Hypocrisy discernment:  Elizabeth Warren’s house flipping

http://www.nationalreview.com/article/418907/elizabeth-warren-bought-foreclosed-homes-make-quick-profit-jillian-kay-melchior

I suppose there’s a set of assumptions where you’re to conclude Elizabeth Warren is a hypocrite for engaging in the unseemly business of house flipping…  but I’m a contrarian you know, so I guess it’s that I think those assumptions are probably wrong.

The trope you start with is that the profits gained by house flipping are absurd.  Ya know, you pay say $30K cash for a house and sell it with some improvements for $120K 6 months later… that’s $90K!  Well, you execute the improvements with cost effectiveness and market it to sell quickly and then navigate the transactional landscape with a certain diligence.  That’s what we call ‘work’.  People get paid for ‘work’.  And $90K was the gross before expenses, and the house could basically occupy the whole 6 months of your time.  It’s just to say, house flipping is a job that pays comparably to some other decent jobs and you can excel if you can survive the learning curve w/o losing your ass.  Not that I ever did it, but I got my side business that is analogous in that its good money but not easy money.

So that’s not a hypocrisy for Warren, and she was somewhat removed such that she was merely capitalizing / profiting from an enterprise being run by her brother.  Maybe there’s some irony to be observed in that ‘investment’ such that it exploits an arbitrage situation created by the ‘tragedy’ of foreclosure.  But, someone’s got to do it and it’s not as if Warren is so far left that she’s proposed we outlaw the buying, remodeling, and selling of homes.

There’s also some moral umbrage in that it was for ‘quick bucks’.  I do think the notion of ‘quick’ –ness is obviated by having your cash tied up in an asset that takes so much effort to resell.  Selling houses ain’t easy.  And there’s the risk.

And… there’s kinda something morally upright about having your money in … houses… rather than say in a brokerage account doing the financialization thing.  Very Warren-esque.

Discernment: it’s not hypocrisy

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