The Economy

LOL wrote: I thought I remember reading numbers that new housing starts are up, and existing sales are up. Yes foreclosures are still a problem though.

I read them too. Slight uptick before a big drop.

Is housing a leading or lagging indicator. Real estate prices in N. Dakota have gone nuts.

(Heading to town to do our part for the economy)

towermonkey wrote: There's a lot of election year rhetoric whirring around as if we live in a giant blender right now, but what is the truth about the economy? Does GDP tell the tale? Is it even possible to correct this ship now? Bill Clinton got credit for turning around an economy that was pretty rotten, but what really turned things around was the development of the PC and the internet. Is there anything out there on the horizon that is even close to those developments that could jump start this sagging economy?

Very important topic. And a good assessment of why the Clinton era economy did so well- it indeed was the internet - and the massive prodictivity gains from it that lead to a boom - and more importantly- the fact that America was able to use that technology before the rest of the world got connected.

We no longer have this advantage.

Housing. It was the main cause of the slow economy, and the economy will self-heal when housing picks up which it is already starting to do lately. Not so much prices, but sales and new construction and flushing out foreclosures.

No- sorry LOL- this was not the cause of the slow economy. I don't mean to pick on you but the housing crash was a result of the slow economy - not the cause of it.

The real cause of the 2008 economic crash was a sudden spike in OIL prices- up to $140/barrel which our economy could not handle. Industry and corporations and small businesses and individuals could not take the domino effect of higher prices (for everything) as a result of the spike in energy prices. That's how important it is to have steady reliable energy - even better if we can produce it here ourselves.

Corporations cut back in response - industry slowed down, businesses started to cut jobs in response to the slowing economy- and the domino effect rippled through the economy from top to bottom- eventually companies were sheding jobs at the rate of hundreds of thousands per month.

This lead to individuals not being able to pay their mortgages- and thus we had a housing crisis.

Now LOL- here's where I do agree with you...

I'm not sure why people think there is going to be some breakthrough in cheap energy. I don't see it right now. There are already plenty of breakthroughs over the past decades, none of them are cheap though. I posted an article about Nitrogen in the Science lab for example.

I still say housing has to heal before we get the economy growing strong. Right now is a golden opportunity to get into a house.

I also agree that there is no breakthrough in cheap energy anywhere on the horizon. Energy will be the main issue for the USA- which is why you keep hearing Romney say it's his #1 item in his plan to recover the economy.

It is a major issue, even just having energy prices be stable. But the housing recovery depends on JOBS coming back. Until the jobs come back- the housing market recovery will be weak at best.

Some ways to bring jobs back - is to get government out of the way of business- cut the corporate tax rate and reduce regulations and restrictions that are preventing businesses from growing right now. Also unknown expenses like Obamacare are frightening businesses.

Notice Obama has no plan, and these points ARE the Romney plan- the same plan that the liberals keep saying dosn't exist.

Personally - I don't see anything big on the horizon, but if we create an environment where the next big thing CAN happen, then who knows.

I know one thing- we must cut government- and we must grow our way out of the debt hole that our government has put us into- or we are indeed toast- just like greece, but worse.

And there's not much time left.

BearMtnHIB wrote: The real cause of the 2008 economic crash was a sudden spike in OIL prices- up to $140/barrel which our economy could not handle. Industry and corporations and small businesses and individuals could not take the domino effect of higher prices (for everything) as a result of the spike in energy prices. That's how important it is to have steady reliable energy - even better if we can produce it here ourselves.

Corporations cut back in response - industry slowed down, businesses started to cut jobs in response to the slowing economy- and the domino effect rippled through the economy from top to bottom- eventually companies were sheding jobs at the rate of hundreds of thousands per month.

This lead to individuals not being able to pay their mortgages- and thus we had a housing crisis.

I tend to agree with this although you won't find much support in academia for this theory. I do think you're wrong about no cheap - renewable energy innovations on the horizon. I think it will happen regardless of who gets elected, or if not, we had better learn to speak Chinese.

I do think you're wrong about no cheap - renewable energy innovations on the horizon.

Can you tell me what you have on your mind here? My education is in alternative energy, and I keep up on the developments as best I can.

I'm also in the energy business- and my assessment is that energy prices are poised to go up- up - and up. Bad government policy has made matters worse. Instead of making things easier for our most cost effective energy sources- this administration has made them out to be the devil.

