{"id":4385,"date":"2010-10-03T21:00:21","date_gmt":"2010-10-04T01:00:21","guid":{"rendered":"http:\/\/1boringoldman.com\/?p=4385"},"modified":"2010-10-07T20:38:12","modified_gmt":"2010-10-08T00:38:12","slug":"the-new-norm","status":"publish","type":"post","link":"https:\/\/1boringoldman.com\/index.php\/2010\/10\/03\/the-new-norm\/","title":{"rendered":"the new norm?…"},"content":{"rendered":"
<\/div>\n

Looking at the bottom graph [one month net change in unemployment<\/font><\/strong>], it’s easy to see that this was "the big one." And it lingers [top graph], with unemployment seeming to dawdle a bit below 10%. If where I live is any indicator, one of the main forces at work is the fall of the housing market resulting from the now famous "housing bubble." Here [for those of you who were asleep for the last decade] is the Case-Shiller housing price index for major cities [2000-2008] alongside the country-wide building starts [2005-present]:<\/p>\n

  <\/p>\n

So the people who worked in construction are still out of work – and will be for a while. There are still a lot of empty houses and foreclosed properties out there – supply&deman<\/em>d hell for builders and their workers. And it ripples through any industry that produces building supplies. That surely has something to do with the torpor and the sluggish recovery in our post-recession economy – the sins of our fathers<\/em>. <\/p>\n

The problem with being a jake-leg economist is that I have no more idea than Christine O’Donnell how to partition the various forces at work in our economy. While I think the housing crisis is a big factor, how can I be sure? There’s yet another scenario that worries me. There are a panoply of things that have happened in the last couple of decades that might be problems: outsourcing jobs overseas, the rise of technology, automation, the decline of the labor unions, the buying and selling of companies, the movement from manufacturing to financial services, the concentration of wealth, etc. etc. I have no way of knowing how to even think about those [and other] factors. and how they are affecting things. But my overall concern is that this is more than a recession – that it’s a correction, and that our unemployment situation right now is the new norm<\/font><\/strong>. Maybe it’s something that’s been trying to happen for a while, but was held in check by artificial crutches – things like the "housing bubble." In other words, the change is more fundamental than situational. <\/p>\n

Whichever the case [or both], Obama’s on the right track from my point of view, particularly with the plan to employ people rebuilding our infrastructure. We need to recover enough to get people thinking about the future instead of kvetching about the present. Re-electing the "small government" Republicans is the worst idea I can think of right now. The constituency they want to help is at the wrong end of our problem…<\/div>\n
UPDATE: <\/p>\n

The housing starts in a monthly format from 2000-2010:<\/p>\n

<\/div>\n
The housing starts in a yearly format from 1959-2009: <\/div>\n
 <\/div>\n
That looks pretty dramatic to me! I want to say, "No wonder we took such a hit!<\/font><\/strong>" My speculation is that the burst of sub-prime lending and CDO trading interrupted the usual cyclical rise and fall of building and set us up for going off of a big cliff… <\/div>\n

<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Looking at the bottom graph [one month net change in unemployment], it’s easy to see that this was "the big one." And it lingers [top graph], with unemployment seeming to dawdle a bit below 10%. If where I live is any indicator, one of the main forces at work is the fall of the housing […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_forum_subforum_count":0,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-4385","post","type-post","status-publish","format-standard","hentry","category-politics"],"_links":{"self":[{"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/posts\/4385","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/comments?post=4385"}],"version-history":[{"count":0,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/posts\/4385\/revisions"}],"wp:attachment":[{"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/media?parent=4385"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/categories?post=4385"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/tags?post=4385"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}