Worst decade in generations.
January 2, 2010 9:11 AM Subscribe
Aughts were a lost decade for U.S. economy and workers. For most of the past 70 years, the U.S. economy has grown at a steady clip, generating perpetually higher incomes and wealth for American households. But since 2000, the story is starkly different. The past decade was the worst for the U.S. economy in modern times, a sharp reversal from a long period of prosperity that is leading economists and policymakers to fundamentally rethink the underpinnings of the nation's growth. Meanwhile, some of the administration's remedies might be making things worse: U.S. Loan Effort Is Seen as Adding to Housing Woes.
It was, according to a wide range of data, a lost decade for American workers. There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well. "One of our challenges now," President Obama said in November, "is how do we get what I call a post-bubble growth model, one that is sustainable." The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.
It was, according to a wide range of data, a lost decade for American workers. There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well. "One of our challenges now," President Obama said in November, "is how do we get what I call a post-bubble growth model, one that is sustainable." The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.
I hate the term "the aughts". Friggin' ridiculous.
posted by delmoi at 9:17 AM on January 2, 2010 [6 favorites]
posted by delmoi at 9:17 AM on January 2, 2010 [6 favorites]
I know everything went kind of nuts there at the end of the '90s, what with the dot-com era and all that, but it still blows my mind a bit to hear that decade described as "prosperous." I mean, compared to the '00s it probably was, but I graduated into a pretty freakin' lousy job market in the early-'90s.
posted by Stonewall Jackson at 9:20 AM on January 2, 2010
posted by Stonewall Jackson at 9:20 AM on January 2, 2010
How is it possible to say (as the Washington Post article does) that the US economy grew at "a steady clip" during the past 70 years when there have been at least three huge and long-lasting recessions (albeit not as large as the current recession), if not more, in the same time frame?
Well, there have always been recessions, but it's about the length - the timeframe here is "decades". Try to find a decade (since the Great Depression) where there has been ZERO net job and wealth creation.
posted by VikingSword at 9:24 AM on January 2, 2010
Well, there have always been recessions, but it's about the length - the timeframe here is "decades". Try to find a decade (since the Great Depression) where there has been ZERO net job and wealth creation.
posted by VikingSword at 9:24 AM on January 2, 2010
I hate the term "the aughts". Friggin' ridiculous.
The Oughts?
The Noughts?
The Ohs?
The Oh Noes?
The Uh-Ohs?
The Double Ohs?
The Weary Ohs?
The D'Ohs?
posted by notyou at 9:24 AM on January 2, 2010 [4 favorites]
The Oughts?
The Noughts?
The Ohs?
The Oh Noes?
The Uh-Ohs?
The Double Ohs?
The Weary Ohs?
The D'Ohs?
posted by notyou at 9:24 AM on January 2, 2010 [4 favorites]
I hate the term "the aughts". Friggin' ridiculous.
I've only caught myself using it the last year or so, too.
D'Ohs?
Perfect!
posted by marimeko at 9:26 AM on January 2, 2010
I've only caught myself using it the last year or so, too.
D'Ohs?
Perfect!
posted by marimeko at 9:26 AM on January 2, 2010
I figure the administration's program is doing just fine. It is slowing the wave of foreclosures to an somewhat manageable rate while keeping families in their homes. The experts, whoever they may be, are right that many people will ultimately lose their homes and be forced into cheaper rental situations. It would be better, however, if everyone in danger of foreclosure didn't all do so at once.
Also, the NYT article makes the point that houses are currently too expensive, which is true, but the process of allowing the housing stock's value to drop too quickly could have real nasty consequences - as we've seen. What makes more sense is to keep housing prices as stable as possible for as long as possible. This does, however, undermine the concept of 'house as investment' in favor of 'house as home.'
To me, it felt that the experts in this case are unhappy not because they see this policy as damaging to the economy, but because the policy isn't "free market" enough.
posted by elwoodwiles at 9:28 AM on January 2, 2010
Also, the NYT article makes the point that houses are currently too expensive, which is true, but the process of allowing the housing stock's value to drop too quickly could have real nasty consequences - as we've seen. What makes more sense is to keep housing prices as stable as possible for as long as possible. This does, however, undermine the concept of 'house as investment' in favor of 'house as home.'
