N.Y. Times Admits Recession Not Over; Proposes Hilarious Solutions

Los Tiempos de Nueva York today gives front-page coverage to the Trulia poll you read about last week in Reason

David Streitfeld, a former L.A. Times hand and probably the best person either Times has had on the California real estate correction, gives the lowdown

Trulia and another real estate site, RealtyTrac, commissioned Harris Interactive to take a poll last November about when people thought the market would recover. A third of the respondents chose 2014 or later. But in a new poll, released this month, the percentage giving that answer rose to 54 percent. 

The sharp decline in prices since 2006 has meant a lost decade for many owners. But what may prove even more discouraging to potential buyers is academic research showing that the financial rewards of ownership were uncertain even before the crash. 

At some point we’re going to need a moratorium on the phrase “lost decade.” Asking prices in major markets remain well above where they were ten years ago, in 2001. I have been chronicling the failure to deflate asking prices in my own neck of the woods, and a few minutes with Zillow will almost certainly reveal that prices in your area are above where they were a decade ago. What has dropped back to where it was more than ten years ago is the percentage of Americans who nominally own their homes. Streitfeld notes how the rate of homeownership has been dropping: 

Even as the economy began to fitfully recover in the last year, the percentage of homeowners dropped sharply, to 66.4 percent, from a peak of 69.2 percent in 2004. The ownership rate is now back to the level of 1998, and some housing experts say it could decline to the level of the 1980s or even earlier. 

While this decline in nominal homeownership is important, it masks the much longer-term decline in real homeownership. The equity portion of homeownership (i.e., the part that is owned by you rather than the bank) has been in slow decline since at least the 1950s, and freefall since the 1980s. One of the positive effects of the recession has been to make saving and value creation popular ideas again – popular, that is, everywhere outside the government and the destination media. The Times editorial board piggybacks on Streitfeld’s story with a call for more of the same fiscal policy that got us where we are today: 

Unfortunately, no one in Washington is pushing policies to promote stronger growth now. 

The sinkholes in the economy should be obvious. Most prominently, the housing market is still awful, and state and local government budgets are still a mess. Conditions apparently have to get worse before deficit-obsessed policy makers will be ready to address them, including with bolstered foreclosure relief and more fiscal aid to states. More delay would only imperil the recovery, such as it is. And without a strong recovery, it will be even harder to repair the budget. Continued hard times means low tax revenues and high safety-net spending. 

If Washington won’t do what is needed to make things better, there are still things that can be done to try to keep the economy from getting worse. 

The administration could work to ease the rules for refinancing mortgages owned by Fannie Mae and Freddie Mac, the government-run mortgage giants. 

Wow, there’s really nobody in D.C. supporting “stronger growth now”? There wasn’t a $700 billion bank bailout, or an $800 billion stimulus? There weren’t trillion-dollar rounds of quantitative easing? I welcome the adolescent bitterness and self-dramatization in the ed board’s “such as it is,” with its implicit recognition that there is in fact no recovery. But they could at least have the honesty to admit that the recovery has failed to happen under exactly the policy prescriptions the ed board is saying we need. 

To take just the ed board’s last example, having Fannie and Freddie back more monstrously inflated mortgages with taxpayer dollars is not just the stated policy of members of Congress. It has been pursued with a zeal that would be prosecuted as fraud if it occurred in the private sector. 

In a way, it's reassuring to know that America’s newspaper of record is so clearly out of ideas. Institutional vapidity and ignorance is rarely so clearly displayed – and this time it’s not about some matter of foreign affairs or political speech but a topic with which every person in the country has had five years of hard experience. Now it’s just a matter of time before the editorialists find that the way they lied and all the corny tricks they tried will not forestall the rising tide of Hungry Freaks, Daddy. 

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Warty||

    deficit-obsessed policy makers

    "Hahaha! Oh, wait, you're serious. Let me laugh even harder. HAHAHAHAHAHAHA!"

  • ||

    When did Krugman start writing on the front page?

  • ||

    Didn't you know that all editorialists at the NYT are now clones of Krugman? They grow them in David Brook's personal bathroom.

  • T||

    I already knew slime molds cloned themselves to reproduce, but thanks for reminding me.

  • ||

    I thought he was some sort of outer space potato man.

