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Has Anyone at NPR Heard About the Housing Bubble?

Friday, 23 July 2010 05:06

The housing bubble -- you know that $8 trillion run up in house prices. When it burst it led to a financial crisis that almost brought down the financial system. It also pushed the economy into the worst downturn in 70 years, since its collapse caused construction to plummet and consumption (which had been fueled by bubble created home equity) to plunge.

You would think that people who report on the housing market would have noticed the bubble -- sort of like environmental reporters taking note of global warming -- but that doesn't seem to be the case at NPR. It ran two separate stories this morning on the housing market, neither of which made any reference to the housing bubble.

The second included an extended presentation of the views of Nicolas Retsinas, the director of the Joint Center for Housing Studies at Harvard. Mr. Retsinas gained notoriety for insisting that there was no bubble during the peak years of the run-up in house prices and insisting that it was still a good time for moderate income families to buy homes. 

Comments (12)Add Comment
written by izzatzo, July 23, 2010 8:09
The NPR stories take note of a high rate of rental vacancy and low rental prices due to weak demand, plus prior homeowners moving in with relatives instead of renting, all in context with a corresponding oversupply and weak demand for buying houses as well.

During the bubble, rental vacancies were also high due as well as to the oversupply of houses being built, which kept rental rates lower than rising house prices, the differential key indicator of a bubble repeatedly reported by Baker but generally ignored.

It's not news until it results in a crisis, and once it's a crisis then its original cause is old news, and only the after effect is news. Finally, rental prices and house prices made it into the news together as a comparison, after the bubble burst.
All things considered
written by bakho, July 23, 2010 8:31
NPR considers information and misinformation equally.
Reporters cannot separate fact from fiction.
written by Scott ffolliott, July 23, 2010 9:57
Superstitions are now de rigueur in the world of economic. Reporters cannot separate fact from fiction. Economics has its thoughtless repetitions akin to the virgin birth and the parting of the waters.
written by James, July 23, 2010 10:42
The Harvard Joint Center also published a research back then stating the rise in housing prices is justified and due to substantial home improvements. The Director even pointed out the rise in home improvement; for example, Home Depot and Lowe.
State Your Own Housing Situation Before Giving Advice
written by leo, July 23, 2010 10:43
I was just getting up but I believe they went into the benefits of renting vs. owning. Typically this comparison is done by people who themselves are part of the 'owning' class.

It's just they're never obliged to point it out.
More of the NPR/Retsinas love affair
written by Ben Zipperer, July 23, 2010 11:47
"So that leads us to the conclusion that while double digit price appreciation is a thing of the past, that it can't be sustained, that what we're looking for at least in the next few years is a much flattened price appreciation over time. Over the long run however, we tend to be relatively bullish in terms of prices because we still have a growing population. And in many markets there continues to be constraints on supply. So a rough, rocky patch, lots of rain and clouds and maybe thunderstorms, but we don't think the sky will fall on the housing sector." - Nicholas Retsinas, July 18, 2006: http://www.npr.org/templates/t...Id=5565119

"2007 doesn't look very good form the housing market's point of view. I do think we may be near the bottom. The good news for example is inventories have started to stabilize, but at a high number. So I think we're near the bottom but I think we're going to be at the bottom for a while and if history is any guide, then it looks like this housing market downturn will probably last well into 2007, and it won't be toward the last quarter, maybe 2008 before we see signs of it turning around." - Nicholas Retsinas, December 26, 2006: http://marketplace.publicradio...nd_future/
written by Hayduke, July 23, 2010 1:33
Well, I suppose someone has to listen to Morning Edition or ATC. I gave up on it earlier this summer, as backho says above, they balance facts with misinformation and call it reporting. Now I listen to music going to and from work. I find I'm less frustrated, if at all, wading thru traffic, and much happier when I reach my destination.
written by PeonInChief, July 23, 2010 3:38
The Joint Center is almost entirely funded by the real estate industry. Its job is to provide academic cover for policies that serve the real estate industry. So it's no wonder that they publish more academic versions of "why real estate is always a good investment". And no one at NPR ever identifies it as an industry-sponsored entity.
written by zinc, July 23, 2010 9:57
The writers of econic history are holding on to a tenuous thread, at best. Sometimes I think the Dr. Baker doesn't quite understand the roots of the housing bubble. Even though the blue print is there from the last time the Bush family and Greenspan used a real estate bubble to stimulate the Laffer revolution of tax cut economics. The game plan was the same, right down to corrupting the regulatory apparatus.

In 2001 it was slightly different because the Walmart "fwee twade" agenda was in play. Anyone want to argue the value of eliminating the " prevention of the retarded emperors' son comes to power" tax ?
written by Union Member, July 23, 2010 11:03
i don't want to give up on Morning Edition, I want them investigated!

They're glad if critical thinkers such as yourself turn the station, persuading you isn't the goal. Rather, the news choreography is dancing for malleable low information voters vulnerable to jargon, baseless "facts," and myth. ( It seeks to be the perfect compliment to Rush and Glenn and Sarah)

Neoliberal economics is a cult not a science. And as a cult it's success is measured not the soundness of the economy following its precepts. but instead by gaining zealous adherents (preferably in the media and academia) and fooling the rest. Look at what has happened to the World's Economy following neoliberal policies. The economy doesn't work and government is broke and ineffective.

It would be nice if a half-dozen of the Nation's best J schools would devote themselves entirely to uncovering the pernicious antics of NATIONAL PUBLIC RADIO and then inform the rest of the country just what their nation's "PUBLIC" news system is really all about--constructing a barrier between democracy and the People.
written by zinc, July 23, 2010 11:42
You, Sir, are casting dispersions on Radio Free America. You dastardly dastard.

"And as a cult it's success is measured not the soundness of the economy following its precepts. but instead by gaining zealous adherents (preferably in the media and academia) and fooling the rest. "

Fooling the fools into chewing off their own foot. It is a sad commentary when the dumb dumbs are carrying the water for a bimbo weather girl from Alaska. I need to be armed for sure.
written by zinc, July 23, 2010 11:54
PS: The economics profession, academia, and government "leaders" are completely clueless about jobs creation. How many graduates of Hawvard ever worked in a factory, served in the military, were homeless, unemployed and broke, hungry, etc.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.