Skip to Content.
Sympa Menu

livingontheland - [Livingontheland] Trouble At Home: The Housing Bubble

livingontheland@lists.ibiblio.org

Subject: Healthy soil and sustainable growing

List archive

Chronological Thread  
  • From: "Tradingpost" <tradingpost@gilanet.com>
  • To: livingontheland@lists.ibiblio.org
  • Subject: [Livingontheland] Trouble At Home: The Housing Bubble
  • Date: Sat, 29 Jan 2005 09:13:03 -0700


Trouble At Home: The Housing Bubble
http://www.demos-usa.org/page253.cfm
Demos, by Dean Baker, Co-Director, CEPR, 1/11/05

In the late nineties, the stock market zoomed upwards, with the ratio of
stock prices to corporate earnings eventually reaching more than twice its
historic level by 2000. While there was no way to explain this run-up in
share prices as anything but a speculative bubble, the vast majority of
professional economists failed to recognize this bubble and the dangers it
posed to the economy. In the fall of 2000, even after the market collapse
had already begun, not one of the "Blue Chip" 50 economic forecasters saw a
recession coming in 2001. The budget projections at the beginning of 2001
continued to assume solid growth in tax revenue, including capital gains
tax
revenue. . . This history is important in the context of the housing
bubble,
because people should realize how oblivious the economic Œexperts¹ can
be to
important facts that are right in front of their faces. Very few economists
have noted the existence of a housing bubble, nor the potential impact of
its collapse on the economy. Nonetheless, it takes no more than simple
arithmetic to recognize the nature and size of the problem.²





  • [Livingontheland] Trouble At Home: The Housing Bubble, Tradingpost, 01/29/2005

Archive powered by MHonArc 2.6.24.

Top of Page