Hey libs, let Peter Schiff educate you on 9-9-9 and OWS

[8537]

He was wrong about hyperinflation.

He was wrong about the dollar.

He was wrong about China

He as wrong about US Treasuries.

The same way the Paul Eherlich was wrong, yet welshed on his bet with Julain Simon.

OK then....Are you just trying to look smart or did you really think the Simon-Eherlich bet was relevant here?

 

[Oddball]

It's relevant in that you claimed Ehrlich won the bet, only that the time frame was off....Also conveniently dismissing the inflation factor.

 

[8537]

It's relevant in that you claimed Ehrlich won the bet, only that the time frame was off....Also conveniently dismissing the inflation factor.

How flattering...The inflation factor doesn't count, Tom. You need to consider the nature of the bet a bit more if you think inflation is relevant.

As for claiming he won, I said no such thing. He was obviously wrong in the time frame of the bet.

 

[pgm]

He and dozens of other economists were right about the housing bubble.

name two. If so many economists were right about it, how come EVERY economist in the Bush administration and in Freddie/Fannie Dodd/Frank was wrong?

Meredith Whitney
Noureill Roubini (Neo-Keynesian)- in 2006
Peter Shiller (post-Keynesian) - in 2005
Dean Baker - circa 2002.
Nassim Taleb
Hyman Minsky (The original American Post-Keynesian)
Ken Rogoff

....I could go on, but there's a start. There are - literally - dozens more that can be found with a touch of research.

Add Paul Krugman.

 

[blu]

He was wrong about hyperinflation.

He was wrong about the dollar.

He was wrong about China

He as wrong about US Treasuries.

Remind me why we should think he's right about 999?

he wasn't wrong... I believe you referring to the 2008 era... he would have made his clients returns 1000 times over if other countries didn't devalue their currency to save the dollar

 

[Liberty]

name two. If so many economists were right about it, how come EVERY economist in the Bush administration and in Freddie/Fannie Dodd/Frank was wrong?

Meredith Whitney
Noureill Roubini (Neo-Keynesian)- in 2006
Peter Shiller (post-Keynesian) - in 2005
Dean Baker - circa 2002.
Nassim Taleb
Hyman Minsky (The original American Post-Keynesian)
Ken Rogoff

....I could go on, but there's a start. There are - literally - dozens more that can be found with a touch of research.

Add Paul Krugman.

only schiff and the austrians predicted the actual crash, buddy boy.

 

[Full-Auto]

name two. If so many economists were right about it, how come EVERY economist in the Bush administration and in Freddie/Fannie Dodd/Frank was wrong?

Meredith Whitney
Noureill Roubini (Neo-Keynesian)- in 2006
Peter Shiller (post-Keynesian) - in 2005
Dean Baker - circa 2002.
Nassim Taleb
Hyman Minsky (The original American Post-Keynesian)
Ken Rogoff

....I could go on, but there's a start. There are - literally - dozens more that can be found with a touch of research.

Add Paul Krugman.

What is krugmans official position? Opposite whatever repubs announce, he was always for it before the repubs were. When they announce his position changes.

 

[Toro]

He was wrong about hyperinflation.

He was wrong about the dollar.

He was wrong about China

He as wrong about US Treasuries.

Remind me why we should think he's right about 999?

he was right about the housing bubble. the others have yet to burst.

He and dozens of other economists were right about the housing bubble.

Dozens out of about 5000...

 

[PoliticalChic]

PC, isn't that the whole Austrian Vs. Keynesian thing reborn?

Do people who spend money help the economy (consumerism)?
Do people who save money and invest it in their businesses, lives, and other larger purchases help the economy?

My point was the way the Old Left Media will report the effects of 9-9-9

 

[Toro]

He and dozens of other economists were right about the housing bubble.

name two. If so many economists were right about it, how come EVERY economist in the Bush administration and in Freddie/Fannie Dodd/Frank was wrong?

Meredith Whitney
Noureill Roubini (Neo-Keynesian)- in 2006
Peter Shiller (post-Keynesian) - in 2005
Dean Baker - circa 2002.
Nassim Taleb
Hyman Minsky (The original American Post-Keynesian)
Ken Rogoff

....I could go on, but there's a start. There are - literally - dozens more that can be found with a touch of research.

The Bush administration economists were wrong because they were...Bush administration economists. I'm not sure that requires explanation. Ditto, GSE Economists.

Relatively few economists even identified housing as a bubble, let alone predicted that it would implode.

There are two reasons for this. First, in the way econometricians are generally trained in general equilibrium models, asset markets net out against liabilities, and have either zero or a minor affect on the economy as an asset class. So construction affects supply and demand but the pricing of those assets, in the model, does not. Second, the ideology of many economists is that bubbles cannot happen because markets are efficient, or are very rare and virtually impossible to identify when they are occurring. So most economists are either trained not to identify bubbles or refuse to recognize bubbles.

FTR Whitney is a financial analyst, not an economist. Financial analysts were far more likely to have identified the housing bubble than economists.

