Linking ≠ endorsement.
⇧ “… lot size and lot values across the country for new single-family construction”
⇧ When Will Rising Wages Threaten Profits?
Unit labor costs, a broader measure that takes in pay and benefits, actually fell at a 1% annual rate during the period.
The 2.9% increase in average hourly earnings in the past 12 months may actually understate the pace of pay gains as businesses replace older, retiring workers with lower-paid new entrants into the labor force. That’s the finding of San Francisco Fed economists, which I have had pointed out previously in this column.
“This effect is even more pronounced than usual because of the large-scale exit of higher-paid baby boomers from the labor force. With so many of this generation still approaching retirement, the so-called Silver Tsunami will continue to be a drag on aggregate wage growth for some time,” they wrote in the bank’s blog.
Even so, there remains a reserve army of unemployed still to draw upon.
Those are all good observations; however, as is typical in US media, the idea of moving costs around in the form of redistributing compensation from the top to the new hires is not mentioned.
⇧ The Psychology of Why Gray Kitchen Cabinets Are So Popular
I like the “MASCULINE MASTER.” The yellow hue of the lighting really adds to it. Check it out.
⇧ Sonnen aims to unify all aspects of the smart home
The concept is great, but I want to know about security because it’s connected to the Internet.
⇧ China’s Command Innovation
The information lock-down (the Great Internet Chinese Firewall) will trip them up. The demand for freedom (real democracy) will trip them up. Trump’s tariffs will trip them up if they refuse a deal and he keeps up the pressure. Their attempted grab of the open sea known as the South China Sea will trip them up. Their environmental pollution legacy will come back and back and back to haunt them and trip them up. Their demand for the democratic nation of Taiwan to come under their rule will trip them up.
Of course, what’s to prevent the US from tripping itself up too? It’s already done that in spades concerning China.
⇧ Trump has set economic growth on fire. Here is how he did it
… the Federal Reserve, which cut rates and flooded the financial system with cash during the Obama years. Now it is reversing course and tightening, or raising rates.
“The short answer is the honest answer: Nobody knows,” Joe LaVorgna, chief economist for the Americas at Natixis, said in assessing the duration of the Trump bump. “If we generate 3.5 percent this year and generate 3.5 percent next year, that could happen provided the Fed doesn’t kill it. Then you’re going to say it looks like some of it was Trump. It has to be.”
Except the corporate tax-cuts are really going to the top and stock buybacks. Plus, the cuts for those at the bottom are tiny and slated to disappear entirely. Also, what if the rest of the world gets its act together and cooperates on the creation of a new world-economic-order where the US can’t control the flow? China has been working on it.
⇧ How the U.S. economy turned six good jobs into bad ones
What many of your tenants are facing …
⇧ Earth has more trees than it did 35 years ago – but there’s a huge catch
The study points out that industrial timber plantations, mature oil palm estates and other specifically planted forests add to global tree cover. On paper these areas compensate for the primary forest that has been cut down; 100-hectare loss of primary forest is perfectly offset by a 100-hectare gain on a man-made plantation, for example.
But while they may be equal in area, they are not equal in biodiversity. Primary tropical forests and savannas harbour a wealth of flora and fauna which is lost when these areas are cleared.
And man-made forests do not compensate for the damage and degradation done to ecosystems through land clearance.
⇧ World’s largest offshore wind farm opens off northwest England
⇧ Air pollution can put a dent in solar power
When solar cuts pollution, solar works better cutting even more pollution. Go solar even if it means a profit loss for awhile.
After initially collecting data on both the amount of solar radiation reaching the ground, and the amount of particulate matter in the air as measured by other instruments, Peters worked with MIT associate professor of mechanical engineering Tonio Buonassisi and three others to find a way to calculate the amount of sunlight that was being absorbed or scattered by haze before reaching the solar panels.
⇧ No more neutral rate? The shine comes off the Fed’s r-star
New research from a team of global central bankers released on Friday suggests it may be flat-out wrong as a policy guide, because the neutral rate itself may be a product of decisions the Fed has made.
Of course. Who didn’t know that?
The more we operate the economy in real time, the better. Models are not as good as a real-time sense of balance. That means models should be replaced by full-transaction knowledge in real time.
I’ve been advocating it for many years. It’s been falling mostly on deaf ears, though. I don’t expect that to last forever. I also don’t expect to get credit for being the first person to realize how the economy should really be managed.
⇧ We Can No Longer Afford A Fossil Fuel Economy
You may not agree with massive nationalization, but this article raises plenty of extremely valid points and is not wrong about urgency.
⇧ Fighting climate change could boost the global economy by $26 trillion
⇧ A simple chart shows what some economists consider to be the ‘most striking development’ in 40 years of the US economy
For the past 40 years, when the economy has grown in the US, an increasingly smaller percentage of Americans capture that growth.
That, my friends, is not sustainable.
⇧ Nearly 6 in 10 workers are still recovering after the Great Recession
In a survey of workers from the Transamerica Center for Retirement Studies, 56 percent of respondents said they have not fully recovered from the Great Recession.
Of those respondents, 37 percent said they have somewhat recovered, 12 percent said they have not begun to recover and 7 percent said they may never recover.
⇧ Scathing: “Pigs Want To Feed at the Trough Again: Bernanke, Geithner and Paulson Use Crisis Anniversary to Ask for More Bailout Powers,” by Yves Smith
After a decade of writing about the crisis, we are now subjected to an orgy of yet more chatter with not much insight. It speaks volumes that the likes of Ben Bernanke, Timothy Geithner, and Hank Paulson are deemed fit to say anything about it, let alone pitch the need for the officialdom to have more bank bailout tools in a New York Times op-e titled What We Need to Fight the Next Financial Crisis.
The fact that they blandly depict crises that demand extraordinary interventions as to be expected confirms that greedy technocrats like them are a big part of the problem. Their call for more help for financiers confirms that they have things backwards. How about doing more to make sure that future crises aren’t meteor-killing-the-dinosaurs level events, and foisting more costs and punishments on the financiers who got drunk and rich on too much risk-taking? The first line of defense should be stronger regulations, including prohibition of certain activities.
So the bailer-outers-in-chief are keen to prescribe more of what they foisted on the American public. It should come as no surprise that they didn’t pump for stronger financial reforms, were perfectly content to allow the Fed to authorize banks subject to stress tests to pay dividends and bonuses rather than have them build up much bigger capital cushions, and in Bernanke’s case, call for a resumption of austerity policies in 2012.