To me, it felt that the experts in this case are unhappy not because they see this policy as damaging to the economy, but because the policy isn't "free market" enough.
posted by elwoodwiles at 9:28 AM on January 2, 2010
Also, the S&P 500 posted its first negative decade ever: "Investors who put $10,000 in stocks on Dec. 31, 1999, have $9,090 now."
posted by knave at 9:30 AM on January 2, 2010 [1 favorite]
posted by knave at 9:30 AM on January 2, 2010 [1 favorite]
> Also, the S&P 500 posted its first negative decade ever: "Investors who put $10,000 in stocks on Dec. 31, 1999, have $9,090 now."
So my shitty savings account beat the stock market? On one hand, woo hoo! On the other, that can't be good.
posted by The Card Cheat at 9:33 AM on January 2, 2010
So my shitty savings account beat the stock market? On one hand, woo hoo! On the other, that can't be good.
posted by The Card Cheat at 9:33 AM on January 2, 2010
"The past decade" works.
posted by delmoi at 9:37 AM on January 2, 2010 [1 favorite]
posted by delmoi at 9:37 AM on January 2, 2010 [1 favorite]
Regarding the OP's second link, Yves Smith had an interesting point:
The story indicates that Treasury is becoming more realistic about the magnitude of the problem, but is not willing to do anything that might inconvenience the banker or investor classes...Approaches that are sensible, likely to work, but possibly damaging to the fragile banking establishment are apparently to be avoided at all costs.The point is, the first line of the NYT piece is wrong, this is not a $75 billion program to help homeowners. It's a way to help the finance industry. Dean Baker underlines the point:
Using public money to buy down principle in underwater mortgages is a strategy to help banks. It is likely to do little or nothing to help underwater homeowners. In most cases these homeowners will still pay more in ownership costs each month than they would to rent a comparable unit. This is money that they could have otherwise used to meet other needs or to save for the future.posted by Hypnotic Chick at 9:44 AM on January 2, 2010 [3 favorites]
"Turn of the century" works, too.
posted by vibrotronica at 9:44 AM on January 2, 2010
posted by vibrotronica at 9:44 AM on January 2, 2010
So I guess the previous decade is also the one where we, again, didn't realize that perpetual growth isn't really a great idea on a finite planet.
posted by klanawa at 9:57 AM on January 2, 2010 [4 favorites]
posted by klanawa at 9:57 AM on January 2, 2010 [4 favorites]
I've started calling them the Fraughts.
posted by Dormant Gorilla at 9:57 AM on January 2, 2010 [4 favorites]
posted by Dormant Gorilla at 9:57 AM on January 2, 2010 [4 favorites]
The Oughts. As in, "We ought to have elected Al Gore."
posted by tamagosan at 10:07 AM on January 2, 2010 [18 favorites]
posted by tamagosan at 10:07 AM on January 2, 2010 [18 favorites]
Actually, the 10 years ending in 1974, 1975, 1977, 1978, and 2008 were also negative. Or were you just looking for a lede?
posted by FuManchu at 10:24 AM on January 2, 2010 [4 favorites]
posted by FuManchu at 10:24 AM on January 2, 2010 [4 favorites]
Sorry, that was intended for the author in knave's link, not the FPP or anyone here
posted by FuManchu at 10:26 AM on January 2, 2010
posted by FuManchu at 10:26 AM on January 2, 2010
Does every discussion of the last decade have to turn into a discussion of what they should be named? Really?
posted by jscalzi at 10:28 AM on January 2, 2010 [8 favorites]
posted by jscalzi at 10:28 AM on January 2, 2010 [8 favorites]
Actually, the 10 years ending in 1974, 1975, 1977, 1978, and 2008 were also negative. Or were you just looking for a lede?
The idea here is not any 10 year block of time however one counts, but decades as they are conventionally counted: 40's, 50's, 60's, 70's, 80's, 90's, 00's. See the graphs in the linked article. And the lede is not mine, it's a quote from the article.
posted by VikingSword at 10:30 AM on January 2, 2010 [1 favorite]
The idea here is not any 10 year block of time however one counts, but decades as they are conventionally counted: 40's, 50's, 60's, 70's, 80's, 90's, 00's. See the graphs in the linked article. And the lede is not mine, it's a quote from the article.
posted by VikingSword at 10:30 AM on January 2, 2010 [1 favorite]
Oops, should have previewed again, sorry FuManchu, all is well.
posted by VikingSword at 10:31 AM on January 2, 2010
posted by VikingSword at 10:31 AM on January 2, 2010
Does every discussion of the last decade have to turn into a discussion of what they should be named? Really?
