2009 January 05 Monday
Housing Market Bottom In 2010?
11% unemployment coming to the US?
Economists Kenneth Rogoff of Harvard and Carmen Reinhart of the University of Maryland have a particularly grim view of the economic outlook.
In a fascinating new paper that Mr. Rogoff presented this weekend at the annual meeting of the American Economic Association, they offered some sobering details on what has happened to other countries in the aftermath of severe financial panics like the one the U.S. is now experiencing.
Their bottom line: If history is any guide, the housing market might not bottom until 2010, a stock market rebound isnít in sight, the unemployment rate could exceed 11% and government debt is about to soar.
The work is an extension of long-running research by the two professors on the history of financial crises. In past work, they compared the U.S. situation to financial crises in developed countries. This time, they are adding in the experiences of developing after concluding that severe emerging-market crises arenít all that different from crises in developed markets.
They also expect the stock market to stay down for a few years.
Ignore any economist's research unless he also shows that he's invested his life savings accordingly.
Further, I wonder if over the long term economists end up being financially better off than people employed in similarly paid non-economics professions? Something for the inductivist to research!
It has finally dawned on them, huh? Two thousand and ten, they say? How delightful to see our boy economists are beginning to catch up with the more prescient of economic analysts like blogger Doctor Housing Bubble of DoctorHousingBubble.com.
Perhaps -- and purely in the interests of economic efficiency -- we could just lay them off from their tenured ivory towers and globalist free trade rags and send them into the field to get a practical education. Although I fear that having engineered Obama's triumph they are now too embedded in the Obama Messiah machine to be dislodged with anything short of dynamite. Pity Obama did not rely on a native American like Warren Buffett instead of a stock pimpster like Rahm Emanuel, his family and long-time friends.
"Perhaps -- and purely in the interests of economic efficiency -- we could just lay them off from their tenured ivory towers and globalist free trade rags and send them into the field to get a practical education."
Reeducation Through Labor. I think that is what the PRC calls it...
Unfortunately, the GSS is really scant on information about careers and college degrees obtained. I'm not sure why that is, but the sample sizes are restrictively small--only generic "business administration" has a respondent size of more than 100. The samples are in single-digits for certain degrees. There are 10 respondents who have reported they have economics degrees. The most recent occupational data I've been able to find are from 1988.
As far as U. S. real estate goes, it seems less like a panic and more like a facing of reality.
Most likely the bottom will be at 2012... right when the time comes to kick marxist president out of the office. I hope by then the majority will see that the socialist nostrums don't work and only make things worse, and vote accordingly, thus starting the recovery.
FDR got reelected 3 times.
Our majority is becoming steadily dumber due to immigration that you oppose blocking. You are part of the very problem you complain about.
Randall - since when the illegal immigrants started to vote?
In any case, immigrants on average are smarter than natives from the same social class - for a very simple reason - they *are* capable of getting off their arse and doing something to improve their lot in life. If you talk, for example, to ex-Soviet and European immigrants, you'll find them to be much more individualist and suspicious of socialism than average americans. After the 5-8 years they also tend to earn and save more, because they harbor no illusions about government taking care of them when they get old.
Their children, educated in american public schools, get to be lefties... just as dumbed down as their native classmates.
What all the stupid restrictions on immigration do is making life harder for those who are productive and smart. Waiting for 5-6 years to get a permanent resident status (after being a half-slave for 3 or so years on H-1 visa) is quite sufficient to discourage many smart people from coming to US. These people are generally law-abiding. The illegals are quite often criminal and don't care about whatever laws are here to keep them away. The only way to get rid of them (short of turning the country into a Soviet-style prison nation) is to remove the incentives for coming. Stop providing them with *any* socialized services. Allow easier entry for the law-abiding workers, so they'll displace illegals from the market for low-paying jobs. End the birthright citizenship.
Again, the problem with any government immigration policy is not that lets too many immigrants in, but that it lets the precisely wrong kinds of immigrants in. It's very easy to fix: make immigration conditional on invitation, and make whomever invites people in responsible for the invitee's behavior - and eliminate the right of the bureaucrats with their "diversity" and other crappy agendas to pick who gets admitted, and who doesn't. Got invitation and guarantees from hosts? You're in. No guarantees? You're out. The only guarantee the current immigration law requires from hosts is to provide a return ticket - no liability for the ivitee's criminal behavior, medical expenses, and such.
This is, essentially, the Hans Hermann Hoppes "anti-immigration" argument
averros makes a glaring error in reasoning:
In any case, immigrants on average are smarter than natives from the same social class - for a very simple reason - they *are* capable of getting off their arse and doing something to improve their lot in life.
People who are more motivated will achieve more per given amount of IQ and talent. So at a given level of social class the less motivated people will be smarter than the more motivated people.
Illegal aliens voting: Some do. They break the law to vote just like they break the law to come here.
Letting in the wrong kind of people: We certainly do that. I'd rather just let in people with IQs over 130.
Hosts who have responsibility: In some cases that is in theory legally the case now. But the law on this is rarely if ever enforced. In some small number of cases the people who sponsor family members are supposed to be financially responsible for them. But they get the US government to pay medical and other costs rather than the kids paying for the sponsored parents.
I say keep out all but the very most capable. Anyone likely to become a net liability should simply not be let in.