⇧ Heavy Rains from Gordon Cause Dam Breach in Mississippi
⇧ Hurricane Florence gaining strength as it nears East Coast. Why homeowners outside its path should check their insurance
⇧ Minimum Wage Increases Didn’t Impact Jobs in 6 U.S. Cities
As always, the libertarian mantra was flat-out wrong.
It’s a hard concept to understand how minimum wage hikes don’t automatically result in job losses, Allegretto says. But the increase in wages employers must pay their workers is supplemented by other factors, such as the money saved from less employee turnover. If employees are more satisfied with their earnings and stay in their positions longer, employers don’t have to spend as much money training new hires, she explains.
⇧ Ambitious climate action is building a zero-carbon #FutureFaster
Governments that build industrial policy to support accelerated transitions in electricity, transport and buildings will be better placed to win the macroeconomic race.
That’s a fact.
⇧ “We’ve been blindsided. We didn’t agree to live in a hotel.”
Airbnb’s new concept offers olive branch to landlords, property managers while riling up residents …
⇧ New Company to Offer Container-Based Modular Housing
⇧ Wisconsin Flood Damage Estimated to be $209M [so far]
According to Dane County officials, only 2 percent of the affected residences and businesses have flood insurance.
⇧ Whither Labor Force Participation?
Our results thus indicate that even a very robust labor market is unlikely to undo all the effects of an aging population ….
Of course, there’s always advancements in science and medicine that could skew things. On the flipside, toxic pollution could worsen things. Those are only two factors of many, such as further automation.
⇧ The Prime-Age Workforce and Labor Market Polarization
How will tenants pay?
… labor market “polarization,” or the slow disappearance of jobs that traditionally have been in the middle of the wage and skill distribution. This has been a sustained trend over the past few decades that extends beyond the ups and downs of the business cycle. Our analysis of state-level data suggests that about half or more of the decline in prime-age participation since the year 2000 is attributable to the disappearance of manual labor positions in manufacturing and other industries—a key feature of labor market polarization.
… In their recent comprehensive overview of relevant research, Abraham and Kearney (2018) concluded that “labor demand factors, in particular trade and the penetration of robots into the labor market, are the most important drivers.” …
… as the job market has evolved and some labor force participants have dropped out, other long-term economic and social trends have reinforced low participation rates among prime-age individuals. As discussed in Abraham and Kearney (2018), these factors include the rise in disability claims and other indicators of poor health (such as opioid abuse), an increasing fraction of individuals (primarily men) with prison records, and improvements in the availability and quality of leisure pursuits, such as online gaming ….
… if encouraging labor force participation is deemed to be an important economic and social goal, other well-designed policies may be successful. These could include policies aimed at enhancing skill acquisition and retraining, increasing worker mobility, improving workforce health, and easing childcare constraints, along with other broad social policies to encourage and support work among prime-age adults.
It won’t work. We’re going to have a guaranteed minimum income enough to keep the economy humming or we’re going to go into a moneyless society, which would mean full-on socialism, or we’re going to implode or exp lode. Imploding would be a massive die-off. Exploding would be a violent revolution against monopolistic capitalism.
⇧ Doubts about wage-led growth
… capitalism is failing in its current form. Equally, though, capitalism has served us reasonably well for decades. It therefore deserves the chance of reform, which is what the IPPR offers. And I might be wrong***.
But what if I’m right? It doesn’t necessarily follow that the neoliberal status quo is right. We could equally well draw a Marxian inference instead — that capitalism is spent and no longer compatible with acceptable living standards for working people and that we need more radical measures than the IPPR is proposing — among them that the task of investment can no longer be entrusted to capitalists. Perhaps, as the man said, “a somewhat comprehensive socialisation of investment will prove the only means of securing an approximation to full employment.” (That man was Keynes.)
“Socialization of investment” is not necessarily democratic in Keynesianism. I’m for the democratization of investment, even the democratization of the money supply.
“It’s the economy, stupid”? It’s inequality, stupid would be more like it right now. Most people are painfully aware that the gap between the uber-rich and everyone else is huge and growing (with ups and downs but long-term trending up, way up).
Also, the recent numbers don’t mean an instant country-wide boost. There is a lag-time.
Even though Trump’s polling numbers may go up a bit due to the recent unemployment and GDP numbers, I don’t expect it to last unless he does an about face away from so much libertarian school of economics. The boom is fake and will be shown as such by the degree of bust that will surely arrive. It’s only a question of when, not if (if Trump doesn’t change course and if the voters don’t make the economic changes themselves).
⇧ Argentine austerity protests mount over Macri’s IMF-backed measures
Stimulus spending that might pep up the economy would dash Macri’s promise of bringing the primary fiscal deficit to zero next year.
Prices go up when supply isn’t meeting demand. Demand can increase when there’s too much currency in the hands of those with a high propensity to spend. Increasing supply is therefore in order while not taking away too much currency in real circulation with the poor. Stimulus spending can be targeted directly at what is most in demand but in shortest supply. The money to pay for that targeting does not have to increase the deficit if it is issued without the government borrowing anything. Why did Argentina borrow more? Do they owe in US dollars? Why did they borrow in US dollars then? Why have they ever borrowed? If you know the answer, you know it’s because the international bankers have duped the common people into misbelieving that there is no alternative.
Economics is easy.
⇧ Baby boomers are struggling to downsize and it could create the next housing crisis
The economy is so out of balance that older people can’t downsize so growing families can move into the larger homes being sold by the older folks. The cause is general inequality.
Developers must be subsidized if we’re going to make things even remotely right under our mixed-economy system. It’s too expensive without it to build affordable housing for the middle class.
⇧ Crypto’s 80% Plunge Is Now Worse Than the Dot-Com Crash
“Until you can pay your taxes in cryptos, it’s just a pointless investment vehicle,” said Markets.com’s Wilson. “Some people will make loads of money but most won’t.”
I called Bitcoin a bubble vehicle and Ponzi scheme when it was trading at 25¢.