  • Jim||

    He's an outer space Godzilla clone. Who also writes for the Times when not destroying Tokyo.

    http://en.wikipedia.org/wiki/Space_Godzilla

  • Platypus||

    That's such an awesome movie. It's like they didn't even care if you could see the strings holding up Space Gojira. I mean, it HAD to be intentional.

  • ||

    Those are some fugly clones

  • Hugh Akston||

    At some point we’re going to need a moratorium on the phrase “lost decade.”

    I propose taking at least ten years off from this phrase.

  • Otto||

    It still hasn't lost as much value as housing prices.

  • ||

    It's all due to time inflation.

  • Hugh Akston||

    I was looking for a lost "lost decade" decade.

  • ||

    We are living in a: Society that turned away from those who aren't afraid to say what's on their minds. The left behind, of the Great Society.

  • l0b0t||

    +1000
    You win a date with Suzie Creamcheese.

  • ||

    One of the positive effects of the recession has been to make saving and value creation popular ideas again

    Well, its made talking about it popular. Actually doing it, not so much. Too lazy to Google it, but I've been seeing data that says that debt and savings are about where they have been.

  • rather||

    One of the positive effects of the recession has been to make saving and value creation popular ideas again

    It has for graduates now. The message is getting to them

  • Tim Cavanaugh||

    Well you're right as of the April P.I. report, but the savings rate averaged 5.5 percent for the year before that. Disposable personal income is about a percent more than it was in the middle of Decade Zero. Not big enough, but the trend has generally been up. One of my links above has other examples of saving/wealth formation, including a minuscule increase in the equity portion in the most recent flow of funds report.

    The irony is that saving is the last thing Obama, Geithner or Bernanke want people doing — and there is a solid macro case that increasing savings right now is irrational behavior. If we could just get people to stop being stubborn behave the way the government wants them to, everything would be fine.

  • Invisible Finger||

    The trick is to save in something other than US dollars - saving US dollars encourages the unholy trinity to plan another round of quantitative easing.

  • NYT||

    Fuck history. America drinks and goes home.

  • Douglas Fletcher||

    Times gets Zapped by Tim

  • ||

    I'm considering taking a job in southern california and it's pissing me off how overinflated housing prices there still are.

    People in the LA area are still in denial about the desirability of the area.

    Wake the fuck up. Nobody wants to live in the LA anymore. So Cal is not the dream land that is was for Americans in the 60s. Today, it is a dirty, overcrowded metropolis with no culture populated by image-conscious prom queens trying to look like barbie (and ken) dolls.

  • Jimbo Wales||

    Bit of irony in your statement there.

  • ||

    Not really. It's the employer and the work that interests me. The location is a negative. I'd rather live in Colorado.

  • Sudden||

    Where in Southern California is the company you're looking at and what is the desired price range and SF/room count needed for your situation?

    If its the Westside somewhere, you're fucked.

  • ||

    Hawthorne

  • ||

    High home prices in Hawthorne?

  • EDG reppin' LBC||

    Yeah... you might want to re-think Hawthorne. I used to live in Redondo Beach, near the Hawthorne border and it kinda' sucks. As a real estate agent, I would recommend Lakewood, or certain neighborhoods in north and east Long Beach. The commute to Hawthorne would be easy, the homes are very nice, and the prices are reasonable. The South Bay (including Hawthorne) is inflated in my opinion.

  • Not Sure||

    If no one wants to live there, how is it overcrowded?

  • Platypus||

    They're FORCED to live there. At gun point.

  • Joli||

    Cavanaugh, you haven't had a fucking idea since your lips got sore reading Ayn Rand. Shove your right-wing shit back up your fat ass where is came from.

  • ||

    Oh look, Edward's back with a stupid new handle. How...boring.

  • Spiny Norman||

    You sure it's him? There's only one typo.

  • Jersey Patriot||

    Gentleman's D-

  • ||

    Obviously, anyone who doesn't want to blow another $1 trillion we don't have propping up housing prices is a right-wing shitbag.

    Asset price inflation is a human right!!!!

  • ||

    But, if the stimulus had been $1 trillion more, unemployment would have never gone over 8%.

