in incomes, poverty, race and ethnicity.

California stands out among the states with expensive housing costs. It ranked No. 1 in median home value, at $477,700; No. 2 in monthly housing costs for homeowners, at $1,912; and No. 2 in monthly costs for renters, at $973.

Nearly half of California homeowners _ 48 percent _ spent more than 30 percent of their incomes on housing last year.

‘We really are reaching the outer edge of the envelope of what people can manage,’ said Cynthia Kroll, senior regional economist at the University of California at Berkeley.

Among the other findings released Tuesday:

_New Jersey had the highest monthly housing costs for homeowners, at $1,938.

_West Virginia had the least expensive monthly costs for homeowners, at $797.

_Hawaii had the highest monthly costs for renters, at $995.

_North Dakota had the lowest monthly costs for renters, at $479.

_Mississippi had the least expensive median home value, at $82,700.

_Among America’s 15 largest cities, San Francisco had the most expensive homes, with a median value of $726,700. Detroit had the least expensive, at $88,300.

_San Diego had the biggest increase in median home values from 2000 to 2005, going from $249,000 to $567,000.

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By Greg Quinn and Scott Lanman

Oct. 6 (Bloomberg) — Former Federal Reserve Chairman Alan Greenspan said the “worst may well be over'’ for the U.S. housing industry that’s suffering its worst downturn in more than a decade.

Greenspan, speaking at a conference in Calgary today, pointed to a “flattening out'’ of weekly mortgage applications after they went down “very dramatically.'’

A longer and deeper U.S. housing slump may reduce consumer spending enough to push the economy into recession, some forecasters warn. Greenspan’s comments may represent a more sanguine view than his successor, Ben S. Bernanke, who said two days ago in Washington that the market is in a “substantial correction'’ that will lop about a percentage point off economic growth in the second half and restrain the expansion next year.

Fed Vice Chairman Donald Kohn, a former top adviser to Greenspan, also said this week that while he doesn’t know how long and deep the housing slump will be, it probably won’t sink the U.S. economy into a recession.

Mortgage applications in the U.S. rose last week by the most since June of last year as lower borrowing costs spurred home sales and refinancing, the Mortgage Bankers Association reported Oct. 4.

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Many neoconservatives like Paul Wolfowitz are disciples of a philosopher who believed that the elite should use deception, religious fervor and perpetual war to control the ignorant masses.

What would you do if you wanted to topple Saddam Hussein, but your intelligence agencies couldn’t find the evidence to justify a war?

A follower of Leo Strauss may just hire the "right" kind of men to get the job done – people with the intellect, acuity, and, if necessary, the political commitment, polemical skills, and, above all, the imagination to find the evidence that career intelligence officers could not detect.

The "right" man for Deputy Defense Secretary Paul Wolfowitz, suggests Seymour Hersh in his recent New Yorker article entitled ‘Selective Intelligence,’ was Abram Shulsky, director of the Office of Special Plans (OSP) – an agency created specifically to find the evidence of WMDs and/or links with Al Qaeda, piece it together, and clinch the case for the invasion of Iraq.

Like Wolfowitz, Shulsky is a student of an obscure German Jewish political philosopher named Leo Strauss who arrived in the United States in 1938. Strauss taught at several major universities, including Wolfowitz and Shulsky’s alma mater, the University of Chicago, before his death in 1973.

Strauss is a popular figure among the neoconservatives. Adherents of his ideas include prominent figures both within and outside the administration. They include ‘Weekly Standard’ editor William Kristol; his father and indeed the godfather of the neoconservative movement, Irving Kristol; the new Undersecretary of Defense for Intelligence, Stephen Cambone, a number of senior fellows at the American Enterprise Institute (AEI) (home to former Defense Policy Board chairman Richard Perle and Lynne Cheney), and Gary Schmitt, the director of the influential Project for the New American Century (PNAC), which is chaired by Kristol the Younger.

Strauss’ philosophy is hardly incidental to the strategy and mindset adopted by these men – as is obvious in Shulsky’s 1999 essay titled "Leo Strauss and the World of Intelligence (By Which We Do Not Mean Nous)" (in Greek philosophy the term nous denotes the highest form of rationality). As Hersh notes in his article, Shulsky and his co-author Schmitt "criticize America’s intelligence community for its failure to appreciate the duplicitous nature of the regimes it deals with, its susceptibility to social-science notions of proof, and its inability to cope with deliberate concealment." They argued that Strauss’s idea of hidden meaning, "alerts one to the possibility that political life may be closely linked to deception. Indeed, it suggests that deception is the norm in political life, and the hope, to say nothing of the expectation, of establishing a politics that can dispense with it is the exception."

Rule One: Deception

It’s hardly surprising then why Strauss is so popular in an administration obsessed with secrecy, especially when it comes to matters of foreign policy. Not only did Strauss have few qualms about using deception in politics, he saw it as a necessity. While professing deep respect for American democracy, Strauss believed that societies should be hierarchical – divided between an elite who should lead, and the masses who should follow. But unlike fellow elitists like Plato, he was less concerned with the moral character of these leaders. According to Shadia Drury, who teaches politics at the University of Calgary, Strauss believed that "those who are fit to rule are those who realize there is no morality and that there is only one natural right – the right of the superior to rule over the inferior."

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RodgerRafter

The Fed stopped counting M3 back in March, but you can still get a pretty good estimate of it by looking at a couple of other numbers they publish. Both of those numbers were rising at an accelerated rate already this year, and really took off in August and September.

Institutional Money Funds rose by about $10.6 billion per month for the first 7 months of the year, but rose by $27.6 billion in August and around $20 billion in September.

Large Time Deposits at Commercial banks in the US were rising at about $25 billion per month for most of this year, but rose by $31.9 billion in August probably even more in September.

The money has to come from somewhere. In this case it appears to be coming from two places. The first being that it is being squeezed out of the hands of average citizens, and the second is that it is being created in the form of new commercial debt.

Consumers aren’t borrowing as much as they used to. Consumer Credit was up only $5 billion in August, after rising $8.3 billion in July and $34.7 billion in Q2. Real Estate loans at commercial banks were actually down $0.6 billion in August after rising by about $30 billion per month for most of the year. With home prices stagnating, and consumers already overextended, credit appears to be tightening.

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