⇧ Multifamily Still Riding Wave of Economy, Demographics
⇧ Anatomy of a Housing-Bubble Inflection Point in the Bay Area’s Sonoma County
“Having a legal cannabis grower near your property has a significant negative effect on value due to the odors,” explained Thomas Stone, a real estate broker in Sonoma County, California. “This is the first legal harvest in the County, and while better than having a pig farm next door, an acre of flowering cannabis can be pretty overwhelming. You don’t want to show those properties on a warm afternoon.”
⇧ Financial panic and credit disruptions in the 2007-09 crisis, Ben S. Bernanke
The panic of 2008 differed from the Great Depression of the 1930s in that the runs on the financial system during the recent episode were on wholesale funding, and occurred electronically, while in the 1930s retail depositors lined up in the streets. But the overall effect was the same: A loss of confidence in credit providers caused the supply of credit to plummet, the external finance premium to spike, and the real economy to contract rapidly. Macroeconomic analysis and forecasting needs to take into account how disruptions to credit markets, in ordinary recessions as well as in financial panics, can damage the real economy.
⇧ The epicenter of the housing bust is booming again. (That’s a warning sign.)
Steady growth across the country has lifted the stock market and corporate profits. Those gains, though, haven’t filtered down to most workers. Incomes have barely budged, and consumer debt is increasing again.
Housing prices in North Las Vegas are rising so fast that many communities are no longer affordable. Much of the new construction is at the high end, keeping out many first-time homeowners. Some cannot come up with money for a down payment, while others are wary of getting back into a market that once burned them.
⇧ What will happen when Hurricane Florence hits North Carolina’s massive pig manure lagoons?
I haven’t been adding posts about Hurricane Florence above in this post because it hasn’t made landfall yet and I don’t expect to post this until after it has.
This particular post is definitely about risk management, though, because one must know about risks to manage them or at least plan to mitigate the damages. Risks often come in ways not expected, not planned against. When you buy investment property and think about risks, do you consider the wider environmental risks and what could make them suddenly much worse and very costly?
⇧ Plastic pollution: Scientists identify two more potential ‘garbage patch’ zones in world’s oceans
Best estimates suggest 10 million tons of plastic are dumped in the sea every year.
Much attention has focus on the plastic floating on the surface, but this accounts for less than 1 per cent of the total plastic thought to be in [the] ocean[s].
⇧ Trump turns back to Maria, falsely says Dems inflated toll
I really get tired of the politicization of everything. It’s not for me to tell you which side did, or didn’t, politicize things. I do think the following statement is important.
… there are two categories of disaster deaths. “Direct” deaths include such fatalities as drownings in a storm surge or being crushed in a wind-toppled building. “Indirect” deaths are harder to count because they can include such things as heart attacks, electrocutions from downed power lines and failure to receive dialysis because the power is out — and those kinds of fatalities can happen after a storm has ended but while an area is struggling to restore electricity, clean water and other health and safety services.
Dr. Carlos Santos-Burgoa — the lead researcher on the study and a well-known expert in global health, particularly Latin America — told The Associated Press that the initial figure of 64 deaths reflected only people whose death certificates cited the storm. He said the latest figure was more accurate and stressed that every death in the six months following the storm was not attributed to the hurricane.
I can’t read Donald Trump’s mind. How can I say whether or not he earnestly believes his administration did well enough for Puerto Rico. My view is that plenty was done but it was not enough.
⇧ Hurricane Florence Strikes North Carolina: 5 Killed, Dozens Awaiting Rescue, 635,000 Without Power
This post is periodically updated by Weather.com.
As of Friday, 9/14/2018, at about 10 AM on the East coast:
At a Glance
Hurricane Florence has knocked out power to more than 635,000 homes and businesses statewide.
Authorities have confirmed four deaths from the impacts of the storm.
Some 120 people stranded in storm surge were awaiting rescue in New Bern Friday morning.
About 12,000 people are in 126 evacuation shelters, state officials said.
This post is in line with the one above about Puerto Rico. The death so far due to Florence show that until the trail of damage and destruction and such is fixed, Florence will be the proximate cause of many injuries and more deaths. That’s why the number of deaths in Puerto Rico kept rising. The U.S. territory was not restored enough or quickly enough to avoid the rising number. Some people in the U.S. territory of Puerto Rico (for which the US government and people are fully responsible just as if the people of Puerto Rico were living in a state of the US) may yet die (likely) sooner than they would have because of the hurricane’s negative impacts.
UPDATE: 9/16/18 at about 11 AM EDT
“The storm has claimed at least 11 lives in North Carolina, along with five in South Carolina, bringing the overall death toll to 16.”
⇧ Eyes in the sky aim to protect Earth’s rainforests, resources
When it comes to the Amazon rainforest, illegal loggers know that every day at 10:30 am, the “doves” are watching.
⇧ Nordic Socialism Is Realer Than You Think
This is an interesting article full of facts that don’t get coverage in the US for obvious reasons.
No one would argue that the Nordic countries are full-blown socialist countries, whatever that might mean. But it is also folly to pretend the only thing they have proven is that high taxes and large welfare states can work. Even on the narrow understanding of socialism as public ownership of enterprise, the Nordic countries are far more socialistic than most commentators seem to realize. American socialists who draw inspiration from their successes do so rightly.
By the way, a full-blown socialist country is one in which there is zero private enterprise for making profit or even for non-profit reasons. Every enterprise is collectively owned and operated not for profit but to supply each and all with all the necessities of life and more. The real question surrounds just how democratic the system is. My argument is that the more democratic, the better.
⇧ Samuelson and the Great Recession
Yes, we must thank The Washington Post for running Robert Samuelson. He can always be counted on to get almost everything wrong. …
If we have another Great Depression it will be because governments and central banks refuse to act aggressively to get us out of the Great Depression. Keynes taught us the secret of getting out of a depression. It’s called “spending money.”
We will also hear nonsense about inflation, even as the biggest concern will be an inflation rate that is too low due to the depression.
⇧ Nearly 400 investors with $32 trillion in assets step up action on climate change
Smart is as smart does is right.
… new and existing investments in low carbon and climate resilient portfolios, funds, strategies or assets such as renewable energy and energy efficiency projects; phasing out investments in coal; and integrating climate change into portfolio analysis and decision-making.
⇧ Opinion: These 4 called the last financial crisis. Here’s what they see causing the next one
People warned about subprime mortgage loans, derivatives, and too much leverage, but nobody, to my knowledge, said a bursting housing bubble would cause a global crisis that would lead to the demise of venerable financial firms, require trillion-dollar taxpayer bailouts, and cause a recession that rivalled only the Great Depression in its magnitude.