Yes, and I think we should call the decade the Aughtabeens.
posted by TwelveTwo at 10:39 AM on January 2, 2010
"The past decade" works.
Not for much longer.
Does every discussion of the last decade have to turn into a discussion of what they should be named? Really?
Does every wry observation have to end in a question mark? Seriously?
No really. For reals?
posted by notyou at 10:41 AM on January 2, 2010
Not for much longer.
Does every discussion of the last decade have to turn into a discussion of what they should be named? Really?
Does every wry observation have to end in a question mark? Seriously?
No really. For reals?
posted by notyou at 10:41 AM on January 2, 2010
Yea, I do think that the FPP article isn't do bad, but it too tries to shoehorn in the "things are bad" idea. The job growth chart is striking, but there's a lot more story there than the latest stagnant patch. The 1990s were a time of incredible growth, and yet it's pretty meager on that chart. We've had both a population boom, a large rise in the number of households, and a rise in percentage of population working. Of course there are going to be diminishing returns on job growth.
I think a more striking chart is the employment/population ratio.
posted by FuManchu at 10:43 AM on January 2, 2010
I think a more striking chart is the employment/population ratio.
posted by FuManchu at 10:43 AM on January 2, 2010
I HAD been bitching about this decade just like everyone else, but then realized that today I make 5 times what I did 10 years ago.
Yes, my retirement account took a dive last year, but it still has over $80K (which is over $70K more than it did in 2000). And even though my house is a little underwater, it's a billion times nicer than the shitty apartment I started the decade with. Hell, even the girl I'm with now is better in every way.
I realize that the article is discussing overall trends, but really, am I the only on who's SIGNIFICANTLY better off than he was 10 years ago?
posted by coolguymichael at 10:44 AM on January 2, 2010
Yes, my retirement account took a dive last year, but it still has over $80K (which is over $70K more than it did in 2000). And even though my house is a little underwater, it's a billion times nicer than the shitty apartment I started the decade with. Hell, even the girl I'm with now is better in every way.
I realize that the article is discussing overall trends, but really, am I the only on who's SIGNIFICANTLY better off than he was 10 years ago?
posted by coolguymichael at 10:44 AM on January 2, 2010
For most of the past 70 years, the U.S. economy has grown at a steady clip, generating perpetually higher incomes and wealth for American households.
I'd always been led to believe that real wages for American workers have stagnated since at least the 1970s, even as productivity rose. Here's a trenchant left screed about what that's meant:
I'd always been led to believe that real wages for American workers have stagnated since at least the 1970s, even as productivity rose. Here's a trenchant left screed about what that's meant:
....posted by Abiezer at 11:00 AM on January 2, 2010 [8 favorites]
First, capitalists weakened their adversaries by lending one portion of their rising revenues back to US workers as high interest "consumer loans." Faced with flat wages, workers could only finance the homes, children's schooling, medical treatments, etc. that they needed either by borrowing or by sending more family members, especially women, into more paid employment. While these developments benefited capitalists, they added serious interpersonal tensions to worker households struggling with mounting debts...
Second, capitalists used their rising revenues to finance (1) the relocation of production and other facilities outside the US and (2) computerization of production. By globalizing, corporations threatened employees and unions that rising wages or other job improvements could mean job loss. By computerization, fewer workers would be needed and their bargaining power with capitalists weakened.
Third, capitalist boards of directors used another portion of rising revenues to raise salaries and bonuses for upper-level managers (including themselves), people who contribute significant sums to politicians favoring conservative, pro-business laws and regulations. Corporations and upper-level managers thereby increased the dependence of politicians on their coordinated largesse.
I hate the term "the aughts". Friggin' ridiculous.
It's better than "aughties".
posted by adamdschneider at 11:10 AM on January 2, 2010
It's better than "aughties".
posted by adamdschneider at 11:10 AM on January 2, 2010
I thought it interesting that Chase bought their own foreclosed house for $100. Is this a new technique for lenders to get the market value (whatever it might be) of a foreclosed house while having the full remaining debt due (minus the $100)?
