It's a bit hard to comprehend that this housing/foreclosure crisis stuff has been going on for...fucking years already. As is so often the case, the maintstream media got it completely wrong initially, painting it as a "subprime" crisis due to bad behavior by unworthy brown people.
Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.
More than one in seven homeowners with loans in excess of a million dollars is seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.
By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.
My fiance and I are in the process of trading in one delightful urban hellhole for another, and this past weekend all the driving earned me a cracked windshield on my pickup truck. A couple days ago I called a local dealer (yeah I know, dealer) in my former city, where the truck was but I wasn't, and got an estimate for replacing the windshield at $250-$300. Fair enough; they hire a glass contractor to do it for $150 and charge me for the privilege of their customer service.
So imagine my surprise when my fiance dropped it off and called me to say that they gave her an estimate of $450-$500. Same car. Same windshield. 24 hours apart. Now, I'm not quick to assume bad faith or nefarious motive, but I'm pretty damn sure some pig in the service department thinks it's ok to try to rip off women.
When I called this morning to speak with the manager the woman who handled my call seemed genuinely appalled that this was going on where she worked. I'm sure it made her feel good to know what at least one of her coworkers thinks of women. Speaking to the manager only furthered my suspicions. The repair had already been done, and the bill had come to about $425 total, but there was little attempt on his end to justify the price. As soon as I said I wanted to see the invoice from the glass contractor he told me he would see what he could do, and five minutes later he called me back to say he had "fixed the problem with my bill," with a state inspection thrown in to sweeten the deal.
It's an indication of my blindness to my privilege that this episode shocked me. It seemed like an antiquated cliche, but I guess it's really not rare at all. The fact that the manager seemed more sheepish about being caught than surprised at the behavior of his employees is enough to make me realize how common the practice must be. And the really crazy/depressing thing is that in a global context getting ripped off by mechanics is pretty far down on the list of pressing issues women face.
I'm not especially convinced that a commitment to a moderately higher target inflation would really do the trick. It would be better than nothing, but there's no way the Fed will commit to high enough inflation to lower the real interest rate significantly.
At this point, the Fed should do the act which gave Helicopter Ben his nickname, and shower free money on all of us. They won't do that either, both because they're allergic to invisible inflation and because some of that money might flow into the nasty hands of the great wretched masses. But it just might work!
BOSTON -- A U.S. judge in Boston has ruled that a federal gay marriage ban is unconstitutional because it interferes with the right of a state to define marriage.
Someone once sent me an email exchange they had once with (Econ Nobel Prize Winner) Ed Prescott which was more than a little nutty. As is this:
3. Ed Prescott did pathbreaking work in the economics profession, and his Nobel prize is well-deserved. His work with Finn Kydland made macroeonomists more quantitatively disciplined, and serves as a benchmark for most of the work done in macro in the last 30 years, including New Keynesian economics, models with financial frictions, and incomplete markets models. However, I doubt that there were any people in the room yesterday who took Ed seriously. Ed's key points were: 1. Monetary policy does not matter. 2. Financial factors are the symptoms, not the causes, of the recent downturn. 3. The recession was due to an Obama shock, i.e. labor supply fell because US workers anticipate higher future taxes.
Back on Stimulus Anniversary day, Jared Bernstein expressed some discontent with the degree to which liberal media folks were selling the stimulus. The administration does not make it easy to do so.
The IMF might be wrong, of course, but they're predicting 9%+ unemployment until the end of 2011. If I had suggested such a prolonged period of unemployment at the end of 2008, people would have thought I was a nutter. If anyone actually believed me they would have considered it to be economic armageddon. Now it's just the new normal.
It's worth pointing out that in January 2009 the administration thought that without any stimulus unemployment would go back down to 7% by the end of 2011. This was not thought to be good enough, and that's why we had the stimulus.
And what do these models say today? They are forecasting that the recession will end in the next few months. Administration officials aren’t quite so specific, but they are in a similar place.
Christina Romer, a senior Obama economist, argues that businesses that have spent the last few months drawing down their warehouse inventories will eventually need to rebuild them. Lawrence Summers, the top economics adviser, says that many consumers who have been delaying the purchase of a new car will eventually take the plunge. The government, meanwhile, will be pumping out close to $30 billion in stimulus money every month for months to come.
A big headline across the front page of Monday’s Financial Times summed up the position: “Romer upbeat on economy.â€?
Yes it is true that more action could come from the Fed, but I'm just not optimistic that Fed action can be effective. While in theory there is a lot the Fed could do, in practice it's relying on our failed financial system to ultimately do the work. And, as I said, it's a failed financial system. What part of failed don't we understand?
I had expected that we economists would have to fight Democratic political advisors who would be pushing for policies that were bad in the long run but that gained votes in the short run. I had never expected to be fighting Democratic political advisors who are pushing policies that are:
nitial claims for state unemployment benefits dropped 21,000 to a seasonally adjusted 454,000 in the week ended July 3, the lowest level since early May, the Labor Department said.
Analysts polled by Reuters had expected claims to fall to 460,000 from the previously reported 472,000, which was revised up to 475,000 in Thursday's report.
But beyond that, it seems to me that the abdication of provincial responsibility in announcing and interpreting the temporary law speaks to a broader phenomenon: the choice of governments, through both their actions and inactions, to give police gratuitous leeway in securing these kinds of international summits.
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