Tuesday, September 2, 2008

The same group of economists that led the economy into this catastrophe still has its hands on the wheel.

The Villains of the Housing Crisis Are Denying All Responsibility

How did we get here? The centerpiece in this story is the United States allowed an $8 trillion housing bubble to grow unchecked. Between 1996 and 2006, house prices rose by more than 70 percent, after adjusting for inflation. In the previous century, from 1896 to 1996, house prices had just kept even with the overall rate of inflation. When there is suddenly a sharp divergence from a long-term trend like this, it is reasonable to look for an explanation. Was there some fundamental factor on either the supply or demand side that was suddenly causing house prices to skyrocket?

Posted by malct @ 06:55 PM (481 views)
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4 thoughts on “The same group of economists that led the economy into this catastrophe still has its hands on the wheel.

  • tyrellcorporation says:

    So it’s the evil US again eh? Of course we had nothing to do with it… yawn.

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  • This article could just as well have been written for the UK though. Anyone who thinks the BoE and MPC had little part in providing the fuel for the housing boom is deluded or in denial.

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  • tyrecorp – you mean the crown?

    you may yawn, others may wonder – explain

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  • paul – deluded or in denial ? – yup

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