Surely in a fair and open auction some of the new investors running around picking up dirt cheap foreclosures would snap them up?
posted by ianbanks at 11:14 AM on January 2, 2010 [1 favorite]
Surely in a fair and open auction some of the new investors running around picking up dirt cheap foreclosures would snap them up?
posted by ianbanks at 11:14 AM on January 2, 2010 [1 favorite]
We might as well lose the decade, since nobody wants to settle on a name for it. And half the population wants to forget Bush, and the other half has themselves in such a tizzy over Obama, I suspect they want to forget him, too.
I expect to hear a pundit one day say that we should elect Alan Keyes as our first black president, and then back-peddle by saying, "But Obama's mom is white! I had a Cherokee great grandmother, but I don't identify as Indian!"
posted by mccarty.tim at 11:14 AM on January 2, 2010
I expect to hear a pundit one day say that we should elect Alan Keyes as our first black president, and then back-peddle by saying, "But Obama's mom is white! I had a Cherokee great grandmother, but I don't identify as Indian!"
posted by mccarty.tim at 11:14 AM on January 2, 2010
am I the only on who's SIGNIFICANTLY better off than he was 10 years ago?
I'm way better off, but always figured I would do better in a bad job market than a good one.
posted by dilettante at 11:15 AM on January 2, 2010
I'm way better off, but always figured I would do better in a bad job market than a good one.
posted by dilettante at 11:15 AM on January 2, 2010
I call them "The Bush Years."
posted by uri at 12:05 PM on January 2, 2010 [4 favorites]
posted by uri at 12:05 PM on January 2, 2010 [4 favorites]
@tamagosan: We did elect Al Gore. The Supreme Court appointed GWB.
I'm almost beginning to think voting for McCain would've been better. This country is clearly on its way out, and a McCain/Palin administration would've sped up the inevitable. Obama doesn't seem to really want to do much about creating jobs; we need a modern-day WPA. There are lots of roads, bridges, schools etc out there that need a-fixin'. That stimulus bill was way too watered down to be as effective as it needed to be.
posted by MattMangels at 12:09 PM on January 2, 2010 [1 favorite]
I'm almost beginning to think voting for McCain would've been better. This country is clearly on its way out, and a McCain/Palin administration would've sped up the inevitable. Obama doesn't seem to really want to do much about creating jobs; we need a modern-day WPA. There are lots of roads, bridges, schools etc out there that need a-fixin'. That stimulus bill was way too watered down to be as effective as it needed to be.
posted by MattMangels at 12:09 PM on January 2, 2010 [1 favorite]
I hate the term "the aughts". Friggin' ridiculous.
The Awfuls.
posted by The Whelk at 12:18 PM on January 2, 2010
The idea here is not any 10 year block of time however one counts, but decades as they are conventionally counted: 40's, 50's, 60's, 70's, 80's, 90's, 00's.
That's still completely arbitrary.
posted by cillit bang at 12:22 PM on January 2, 2010
That's still completely arbitrary.
posted by cillit bang at 12:22 PM on January 2, 2010
I realize that the article is discussing overall trends, but really, am I the only on who's SIGNIFICANTLY better off than he was 10 years ago?
posted by coolguymichael
I work in the same trade my father did I've been hanging drywall for the last 14 years. When my dad was hanging back in the 80s he brought home around $40,000 a year, good money.
Today I'm lucky if I bring in $20,000 a year and this year it will be more like $15,000 or maybe less. The work has been shrinking every year for a least the last 6. I don't know how much longer I can keep working a trade. The only problem is I don't know what the hell else I'm gonna do for cold hard cash. Things look bleak.
posted by nola at 12:36 PM on January 2, 2010 [4 favorites]
posted by coolguymichael
I work in the same trade my father did I've been hanging drywall for the last 14 years. When my dad was hanging back in the 80s he brought home around $40,000 a year, good money.
Today I'm lucky if I bring in $20,000 a year and this year it will be more like $15,000 or maybe less. The work has been shrinking every year for a least the last 6. I don't know how much longer I can keep working a trade. The only problem is I don't know what the hell else I'm gonna do for cold hard cash. Things look bleak.
posted by nola at 12:36 PM on January 2, 2010 [4 favorites]
I will not follow any convention that includes greengrocers' apostrophes.
posted by Astro Zombie at 12:38 PM on January 2, 2010
posted by Astro Zombie at 12:38 PM on January 2, 2010
I work in the same trade my father did I've been hanging drywall for the last 14 years. When my dad was hanging back in the 80s he brought home around $40,000 a year, good money.
