A couple weeks ago I hosted local edge radio and I spent the whole segment talking about the fact that our government needs to focus on jobs like a laser. Our problem is not our debt. Deficit spending is not what is on the minds of the average American. The average American is wondering how to make ends meet. The average American is either out of work or knows somebody who’s out of work. This is what we need to fix. In my opinion, there’s nothing more important than fixing our job situation. There’s plenty of blame to go around. Whether you want to blame the Obama administration for not asking for a large enough stimulus in order to really fix the jobs problem or you’d like to blame House and Senate Republicans for blocking every jobs bill since the stimulus – the bottom line is that it really doesn’t matter whose fault it is. The problem is that neither party is 100% focused on jobs.
The job situation is improving, but we have to do better. Economists calculate that at our current rate we will not achieve full employment (unemployment rate below 5%) for another five – seven years. Most Americans should not have to suffer for five to seven years because we don’t have the political will to do what’s necessary. We need to fix this problem.
Mitt Romney and many conservatives have criticized the president for not doing “enough” to create an environment where the economy can thrive. (This post is a continuation of yesterday’s post.) Basically, their main complaint is that taxes are simply too high. They’ve even suggested that corporate taxes are too high, even though we know several corporations are paying nothing in taxes in spite of making billions of dollars in profits. In my mind, the real question is why the economy is so sluggish. Continue reading Sluggish Economy
My good friend, Theron, pointed this out some time ago. I don’t recall what data he was citing, but it appears to have been 100% correct. I have only recently begun to understand that every day Americans who thought that they were one house flip away from riches were a big factor in the bubble.
From CalculatedRisk Blog:
Several readers have asked me to comment on this new paper from Fed economists Haughwout, Lee, Tracy, and van der Klaauw: “Flip This House”: Investor Speculation and the Housing Bubble (ht Josh)
[W]e present new findings from our recent New York Fed study that uses unique data to suggest that real estate “investors”—borrowers who use financial leverage in the form of mortgage credit to purchase multiple residential properties—played a previously unrecognized, but very important, role. These investors likely helped push prices up during 2004-06; but when prices turned down in early 2006, they defaulted in large numbers and thereby contributed importantly to the intensity of the housing cycle’s downward leg.
It was pretty obvious that investor buying was pushing up prices in 2004 and 2005. I wrote a post in April 2005 (over six years ago!) on that subject: Housing: Speculation is the Key (Note: in that 2005 post I treated speculation as storage and showed how speculation pushes up prices during the bubble – and pushes down prices after the bubble bursts).