1. If you'd like to see an abominably bad job of prognostication, check out Power Line's reaction to Paul Krugman's warnings about the housing bubble in 2005:
Krugman says there is a housing bubble, and it's about to burst.
Well, if we believed anything Krugman writes, we'd be worried all the time.
But it isn't clear, and Krugman doesn't even try to explain, why that constitutes a bubble or why level or declining home prices in selected areas around the country will somehow imperil the economy.
Most people own only one house at a time, and transaction costs make it impractical to buy and sell houses the way you buy and sell stocks.Of course, not being a homeowner myself, the collapse in housing prices is a good thing for the prospect of my future homeownership. But the fact of the matter is that housing prices still have a long way to go down.
My wife and I have just started sending out feelers to test the market and see what kind of homes we might be able to buy. Without getting into too many details, let's just say that if you use sane notions of how much of one's income should go into housing, then the difference between our income bracket and the bracket of housing we could afford to buy is quite noticeable. Granted, the two of us have been at our jobs for less than a year. But I make a decent salary and she's an analytical pharmacist, yet under current prices in L.A., we'd only be able to afford a mediocre condo or a tiny house, neither one of which would be an improvement over the nice apartment we rent now. The lesson to take away here is that there is still a long way for the market to drop here in Southern California before housing affordability is at all reasonable to the average family. There's no reason to buy right now, and there won't be until at least some time next year.
2. I've long been of the belief that the amount of power the President has over the economy is overrated, but it's pretty striking to see what's happened to the national debt under Reagan and the Bushes:
3. It's worth noting that the stories about Sarah Palin charging rape victims for their rape kits appear to be false.