Today I'm lucky if I bring in $20,000 a year and this year it will be more like $15,000 or maybe less. The work has been shrinking every year for a least the last 6. I don't know how much longer I can keep working a trade. The only problem is I don't know what the hell else I'm gonna do for cold hard cash. Things look bleak.
This, right here, is the state of the American blue-collar worker. My brother's a heating-and-air guy and in a similar state, working for peanuts and hanging on by his fingernails. He lost his business a few years back when one customer too many wiped out in bankruptcy and left him ass-out on a big supply bill. Now he works in physical plant at a hospital making about a third of what he used to (and ironically without health insurance), and with the side benefit of being occasionally asked to help move corpses onto a gurney and wheel them down to the morgue.
posted by deadmessenger at 12:58 PM on January 2, 2010 [1 favorite]
Today I'm lucky if I bring in $20,000 a year and this year it will be more like $15,000 or maybe less. The work has been shrinking every year for a least the last 6. I don't know how much longer I can keep working a trade. The only problem is I don't know what the hell else I'm gonna do for cold hard cash. Things look bleak.
This, right here, is the state of the American blue-collar worker. My brother's a heating-and-air guy and in a similar state, working for peanuts and hanging on by his fingernails. He lost his business a few years back when one customer too many wiped out in bankruptcy and left him ass-out on a big supply bill. Now he works in physical plant at a hospital making about a third of what he used to (and ironically without health insurance), and with the side benefit of being occasionally asked to help move corpses onto a gurney and wheel them down to the morgue.
posted by deadmessenger at 12:58 PM on January 2, 2010 [1 favorite]
I HAD been bitching about this decade just like everyone else, but then realized that today I make 5 times what I did 10 years ago...blah, blah, blah...am I the only on who's SIGNIFICANTLY better off than he was 10 years ago?
Your fedora is showing.
posted by adamdschneider at 1:00 PM on January 2, 2010
Your fedora is showing.
posted by adamdschneider at 1:00 PM on January 2, 2010
delmoi: "I hate the term "the aughts". Friggin' ridiculous."
Meta.
posted by octothorpe at 1:07 PM on January 2, 2010
Meta.
posted by octothorpe at 1:07 PM on January 2, 2010
coolguymichael I realize that the article is discussing overall trends, but really, am I the only on who's SIGNIFICANTLY better off than he was 10 years ago?
Not at all. I can't imagine a financial disaster of such magnitude that it would leave no-one better off. Someone always gains.
Some proportion of the population are significantly better off than they were ten years ago. Some proportion have stayed more-or-less in the same position; the remainder are significantly worse off. The problem is that few are better off, and many are worse off.
posted by aeschenkarnos at 1:44 PM on January 2, 2010 [1 favorite]
Not at all. I can't imagine a financial disaster of such magnitude that it would leave no-one better off. Someone always gains.
Some proportion of the population are significantly better off than they were ten years ago. Some proportion have stayed more-or-less in the same position; the remainder are significantly worse off. The problem is that few are better off, and many are worse off.
posted by aeschenkarnos at 1:44 PM on January 2, 2010 [1 favorite]
am I the only on who's SIGNIFICANTLY better off than he was 10 years ago?
i have the same job i did back then and my wages have not kept up with inflation - so i'm doing slightly worse, but not that different
i do not find this reassuring at all - all it takes is one decision by people i've never met and i'm screwed
posted by pyramid termite at 1:46 PM on January 2, 2010
i have the same job i did back then and my wages have not kept up with inflation - so i'm doing slightly worse, but not that different
i do not find this reassuring at all - all it takes is one decision by people i've never met and i'm screwed
posted by pyramid termite at 1:46 PM on January 2, 2010
elwoodwiles Correct me if I'm wrong, but haven't I read that the government could have purchased all the homes in danger of forclosure, given them to the homeowners gratis, thus paying the banks back all the mortgage money they were at risk of losing, and let everyone keep their homes for significantly less than the bailout as it stands?