 

[Toro]

ok, so answer my question then smarty pants. where were the smart ones in DC telling the federal reserve and congress to stop the artificially low interest rates and what not? Hm? Where were the economists that actually had power? Hm?

There were few economists who identified the bubble to begin with. Those who did were generally outside the mainstream. And, as Greenspan correctly said, those who sounded the warning couldn't identify the timing, which makes it difficult to implement policy.

In fairness, there was a huge vested interest in keeping the housing bubble going amongst the public at large. Everyone was making a lot of money. Everyone wanted to keep the party going. Just like the Tech Bubble. Those who did step out were often lambasted and branded as Cassandras who didn't get it. All bubbles are like that.

 

[editec]

How the hell could any competent economist have missed the RE bubble?

We had property values increases of 10-12-15% in some areas of the country, when inflation was down around 1-2%.

The median home price was over 4 times the median family income. 4 TIMES!!!!

If that's not a market bubble that ought to have been easy to see, I don't know what is.

But the fact is that the inapproprate rising market values of real estate were going on for so long that I sometimes wonder if every economist just didn't throw up their hands and tell themselves " I have NO IDEA what's going on"

I know I sure as hell did after watching the median home prices contue to out perform inflation decade after decade.

All this event does is remind me of the old economists' adage that:

Markets can remain irrational longer than you can remain solvent.​

 

[8537]

Meredith Whitney
Noureill Roubini (Neo-Keynesian)- in 2006
Peter Shiller (post-Keynesian) - in 2005
Dean Baker - circa 2002.
Nassim Taleb
Hyman Minsky (The original American Post-Keynesian)
Ken Rogoff

....I could go on, but there's a start. There are - literally - dozens more that can be found with a touch of research.

Add Paul Krugman.

only schiff and the austrians predicted the actual crash, buddy boy.

..and the neo-Keynesians, post-Keynesians etc...in the above list.

 

[8537]

ok, so answer my question then smarty pants. where were the smart ones in DC telling the federal reserve and congress to stop the artificially low interest rates and what not? Hm? Where were the economists that actually had power? Hm?

There were few economists who identified the bubble to begin with. Those who did were generally outside the mainstream. And, as Greenspan correctly said, those who sounded the warning couldn't identify the timing, which makes it difficult to implement policy.

In fairness, there was a huge vested interest in keeping the housing bubble going amongst the public at large. Everyone was making a lot of money. Everyone wanted to keep the party going. Just like the Tech Bubble. Those who did step out were often lambasted and branded as Cassandras who didn't get it. All bubbles are like that.

I don't think Dean Baker (who butters his bread with DSGE models), Roubini and Shiller are outside the mainstream. Everyone who actually makes policy was enamored with models underpinned by the efficient market hypothesis, but that's only because it allowed them to dismiss the reality of the bubble - just as they did in the late 1990s.

 

[pgm]

Meredith Whitney
Noureill Roubini (Neo-Keynesian)- in 2006
Peter Shiller (post-Keynesian) - in 2005
Dean Baker - circa 2002.
Nassim Taleb
Hyman Minsky (The original American Post-Keynesian)
Ken Rogoff

....I could go on, but there's a start. There are - literally - dozens more that can be found with a touch of research.

Add Paul Krugman.

only schiff and the austrians predicted the actual crash, buddy boy.

Um....of course he did. He first mentions it in 2002 and then starting at about 2005, he goes on a bubble-warning crusade. He has tons of articles about it. I'll leave you with just a few.

2002: Mind the Gap

Back when I first got professionally obsessed with Japan's problems, around four years ago, I made myself a mental checklist of reasons that Japan's decade of stagnation could not happen to the United States. It went like this:

1. The Fed has plenty of room to cut interest rates, which should be enough to deal with any eventuality.
2. The U.S. long-term budget position is very strong, so there's plenty of room for fiscal stimulus in the unlikely event interest rate cuts aren't enough.
3. We don't have to worry about an Asian-style loss of confidence in our business sector, because we have excellent corporate governance.
4. We may have a stock bubble, but we don't have a real estate bubble.

I've now had to strike the first three items off my list, and I'm getting worried about the fourth.

More and more people are using the B-word about the housing market. A recent analysis by Dean Baker, of the Center for Economic Policy Research, makes a particularly compelling case for a housing bubble. House prices have run well ahead of rents, suggesting that people are now buying houses for speculation rather than merely for shelter. And the explanations one hears for those high prices sound more and more like the rationalizations one heard for Nasdaq 5,000.

If we do have a housing bubble, and it bursts, we'll be looking a lot too Japanese for comfort.

2005: Running out of Bubbles

Nobody thought the economy could rely forever on home buying and refinancing. But the hope was that by the time the housing boom petered out, it would no longer be needed.

But although the housing boom has lasted longer than anyone could have imagined, the economy would still be in big trouble if it came to an end. That is, if the hectic pace of home construction were to cool, and consumers were to stop borrowing against their houses, the economy would slow down sharply. If housing prices actually started falling, we'd be looking at a very nasty scene, in which both construction and consumer spending would plunge, pushing the economy right back into recession.

