Jim wrote: > it seems that the only way expectations could become more bullish > would be if the housing market reversed its course so that prices > started rising (perhaps even outside the US, like in Spain). That may > not be enough, since commercial construction and a bunch of other > industries are also suffering.
Not the only way. Thinking in terms of a reversal in housing prices is too much thinking inside the box, if you allow my cliche. Look, there's no way that the housing or, rather, real estate market will recover under the existing institutional framework. Fannie and Freedie will be remade. The government is going to be deeper into this market for as long as the eye can see. So, it's not a simply supply and demand thing. A reversal in those markets will be a byproduct. The *key* to shifting expectations is taking a bold global Keynesian stance in dealing with the crisis. There's no way around it -- fiscal policy is going to be it. And, of course, global coordination at an unheard of scale. Now, under today's conditions, the U.S. is going to be on the debtor side of the global New New Deal. That will impose certain (healthy, if you ask me) constraints on U.S. foreign policy. That will jibe with Obama being in the White House. On the other hand, the U.S. can regain a strong economic footing in a relatively short period of time. Now, *this* doesn't take a radical political revolution in the U.S. for something like that to be done. It'd be the equivalent of FDR in our times -- or perhaps something not even as dramatic. Entirely within the historical ideological framework in which this country's economic and foreign policy have been designed and implemented -- except that it'd be a radical change compared to the narrowness and incompetence of the last 8 years. When you take your hand out of hot water and dunk it in warm water, if feels like the water is ice cold. But that's how FDR policies felt when they were first implemented. Yet, they were implemented. It was all in response to needs. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
