Goodbye Economy!

This cartoon depicts the situation of housing market right now and how it is really hurting the value of the United States dollar and the overall economy. It is hard to say how long the economy is going to have to fight to try to come back from this devastating event, but it is definitely going to be an uphill battle for the US economy. Let us just hope that we get someone in the presidency in 2008 that will make this uphill climb fairly easy for all of us.


Logan said...

I am a little concerned with your post because you seem to have 2 pervasive thoughts. One that Alan Greenspan created the current housing market situation, and 2 that the Executive branch of the government can fix it.

The way I see it, housing markets are like all markets. They have ebbs and flows, highs and lows. We will adapt to this low just as we always do. All this means for the housing market is that it is no longer a seller's market but a buyer's market. Eventually it will swing the other way and the scenario will be reversed.

Secondly, assuming that the President of the United States can swoop in with his magic housing wand in a sustainable manner is unrealistic. Politicians will try to spin the issue and make political statements, but there really is little to can do to alter nature.

Hailey said...

I agree with Logan. The last thing we need right now is the government stepping in and "helping." Most likely they will do something inefficient and stupid just to save face with the American people.
The housing market has slowed, not fallen apart completely. It will take sometime for it to catch up to all the excess inventory on the market right now, but this was necessary to correct the market when it was out of control. This slowdown will create problems for some people but will help the economy as a whole.

Dr. Tufte said...

I'm not sure this still links to the right cartoon.

Also, Logan - I love the "magic housing wand".

The time we spend on this leaves me cold. If you pay attention to the discussion about the housing market, it is all about prices. There isn't much about quantity.

But ... quantity is what bad (and good) economic times are all about. The connection is the elasticity of real GDP with respect to housing prices. I don't see any evidence that this is very high, and if not, why is the housing situation a big deal?