  • Jim||

    You're playing in the bigs here, son. You've got to step your troll game up a notch. I give it a "Max" on the "Max - Shrike - Tony - MNG" scale (Max being the lowest).

  • Mensan||

    MNG is above Tony? I know MNG is more annoying, but I think Tony is more misguided. Although, it does seem like MNG would be a top and Tony is a bottom.

  • ||

    What i want to know is why is Max below Shrike?

    Calling libertarians "Christfags" for a year straight deserves more recognition then that.

  • pmains||

    I think he's saying that Shrike has more troll game than Max. Max reached the point where he was pwning himself right out of the gate. That's no fun.

  • Au H20||

    I think we're being hard on MNG. He isn't a troll lately, he just has an insatiable need to hate fuck over Israel

  • ||

    You're mixing up the trolls with the misguided liberaltarians there.

  • Chad||

    on the "Max - Shrike - Tony - MNG" scale

    What about me?

  • JoliPad ARF!||

    Woof! Yip! Snap! Bite!

  • Shit for Brains||

    Shove your right-wing shit back up your fat ass where is came from

    ^^Sing it sister!^^
    Ever since Obama took office libertarians simply dropped all pretenses and now *openly* advocate *homelessness* for the masses. All in pursuit of the mighty dollar and not paying your fair share. And this from a magazine called "Reason"!

  • ||

    And this from a magazine called "Reason"!

    Thank Dog you said that!

    I really needed a drink.

  • uuuh||

    Yup, you either have a mortgage and a home, or you live in the streets and poop in subway stations (or subway restaurants if no mass transit). There are no other options other than those two.

    Though I was able to find this sweet deal where I pay this property owner a monthly fee, and he lets me live in a 2-bedroom dwelling with my own lock and key and bathroom. Neat huh?

  • Boxbot||

    Automatic F for plagiarism.

  • Jimbo Wales||

    Damn those right wing shitbags not wanting to spend trillions of taxpayer dollars!

  • Cyto||

    I'll take the asking price for my property from 2001. Zillow says it is trending below it's sale price in 1994. Nice.

    Too bad my wife wouldn't listen to the "sell and move into a rental until things crash" argument 4 years ago. (pregnant women don't have to respond well to logical arguments about which nest they get to bring their progeny home to, it's one of the perks) I figured that I'd just pocket the 100-150 grand in over-valuation the bubble was creating and then jump back in when it came down to about where I bought the place. We passed that mark quite a while back... now we're in "I coulda lived 10 years on what we just lost" territory, should I be forced to move for some reason. We're down another 20-25% this year.

    So, if you want to buy a really nice house for less than the cost of the building materials (let alone the land), come on down to south Florida. We got inventory in spades. I saw a 3 year old, 7,500 square foot house go for under $400k in December. I don't think you could build 7,500 sq feet of commercial space for that, let alone high-end residential. With concrete block construction and hurricane building codes, $250/sq foot is not even high-end down here.

    So yeah, lost decade might apply here. Except that for most homeowners it isn't the decade. They bought in from 2004-2007, so they are down by 50-75%. In my neighborhood if you bought your home in the 90's, you could conceivably break even - if you can find a buyer. If you bought in 2000-02 you are going to lose tens of thousands. If you bought after that, it's hundreds of thousands. Ouch. If you are one of the lucky ones who did a tear-down upgrade you're gonna lose close to 7 figures. Double-ouch.

    And all of this with an inflated dollar.

  • Paul||

    (pregnant women don't have to respond well to logical arguments about which nest they get to bring their progeny home to, it's one of the perks)

    I gave up a swanky, underpriced, kick-ass high design condo in a 'hip, walkable neighborhood' that I bought when I was single due to a pregnant woman.

    Now I have a lawn to mow, siding to paint, a leaky roof to fix and a garage full of garden tools.

  • Joshua||

    My old neighborhood in AZ is actually right at par with 2001 values according to zillow. So are the homes in my new neighborhood (MN).

  • Invisible Finger||

    In my neighborhood if you bought your home in the 90's, you could conceivably break even

    To me, breaking even includes recouping all the wasted property taxes. And I consider some of the property taxes a useful form of insurance so a 50% recovery of them is break-even for me.

  • Joli||

    Better yet, Cavanaugh, stick Imodium in your ears to stop the shit from pouring out your mouth.