posted by sotonohito at 1:47 PM on January 2, 2010
posted by sotonohito at 1:47 PM on January 2, 2010
I'd always been led to believe that real wages for American workers have stagnated since at least the 1970s, even as productivity rose. Here's a trenchant left screed about what that's meant:
Yes, real wages have been stagnant, but not real household income, until the last decade. The "screed" you cite left out an important indicator of how thoroughly the powerful have defunded the rest of the population: by shifting the number of working members per household from one to two or more, household income could keep pace and even slightly outpace inflation through the end of the last century. Because the owners of capital have gotten so good at shrinking wages, since then, even multiple earners have not been able to keep up to where one used to be.
posted by Mental Wimp at 2:11 PM on January 2, 2010
Yes, real wages have been stagnant, but not real household income, until the last decade. The "screed" you cite left out an important indicator of how thoroughly the powerful have defunded the rest of the population: by shifting the number of working members per household from one to two or more, household income could keep pace and even slightly outpace inflation through the end of the last century. Because the owners of capital have gotten so good at shrinking wages, since then, even multiple earners have not been able to keep up to where one used to be.
posted by Mental Wimp at 2:11 PM on January 2, 2010
am I the only on who's SIGNIFICANTLY better off than he was 10 years ago?
Yes, many people are (99.999% of the wealthy, e.g.). But many more are worse off, and that's the point. We had the rising tide lifting most boats in the past. Our economy has shifted to one that basically pumps all the growth into the hands of the wealthy, aided to no small degree by a government willing to assist through tax laws and lax enforcement. This isn't good even for those making 5 times as much as they did a decade ago, because unless you lock yourself away in a hermetically sealed community (as the uber-wealthy can), your quality of life will suffer as the public space becomes decayed and dangerous.
posted by Mental Wimp at 2:17 PM on January 2, 2010
Yes, many people are (99.999% of the wealthy, e.g.). But many more are worse off, and that's the point. We had the rising tide lifting most boats in the past. Our economy has shifted to one that basically pumps all the growth into the hands of the wealthy, aided to no small degree by a government willing to assist through tax laws and lax enforcement. This isn't good even for those making 5 times as much as they did a decade ago, because unless you lock yourself away in a hermetically sealed community (as the uber-wealthy can), your quality of life will suffer as the public space becomes decayed and dangerous.
posted by Mental Wimp at 2:17 PM on January 2, 2010
...am I the only on who's SIGNIFICANTLY better off than he was 10 years ago?
10 years ago, I had a good-paying job and health benefits. Today, I'm self-employed (a euphemism for laid-off and can't find another position in my field), making about 1/4 what I did (if I'm lucky) and I have to purchase my family's health insurance on the private market. And, my retirement savings got gutted last year. Of course, our costs haven't gone down over the same period. Basically, we're one serious accident or illness away from disaster. So, I'm definitely doing much, much worse.
posted by Thorzdad at 2:17 PM on January 2, 2010
10 years ago, I had a good-paying job and health benefits. Today, I'm self-employed (a euphemism for laid-off and can't find another position in my field), making about 1/4 what I did (if I'm lucky) and I have to purchase my family's health insurance on the private market. And, my retirement savings got gutted last year. Of course, our costs haven't gone down over the same period. Basically, we're one serious accident or illness away from disaster. So, I'm definitely doing much, much worse.
posted by Thorzdad at 2:17 PM on January 2, 2010
>> am I the only on who's SIGNIFICANTLY better off than he was 10 years ago?
Yes, many people are (99.999% of the wealthy, e.g.). But many more are worse off, and that's the point. We had the rising tide lifting most boats in the past. Our economy has shifted to one that basically pumps all the growth into the hands of the wealthy, aided to no small degree by a government willing to assist through tax laws and lax enforcement. This isn't good even for those making 5 times as much as they did a decade ago, because unless you lock yourself away in a hermetically sealed community (as the uber-wealthy can), your quality of life will suffer as the public space becomes decayed and dangerous.
posted by Mental Wimp at 5:17 PM on January 2
MW, was that an intentional Zombie metaphor, or what? That's the way most of Romero's (and imitators) zombie flicks start out.