Long before the crash (a few years), I wrote and told people that a crash like none since the Great Depression is coming soon and that it will result in wiping out as much as 50% of wealth. Shortly after it became clear that the Obama stimulus was not going to be massively expanded but that the government was going to stop there, I wrote that it would take 10 years to get back to something approximating normal. We still haven’t arrived despite the run up in stocks and the consolidation of wealth at the top.
To be honest, I was shocked that more stimulus wasn’t heaped on. I honestly thought everyone knew that Keynesianism was the right approach in the face of a deflationary depression. I was actually afraid they’d overshoot and cause double-digit inflation. Wow, was I ever wrong about just how serious the privatizers were and remain. They were fine with a dragging “recovery” just so long as nobody would see how well Keynesianism could work.
I’m a not Keynesian. I oppose issuing bonds to issue currency, but we needed massive stimulus and didn’t get it.
⇧ Ten Years After the Crash, We’ve Learned Nothing [We’ve learned plenty]
… nobody cared if the loans were shoddy. They were selling like hotcakes, generating lots of cash. Party on!
Matt seems to be siding with the liquidators. Liquidators say to just let the “too big to fail” fail. He’s for mark-to-market, which means the worthless loans should have been marked as worthless on the balance sheets rather than underpinned by the Fed stimulating the banks via massive infusions of liquidity via massively increase bank reserves upon which the Fed then paid the insolvent banks interest.
My view is that all those insolvent institutions should have been nationalized. As to whether or when they should have been later sold back into the private sector, that’s a totally different issue. Frankly, I’m completely for a public US Bank in the form of the US Treasury and for dissolving the Federal Reserve. Currency is to the economy what water is to human health and necessity. It’s a natural monopoly in need of being a public utility for the benefit of all and the private gain of none.
⇧ Rains from Florence cause collapse at NC coal ash landfill
The gray ash left behind when coal is burned contains toxic heavy metals, including arsenic, lead and mercury.
Duke has been under intense scrutiny for the handling of its coal ash since a drainage pipe collapsed under a waste pit at an old plant in Eden in 2014, triggering a massive spill that coated 70 miles (110 kilometers) of the Dan River in gray sludge.
⇧ To help forecast air quality and issue timely warnings, NOAA aims to answer what fires emit and how
Health experts know that wildfire smoke contributes to possibly 25,000 deaths per year and that the economic damages from smoke-related health costs range in the tens of billions of dollars.
⇧ The fight for universal rent control in New York
I don’t hole myself out as any sort of expert when it comes to the question of rent control in terms of what the best approach is to balance landlord profits and the affordable-rent needs of tenants in every economic class. However, I do know that if we are to have a mixed economy (and I sure oppose a no-holds-barred approach), we must find the right balance.
My readers know I’ve been writing for some time now that we need to subsidize housing development better if we’re going to keep a decent floor under the poor. Developers just can’t pencil out affordable housing without such subsidies right now.
We could massively expand Section 8 as the alternative, but we must do something. The status quo is unacceptable.
To preserve and expand the state’s remaining affordable-housing stock, the alliance is calling for universal rent control, a tenants’ rights platform that includes the right to a lease renewal for all renters, and protections against untenable rent hikes and harassment.
Landlords also remain skeptical. Some said that they fear their buildings will fall into disrepair and lose value. “The tenants [will] become so obnoxious,” predicted 54-year-old Peter Johnson, who owns three rental buildings in Ossining. “It’s like being a manager and your employees have more control than you do.
⇧ [IMF nonsense] Chart of the Week: Distribution of Globalization’s Gains
… globalization is often associated with widening economic inequality, putting more money into the pockets of the rich than into those of the poor. While in the average developing economy the poor as well as the wealthy benefit from globalization, in many advanced economies globalization often has little effect on the incomes of the poor.
But government policies matter in making the benefits of globalization more inclusive. Investments in education that raise skill levels, as well as taxes and transfers that spread the benefits more broadly, can help globalization fulfill its promise of generating gains for all.
“… in many advanced economies globalization often has little effect on the incomes of the poor” is a falsehood. The poor became poorer in that it requires more workers working more hours simply to stay at the same living standard in terms of the basic necessities of life.
The promise of globalization was provided simply to appease or dupe workers/voters in the most developed nation when it all started: the USA.
“Investments in education that raise skill levels, as well as taxes and transfers that spread the benefits more broadly” are being fought against, tooth and nail, by those who brought us globalization as we know it, not as it was falsely advertised.
⇧ Repo 105 scam: Dick Fuld, Lehman Brothers
If you or I did what Lehman did with Repo 105, we would be charged and convicted of bank fraud. Happens all the time. It’s pretty much what Paul Manafort just got convicted on. This is a crime. It is not a minor crime. It’s an absolute slam-dunk case for any prosecutor in any jurisdiction in the country. And yet, with the exception of the civil fraud charges brought against Ernst & Young, no other charges — civil or criminal — were ever filed by the SEC or the Justice Department in connection with Repo 105.
⇧ Trump’s Next Trade War Shot Could Hit Americans From Head to Toe [and also spare them much worse in future]
Is this article being what’s called an honest purveyor? It’s entirely one-sided. Is there no flipside, no upside, concerning increasing tariffs on China? The ultimate starting place is whether the US consumer has been better off or worse off due to the full opening of trade with China.
I say we have all been made vastly worse off than we would have been. That’s because of what are euphemistically termed “externalities,” which means all the negatives associated with the trade. In reality, there hasn’t been one net benefit.
So, heavy tariffs will be akin to some unwinding of those negatives. The higher the tariffs, the longer Xi refuses to face the inevitable, the greater the unwinding in the long run.
Those who stand to face shorter-term hardships don’t want America to be in it for the long haul, to be patient for the right reasons.
The US should never have made China rich and powerful with no strings attached. All that’s happened now has been the emboldening of an extremely dangerous totalitarian dictator actually more powerful right now than Stalin and Mao put together.
⇧ How Do I File My Flood Claim?
This is a government post/article. It reads well in terms of getting the ball rolling and big-picture steps. Further research on your part will be necessary where you run into complications not addressed in the overview but reasonably detailed article.
⇧ Can Study [meant Story] Circles Build Support for Solutions across Class and Racial Divides?