  • sevo||

    ha...............................
    ha

  • CE||

    Does 8 years of W and 2 years of Obama count as a "lost decade" for friends of liberty?

  • ||

    Why doesn't the government just do something to stimulate economic growth? Like giving trillions it can't afford to favored constituents all while continuing to spend money it doesn't have on other things to reward favored constituents?

  • Jersey Patriot||

    We have an opening for Undersecretary of the Treasury, if you're interested.

  • ||

    Sure, why not? Can I give away a billion to friends and family?

  • Jersey Patriot||

    Only a billion. LOL. That's why you'll never make it past Undersecretary, son.

  • ||

    That was my thought, JP. Clearly PL is the Doctor Evil of Treasury secretaries. A measly billion? If you aren't thinking in the 10 digits you must want *homelessness* for the masses.

  • Jimbo Wales||

    Obviously you need lessons in looting and mooching.

  • ||

    PLEASE stop calling the New York Times "America's newspaper of record". They can't hold this honor as long as they exhibit partisan affinities that represent roughly half of the country.

  • ||

    The Times only represents the 20% of the population that describes itself as "Liberal"

  • Jersey Patriot||

    If we take the 1990 methods of calculating inflation and GDP, the economy has actually been in recession since 2004. Measured the same way, the economy only expanded for four quarters (2003q3-2004q2) since the 2000 crash. John Williams of Shadowstats put up a stunning chart here.

  • ||

    Someday, reality is going to completely overcome all the bullshit. Can't hide the truth from ourselves forever. Or even for much longer.

  • erikjay||

    The Zappa tune of the year (decade) should be "Mom & Pop":
    Mama! mama!
    Someone said they made some noise
    The cops have shot some girls & boys
    You'll sit home & drink all night
    They looked too weird... it served them right
    Mama! mama!
    Someone said they made some noise
    The cops have shot some girls & boys
    You'll sit home & drink all night
    They looked too weird...it served them right
    Ever take a minute just to show a real emotion
    in between the moisture cream & velvet facial lotion?
    Ever tell your kids you're glad that they can think?
    Ever say you love 'em, ever let 'em watch you drink?
    Ever wonder why your daughter looks so sad?
    It's such a drag to have to love a plastic mom & dad.
    Mama! mama!
    Your child was killed in the park today,
    shot by the cops as she quietly lay
    by the side of the creeps she knew...
    they killed her too.

  • Fist of Etiquette||

    Have we considered trying to artificially inflate home values in some way? Just spit balling.

  • ||

    With inflation alone, eventually the face value of housing has to recover. My parents bought a house in Buffalo in 1971 for 20K. It is now worth 100K. Does anyone really think it is actually worth five times more now, in real terms? Of course not, but on paper it looks like real estate is a huge winner.

  • ||

    Only worth 5x as much?

    That is not even keeping up with inflation:

    What cost $20000 in 1971 would cost $106449.48 in 2010. (source: http://www.westegg.com/inflation/infl.cgi)

  • ||

    On the plus side, all the inflation the Fed is producing is counteracting the price-stickiness of housing. You can keep demanding $1,000,000 for your house in LA, and eventually someone might buy it. When $1,000,000 is the price of a house in Denver too.

  • BigT||

    Low interest rates keep RE prices high. When the rates rise, as they must, prices will drop further. We are far from the bottom, folks.

  • ||

    the stupid is strong with this one...

    "The administration could work to ease the rules for refinancing mortgages owned by Fannie Mae and Freddie Mac, the government-run mortgage giants."

    some people shouldn't breed...

  • Heroic Mulatto||

    I don't get why translating The New York Times into Los Tiempos de Nueva York is supposed to be funny.

  • Fist of Etiquette||

    Try it with a Swedish accent. See if that helps.

  • Hugh Akston||

    You'll see it if you hold your monitor up to a mirror.

  • Res Publica Americana||

    Probably a jab at classical South American socialism/communism an the NYT's liking of it.

  • ||

    "Unfortunately, no one in Washington is pushing policies to promote stronger growth now."

    Actually, he's right about that--just not in the way he intended...

    We need to deregulate the financial industry. Smart capitalists denounced Obama's regulation of the financial industry for a number of reasons--one of them was because it meant putting the brakes on growth just as we were coming out of the recession.

