Washington, D.C. is just an amazing city. My husband and I took our twins for a quick visit to celebrate their 16th birthday, and D.C. is just a stunning place to visit. The energy of the city is palpable, and the architecture is just beautiful. Here are just a couple of pictures of Capitol Hill from our tour.
This trip was very enlightening to me because it helped me to understand why the politicians and bureaucrats in Washington D.C. seem to be out of touch with the rest of the United States.
#1 - Gorgeous City
It might be hard to think life is tough when you live in such a beautiful city. The Roman/Greek influenced buildings are classical and, therefore, never go out of style. You walk along marble steps, view bronze statues and Ionic order columns everywhere. There is a kinetic energy in the air that is hard to explain. Our country is young, in comparison to the rest of the world, but these buildings in D.C. feel ancient and their workmanship commands respect. It is easy to see how people who work there would pick up on the importance and majesty of being in such a place.
I can see why President Biden believes the economy is good (or is better than before his presidency began) when he is surrounded by this scenery and any lack of real violence. There are more than 2,000 Capitol Hill police with fences and borders protecting the White House. I did not see any homeless people which I thought was strange only because I have seen them surface in nice areas of Dallas in the last year. Maybe D.C. needs to help other cities understand what they are doing to help the homeless?
#2 - Visitors love it
I helped take many pictures of families visiting D.C. Here is one conversation I had with one family -
Me - Where are you from?
Woman - (in the most gorgeous Spanish accent) We are from Barcelona, Spain and visiting family who lives in Bethesda.
Me - How wonderful! How do you like your visit so far?
Woman - (with enthusiasm) Washington D.C. is one of the best cities in the world!
She was so endearing and sincere. People visiting D.C. were awestruck, like me, and loved being there. It is easy for me to see why President Biden and politicians in D.C. believe everything is fine when they have visitors, like this woman, coming to their city believing it is one of the best places in the world. Can inflation really exist with this kind of attitude?
#3 - Energy Tone Deaf
We decided to rent a Tesla while we were there. I was amazed at how few electric vehicles (EVs) I saw in D.C. I am glad I did not have to make a charge while I was there because I did not see any charging stations. I have no doubt that I could have found one with an app, but it is not hard to find charging stations here in North Dallas. We have so many Teslas and EV vehicles here that the irony does not escape me.
On our last night, President Biden’s motorcade drove by, and it was just breathtaking. I was amazed to see the amount of police motorcycles, police cars and then black chevrolet SUVs drive by. It was pretty cool. It also made me think… why do they drive gas guzzling vehicles when we are all supposed to drive EV?
Government vehicles and buildings are powered by gas and coal, but they do not have to pay for it. As the gas prices rise, President Biden still rides around in his 40 gas guzzling motorcade before he hops on one of his gas guzzling helicopters to fly to his gas and coal powered home on the beach. I express it this way because if you do not have to pay for gas, it is not real to you.
The Tea Leaves
It is understandable to be out of touch when living in beautiful D.C. Hope is not lost though. Tea leaves have been left, as clues, by people living outside of D.C.
Tea Leaf #1 - Special Texas-34 Election
On Tuesday, Mayra Flores won the special election in Texas district 34 which is a south Texas district. This is truly amazing when you look at the swing in voting from this 85% latino district -
2012 - Barack Obama won by more than 20%
2016 - Hillary Clinton won by more than 20%
2020 - Joe Biden won by more than 4% (*This is the original tea leaf)
She won as a Republican AND the first ever Mexican born person to win in Congress. Only in America can someone born in another country, live modestly in the US, and be voted by her community members to represent them in the house of congress.
Mayra is 36 years old, and her husband is a border agent. She ran on a platform of protecting the border as well as putting American interests first. This is one of her ads she ran during her campaign.
She is not alone as other Latina women are running for Congress as Republicans for the midterms in November. They are worried about the safety of their communities because more than 3 million “migrant apprehensions” at the border have occurred since President Biden has been President. The South Texas communities are being overrun right now, and the people really really want change.
This is really not complicated or conspiratorial. They want a safe community, to provide a living for their family and to protect their constitutional rights. Right now, the Latinos in Texas do not believe the Democrats support that agenda.
Tea Leaf #2 - 6.3% Mortgage rates Up and Building permits Down
Tuesday brought another “surprise” in the average fixed 30 year home mortgage. It jumped from 5.3% last month to 6.28%. To put this in context…
That marks the highest mortgage rate since 2008. The 3.2 percentage point jump in mortgage rates over the past year also marks the biggest upward swing since 1981.
The housing market matters because it makes up about 1/5th of our economy or gross domestic product (GDP). This is one main part of China’s GDP that they are trying to improve. China is trying to get people to invest in homes in order to help improve the growth of their economy. It will be very difficult for China to become the number one economy without more of their people investing in homes. However, many Chinese people are reluctant to take on “debt” because of the uncertainty of their economy with the lockdowns of Shanghai and other cities.
