Finally something close to a comprehensive future look at the economy and a response to Robert Scoble
Its funny when you see a million bloggers try to blow off the current issue as a matter of ‘fear’ or try to act like it doesn’t affect them, or better yet try and make some irrational, emotional, uninformed explanation of whats going on. This is not just about pessimism, this is about reality. Without accurately assessing reality, there is no way to find out what the problem is and to be able to adjust and adapt.
The ‘there is nothing wrong, this is a bunch of fear BS, there is no recession’ mentality has been around for over a year now, and it hasn’t changed anything, all its done is ignore the core facts, which are that there are key economic factors that have changed and it didn’t just happen. It wasn’t because the economy got dragged down by fear of it being dragged down. It was dragged down by many real factors. Sept 11, 2001 (yes, I’m serious), over-extension and overuse of credit, loose underwriting and availability of credit, long term trade deficits, non gold backed dollar, and many more factors which aren’t quite as obvious and easily determined as economics is not a simple issue.
One nice thing about the above NYT article is that it talks about the issue of decreased median household income during the economic growth, which was a precedent. This makes it very clear that the growth was fictional, and driven by the lowered interest rates of the post Sept 11, 2001 rate drops, which then led to the creation and dissolving of the cheap mortgage market within a few years. Which then led to inflated home prices and further borrowing on home equity and false profits of the housing market.
So, like I said before, is everyone convinced now? This post goes out to Robert Scoble. I’m listening, I share what I read through my Google Reader Shares and the accompanying Widget, and I definitely respond to what I read.
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