The demand for housing in London has outstripped supply since the post-war period, making housing unaffordable to a majority of the city’s low and middle-income families. And although the house price growth of the last two decades has reversed itself recently, it is far from clear that London’s housing problems are in any way diminished. The opportunities for first-time buyers to get into the game may be worse than at any time in recent decades. read more »
Over the past year, coverage of the economy appears like a soap opera written by a manic-depressive. Yet once you get away from the coasts – where unemployment is skyrocketing and economies collapsing – you enter what may be best to call the zone of sanity.
The zone starts somewhere in Texas and goes through much of the Great Plains all the way to the Mexican border. It covers a vast region where unemployment is relatively low, foreclosures still rare and much of the economy centers on the production of basic goods like foodstuffs, specialized equipment and energy. read more »
Last week I wrote about the first part of my talk to the Bellevue Kiwanis Club on why our economy is in the position it is today. It is a story about good intentioned policies – like modifying credit scoring for Americans working in a cash-economy – that were bastardized in the execution – like some Americans using modified credit scoring to lie about their income. Just like there were superstar firms among the original “junk bond” companies, there were also firms like Enron and WorldCom.
In the first part of my story: banks wrote mortgages, their broker-arms sold them to the public in the form of bonds, they paid fees to Standard & Poor’s and Moody’s to get triple-A credit ratings, and they devised crazy default protection schemes which they also sold in the public capital markets. On top of all that, they screwed up the paper work so there was no relationship between houses and the ultimate financial paper that could be used to cover potential losses. read more »
When I was in elementary school, I remember reading about the remarkable transformations that the future would bring: Flying cars, manned colonies on the moon, humanoid robotic servants. Almost half a century later, none of these promises of the future – and many, many more – have come to pass. Yet, in many respects, these visions from the future served their purpose in allowing us to imagine a world far more wondrous than the one we were in at the time, to aspire to something greater. read more »
I was thoroughly enjoying the broadcast of the March 23 final game of the recent World Baseball Classic at Dodger Stadium when I thought about steroids and sub-prime mortgages.
A seemingly odd leap, I’ll grant you – but hang in there on this one. read more »
By Richard Reep
The current economic crisis has many mixed impacts, including the shift of grocery customers to low-cost companies like Wal-mart. Yet at the same time we see a shift to local, community markets in an effort to cope with the new economy. While the global players deliver discounts due to their enormous volume, local community markets offer low-priced produce, goods, and services due to their microscopic volume. This common ground between individual efforts and enormous buying machines yields an interesting treasure trove of passion and hope. read more »
Everyone knows that subprime mortgages lie at the root of our current financial crisis. Lenders originated too many of them, they were securitized amidst an increasingly complex credit market, and the bubble popped. The rest is painful history. read more »
What kind of migration patterns will emerge as a result of the current economic downturn? The recession is uneven; some places are much worse off than others. Those differences can give labor cause to move. Economic geographer Edward Glaeser thinks cities with marginal manufacturing legacies should attract a lot of people because the well-educated, living in dense urban environments, should get through the crisis relatively unscathed. If Glaeser is correct, then shrinking Rust Belt cities can expect more of the same even after the recovery begins in earnest. Pittsburgh brains should continue to drain. read more »
Returning to Normalcy
The Bureau of the Census has just released metropolitan and county population estimates for 2008, with estimates of the components of population change, including domestic migration. Consistent with the “mantra” of a perceived return to cities from the suburbs, some analysts have virtually declared the new data as indicating the trend that has been forecast for more than one-half a century. In fact, the new population and domestic migration data merely indicates the end of a domestic migration bubble, coinciding with the end of the housing bubble. read more »
As the financial bailout fiasco worsens, President Obama may want to consider a do-over of his whole approach towards economic stimulus. Instead of lurching haphazardly in search of a "new" New Deal symphony, perhaps he should adapt parts of the original score.
Nothing makes more sense, for example, than reviving programs like the Works Progress Administration (WPA), started in the 1935, as well as the Civilian Conservation Corps (CCC), begun in 1933. These programs, focused on employing young people whose families were on relief, completed many important projects – many still in use today – while providing practical training to and instilling discipline in an entire generation. read more »