    If Obama's regulation was ever needed at all, it was before 2008 when New Century crashed--not after Lehman cratered a year later. If we want the financial industry to rev up coming out of a recession, that's when we need to deregulate--what we didn't need was some wannabe populist piling new regulators on Wall Street.

    He's right...in a way. We could have more economic growth--and no one in Washington is pushing the deregulation to promote stronger growth now.

  • GILMORE||

    "But they could at least have the honesty to admit that the recovery has failed to happen under exactly the policy prescriptions the ed board is saying we need.

    Al Smith once said, "the cure for democracy's ills is more democracy"; as a basis for modern progressive thinking, this roughly translates to, "When our poorly considered policies produce no results (or worse - the opposite intended effect), the only possible reason why is that *we didn't go far enough* in our interventionism.

    You see, the "ideas" of the progressive movement are unquestionable; the fact that they fail in real world applications is simply a consequence of either adverse forces working against their benign intentions... or having not *done enough* of the patently-obvious right thing in the first place.

    In discussions with people who are your prototypical urban progressive-democrat yuppie types, I've found a remarkable lack of interest in policy results versus policy intentions. They don't seem to care at all about policy failures, nor think they reflect at all on the 'principles' that motivated those policies. Basically, as long as the policy is "right feeling" and reflects what they consider the idealistic motivations of their constituency, what it actually produces in terms of results is of little concern. Failure is never a consequence of bad ideas = it's because of the opposition *failing to get on board* with those ideas, or an insufficient amount of time/money/bureaucracy behind those ideas.

  • Alice Bowie||

    People are literally walking away from their Mortgages, Credit Card, and personal Debt. The Only thing they can't walk away from is Student Loans and Taxes.

    The government CAN get involved. It can, at least, keep mortgage defaults off peoples' credit report so that can rent a home or get a job. At this point, people are being denied jobs at Home Depot over bad credit.

    Yes, you loose your home, but one should be able to rent an apartment and get a job. If you leave it to the 'Free Market', you won't be able to get a job anywhere.

    I know you libertarians are not sympathetic to the guy who purchased a home at the all-time high in 2005. However, the fact of the matter is, that prices were at the all-time high for a very long time.

    I say, take their homes a forgive any deficiencies. Let the investor eat it.

  • New York State Of Mine||

    I know a case of a Guy that got

    A> Laid off from a Bank
    B> Foreclosed on by another Bank
    C> Yet, a third Bank won't hire him because he has bad Credit.

  • ||

    "Let the investor eat it."

    I'm sure we wont see any unintended consequences from such a policy...

  • Trespassers W||

    the fact of the matter is, that prices were at the all-time high for a very long time

    What an odd claim.

  • ||

    "...one should be able to rent an apartment and get a job. If you leave it to the 'Free Market', you won't be able to get a job anywhere."

    I haven't seen the stats for homelessness going up--maybe they have?

    But all those people who've been foreclosed on have moved somewhere. There are plenty places available for rent, especially in cities worst hit by home foreclosures--but the vacancy rate is falling.

    http://www.calculatedriskblog......house.html

    There's a good graph there to show you what's happening with the vacancy rate nationally.

    There are consequences to signing a contract--as well there should be.

    I don't see why the government should unilaterally decide that people who extend credit and rental agreements--shouldn't be allowed to know if people have a history being a deadbeat.

    I openly question the government making everybody's criminal history open to anybody who wants to know, but if lenders and landlords can't sift out the deadbeats, you're gonna end up paying the price somehow.

    ...lenders won't lend as much, and they're gonna charge more for what they lend. Landlords will want to exclude everybody but friends and family--there would be fewer rental units available, and they would charge people more rent to make up for the deadbeats.

    Meanwhile, the inventory of available rental properties has been historically high over the past several years--I haven't seen anything to indicate that even the worst deadbeats can't manage to find something. So, restricting the ability of lenders and landlords to discriminate against deadbeats looks like a solution in search of a problem to me.

    It looks like a solution that would cause more problems than it would solve too.

  • Sam||

    Criminal convictions should be a matter of public record. I don't want courts to operate in secrecy.

  • ||

    Criminal convictions should be a matter of public record.

    If you want it to be.

