Here’s What An Inefficient Tax Break Looks Like
There are a lot of people running around DC these days talking about closing tax loopholes. But when you push them on specifics, most are hard pressed to say which ones. Though I name names in recent testimony on the topic, I’m sympathetic. Your loophole is my treasured job-creation program without which the economy will collapse. [...]
Today’s Papers
A few things that caught my sleepy eyes: –Jim Tankersley reviews the work of the expansionary contraction crowd, which is almost exclusively the work of economist Alberto Alesina with co-authors. I’ve long held the view that tax increases and budget cuts in weak economies are analogous to leeching in medieval medicine: it’s not that it [...]
OTE Live! Talkin’ Housing & Economic Recovery with Jim Parrott
Jim Parrott, a friend and former colleague, recently left his position of senior advisor for housing policy at the White House. He and I sat down to talk about the recent history of the housing bust, focusing on the government role in meeting and dealing with this massive market failure. Jim was there from the [...]
Behind the Scenes! Getting Ready to Interview Housing Market Expert Jim Parrott
Update: you can see the full interview with Jim here. Jim was, until a few months ago, special advisor for housing policy at the White House. The full interview is in the pipeline and should be ready later this week.
The FHA and the Role of Government When Markets Fail
Well, well…once again we’re arguing about the role of government. As he did in his second inaugural address, President Obama’s SOTU address reminded listeners that he twice ran and won on a role for government that goes well beyond that articulated by Gov Romney in the campaign or Sen Rubio in his SOTU rebuttal. One [...]
The CFPB Is Up and Running and Making Important Changes
Remember the Dodd-Frank financial reform law? Remember the Consumer Financial Protection Bureau it created? Perhaps not, given all the sturm und drang over fiscal cliffs and ceilings. But the CFPB is up-and-running and doing good works, as in this case involving realigned housing finance incentives to protect borrowers and to be less bubble-inducing: In the [...]
More on Social Security, Private Pensions, and Retirement Preparedness
Recall this post on how the loss of defined benefit pensions underscores the need to protect our national public defined-benefit pension program: Social Security. Fellow blogger Kevin Drum responds to the post with this interesting look at income trends of older relative to younger households showing the older cohort to be doing much better in [...]
The States of Things to Come
Headed to MI today for a talk on election outcomes and their implications for state policy (my host is the great MI League for Public Policy). As usual, much of my thinking comes from the kick-butt state policy group at CBPP. First, it’s important to recognize that the majority of the electorate, particularly in the [...]
Home Price Trends–Recent and Since their Peak
I’m still cogitating on election outcomes and will have more to say soon, but for now, just a quick look at the slowly but I think surely recovering housing sector. The two figures below convey a few important points. First, home prices are rising steadily, about 5% over the past year, according to CoreLogic. Second, [...]
Housing Was a Huge Headwind; Now It’s a Small Tailwind
From the GS research group, a handy chart showing the impact of housing on real GDP growth, broken down into three parts: –investment in homes, a component of GDP, so this impact is direct; –the impact of housing wealth on consumer spending; –the impact of mortgage equity withdrawal on consumer spending. A few observations: –housing’s [...]
How Much of a Liability is the Recovery?
See for yourself: live at Rachel Maddow’s Blog!
The Recovery Is Better Than Romney Would Like It To Be
The challenger will always try to talk down the economy. Even back in 1996, when jobs, growth, and even middle-class incomes were really taking off, candidate Bob Dole was trying to convince everyone that things were bad and getting worse. It is, of course, a much closer call now, but still, I doubt that Gov. [...]
Refis!
A few weeks ago, I argued that there’s a potentially useful collision of a number of trends occurring in the housing market: –mortgage rates are hitting historical lows; –home prices are finally appreciating; –refis are up. These developments have a lot in common, of course. First, they interact in positive ways for borrowers and for [...]
The Cost of Hitting Bottom
Here’s an interesting oped by a few of my former White House economics colleagues. They’ve come up with an estimate of how much further home prices would have fallen in the absence of the government’s home loan modification policies. That, in turn, is basically an estimate of what it would have cost homeowners if we’d kicked [...]
The Most Hopeful Economic Indicator Out There Right Now…
…is…wait for it…the number of formerly underwater mortgages that have now breached the surface. You can see them up there above the waves, a showering mist of former indebtedness spraying from their blowholes, evaporating in the sea breeze as home prices finally appreciate. OK, sorry about that. But I think it’s fair to say that [...]
Q&A on MSNBC
Did a TV spot on the Alex Witt Show this afternoon and I thought she posed a useful set of questions. For those of you out running, walking, reading a novel, watching football, baking a cake, or just spacing out, here they are with brief responses. 1) The credit rating agency Egan-Jones downgraded the US [...]
Econo Update
It’s a rainy Saturday here on the back porch so instead of yard work, how’s about a quick run through of some indicators of note re the current economy? In sum, housing isn’t hurting the way it was, and that’s an important plus. But the usual headwinds remain in place, with a bit of added [...]
Econ Roundup
Just a few random observations based on some indicators that caught my eye. –The monthly trade balance improved in June enough to suggest that the first print of second quarter GDP may be revised up (note smaller bars in Q2 in Trade Balance figure below). These monthly numbers bounce around and are themselves subject to [...]
Ed DeMarco Wins the Gold in New Event: Stonewalling on Principal Reduction
Despite the fact that their own analysis finds that it would save them and the taxpayer money, Ed DeMarco, head of the FHFA, just announced that Fannie and Freddie would not do principal reductions under HAMP to help a subset of underwater borrowers avoid default. His announcement surprised a lot of us following this development, since [...]
A Step Closer to Principal Reduction at the GSEs
Well, well…this is potentially welcomed news. According to hard-nosed-WSJ-housing-beat reporter Nick Timiraos, Fannie and Freddie’s regulator, the FHFA—which has heretofore argued that principal reduction was not something it wanted to add to the GSEs portfolio of loan mod programs, now finds that its benefits are considerably larger than they thought. …a new analysis by the [...]
A New Tax Credit Idea to Help Low-Income Renters
Almost all of my posts on housing have been on owner-occupied, as opposed to rental housing, reflecting a bias that’s in both our tax code and our dreams. That is, the American dream supports homeownership, and our housing policies subsidize the dream. Renters tend to get short shrift. I get it—owning a home, as I [...]
Breaking the Surface?
Those who hang around these here parts know that I maintain a solidly realistic view of the current economy, both here and abroad. So if I post something upbeat, let’s be clear: I don’t think we’re out of the woods, I’m not anywhere near satisfied with the pace of job growth, GDP growth, wage and [...]
Prices: You’ve Got a Friend…
“When you’re down, and troubled, and you need a helping hand…” Last Friday’s jobs report confirmed a weakening trend in employment growth and an unemployment rate stuck north of 8%. We’re still growing, and most industries outside of the public sector are adding jobs, but too slowly. Other important indicators, most notably real GDP growth, [...]
Jared Bernstein’s areas of expertise include federal and state economic and fiscal policies, income inequality and mobility, trends in employment and earnings, international comparisons, and the analysis of financial and housing markets.
