The People Who Could Not See an $8 Trillion Housing Bubble Warn of Public Debt Levels

[chill_wind]

The People Who Could Not See an $8 Trillion Housing Bubble Warn of Public Debt Levels
December 12, 2009


The Post, which published zero news articles anywhere warning of the collapse of the housing bubble, published yet another front page piece warning about budget deficit problems, this time in Greece. This one most expressed the concerns of unnamed "analysts," (people who didn't know enough about the economy to see an $8 trillion housing bubble). The piece does include an explicit reference to Moody's, the bond-rating agency best known for giving investment grade rating to near worthless collaterized debt obligations.

The point of this article is that the Washington Post wants to cut Social Security and Medicare and it will use its news pages to shamelessly push this agenda.

--Dean Baker

http://www.prospect.org/csnc/blogs/beat_the_press

David Brooks pops up with some nastiness in the comments section. Could be he's smarting from this earlier item from Baker down the page (Dec 8).

David Brooks Flunks Economics, Again
Dean Baker on December 8, 2009

David Brooks tells readers that: "The U.S. has its problems, but Americans would be crazy to trade their problems with those of any other large nation." The basis for this assertion is that it enjoyed considerably faster GDP growth since 1991 than the other major wealthy countries between 1991 and 2009.

There are three main problems in Brooks' analysis. First, the U.S. was in the middle of a recession in 1991. While hucksters often take measures of growth from the middle of recession, serious people do not. The appropriate comparison year is 1989, the peak of the prior business cycle. This erases some of the gap in growth over this period.

However the more important error is that Brooks uses overall growth, rather than per capita growth. Countries do not get richer unless their economy grows more than their population. Most of the difference in growth rate between the U.S. and France and Germany is due to differences in population growth. The U.S. is getting more crowded. Germany and Japan are getting less crowded.

(snip- see link)

.

For those who care about the future of the planet, we may also consider the fact that greenhouse gas emissions in these other countries have not risen anywhere near as rapidly as in the U.S., and we have even further grounds to question the superiority of the U.S. model.

Also, the U.S. growth was accompanied by an unsustainable trade deficit. Okay, we're getting way over Brooks' head here, so I better stop.

http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=12&year=2009&base_name=david_brooks_flunks_economics

[truedelphi]

1. Thank you for posting this. n/t

[chill_wind]

3. "Beat The Press"

and does he ever, most days. From WAPO to NPR and plenty in between. Owwwww!

[kenny blankenship]

2. Recworthy on the basis of subject line alone!

Not that the rest of it isn't worthy too. We need a great deal more scoffing in the direction of "respectable" financial institutions. We need a great deal more skepticism and a great deal more plain speaking.

The bond rating institutions haven't been reformed any more than the leading crooked banks have been reformed. Watch out for them.

[chill_wind]

4. I like this guy a lot. And his CEPR website.

http://www.cepr.net/

http://www.cepr.net/index.php/dean-baker/


( Edit to add-- he's got two Nobel Laureates on his advisory board-- Stiglitz is one.)

http://www.cepr.net/index.php/board/

[Turbineguy]

6. Thanks for that!

[chill_wind]

7. Welcome. You might like this one, too-- The New Deal 2.0

Check out the brain trust column and blogroll at this one--

http://www.newdeal20.org/

:hi:

[girl gone mad]

5. Dean Baker is a gem..

he wrote a must read article earlier this week about the stealth plans to obliterate SS and Medicare. Not sure if it was posted here. If not, it should be.

[chill_wind]

9. Not sure if this is it: "Commission" is WashingtonSpeak

for Cutting Social Security and Medicare
December 1, 2009, 12:27PM


http://tpmcafe.talkingpointsmemo.com/talk/blogs/dean_baker/


He was talking about Pete Peterson in back in April

Hands Off Social Security
http://blogs.usatoday.com/oped/2009/04/hands-off-social-security.html

He's pretty bothered about him.

[bemildred]

8. Public debt is only good when it goes to corporations and other economic bigshots.

Public debt that helps mere citizens is a terrible danger, and tax money being used to help mere citizens verges on being truly evil.
:sarcasm:

[Miss Authoritiva]

10. Also, when it goes to war (so to speak)

Public debt for war is so unquestioned in this country that the debt itself pretty much doesn't exist in the minds of citizens. It's as if we wage war with only Monopoly money but pay for infrastructure and social programs with real money. I wish every time an article appears listing how many people got drone bombed or cruise missiled by the US, the cost of the munitions and manpower involved is specified as well. So far, my favorite is the cost (approx $1.5 million) for two Tomahawk cruise missiles used to kill 4 cows and 1 donkey in Somalia. The human target (one person) either wasn't there or got away.