If you’re a landlord or manager, you might want to look into this, as attending could help bridge gaps. You’d also be able to give the landlord/manager perspective, which is just as valuable.
For Ross, the biggest gain was having people communicate with those with differing views. She calls places that bring people together across divides “contact zones,” citing the work of Mary Louise Pratt.
“We need Contact Zones like CapRadio’s Story Circles that bring people together across silos to engage in meaningful conversations about pressing social issues,” Ross says, adding that public media can play this role in many cities, not just Sacramento.
⇧ How universal basic income fulfills a fundamental human right [not really]
…universal basic income is a form of advanced capitalism, with all its progressive nature and the benefits of the free economy, but with minimum consuming power to everyone.
… and with zero legitimate reason as to why it should be “basic” or “minimum” rather than “living.” The “basic” idea has been put forth by those who want to reduce, not enhance, progressivism. They want the “basic” to replace all forms of public assistance. It would result in zero net-gain for the poor. In fact, it would do more harm than good. The libertarians pushing the plan have it in mind that the reduced government would leave them with more power to further privatize for their own benefit and not the general benefit of the nation.
⇧ Another lesson of the GFC unlearnt: the Consensus Assignment is dead
UK unemployment rose from around 5% to around 8% in 2008/9, and stayed at that level until it began coming down in 2013. US unemployment was also above 8% until 2013. Both economies needed more stimulus in 2009, and in its absence in 2010 and so on. To think otherwise means you are placing too high a weight on temporary changes in inflation and too low a weight on the costs of the recession.
Where I think I might disagree with Martin is that this stimulus could have reliablycome from monetary policy. A good policy instrument is one that has a reliable impact on demand, and the only reliable monetary policy instrument that fulfills that criteria is short interest rates. Central banks could have done more QE, or they could have reduced rates below the Effective Lower Bound (ELB), but they wouldn’t have known how much to do. They might have got there in the end, but extra years of unemployment and probably a permanent hit to output through hysteresis were an avoidable cost.
The biggest mistake central banks made was not to recognise this and be honest with the public. They should have said, clearly and repeatedly, that once rates hit the ELB monetary policy was no longer the most reliable instrument to stabilise the economy, and fiscal policy should be used.
⇧ What’s Going On with the Economy? It’s the Stimulus, Stupid
The tax bill cut corporate and personal taxes, thus raising the spending power of businesses and households. The budget bill raised caps on discretionary-spending authority for 2018 and 2019, which has led to more federal spending across the board.
Few have acknowledged the scale of the stimulus these [fleeting] measures introduced into the economy. …
… developments also vindicate those analysts who argued all along that there was a good deal of slack left in the labor market, and that the official unemployment rate wasn’t a good measure of that slack, because all the people who had dropped out of the workforce weren’t being officially counted as jobless. [Thank you for the credit.]
The rest of the article goes on to support my “fleeting” interjection.
However, it doesn’t mention the tariffs that will increase price inflation and what the Fed will do in terms of possibly panicking and way overshooting via rate increases. At least I’ve been hearing some noises strongly suggesting that nothings off the table in terms of the Fed trying to quickly reevaluate its findings, its models, etc., in the face of surprises.
⇧ The Bailouts for the Rich Are [part of the reason] Why America Is So Screwed Right Now
Eric Holder, meanwhile, also de facto granted legal amnesty to executives for possible securities fraud associated with the crisis.
Roosevelt also ordered his attorney general “vigorously to prosecute any violations of the law” that emerged from the investigations. New Dealers felt that “if the people become convinced that the big violators are to be punished it will be helpful in restoring confidence.” The DOJ indicted National City’s Charles Mitchell for tax evasion. This was part of a series of aggressive attacks on the old order of corrupt political and economic elites. The administration pursued these cases, often losing the criminal complaints but continuing with civil charges. This bought the Democrats the trust of the public.
When Roosevelt engaged in his own broad series of bank bailouts, the people rewarded his party with overwhelming gains in the midterm elections of 1934 and a resounding re-election in 1936. Along with an assertive populist Congress, the new administration used the bailout money in the RFC to implement mass foreclosure-mitigation programs, create deposit insurance, and put millions of people to work. He sought to save not the bankers but the savings of the people themselves.
Democrats did more than save the economy—they also restructured it along democratic lines. They passed laws to break up banks, the emerging airline industry, and electric utilities. The administration engaged in an aggressive antitrust campaign against industrial monopolists. And Roosevelt restructured the Federal Reserve so that the central bank was not “independent” but set interest rates entirely subservient to the wishes of elected officials.
⇧ Central Banks Have Gone Rogue, Putting Us All at Risk
Switzerland is home to the Bank for International Settlements, the “central bankers’ bank” in Basel, where central bankers meet regularly behind closed doors. Dr. Carroll Quigley, a Georgetown history professor who claimed to be the historian of the international bankers, wrote of this institution in Tragedy and Hope in 1966:
[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.
The key to their success, said Quigley, was that they would control and manipulate the money system of a nation while letting it appear to be controlled by the government. The economic and political systems of nations would be controlled not by citizens but by bankers, for the benefit of bankers. The goal was to establish an independent (privately owned or controlled) central bank in every country. Today, that goal has largely been achieved.
The rest of the article is for public banking and other nationalizations but is still pro-usury, which I am not. I oppose lending at interest. It’s completely unnecessary and is even quite counterproductive. In fact, we don’t need lending either. It too is counterproductive. What we need is democracy the likes of which the world has never seen.
⇧ The Aftershocks Of The Economic Collapse Are Still Being Felt: The Real Confrontation Is Yet To Come
Heads up means due diligence means risk management means facing distinct possibilities means looking at the complete spectrum whether one likes one end or the other or neither. As this article states, even JP Morgan realizes there will be unrest if the economic classes below the upper class are further abused by the entrenched system of dog-eat-dog and the superrich buying up all the politicians such that we don’t live in a true democracy but a plutocracy where money is the real vote rather than what we do at our voting booths.
Your residential-income-property-investment business could be severely undercut if the economic and political systems aren’t sufficiently fixed in time.
As Miles Kampf-Lessin writes, “An August poll shows that, for the first time since Gallup started asking the question 10 years ago, Democrats now view socialism more favorably than capitalism.”
