Tony Downs – Real Estate Matters
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Tony Downs

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Downs: Americans must be more Realistic for Economic Recovery


Real estate industry leaders gathered at UST on October 26, 2011 for the Hall of Fame induction ceremony and to hear Tony Downs, Senior Fellow at the Brookings Institution

Tony Downs’ reputation precedes him.  Having authored An Economic Theory of Democracy at age 27, 23 books and over 500 articles, and being an active economist at the Brookings Institution since 1977, he has seen the rise and fall of the US economy many times over.  At the 2011 Minnesota Real Estate Hall of Fame induction ceremony, the University of St. Thomas presented Downs with a Certificate of Professional Distinction.  Downs presented the audience with an assortment of colorful jokes and a foreboding economic forecast.

Downs projects another 3-5 years of depressed economic conditions, due to the myriad of issues that he believes stem from Americans’ unwillingness to accept the reality of the economic situation, to make sacrifices, and to encourage realistic solutions from politicians.

“Short run focus is a big weakness in American democracy,” states Downs, who undoubtedly sympathizes with the current situation and believes that “what we really need is a miracle of some kind.”

Downs elaborates, highlighting the factors that have added up to produce the current Great Recession. “Long run federal spending must be greatly reduced,” advocates Downs, but he recognizes that now is not the time to reduce the federal workforce and put more Americans out of a job.  Interestingly, Downs notes that the Clinton administration observed the largest increase in American employment of any president, even though taxes were raised on the wealthy twice during those eight years.  The economic disparity between classes has become greater with the lowest 20% of workers earning just 3.4% of total income and the highest 20% bringing in one half of the country’s total income.  Downs believes it is in part the wealthier Americans’ responsibility to make the country more equitable; otherwise, uprisings will continue to spread, similar to what’s been happening in Greece.

The discrepancy in incomes has resulted in the middle class borrowing too much to consume imported foreign goods, with consumption becoming too large a portion of the overall GDP (consumption had risen to 70% by 2009, a historically high level); this level of consumption was not sustainable and must remain at previous levels for the health of our overall economy.

America should be investing in “production, education, and new energy sources” to protect its future.

To avoid a future financial crisis, Downs recommends breaking up the largest banks to spread the wealth amongst the nation’s 8,195 financial institutions so that none are ever too big to require bailing out.  With 80% of US capital held by only 10 banks, history is bound to repeat itself if we do not act to break up financial monopolies.

Click below to read the rest of Downs’ key points, including information about the real estate market…

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Why real estate has become a drag on the economy – a year in review.

chartsLast October, Dr. Anthony Downs provided the keynote address at the first annual Minnesota Real Estate Hall of Fame induction ceremony. His address, Why real estate has become a drag on the US economy was a realistic, unvarnished assessment of the issues that our country was facing at the time. He noted that in previous recessions, real estate had often led the way to recovery. Today, however, real estate is a serious drag on our economy’s ability to return to prosperity.

Dr. Downs will return to the University of St. Thomas on October 26 to present the keynote address, “2012 Real Estate Market Update” for the second annual Minnesota Real Estate Hall of Fame induction ceremony. In preparation for this event, I looked back at his presentation from last fall and was surprised by how relevant his address remains today. I thought it would be interesting to revisit his remarks to see how they compare to actual events in the last year. 

Most of the key issues that Dr. Downs mentioned last year are still with us today and many of his predictions have come to pass in the ensuing year. Here are several examples:

Unemployment. Dr. Downs observed “high rates of employment are likely to continue for several more years”. He mentioned consumers will not have the cash to increase spending and small businesses will have little reason to hire more. Related to employment he foresaw “no sudden change in conditions is likely to radically increase the demand for new workers and for new production”. Looking at the national employment rate that has been hovering at just over 9% and the Minnesota rate that has been over 7% since last fall with little prospect of near term improvement, his observations seem to be right on. Continue Reading

Minnesota Real Estate Hall of Fame

Good things come to those who wait…

We are currently working to finalize the 2011 Minnesota Real Estate Hall of Fame Inductee list. This information will be available soon.


Tony Downs, Keynote Speaker 2011 Real Estate Hall of Fame Induction Ceremony

In the meantime, mark your calendar for the 2011 Minnesota Real Estate Induction Ceremony featuring keynote speaker Tony Downs. Downs is an economist, a senior fellow with the Brookings Institute in Washington D.C. and author of 24 books and more than 500 articles. His presentation from the 2010 Real Estate Hall of Fame Induction Ceremony can be found in this blog post.    

Minnesota Real Estate Hall of Fame Induction Ceremony
Wednesday, October 26 2011, 5:30 PM
University of St. Thomas
Minneapolis Campus
Cost: $50 

Registration is now open for this induction ceremony.  For more information or to register, visit:  

This event has been submitted for one hour of real estate continuing education credit through the Minnesota Department of Commerce.  (approval pending)