    I think schools that hire teachers have a right to know if somebody they hire to put in a classroom is a convicted sex offender.

    But I don't see how putting marijuana possession convictions on people's records is necessarily helpful to anyone.

    It becomes like making Hester Prynne walk around with a scarlet letter on her dress. You can waive your right to a speedy trial--why does the government have to shame you for the rest of your life?

    Some of these public records aren't meant to make sure people get a fair trial--it's retributive. It's meant to make it so committing a crime in your 20s will all but ruin your life.

    If the government wants to lock you up for however many years, that's their business. Why do they have to make it so hard for convicted people to get a job once they're out? That's counter-productive in the worst possible way--and why do we do it?

    Because people get their jollies by imagining that breaking the law ruins your life?

    I'm not saying people don't have a right to a public trial if they want one, but they let people opt out of having a speedy trial if they want one too. Why is this any different?

  • Alice Bowie||

    People that are being foreclosed on and have a job can at least save up payments (since they are not paying the mortgage) to pay a landlord Cash for the entire year in most cases.

    However, people with no jobs are really screwed. Especially if they not only lost their jobs but also lost their homes and can't find anything other than a n-gger job which probably pays 1/2 because of bad credit.

    OK. OK. OK.

    I have to agree with you, Landlords should have access to credit and we should let landlords, alone, decide if an individual just got a bad break or is a dead-beat. Employers should not be allowed to deny people a job due to bad credit...Especially a bank.

  • ||

    "Employers should not be allowed to deny people a job due to bad credit...Especially a bank."

    You have that backwards. A bank should especially be able to deny someone a job based upon a poor credit history. They're giving them access to large sums of cash. Someone who has had debt issues will be in a position with a greater temptation to due something unseemly.

    Are you also aware you can be denied a security clearance based on having too much outstanding debt? They consider such a person to be a security risk, as there is a greater likelihood they could be comprimised.

  • ||

    "They're giving them access to large sums of cash. Someone who has had debt issues will be in a position with a greater temptation to due something unseemly."

    I'd put the emphasis on "unseemly".

    Many financial institutions are contractually obligated to screen our applicants for stuff like that.

    Why would I trust my bank with my financial information and my SSN, among other things, if they're not screening out the people who are most likely to misuse my information?

    And I'm speaking as a retail customer. Banks that are doing things for other financial entities are contractually obligated...you wouldn't do business with a firm that doesn't protect their customer's data in the most basic way.

    Anyway, people with poor credit histories do manage to find jobs. Just not in certain industries.

  • Jim||

    As a libertarian I agree the employer can use any criteria they choose to discriminate for or against hiring someone, but personally I don't think using credit reports are a good idea. I read recently that there isn't much evidence that people with bad credit are bad employees (employers use credit reports because the credit bureaus are marketing them to employers as a useful tool to screen employees; I'm sure their evidence is completely unbiased...) Personal experience seems to bear that out as well. I do think it can become kind of a vicious cycle, especially following job losses. I suspect though that eventually the market will fix this, in that there are enough people out there now with bad credit through no real fault of their own (i.e. just in the wrong place at the wrong time in the recession, job and/or housing wise), there are tremendous opportunities available to those lenders or employers that take the time to sift through the details and understand the whole picture rather than just looking at debt or the credit score.

    That said, some folks are lifetime screwups and credit history can give some insight into that as well.

  • ||

    While I'm sure that some employers give a bad credit report more weight than it deserves, I would imagine that most would use it as a tool in a larger screening process.

    If an employer overvalues a credit report though, that's a price they pay by hiring an inferior employee and letting the superior one go. As someone who has had very poor credit in the past (sub 600) I can attest to the fact that a) such a situation is not permanent, and b) credit reports are not a universal hiring tool.

  • Sam||

    Who is this "investor" who should take a beating because we don't want to hold anyone financially accountable? Is it a guy with a top hat and monocle who lights his cigars with a $100 bill while he evicts widows and orphans ? Or is it a pension fund, mutual fund, 401k, insurance company, etc that will pass along any investment losses to you?

    If people can simply walk away from mortgages without even taking a hit to their credit history then no banks will give out mortgages.

  • Alice Bowie||

    If Banks can walk away without even taking a hit to their credit rating and continue to be a bank, why shouldn't an individual be able to walk away?

