Finally, contrary to myth houses are not like like factories, infrastructure, and R&D. A house is NOT an investment, it is consumption. Getting people to go massively into debt to buy houses is no more productive than getting people to go massively into debt to buy clothes. It won’t end with more prosperity, just more trouble.

I love it when I hear lines like this. Although most economic “experts” now admit there was a (quasi) housing bubble, that confession is usually followed by something absurd like the above. I wonder what is considered recovery – a return to bubble prices?

The lower prices fall the sooner we will begin to recover. Contrary to what the government keeps saying about stimulating a price recovery we need low housing prices. What else is affordable housing?””””

You have not been listening to the government, affordable housing is not housing that people can afford. It is having a crony contractor build a house for $500,000 and then either rent or sell it as though it cost $250,000 and then make others who don’t get to live in the house pay the difference between a $250,000 house and what it actually costs to pay for a house that costs $500,000.

They way you want to do it has people actually paying their own way and buying what they can actually afford. That is considered to be crazy talk in Washington.

The way the government wants to do it opens up all sorts of opportunities for kickbacks, crony deals, special rules for special people which politicians and bureaucrats can used to increase their power and wealth and reward their special friends in “private” business

They don’t know it. I’m guessing some of them actually believe it because they believe that Keynesianism makes some sort of sense, and there’s some formula they can plug numbers into and arrive at a WAG on the date of recovery. As for the rest, it’s a little white lie, told to “restore consumer confidence” in the economy and hopefully spur people to get out there and spend, spend, spend, and stop thinking about what’s going on in DC.

Economic Wisdom
Wednesday, May 27, 2009

Who Has A Perfect Record Of Economic Forecasting?

“We always know where he stands . . . when he wraps up an interview.” ( http://www.campaignforliberty.com/blog.php?view=18908 )

True.

What a contrast between the amorphous and anonymous poll of economists (mentioned at the beginning of the report) who supposedly say that the recession will come to an end shortly. Who are they? Let them go on record and say “If I am wrong I will admit that I am a quack and never again make the claim that I am an economist!” They would rather remain anonymous!

Then you have the super-quack Paul Krugman (Nobel Laureate of Wackonomics) who, when the economy falls further into the abyss, will claim that it was because no one took his loony advise of exponential Keynesian quackery!

Yes we do know where Ron Paul stands and if you look back in the past you will see that he predicted the mess we are in now. And as a classical liberalism scholar and an Austrian economist he knows exactly where we are going unless there is real change.

For example: If the Federal Reserve is audited and the people demand justice then the future will be somewhat different than if everything is kept as it is. Ron Paul would then adjust his prediction and again be on the mark!