That's why it's so ominous to see signs that America's housing market, like the stock market at the end of the last decade, is approaching the final, feverish stages of a speculative bubble.

That Hissing Sound

Of course, some people still deny that there's a housing bubble. Let me explain how we know that they're wrong.

One piece of evidence is the sense of frenzy about real estate, which irresistibly brings to mind the stock frenzy of 1999. Even some of the players are the same. The authors of the 1999 best seller "Dow 36,000" are now among the most vocal proponents of the view that there is no housing bubble.

Then there are the numbers. Many bubble deniers point to average prices for the country as a whole, which look worrisome but not totally crazy. When it comes to housing, however, the United States is really two countries, Flatland and the Zoned Zone.

In Flatland, which occupies the middle of the country, it's easy to build houses. When the demand for houses rises, Flatland metropolitan areas, which don't really have traditional downtowns, just sprawl some more. As a result, housing prices are basically determined by the cost of construction. In Flatland, a housing bubble can't even get started.

But in the Zoned Zone, which lies along the coasts, a combination of high population density and land-use restrictions - hence "zoned" - makes it hard to build new houses. So when people become willing to spend more on houses, say because of a fall in mortgage rates, some houses get built, but the prices of existing houses also go up. And if people think that prices will continue to rise, they become willing to spend even more, driving prices still higher, and so on. In other words, the Zoned Zone is prone to housing bubbles.

And Zoned Zone housing prices, which have risen much faster than the national average, clearly point to a bubble.
...
Meanwhile, the U.S. economy has become deeply dependent on the housing bubble. The economic recovery since 2001 has been disappointing in many ways, but it wouldn't have happened at all without soaring spending on residential construction, plus a surge in consumer spending largely based on mortgage refinancing. Did I mention that the personal savings rate has fallen to zero?

Now we're starting to hear a hissing sound, as the air begins to leak out of the bubble. And everyone - not just those who own Zoned Zone real estate - should be worried.

Safe as Houses

I used to live next door to a Russian émigré. One day he asked me to explain something that puzzled him about his new country. "This place seems very rich," he said, "but I never see anyone making anything. How does the country earn its money?"

The answer, these days, is that we make a living by selling each other houses. Since December 2000 employment in U.S. manufacturing has fallen 17 percent, but membership in the National Association of Realtors has risen 58 percent.

Let's start with home building. Between 1980 and 2000, which was before the housing boom, spending on the construction of new homes averaged 4.25 percent of G.D.P. In the most recent quarter, however, the figure was 5.98 percent. That difference is equivalent to about $200 billion a year in additional spending, generating roughly two million extra jobs.

Then there's the jump in house prices. Over the past five years housing prices have grown much faster than the overall cost of living, adding about $5 trillion to the public's wealth. Typical estimates say that each additional dollar of housing wealth adds about 3 cents to annual consumer spending, as families reduce their savings and borrow against their newly valuable homes. So we're talking about an additional $150 billion in spending, and roughly 1.5 million more jobs.

Does anything else in the U.S. economy rival housing as a source of job creation? Well, there's also the military buildup. The Economic Policy Institute estimates that increased military spending over the past four years has created 1.3 million private-sector jobs.

And, yes, there are the Bush tax cuts, which the administration insists are the source of everything good in the economy. And it's true that some portion of the tax cuts, which amounted to $225 billion this year, must have been spent in ways that created jobs. Given reasonable estimates of the effect of tax cuts on spending, however, they were probably a smaller force for job creation than the military buildup, and dwarfed by the housing boom.
...
Still, the economy is expanding. But because that expansion depends so much on real estate - without the housing boom, the economic picture would look dismal indeed - you have to wonder how much to trust it.

There are some other good insights in there as well (such as good and bad things about borrowing money from foreign governments), if you want to take the time to read those. However, I don't expect you to necessarily do that. I just hope you at least read what is written in this post.

 

[Sallow]

He and dozens of other economists were right about the housing bubble.

name two. If so many economists were right about it, how come EVERY economist in the Bush administration and in Freddie/Fannie Dodd/Frank was wrong?

Meredith Whitney
Noureill Roubini (Neo-Keynesian)- in 2006
Peter Shiller (post-Keynesian) - in 2005
Dean Baker - circa 2002.
Nassim Taleb
Hyman Minsky (The original American Post-Keynesian)
Ken Rogoff

....I could go on, but there's a start. There are - literally - dozens more that can be found with a touch of research.

The Bush administration economists were wrong because they were...Bush administration economists. I'm not sure that requires explanation. Ditto, GSE Economists.

You forgot Paul Krugman.

 

[NYcarbineer]

I think all we need for 'education' on Herman Cain's tax plan is to ask Herman Cain himself, who said less than a year ago:

"The worst idea is a proposed national sales tax...."

Herman Cain: T*H*E New Voice

But, I'm sure the new Herman Cain can explain why the old Herman Cain was an idiot.