There are 2 measures used to calculate the Housing Market into the GDP -
Residential investment (4.2%) - building and construction
Housing services (13.3%) - mortgages, rent, utilities
Mortgages vs. Permits: From the chart above, you can see the big dip in “residential investment” during the Housing bust starting in 2006, but there was a slight decline in the “Housing services” for that same time period. It is interesting that the big bust that seemed to take down our whole economy came from the dip in the smaller portion of the housing market = “Residential Investment” (building) while it did not have as much of an effect on the “Housing services” (mortgages). If you look at the 1970s and 1980s, the time period of stagflation, they had a wild ride with “residential investment”.
Building Permits & Recessions: Therefore, mortgage rates rising does not mean there is a big housing bubble waiting to be burst. A better key indicator of problems will be building permits for construction on single and multi-family residential homes. This chart shows the building permits and where the recessions were in the economy. It is interesting to see how the height of the building permits for the Housing bubble was in September of 2005, but the burst did not come until a year later.
According to the latest Census report for building permits in May 2022 -
Permits are Down 7% from last month (April 2022), but…
Permits were 0.2% higher from this time last year (May 2021)
I do not think these are concerning signs right now, but the report also cautions that “it may take three months to establish an underlying trend for building permit authorizations.” The question for me is what is the lag time between the rise in interest rates and the fall in building permits?
Mortgage rates: Can affect at least 3 areas of the economy.
#1 - Residential investments: Builders and construction companies tend to apply for less permits in building when mortgage rates rise. It is a good indicator that less people will be willing to buy homes at such high rates. This is also why the Census report on building permits for June, July and August will be good tea leaves to read about the state of the economy.
#2 - Consumer stress: A rise in mortgage rates is also causing real issues with the consumer. It does not just affect being able to buy a home, but it affects those whose mortgage and rent payments will rise because of the higher interest rate. Inflation has already stretched the consumer thin with rising costs in gas and groceries which are basic necessities for our standard of living. For many Americans who rent or own a home, they are seeing just about every bill go up in cost which is extremely stressful.
#3 - Retailer stress: There is another domino effect this has on the economy = retail shopping. For example, Target has just “warned its profits would drop because it needs to cancel orders with vendors and offer discounts to clear out unwanted goods, the latest sign of the sudden mismatch between supply and demand inside America’s stores.” These type of loses affects the ability for retailers to maintain their staff or keep wages at their current rates.
I do not think we are in jeopardy of layoffs right now because there is such a labor shortage right now. Retailers and fast food services are desperate for help. Here is one sign I pass every time I go and get the cheaper gas at Walmart. I am just not sure places like Burger King will be able to keep wages at this rate even though they really need the employees.
Rising mortgage rates creates a domino effect in several areas of the economy that will be hard to predict and difficult to stop.
Tea Leaf #3 - Obama’s propane tank
President Obama has a beautiful secondary residence in Martha’s Vineyard, a place I am still dying to visit. It is about 6,900 square feet and has an amazing view of the ocean. Good for them!
Recently, President Obama applied to the city for a permit to install 3 underground propane tanks that equal 2,500 gallons. This was such an unusual request that one review board member said, “We’ve never had a private propane tank come to us” because residents usually use generators.
“Propane comes from natural gas wells and oil wells”. So, why use propane tanks? Maybe because gas is more reliable because you can store it, and it can generate enough power to run a 6,900 square foot home all on its’ own if there happens to be any blackouts? Does President Obama know something we do not or is he choosing to believe experts warnings about an energy crisis causing blackouts this summer? Are you annoyed yet with my paragraph of back to back questions?
Many of the articles warning about rolling blackouts this summer are setting up “climate change” and rising heat wave with surging demand as the culprits. However, President Obama has shown us that the best way to prepare for a surge in demand or even “climate change” is a reliable energy source = natural gas. This is the opposite of what President Biden is doing. Instead, “the Biden Administration’s effort to transition America’s six energy grids to a decarbonized system” will be a major part of the energy crisis problem this summer.
Maybe the White House Doesn’t Drink Tea?
Americans did start to drink coffee more as a revolt to The Tea Act of 1773 that gave the British East India Company a monopoly on tea. Our distaste for monopolies started early, and the colonists started their boycott of tea that changed their preference in hot beverages. Maybe it is time for a reconciliation so D.C. can be in better touch with the lives of average Americans across the country. ;)
Regardless of tea leaves, I felt a sense of deep love and gratitude for my country while visiting Washington D.C. We have a daily opportunity to try and work together in self-governance. It is a messy process, but I would not have it any other way.
Sincerely,
Someone who doesn’t drink tea
I enjoyed reading your great thoughts! It was 5 years ago when my home teachers (the Miners) took me and my daughter visited the D.C. I have very good memory of it. Thank you for sharing your trip and thoughts! I wish the same as you do that the Americans can be brought back to great again and even greater💪
Thought provoking questions— while patriotic. Well written! Enjoyed the trip with you and the twins.