To be honest, the only thing Jared – yes, I mean Ivanka’s Jared – and I have in common is real estate. Deals and buildings are falling apart around us.
Jared has had his well-publicised problems with 666 Fifth Avenue, or 660 Fifth Avenue, as he renamed it after perusing the Bible. The Book of Revelation has nothing good to say about 666.
I, in turn, have been driven crazy by unreliable builders in two different countries. Windows are being torn out and remounted in one of my homes. Scaffolding surrounds my other home, while old stucco is being demolished and replaced by new.
Both my homes were built less than ten years ago. In both cases the builders were negligent, and have had to pay for the remediation. So why does this keep happening, one wonders? Wouldn’t it be so much easier to get it done right in the first place?
I decided to indulge in an amateur hour of analysing the real estate business. Here is my off the cuff take on some of the key contributors to our present-day problems.
The Jared effect: You know the one where somebody overpays for a piece of real estate.
Whether we are talking real estate in New York, or somewhere else, the effect is the same. The investors need to show a profit on something they initially overpaid for. This often ends with corners being cut.
Unless an unsuspecting Chinese investor with pots of money from unidentified sources can be found – and held on to. But even they have to make a profit, although “indirect profits” might have sufficed in the case of 666 Fifth Avenue. Yes, it’s the building Jared overpaid for in 2007, in case you are wondering.
Jared is more of a “I´ll take this building ” type of person, while I am more of a “I´ll take this condo” person. We both have to live with our bad choices. I actually have to live in, not only with, mine. Luckily I never overpaid, unless you put a price on my peace of mind.
The Alibaba effect: I am sure you are familiar with Alibaba.com, the site where everything is cheap, or cheaper, compared to prices anywhere else.
You can’t always be sure that what you receive is what you ordered, or rather what you thought you ordered. If you are lucky enough to receive anything at all. But the price is competitive.
The Alibaba effect can be seen clearly in construction too. There are always so-called Alibaba offers out there. They sound good, they may even look good, the price is definitely right, but the quality is a mystery. It may be, but more probably isn’t, as good as what you would have bought before the world became so competitive. To beat the Alibaba effect, formerly reliable suppliers have to “go Alibaba” too.
Bidding wars abound. Corners are cut in all areas to ensure that the prices are competitive.
The Buffet effect: There is so much to choose from, so many alternatives; starting with planning and financing, and ending with building and marketing.
Projects become more and more complex as old technologies meet new, as financing and marketing become more and more “innovative”, as national meets international, both in terms of material and human resources, and as the customers demand more choice.
The Buffet effect gets out of hand. It becomes difficult to offer such a broad variety of choices at the fixed buffet price. Corners will have to be cut.
How many buffets have you seen with the same care for superb ingredients as in a good à la carte restaurant? After your second buffet helping you start to notice the small, but important, differences; the shrimps have seen better days, the potatoes are soggy, and the best that can be said about the main course is that it´s filling. By then it is too late.
The Shylock effect: It all looks good until it begins to fall apart; when the budget is exceeded or the market turns sour, or both. The financiers want their pound of flesh. Since this is real life, not a play by Shakespeare, the Shylock’s will win in the end. Again corners will be cut.
No wonder so many buildings today look good, sound good, and offer great living or working choices – until the cut corners surface.
Come to think of it, this is not only the real estate business I am describing. This is our world today.
It’s falling apart with choices. Too many moving parts for Jared and me to process them effectively, even though we tell ourselves that we are in control. The building industry keeps telling itself the same, but the results tell a different story. The control is not there anymore.
The same is true for the world. I sit at home and blog, because I realise that Western world, as I have known it, is spinning out of control. I watch it slowly falling apart, and feel powerless.
Jared has taken a more aggressive route. He is still out there buying and selling. When he isn´t busy with the Chinese, he is brokering a real estate deal on a larger scale in the Middle East. It’s all about the land there too. It looks like the Palestinians will end up with the bill for this one. With Jared in the mix, the price may well be too high – again.
The success of the populists is starting to make a weird kind of sense. It’s the Jared, Alibaba, Buffet and Shylock effect all over again. Countries overreach like Jared, boost their economies with Alibaba fixes, enjoy the Buffet while it lasts, and wake up to Shylock at their door.
Reliable politicians – an oxymoron, I know – try to offer sensible counteractions, but the people want a quick Alibaba fix. Isn’t this what Bannon, Trump’s alt right left hand, is said to be betting on? That we will keep cutting corners until it all comes crashing down?
Steve Bannon became rich as a global capitalist. Now he preaches anti-globalism. He has the money to make a crash work for him. The Shylocks, read Steves, always win in real life. Maybe Jared will get lucky too, this time.
I am clearly slated for the role of the lamb in this scenario; the one that is to be slaughtered. I am! Says the lamb.
Why does this keep happening, I wondered earlier on. I still have no answers. Some of you may have noted the hidden reference to Theodore Roethke above. I leave you with his poem the The Reckoning.
A good poem says so much more than these 1095 words. Not that I am counting, but WordPress is.