BazzFazz sums it up:
Americans are still in a fair amount of denial about how bad things are going to get. In the leafy bucolic Boston suburb where I still have a house and the offspring continue to bring me delightful grandchildren, there are still lots of houses on the market for what are clearly delusional valuations … And it’s bad in so many places, and it’s going to get so much worse, that you have to wonder what, if anything, will help. Sadly, until the great asset write-down runs its course, not much will. And this process will take several years – which is why I think the U.S. will not be the first out of the current recession – it will probably be the last. Because the U.S. over the past two decades has tied up so much wealth creation – which has fed through the entire global financial system, mind you – in real estate in bad places. And the amount of denial here remains painfully high.
Yep.
March 4th, 2009 at 9:50 am
I still hear people saying “when houses prices recover to what they were last year, we can move”, or “when things get back to normal (and we can make money out of thin air again)”.
I wonder if this means that community ties will grow, a la Robert Putnam, as people stay in neighbourhoods for longer?
Or if it’ll just create more absentee landlords as people try to rent out their houses and use the proceeds to rent somewhere else.
March 4th, 2009 at 11:16 am
I’m not saying things are going back to where they were, but the more of these dooms-day articles I read (and there are plenty), the more I think some type of turnaround is headed our way.
Unemployment should hit it’s low in the 3rd quarter, and I think the economy will begin to factor in a republican sweep (like 1994) in the legislative branches. Maybe those of us on both sides of the aisle can agree that things don’t work well when one side has unchecked control over the legislative & executive branches – see 2004-2005 Republicans,and our current mess 2006- Democrats.
March 4th, 2009 at 6:35 pm
Before any republicans can win any elections, they actually need alternative ideas.
March 5th, 2009 at 12:09 am
Jim H, do you really think this crisis has it’s roots in the Democratic control of the Congress (and now Executive branch) since 2006? Wow, you need some help with the facts.
The crisis is not monocausal, let alone the result of Democrats’ policies since 2006. This catastrophe has its roots in the free market thinking that characterized the Reagan and Clinton administrations. In fact you could point the finger at Phil Gramm, Jim Leach, Robert Rubin, Alan Greenspan, and Larry Summers for their effective promotion of both the Gramm-Leach-Bliley Act of 1999 and the Commodity Futures Modernization Act of 2000. These two pieces of legislation set us on the road to economic ruin. But I assure you, there were many other ingredients thrown into the pie. It was a true bipartisan effort and we will pay the price for generations.
Good luck with that turnaround you see coming. Hope springs eternal.
March 5th, 2009 at 6:47 am
I don’t know if Jim was saying that the Democratic party leadership from January 2007 is responsible for the current crisis, but if he is, he’s getting his marching orders from Fox News since the housing bubble that caused said meltdown started long before January 2007. So did our current deficits.
I wonder the current crop of fiscal conservatives, both in Congress and in the media: where were you guys when Bush blew a hole in the budget with 1.3 trillion dollars in tax cuts for the wealthy? Obama inherited a 1.7 trillion dollar deficit. Bush inherited a predicted surplus. Without those disastrous tax cuts, Obama would have inherited a 500 billion dollar deficit, and 800 billion dollars in stimulus money would look like not that big a deal. As it is, quibbling about 800 billion dollars and acting like that’s going to sink the economy when 1.3 trillion in 2001 and 2003 was fine with them seems…well, “immature” is me being kind.
March 5th, 2009 at 6:49 am
Isn’t it strange that no mention is made of the expensive and inconvenient Sarbanes-Oxley Act of 2002 which was motivated by Enron, etc. It was supposed to protect investors from financial surprises.
It hasn’t prevented legal surprises (AIG, etc.) or illegal surprises (Madoff, Sandford, etc.). But it has cost business a lot of time, effort and money.
Let’s hope that the politicians have learned the lesson of that Act – the solution to our problems is not more regulation.
March 6th, 2009 at 5:17 pm
“Before any republicans can win any elections, they actually need alternative ideas.”
Swordsman:
We have alternative ideas, they’re called principles, and the reason we lost in November is because we’d gotten away from them.
Nikolai,
I was referring to the public showcase of how flawed the liberal agenda is. The utter stupidity of this “stimulus” plan is proof that when one side get’s total control, they blow it. We did it in 2004, the dims are doing it now.
March 7th, 2009 at 8:22 pm
Jim,
With all due respect, I don’t think you get it. Partisanship is a scourge on our Democratic processes. This crisis has nothing to do with a liberal agenda, nor a conservative one. This crisis is about greed, blind faith in the infallibility of free markets, special interests, and a colossal failure of government to do what is its raison d’etre–to provide for the commonweal. As long as you play a silly blame game, and people who share your myopic view of the political arena (like demogogues and blowhards Rush Limbaugh, Sean Hannity, and Glenn Beck to name a few) we’ll never get on the right path.
FWIW, I am not a liberal. I have always voted Republican until Obama. I look at the Republican party of today and their kow-tow to the “conserative base” and shudder. This is not the party of Lincoln and Teddy Roosevelt. And it will most certainly not help us find the policies that are needed to guide this country out of the catastrophe we’re in. That said, I think the Obama team is making some very grevious errors–but it has nothing to do with liberal agendas. It is because the special interests and allegiances of the Obama economic team are no different from every team before them in the past 25 years. It has NOTHING to do with party principles.