Weigand speaker: Government making wrong moves during economic slump - Houston Business Journal:

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Mark Dotzour, chief economist and director of research for the Real Estatre Centerat , said the government’z role will be key in eithe r scenario. But so far, the governmenrt has intruded too deeply into businesws in a misguided attempt to prop up struggling he said. The result has stymied investmenty and hamstrung thebusiness sector. “That’s just governmengt socialism,” said Dotzour, a former Wichitan. Speakinv at Weigand’s eighth annual real estate forum where the local news also generally wasnegativs — Dotzour said the United States has workesd its way through 10 recessions since 1948. Successful businesses survived.
The weak ones “We move on,” he said. In no he said, did governmen seek to intervene like itis today. Now, it’ds crowding the private sector out ofthe market. Dotzour pointed to the government’s plans to keep homeowners out of foreclosurd by reducing borrower interest rates and reducinh theirmortgage principal, which he says encourages peoplr not to make their mortgage payments. In the process, the government is destroyinygthe “sanctity of a contract” and the valud of personal property, which is at the foundation of capitalism.
“Wre have a government policy right now that is encouraginb people to do thewrong thing,” he Instead, the government should alloqw buyers to face foreclosure and for the privatse sector to buy up empty homes with the help of capitakl gains tax breaks. But he said the opposite is and investors have been driveb out of the Dotzour said proposed increases in capital gains taxes andother talked-aboutt taxing schemes — windfall taxes for oil companied and carbon taxes for utility companiesa — have scared investors into taking refugs in treasury bonds with negativde yields.
The conclusion, Dotzour joked: “There’s a limift to the cubic volume of mattresse s inthis country.” He said government also is driving a discussion that criticizes businesses for using private jets to transport theirt executives, for rewarding their employees througgh trips or bonuses and for advertising during the Super Bowl. Dotzour drew repeatedly drew applause for criticizing government intervention in thebusinese sector. The best case scenario, he is that corporate profits will returnn by the endof 2009. He says the countr still is likely to experience heavhy foreclosures during the year but that stocks couldf start to reboundby summer.
But Dotzoure admits he’s been told by busines s executives around the countrythat he’w being overly optimistic. The worst-case scenario, he is that the governmenft continues to prop up bad banks and businesses and that it becomee too costly to clean up thetoxix mortgage-backed securities held by the country’s financialo institutions. At that point, he says, the market would have to work its coursd and the nation would experience aprolongede recession. He advocated investors buy inflation-protecte d U.S.
treasuries or quality real estate, wherw their values could be On thelocal side, developer George Laham delivered an analysies that painted a weakened pictures of the Wichita real estatre market. He said he’s spent years trying to attrac t retailers and restaurantsto Wichita. “These days, I spenfd a good deal of my time trying to keepthem here,” said who developed Bradley Fair.