  • ||

    If you think you've read people advocating that here, you're on the wrong blog.

  • Sam||

    Google Standard and Poors. If banks have bad credit or are in danger of failing their charter is pulled and the FDIC takes them over.

  • ||

  • Nicholas D. Rosen||

    " The equity portion of homeownership (i.e., the part that is owned by you rather than the bank) has been in slow decline since at least the 1950s, and freefall since the 1980s." Now why is that?

    Partly, people have chosen to take out home equity lines of credit, or have chosen to move in a few years, before paying off a large part of their mortgages. But it's partly because housing has become more expensive, and it has become more expensive because government has been artificially creating esy credit, and also because land has become more expensive. Not bricks and girders and plumbing fixtures, but land. Easy credit pumps up land prices, and so does the fact that they aren't making any more land.

    Therefore, you need a bigger mortgae to afford a comparable place to live, so your actual equity ownership is likely to remain smaller.

  • ||

    The good news is that with prices going up and the economy entering a double dip we get to once again prove that the Philips curve is complete bullshit...

    Of course I have my doubts this will convince the left of this fact...perhaps the third time will be the charm.

    2040s here we come!!!

  • ||

    Just because we had inflation, high unemployment and low growth all at one time in the 1970s, doesn't mean it will happen again. I mean Nixon was in charge back then. And this time is different right?

  • ||

    Nixon, Carter they always get the blame.

    I am putting the whole mess on Ford's shoulders.

    Worst President ever.

    note: I have no knowledge of Ford's Presidency.

    note2: I was a little unfair. most conservatives (BUSHITLER!!!!) don't know that the Philips curve is broken either.

  • ||

    The Phillips curve is one of those things that intuitively seems correct. So it is believed by a lot of people. But reality is not intuition. It was never valid. The reason is that as labor becomes more scarce, businesses make up for the rise in cost in labor by moving things off shore or investing in more capital and improving productivity. And even during times of high unemployment labor costs are only a part of the total cost of a product. Things like the relative value of the dollar and the cost of raw materials matter to. Moreover, even when unemployment is high wages tend to stagnate not drop. So, high unemployment doesn't offset the inflationary effects of raising raw materials prices. Further, since we have generous welfare programs and many two earner families, businesses couldn't just drop wages too far if even if they wanted to since many workers can easily quit and live on their spouses income. I suppose if we have great depression level unemployment or if we didn't have such an integrated world economy, we could see the Phillips curve work in real life. But neither of those things are likely to happen, so it is basically bunk.

  • Enlightened||

    So The New York Times runs the country? I thought it was the Jews. Oh, wait...

  • Daily Kos Diarist ||

    If businesses were not so racist and didn't hate Obama, they would be hiring and there wouldn't be a recession.

  • J_L_B||

    Ordinarily you'd laugh at the idiocy of this claim. Then I remembered that a few months ago, Ed Schultz had a segment suggesting this very thing. The thought of the Daily Kos also suggesting this (whether they are or not) has left me frustrated (again) with the lack of leftists' understanding of basic economics.

    Won't Keynesianism ever die?!

  • L4F||

    The New York Times knows as much about the economy as they know about journalism. Absolutely nothing. The old gray whore bitch isn't worth a damn.
    http://libertarians4freedom.blogspot.com/

  • D e m o c r a t||

    To be fair, if Republicans didn't want the elderly to rot in the gutters, we'd have single-payer already. The NYT is just presenting the truth.

  • ||

    To be fair, if Republicans didn't want the elderly to rot in the gutters, we'd have single-payer already.

    FYP

  • ||

    I don't get why translating The New York Times into Los Tiempos de Nueva York is supposed to be funny.

    Because its owned by a Mexican oligarch.

  • ||

    One day the American public and media will figure out that real estate prices do not = "the economy."

    Sorry your houses are underwater, guys but my business and the jobs it supports is more important than your bad home buying choice.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Progressive Puritans: From e-cigs to sex classifieds, the once transgressive left wants to criminalize fun.
  • Port Authoritarians: Chris Christie’s Bridgegate scandal
  • The Menace of Secret Government: Obama’s proposed intelligence reforms don’t safeguard civil liberties

SUBSCRIBE

advertisement