While polls indicate increased support for socialism, in the United States there is a lack of clarity on what that means exactly. Rather than a state socialism, most people are advocating for policy changes that socialize the basic necessities of the people. National Improved Medicare for All is one example. There is also increased pressure for community-controlled or municipal Internet, taking this critical public service out of the hands of the much-hated for-profit providers.
Other demands include a living wage, free college education and affordable housing. There is also increased advocacy for a universal basic income and for public banks. All of these socialized programs can and do exist in capitalist countries.
… the solidarity economy is built on a set of principles: democracy, cooperation, equity, anti-oppression, sustainability and pluralism. …
The economy needs to move from concentrated wealth to shared economic prosperity. In addition to requiring specific changes in policy that lead to greater socialization of the economy, systemic c hanges will be needed to establish a cooperative and egalitarian economy. Without far-reaching changes to the structure of the state, they are highly unlikely to succeed.
There will be another economic crisis in the near future, which will present opportunities for rapid transformational change, if the movement is organized to demand it. JP Morgan issued a report on the tenth anniversary of the collapse warning of another collapse and mass social unrest like the US has not seen in 50 years. It is up to us now to prepare for that moment by developing our vision for the future and working out the types of institutions that will bring it about. The other option, if we are not prepared, could bring fascism and greater repression.
“… most people are advocating for policy changes that socialize the basic necessities of the people.” That would be a strong welfare state and not even necessarily social democracy. Public banking would be leaning toward social democracy, which is the state owning at least some of what is referred to in political science as the commanding heights of the economy. As I’ve pointed out above, a universal basic income is a euphemism, which should be summarily rejected by all progressives. Rather than a universal basic income, it should be a universal living income. The Rev. Martin Luther King, Jr. advocated for a guaranteed living income.
⇧ North Carolina Weakened Building Codes in 2013 [not smart]
With changes in the climate accelerating, building codes should be revisited and revised more often, not less. It’s simply the cost of doing proper business. If housing is more expensive as a result and sales go down, look for governmental subsidies, not deregulation.
While many homes were built before the new codes would have taken effect, without them houses rebuilt after the hurricane won’t be required to use the most up-to-date codes ….
⇧ Puerto Rico Unveils New Emergency Preparation Plans
“Significant obstacles still remain,” Rossello said, acknowledging that emergency protocols in place prior to Maria were inadequate. “That was the reality. It wasn’t only us. The federal government was not prepared ….
⇧ Report Outlines Climate Change Risks Faced by Insurance Sector
… total economic losses from hurricanes in 2017 were nearly five times the average of the preceding 16 years, losses from wildfire were four-times higher, and losses from other severe storms were 60 percent higher.
⇧ Deadly Gas Explosions Near Boston Put Focus on Pipe Safety
Andover Police Department Lieutenant Eddie Guy told NBC’s Today television show Friday morning that officials believe the blasts were caused by over-pressurized gas lines.
⇧ 3 Massachusetts Towns Rocked by Series of Gas Explosions, Home Fires
A few more facts about the extent of the explosions …
⇧ Carolinians Must Wait for Flood Waters to Recede to Assess Florence’s Damage
… many rivers are still days from cresting. North Carolina will be dealing with flooding for at least two weeks ….
The article is loaded with environmental concerns: toxic waste being released.
⇧ We’re Measuring the Economy All Wrong
… the federal government and much of the news media continue to act as if the same economic measures that made sense decades ago still make sense today. Habit comes before accuracy.
Fortunately, there is a nascent movement to change that. A team of academic economists — Gabriel Zucman, Emmanuel Saez and Thomas Piketty (the best-selling author on inequality) — has begun publishing a version of G.D.P. that separates out the share of national income flowing to rich, middle class and poor. For now, its data is published with a lag; the most recent available year is 2014. But the work is starting to receive attention from other academics and policy experts.
In the Senate, two Democratic senators, including Chuck Schumer, the party leader, have introduced a bill that would direct the federal government to publish a version of the same data series. Heather Boushey, who runs the Washington Center for Equitable Growth, told me that it could be the most important change in economic data collection in decades.
And there is no reason that data reform needs to be limited to G.D.P. The Labor Department could change the monthly jobs report to give more attention to other unemployment numbers. It could also provide more data on wages, rather than only broad averages. The Federal Reserve, for its part, could publish quarterly estimates of household wealth by economic class.
⇧ Economic Security Programs Cut Poverty Nearly in Half Over Last 50 Years, New Data Show
Using the federal government’s Supplemental Poverty Measure (SPM) — a more comprehensive metric than the official poverty measure, which counts only cash income — we calculate that the poverty rate has fallen by nearly half since 1967, largely due to the growing effectiveness of economic security programs such as Social Security, food assistance, and tax credits for working families. The SPM poverty rate fell from 25.1 percent in 1967 to 13.9 percent in 2017, with most of this improvement coming from the increased anti-poverty impact of economic security programs. Earnings and other non-government sources of income did not improve sufficiently over this period to reduce poverty substantially. …
This progress is particularly important in light of the evidence of child poverty’s long-lasting consequences. A growing body of research suggests that various economic security programs not only help families address their basic needs today, but also can have longer-term positive effects on children, improving their health and helping them do better (and go farther) in school, thereby boosting their expected earnings as adults.
… comparing poverty rates in the 1960s and today using the official poverty measure yields misleading results because the official measure doesn’t count programs like SNAP, the EITC, and rental assistance, which now constitute a much larger part of the safety net than 50 years ago, and which most poverty analysts favor including in the poverty measure.
Now, if we compare 1) the amount of money that was created out of thin air to bail out the bankers to 2) the amount of money it would take to lift every American who is in poverty out of poverty, we find that it would be a very simple matter to completely and permanently eliminate poverty in the USA in just a matter of days if the plutocrats were politically pushed out of the way. Wouldn’t that make it much easier for everyone to pay the rent? Wouldn’t you like that? Wouldn’t you vote for that?
⇧ The Crisis Next Time: What We Should Have Learned From 2008 [the authors left out the real story]
At the turn of this century, most economists in the developed world believed that major economic disasters were a thing of the past, or at least relegated to volatile emerging markets. Financial systems in rich countries, the thinking went, were too sophisticated to simply collapse. Markets were capable of regulating themselves. Policymakers had tamed the business cycle. Recessions would remain short, shallow, and rare.
Most economists were airheads.
The next crisis will come, and the more the world forgets the lessons of the last one, the greater the damage will be.
