The lack of any recovery in the housing market is a crucial indicator of the real state of the US economy. The current crisis began with the implosion of the housing bubble that had been built up over previous years on the basis of credit inflation, speculation and swindling on the part of the major banks and mortgage companies, carried out with the blessings of the government.
The housing collapse burst the credit bubble and precipitated the Wall Street crash of 2008 and the ensuing US and global recession. Without an end to the housing slump and revival in home building and house prices, no genuine or sustainable recovery is possible.
Behind the continuing depression in housing stands near-Depression levels of unemployment—officially at 9 percent, with 13.7 million counted as unemployed, including 5.8 million out of work for six months or more, a massive overhang of foreclosed homes (nearly 4 million over the past five years), declining wages and tight consumer credit.
Just as the Obama administration has rejected any serious measures to provide jobs and relief for the unemployed, it has opposed policies to help embattled homeowners facing default and foreclosure. The tax credit for first-time home buyers was allowed to lapse last year, and Democratic proposals to allow bankruptcy courts to reduce the principal on mortgages for households filing for personal bankruptcy protection were dropped in the face of opposition from Wall Street. The banks oppose any steps to help homeowners that could impinge on their profits, and the administration and congressional Democrats have complied with their demands.
I heard a piece on NPR today -- no link, it was nonsense -- where a man tried to spin it and the unemployment as a momentary blip and nothing to be alarmed about. Swore we need five consecutive months to be back in a recession. Really? When we had months and months of consecutive bad news, they didn't call it a recession. We had to be well into the recession before they'd finally admit it.
Think about that when you hear a blow hard 'expert' on TV or the radio telling you this is no big deal.
This is C.I.'s "Iraq snapshot" for Wednesday: