“The Lessons I Didn’t Learn From My Mom”

Posted by Marc Hodak on May 5, 2008 under Economics | Comments are off for this article

Barbara Corcoran wrote two books subtitled “…and other business lessons I learned from my mom.”

The lessons themselves are interesting and useful, but Corcoran, who boasts straight D’s in high school and college demonstrated that there were some important economics lessons that were missing or forgotten. The other morning on the Today Show, she gave her take on the current crisis of foreclosures: the big financial institutions lured poor suckers to buy homes they couldn’t afford in order to make a buck, and the government wasn’t doing enough to help these poor people. Some of you might recall that real estate brokers were involved somewhere in the this process…hmm, what was that? Oh, yea brokering the transactions. Hey, Corcoran is a broker!

Apparently, one of the lessons her mom taught her was, “always cast blame in every direction but yours.”

Corcoran established her credibility on economics, as it were, beginning in November 2005, when she was pooh-poohing economists who were warning about the unsustainability of the housing boom:

It’s funny what’s happening right now – there’s so much uncertainty in the market, and everybody’s been spooked by all the media coverage that’s out there that it really is a great time to buy. It’s a great opportunity right now, and I don’t think it’s going to last very long…This ‘bubble babble’ is baloney, and it’s scaring people away and making buyers “think about it”, and while they’re “thinking about it”, the house prices are going to go up, and I truly believe that.

By next Fall, Corcoran was singing a different tune…about why people should be buying:

If you look at the actual sale prices, the deals that are happening now, prices have already come down, and they’ve come down by a lot.

Another lesson she learned was, “It’s OK to mislead your customers in order to make a sale.”