Confirmed: Housing Double Dip



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The failure of Keynsian economics: Housing upside down


By the Left Coast Rebel

Via CNBC:
U.S. single-family home prices dropped in March, dipping below their 2009 low, as the housing market remained bogged down by inventory and weak demand, a closely watched survey said Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.2 percent in March from February on a seasonally adjusted basis, in line with economists' expectations.

The price index was below the low seen in April 2009 during the financial crisis. The glut of houses for sale, foreclosures, tight credit and weak demand have kept the housing market on the ropes even as other areas of the economy start to recover.

The 20-city composite index was at 138.16, falling below the 2009 low of 139.26.

The cause of the failure of Obamanomics (Keynsian economics) is quite simple. The "Making Home Affordable Act," eight-thousand-dollar first-home-purchase tax credit and other "stimulus" for the post-2007 ailing housing market delayed the inevitable correction in pricing and inventory and stole from future growth in the market.

That's the basics of what is causing the "double dip".

Of course, our politicians know that Keynsian economics doesn't work and it would be better for our markets -- and Americans in general -- if the market(s) were allowed to correct and become healthy again.

But they can't resist the call "do something" thereby making the problem -- such as the terminally-ill housing market -- all that much worse.

That's statism and Keynsian economics for yah!

Via Memeorandum. Cross posted to Proof Positive.

BONUS: Cato's Dan Mitchell on the basic fallacies of Keynsian economics:


3 comments:

  1. The other thing they don't get: if you don't have a job, you can't afford a house. With unemployment (those they are counting) at nearly 10%, wages depressed, and lack of growth, and, let's face it, houses still overpriced from the fraudulent boom, as well as banks now tightening their fists after getting burned by "community organizer's" shack-downs that got them into this mess to begin with, Freddie and Fannie are worse off than before the crisis, and no faith in the economy nor the government. It's still a mystery to the left why the housing market is still in the toilet? I don't know whether to fear their stupidity or arrogance. Perhaps both.

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  2. In my way of thinking there has to be an upswing for there to be a downswing...So I ask you: Where was the upswing that led to the "double" in "double-dip"?

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  3. Wayne: There was a recovery nationwide that is now coming to an end. Many areas in So-Cal and across the nation are undercutting 2008-2009 lows, hence the "double" dip.

    Fan of Keynes, are you?

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