Is there another Bush recession looming in 2007? Yes, says Nouriel Roubini, president of Roubini Global Economics. And it will be “much nastier, deeper and more protracted” than the 2001 recession. Just great! I’ve been unemployed three times in my life. Twice during the George H.W. Bush recession in in the early 90s and once in 2002. The only consolation (if you want to call it that) was the many friends of mine who found themselves in the same boat. Misery loves company, yes? At least I had people to hang out with at the bar… but anyway…
Writing on his blog on Wednesday, Roubini repeated his call that the U.S. would be in a recession in 2007, arguing that the collapse of housing will bring down the rest of the economy. According to Marketwatch:
Roubini wrote after the National Association of Realtors reported Wednesday that sales of existing homes fell 4.1% in July, while inventories soared to a 13-year high and prices flattened out year-over-year.
“This is the biggest housing slump in the last four or five decades: every housing indictor is in free fall, including now housing prices,” Roubini said. The decline in investment in the housing sector will exceed the drop in investment when the Nasdaq collapsed in 2000 and 2001, he said.
And the impact of the bursting of the bubble will affect every household in America, not just the few people who owned significant shares in technology companies during the dot-com boom, he said. Prices are falling even in the Midwest, which never experienced a bubble, “a scary signal” of how much pain the drop in household wealth could cause.
Roubini, by the way, is a professor of economics at New York University and was a senior economist in the White House and the Treasury Department in the late 1990s. His firm focuses largely on global macroeconomics. So he knows his stuff. I wonder if this means people in the construction and realty business will feel the strongest crunch like those in the IT field felt back in 2001-2002?
I’d also like to point out that Ed Kilgore over at NewDonkey hinted at such a gloomy outlook on the horizon last Friday:
Not that long ago, one of the prime White House/GOP talking points was that Americans just didn’t appreciate how well they had it in terms of the national economy. With polls showing persistent unhappiness with Bush’s economic stewardship, W. and his minions fanned out across America touting growth, productivity, inflation and unemployment stats, and discounting concerns about job and pension insecurity; energy, health care and college costs; the federal borrowing binge; and general pessimism about the future of the U.S. economy.
Well, Reuters reported today that Bush was “huddling” with his economic advisers to consider “options” for dealing with higher interest rates, a cooling housing market, higher unemployment, and fresh inflation fears, aside from all those continuing problems the GOP keeps telling Americans they shouldn’t worry about.
And speaking of NewDonkey, Kilgore takes Matt Taibbi to task for his second straight Rolling Stone column about the DLC.
After reading Matt Taibbi’s second straight Rolling Stone column about the satanic conspiracy I am apparently working for here at the DLC, I’ve decided he’s a lot of fun, much like a particularly twisted roller coaster ride. You never quite know where he’s going next, but he gets there pretty fast, with all sorts of dizzying upside-down turns.
Taibbi’s Big Insight, with which I suspect he will bludgeon readers regularly, is that American politics generally, and Democratic Party politics in particular, are fundamentally rigged by “the holy trinity of the American political establishment — big business, the major political parties and the commercial media.” In Taibbi-land, moreover, this Establishment is not simply benighted or corrupt; it is fundamentally determined to destroy democracy by denying actual voters any say in the political affairs of either party.
And here’s where the roller coaster ride gains momentum. Taibbi goes off on a loop-de-loop suggesting that the Holy Trinity is the only thing standing between Hillary Clinton’s obscure primary opponent, Jonathan Tasini, and a Lamont-style upset…
… (we) know that people like Matt Taibbi who respect The People when they agree with him, and consider them disenfranchised and deluded when they don’t, are just as elitist as anybody in DC. But Matt has to take us on quite a crazy ride to square that particular circle.
Not clear on who Taibbi is? Think David Sirota off his meds. In 2005, he wrote the utterly disgusting The 52 Funniest Things About The Upcoming Death of the Pope. He was an editor of the Moscow-based eXile newspaper (think Jackass with a radical political perspective) where he once bragged about being immune to libel laws. In other words, he knows how to pull sophmoric stunts and write the revolution-ladened prose those on the far left like to read, but he’s hardly a reputable source or a responsible journalist and certainly not someone the left should desire as a spokesperson.
Well, the Pennsylvania Senate Race is getting a tad more interesting. A Pittsburgh Tribune-Review poll shows Republican U.S. Sen. Rick Santorum closing the gap against Democratic challenger Robert P. Casey Jr., in a contest many analysts see as the nation’s premier Senate race.
The Keystone Poll of 551 Pennsylvania voters shows Casey, the state treasurer from Scranton, leading Santorum, of Penn Hills, by five percentage points — 44 to 39 percent. Judas Party, I mean Spoiler Party, I mean Green Party nominee Carl Romanelli, a former Luzerne County family court officer, garnered 4 percent, and 13 percent of respondents were undecided.
Shadi Hamid believes “progressives” desperately need a foreign policy vision. So do I. This is an article well worth your time…
…as is this one. Senator (President?) Joe Biden’s plan for Iraq.
A few days ago (yesterday? hmmm…) I blogged about The Plan: Big Ideas for America by Rep. Rahm Emanuel of Chicago and Bruce Reed of the DLC. Now, Steve Huntley of the Chicago Sun-Times observes:
The Plan is mostly centrist Democratic stuff. However you may feel about issues he raises, there’s no doubt that Emanuel is proposing for the Democrats a comprehensive national agenda, maybe even a winning one. Just one question: Is it an agenda that will appeal to the rabid Bush-hating, anti-war, bring-back-the-’60s crowd that seems to dominate the party these days?
The answer is no, for a couple of reasons. The Left always sets the bar of acceptability just out of reach of us mere mortals. In other words, they’ll say The Plan doesn’t do enough. Then, of course, there is the obvious. They have negative knee-jerk reactions to anything the “Bill Clinton” wing of the Democratic party does, so they’ll denounce the book as “corporo-fascist-Republican lite garbage” or some other nonsensical description, without even skimming the back cover.