The next crisis will come only because we haven’t done what it takes to prevent it. Preventing it would be extremely easy. It’s no mystery. There are simply powers that don’t want to prevent it. They thrive on crises they cause.
… houses formed a major part of most Americans’ wealth, and banks around the world had used them as collateral in vast numbers of complicated and opaque financial instruments. Once house prices fell and Americans began defaulting on their mortgages, the elaborate system of financial obligations built on top of U.S. household debt came crashing down.
“complicated and opaque”? How about downright fraudulent!
Officials usually worry that major banks are too important to the economy to go under, so the government steps in with bailouts.
It should step in with takeovers: nationalization.
From 2008 to 2011, across the 11 countries hit hardest by the crisis, governments spent an average of 25 percent of GDP on stimulating their economies.
But they all could have done better. The United States spent heavily but too slowly and inefficiently. In Europe, too much of the stimulus went toward picking up the pieces of failed financial institutions, which provided neither the immediate fillip that would have come from policies such as raising compensati on for the unemployed nor the permanent benefits that would have come from building infrastructure. Moreover, the governments that had the most room to borrow—most notably Germany, the eurozone’s largest economy—did the least to boost spending.
Europe also wasted valuable time when it came to monetary policy. In 2012, Mario Draghi, the president of the European Central Bank, famously promised to “do whatever it takes to preserve the euro.” He kept his word, by lowering interest rates below zero and buying vast quantities of financial assets. But his U.S. counterpart, Ben Bernanke, the chair of the Federal Reserve, was more than three years ahead of him. In December 2008, the Fed cut the nominal interest rate to zero and then over the next four years broke new ground in several other ways. It launched new lending programs that accepted collateral the Fed had previously never touched from institutions it had not previously lent to. And it bought huge tranches of financial assets, inflating its balance sheet to an unprecedented size, around one-quarter of U.S. nominal GDP.
Please notice that the Fed did zero to help the average citizenry even though its mandate includes protecting the overall economy, not just the banking sector. The Fed also did not tell the US Congress nearly enough or loudly enough that more fiscal stimulus was needed even though the Fed knew more such stimulus would greatly help the recovery.
… the fatal flaw in the Dodd-Frank Act is its focus on the mainstream banking system. The act makes it more expensive for banks to operate by forcing them to hold more capital, pay more for longer-term funding, and comply with increased reporting requirements. But American attitudes toward risk taking remain the same: aspiring homeowners still want to borrow, and investors still want to lend to them. By making it more expensive to take out a mortgage with a mainstream bank, regulators have shifted borrowing and lending from the monitored sector to the unmonitored one, with homebuyers increasingly t urning to, say, Quicken Loans rather than Wells Fargo. A majority of U.S. mortgages are now created by such nonbanking institutions, also known as “shadow banks.” The result is that the financial vulnerability remains but is harder to spot.
After a crisis, the regulatory pendulum typically swings too far, moving from overly lax to overly restrictive. Dodd-Frank was no exception; it swept more institutions into a burdensome compliance scheme than was necessary to limit systemic risk.
That’s exactly wrong. Dodd-Frank didn’t go nearly far enough to reregulate the sectors responsible for the crash.
The crisis also showed that it matters how much room governments have to borrow, even when interest rates are extremely low. In times of trouble, policymakers are less likely to be sure that investors will buy new government debt.
Governments shouldn’t issue debt, period! They should issue money without corresponding debt. Carmen Reinhart and Vincent Reinhart deliberately want to avoid that fact because they don’t want the type of economy that would result, which economy would be democratic and boost the bottom and take away the superrich’s ability to be superrich relative to everyone else. Ask them. They’ll hem and haw and avoid going into any detail on the subject. They’ll give quippy replies designed to suggest that any suggestion that governments don’t need to issue debt ignores the supposed pivotal role the central banks and only the central banks can play because politicians can’t be trusted with the money supply. If asked about the people deciding directly via more pure democracy with the right to instant recall and such, they’ll likely not want to discuss those aspects because they won’t have any truly intelligent, supportable comebacks to address them. Again, ask them.
⇧ How to Fight the Next Crisis
When it comes to economics, an ounce of prevention truly is worth a pound of cure.
“The only way out of this dilemma is effective regulation so we never get into this situation again,” says Columbia University historian Adam Tooze, author of the book Crashed: How a Decade of Financial Crises Changed the World.
⇧ Frequently Asked Questions: Wireless Emergency Alerts
⇧ Trump accuses China of using trade to target election, threatens retaliation
I don’t often comment on raw political-moves, but this is actually quite clever:
“China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me,” Trump wrote. …
“There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!”
I don’t say that it’s clever as some sort of blanket support of all things Trump but rather solely in support of the fact that Xi is an increasingly anti-democratic totalitarian dictator heading the one-party dictatorship of China. I realize Trump is not fighting the trade war for democracy but rather for nationalistic-capitalist-economic reasons. Regardless, China’s system is ultimately counterproductive in my view. That said, the US needs to become vastly more democratic itself.
⇧ Puerto Rico sues insurance companies amid unresolved claims
… companies believe they can drop a claim if clients do not sue within a year.
Unfortunately, the article is quite short and doesn’t go into any detail as to upon what law or policy language the given companies are basing their position(s). I would be surprised if Puerto Rico is suggesting that there should be no limits whatsoever. We’ll need to see exactly where the gap is between what companies think versus what Puerto Rico thinks.
⇧ Trump’s Tariffs Will Make Food and Clothes Pricier for Americans [and then cheaper after that]
Economists so far have seen growth as strong enough to withstand the tariff battles. The latest Bloomberg monthly survey shows GDP will advance at an annualized 3 percent pace this quarter and 2.8 percent in the final three months of the year, before easing to 2.5 percent for the first half of 2019. It expanded 4.2 percent in the second quarter.
The problem with this article and all such articles is the focus on the short term rather than the longer haul. A quarter or two of going up a hill is nothing if the other side of the hill is down for much longer than it took to climb to the top. So prices of some things will go up for a bit. What we all need to think about is whether the US will be better off in the long run. So far, Trump’s been handling the China trade issue better than he’s handled anything else.
We can’t think about just prices. We must think about incomes and debt. If more better-paying jobs are created in the US than lost, it will be a net gain. Of course, we’ll have to avoid adding to industrial pollution. We can do that, though Trump will have to be forced to. He can be.