I see electric prices poised to double in the next 4 years. Double.

One side effect of cheap new energy sources? The Earth might heat up even more. If conventional energy prices continue to rise, economies will slow.

I really don't remember the oil price spike lasting very long, and the economy was already slowing at the time I think. I would like to see any links to analysis of that theory also. Like comparing GDP, jobs, to $140 oil price.

It didn't last very long- because as the recession hit us- prices fell again. But the damage was done....

March 16, 2007 $57.11
March 23, 2007 $62.28
March 30, 2007 $65.87
April 6, 2007 $64.28
April 13, 2007 $63.63
April 20, 2007 $64.11
April 27, 2007 $66.46
May 4, 2007 $61.93
May 11, 2007 $62.37
May 18, 2007 $64.94
May 25, 2007 $65.20
June 1, 2007 $65.08
June 8, 2007 $64.76
June 15, 2007 $68.00
June 22, 2007 $69.14
June 29, 2007 $70.68
July 6, 2007 $72.81
July 13, 2007 $73.93
July 20, 2007 $75.79
July 27, 2007 $77.02
August 3, 2007 $75.48
August 10, 2007 $71.47
August 17, 2007 $71.98
August 24, 2007 $71.09
August 31, 2007 $74.04
September 7, 2007 $76.70
September 14, 2007 $79.10
September 21, 2007 $81.62
September 28, 2007 $81.66
October 5, 2007 $81.22
October 12, 2007 $83.69
October 19, 2007 $88.60
October 26, 2007 $91.86
November 2, 2007 $95.93
November 9, 2007 $96.32
November 16, 2007 $93.84
November 23, 2007 $98.18
November 30, 2007 $88.71
December 7, 2007 $88.28
December 14, 2007 $91.27
December 21, 2007 $93.31
December 28, 2007 $96.00
December 31, 2007 $95.98
January 4, 2008 $97.91
January 11, 2008 $92.69
January 18, 2008 $90.57
January 25, 2008 $90.71
February 1, 2008 $88.96
February 8, 2008 $91.77
February 15, 2008 $95.50
February 22, 2008 $98.81
February 29, 2008 $101.84
March 7, 2008 $105.15
March 14, 2008 $110.21
March 21, 2008 $101.84
March 28, 2008 $105.62
April 4, 2008 $106.23
April 11, 2008 $110.14
April 18, 2008 $116.69
April 25, 2008 $118.52
May 2, 2008 $116.32
May 9, 2008 $125.96
May 16, 2008 $126.29
May 23, 2008 $132.19
May 30, 2008 $127.35
June 6, 2008 $138.54
June 13, 2008 $134.86
June 20, 2008 $135.36
June 27, 2008 $140.21
July 4, 2008 $145.29
July 11, 2008 $145.08
July 18, 2008 $128.88
July 25, 2008 $123.26
August 1, 2008 $125.10
August 8, 2008 $115.20
August 15, 2008 $113.77
August 22, 2008 $114.59
August 29, 2008 $115.46
September 5, 2008 $106.23
September 12, 2008 $101.18
September 19, 2008 $104.55
September 26, 2008 $106.89
October 3, 2008 $93.88
October 10, 2008 $77.70
October 17, 2008 $71.85
October 24, 2008 $64.15
October 31, 2008 $67.81
November 7, 2008 $61.04
November 14, 2008 $57.04
November 21, 2008 $49.93
November 28, 2008 $54.43
December 5, 2008 $40.81
December 12, 2008 $46.28
December 19, 2008 $42.36
December 26, 2008 $37.71
December 31, 2008 $44.60
January 2, 2009 $46.34

The question I have is housing prices peaked in 2006, and from 2006-2008 you already had foreclosures, negative equity, and a slowdown in all the re-fis and home equity money feeding the economy. The economy was already weak and maybe the oil spike pushed it over the edge. I could see that. There must be some charts somewhere. Job losses were big in 2008 but they are always a lagging indicator too.

The other theory is that the Dems were trying to win the 2006 mid-term election so they convinced the general public that this was the worst economy since the Great Depression. the Left's strategy worked, Pelosi won, and everyone zipped shut their checkbook. People weren't willing to flip houses anymore and the housing bubble burst.
It was going to burst anyway, no one could afford to buy a house when prices were rising 5-10% per year in the southwest when wages were flat.