but I'm certain it would not include housing.
I would think that much would be clear after the Great Housing Crash. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
Prices are crashing here (finally), but it isn't really doing too much damage to the local economy. Unemployment was at about 3.6% when the labor market peaked, and now it's up to about 4%. Obviously having the relative stability of federal jobs, especially at a time when the government is expanding at a fast pace and with a lot more to come, helps with that, so it's not really fair to compare it with other places.
But I have a hard time imagining, based purely on the price and income numbers, that the remaining bubbletowns -- and we're basically down to Boston, New York and DC now -- will see anything like what happened to South Florida, where it was, literally, street after street of seeing every third or fourth house either on the market, as the owners tried to bail, or already foreclosed. My parents' bought their house in 2001 a little before things took off, and it nearly quadrupled in value by the 2005 peak. It's nearly back down to where it was when they bought it.
And that was in an area that was apparently not hit too hard compared with others. Miami was much worse. Prices peaked around $400k (about 10-15x income). That's in the third-poorest of the major American cities (trailing only Detroit and New Orleans). Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
OTOH, I agree strongly that the stimulus was and remains insufficient and I have no qualms about spending much more, especially on alternative energy or on anything that will improve our national accounts balance. My concern is that all of the money spent or pledged on the financial sector is and will be shown to be totally wasted. The Fed has loaded up on toxic assets paid for with the cleanest US currency available. When they need to withdraw liquidity to prevent inflation, when the economy starts heating up and commodities start increasing in price, they will be unable to sell those assets at anything like the price they paid for them and will only be able to withdraw liquidity at the rate of dimes for dollars. That, at least, is the sense I have gotten from some of the more cautious "inflation hawks." As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