⇧ New Study Confirms Offshore Earnings are Flowing into Stock Buybacks, Not Jobs and Investments
Companies were not particularly constrained from making investments in the United States under the old system, for several reasons. First, much of the money being held offshore for tax purposes was already invested in the United States. A Wall Street Journal investigation found, for instance, that 93 percent of the billions that Microsoft held “offshore” in tax haven subsidiaries were, in fact, invested in the U.S. financial system. Second, major multinational companies have easy access to credit, which they could use under the old system to make investments in the United States, while still holding a substantial amount of cash offshore as a tax accounting matter. For example, Apple used its offshore earnings as collateral to take out loans to pay for share buybacks and other investments in the United States, even as it held over $200 billion in earnings offshore to avoid taxes.
⇧ Why Economics Is Having a Replication Crisis Recreating research by gathering data from the real world and analyzing it statistically often fails to produce the same result.
… if a finding is confirmed by multiple teams using multiple data sets and methods of analysis, it’s inherently more reliable than if it relies on one paper only. Instead of treating empirical findings as breakthroughs, we should treat them as pieces of evidence that go into building an overall case.
⇧ The Risk of Derivatives Isn’t Gone. It’s Merely Morphed. The problem child of the 2008 financial crisis now lives in central counterparties.
Despite its best intentions, the G-20 created a system that doesn’t eliminate risk, but rather concentrates it into new, too-big-to-fail entities. The incident in Norway isn’t isolated: LCH.Clearnet and the Korea Exchange clearing houses have both experienced defaults.
In the 10 years since Lehman’s failure, policymakers eagerly have pointed to initiatives that, they believe, made the financial system safer and a repeat of 2008 unlikely. That view is Panglossian. They lacked the courage to take necessary actions: restricting derivative activity to hedging, which would decrease the market size; insisting on rigorous risk controls; eliminating conflicts of interest; and ensuring high levels of expertise among market participants and regulators.
I have always held that derivatives are not designed, and can’t be designed, to make the economy safer or better but the exact opposite. They are nothing but gambling chips, and the house never loses because the house is the too-big-to-fail banks that simply print US dollars to cover their otherwise losses. It’s a rigged system, a Ponzi scheme at heart, which does the collective US citizenry nothing but harm.
They are not a form of insurance. They aren’t regulated the way insurance is highly regulated. The banks get away with that because they are a different industry that can print the money. Insurance companies don’t print their own money.
It was a huge error to allow banks, investment houses, and insurance companies to merge. It should be undone, the banking industry should be subjected to even more regulations than are insurance companies, and the regulators should be totally governmental rather than the quasigovernmental, at best, Federal Reserve.
⇧ How To Negotiate Issues After A Home Inspection
Inspection Credits Instead of Repairs
That’s the ticket. The buyer’s contractor should be allowed to also inspect the property if a regular-home-inspection report shows relatively major issues. The buyer should pay the contractor for the contractor’s report, which should go only to the buyer. The buyer is looking for a pretty good ballpark estimate from the contractor, not a binding price for repairs, unless that contractor is really going to be doing the work. The buyer will make money by offering a reduced price for the property which reduction amount will more than pay for the costs of repairs. More money will be made by upgrades that don’t overshoot the neighborhood and current market if it’s a flip. For buy and hold rentals, look only to cost effectiveness in terms of rent rates for the immediate area adjusted for rising or lowering vacancy rates and the like. All other due diligence still applies.
⇧ The State of Housing Confidence in 2018
The housing market is far from a perfect science, but there are some trends that could be influencing homeowner behavior and confidence such as:
Rising house prices
Record high interest rates
All of the above have hurt consumer housing confidence. How did we get here? Let’s unpack the above drivers to better understand the state of homeownership in 2018, and what the federal government is doing to reinvigorate the housing market.
I think the smartest thing about this article is that it points out that a steady income is key to making mortgage payments and that younger people are job hoppers so far and don’t necessarily trust that the next job or any job will be there while the mortgage payments will be unless foreclosure in addition to perhaps bankruptcy.
⇧ The IPAWS National Test
The test was originally planned for September 20, 2018 but has been postponed until October 3, 2018 due to ongoing response efforts to Hurricane Florence.
⇧ Why claims that the 2008 bailout was a “success” should make you angry
Wow? Well put. Carolyn Sissoko:
In many cases the originators who were theoretically on the hook for the reps and warranties they had made when they sold the loans to Wall Street had been driven into bankruptcy by — you guessed it — claims based on their reps and warranties. The bag they had in theory been holding had most definitely been passed on to someone else, but it wasn’t clear yet to whom. The obvious candidate was the issuers who had packaged these loans — with utterly inadequate due diligence — into securities for investors to buy. The catch was that the issuers were all the big banks: Bank of America, JP Morgan Chase, Citibank, Goldman Sachs, etc.
And we had financial regulators who were like deer in the headlights, transfixed by terror, when they heard that one of the big retail banks might be in danger. These regulators threw themselves headlong into the project of rescuing the big banks from their failure to perform the due diligence necessary to issue mortgage-backed securities according to the terms in their securities documentation. While I suspect that Ben Bernanke never quite wrapped his head around these issues (he had plenty of other things to worry about), it seems fairly clear that Hank Paulson and Timothy Geithner worked consciously to “save the financial system” by hiving loans that should never have been made off onto the Government. Geithner, in particular, would almost certainly claim that this was the right thing to do in the interests of financial stability.
So what’s my conclusion? Everybody who wants to tout the success of the bailout needs to tackle the reality of the bailout’s structure. There was a housing bubble. Somebody was going to have to absorb the losses that are created when lending takes place against overpriced assets.
Because in the name of financial stability the Fed and Treasury decided that banks weren’t going to bear any of the losses on the origination and securitization of bad mortg ages, they had to find a way to put the tab to the government and to the public.
It was put to the government by putting the mortgage market on government life support from late 2008 to 2010, so that people would refinance out of the bad mortgages in PLMBS securitizations into FHA loans and into GSE MBS.
It was put to the public by making sure that their mortgages were not written down in value, even though the value of the house being used as collateral had collapsed. This means that the housing price bubble of 2006-07 is still with us today. It is being paid off by homeowners who are still paying these mortgages, who can’t spend that money on consumption, and who are scheduled to keep paying off bubble-level housing prices right up until 2050.