posted by vhsiv at 2:42 PM on January 2, 2010
Yes, many people are (99.999% of the wealthy, e.g.). But many more are worse off, and that's the point. We had the rising tide lifting most boats in the past. Our economy has shifted to one that basically pumps all the growth into the hands of the wealthy, aided to no small degree by a government willing to assist through tax laws and lax enforcement. This isn't good even for those making 5 times as much as they did a decade ago, because unless you lock yourself away in a hermetically sealed community (as the uber-wealthy can), your quality of life will suffer as the public space becomes decayed and dangerous.
posted by Mental Wimp at 5:17 PM on January 2
MW, was that an intentional Zombie metaphor, or what? That's the way most of Romero's (and imitators) zombie flicks start out.
posted by vhsiv at 2:42 PM on January 2, 2010
I'm making slightly less now. Got a lot less debt, though, so it mostly seems a wash. Shame that's the best spin I can put on the decade.
posted by hackly_fracture at 2:45 PM on January 2, 2010
posted by hackly_fracture at 2:45 PM on January 2, 2010
I'm almost beginning to think voting for McCain would've been better. This country is clearly on its way out, and a McCain/Palin administration would've sped up the inevitable. Obama doesn't seem to really want to do much about creating jobs;
Wow, do people really, truly, for reals believe this?
posted by angrycat at 3:10 PM on January 2, 2010
Wow, do people really, truly, for reals believe this?
posted by angrycat at 3:10 PM on January 2, 2010
Technically, I suppose there might be more than one person who believes that.
posted by one more dead town's last parade at 3:15 PM on January 2, 2010
posted by one more dead town's last parade at 3:15 PM on January 2, 2010
The Oughts?
The Noughts?
The Ohs?
The Oh Noes?
The Uh-Ohs?
The Double Ohs?
The Weary Ohs?
The D'Ohs?
The Zips.
posted by jgirl at 3:35 PM on January 2, 2010
The Noughts?
The Ohs?
The Oh Noes?
The Uh-Ohs?
The Double Ohs?
The Weary Ohs?
The D'Ohs?
The Zips.
posted by jgirl at 3:35 PM on January 2, 2010
I HAD been bitching about this decade just like everyone else, but then realized that today I make 5 times what I did 10 years ago...blah, blah, blah...am I the only on who's SIGNIFICANTLY better off than he was 10 years ago?
No.
posted by jgirl at 3:39 PM on January 2, 2010
No.
posted by jgirl at 3:39 PM on January 2, 2010
I'm significantly better off than I was ten years ago too but I'm not blind to the fact that I'm pretty darn lucky in that regard.
posted by octothorpe at 3:48 PM on January 2, 2010 [4 favorites]
posted by octothorpe at 3:48 PM on January 2, 2010 [4 favorites]
I realize that the article is discussing overall trends, but really, am I the only on who's SIGNIFICANTLY better off than he was 10 years ago?
posted by coolguymichael
Good on you.
In 1990 I was making 40K and living nicely. In 2000 I was making 95K and still living nicely.
I'm a senior programmer. By 2001 I could not get a job until 2003. By 2004 I was homeless for 18 months.
Now I'm kucky if I make 40K and guess what? My rent has gone up 2.5 times - food costs have doubled and gas has tripled. So 40K in northern california? Not so good.
Glad to hear you had a wonderful decade.
posted by Poet_Lariat at 4:00 PM on January 2, 2010 [3 favorites]
posted by coolguymichael
Good on you.
In 1990 I was making 40K and living nicely. In 2000 I was making 95K and still living nicely.
I'm a senior programmer. By 2001 I could not get a job until 2003. By 2004 I was homeless for 18 months.
Now I'm kucky if I make 40K and guess what? My rent has gone up 2.5 times - food costs have doubled and gas has tripled. So 40K in northern california? Not so good.
Glad to hear you had a wonderful decade.
posted by Poet_Lariat at 4:00 PM on January 2, 2010 [3 favorites]
Well, there have always been recessions, but it's about the length - the timeframe here is "decades". Try to find a decade (since the Great Depression) where there has been ZERO net job and wealth creation.
Good point. I was just scratching my head about the formulation in the Post article. I can't (and won't) argue that the last decade was in any sense great economically, other than for the richest of the rich and a few other scattered exceptions who prove the rule.
posted by blucevalo at 4:11 PM on January 2, 2010
Good point. I was just scratching my head about the formulation in the Post article. I can't (and won't) argue that the last decade was in any sense great economically, other than for the richest of the rich and a few other scattered exceptions who prove the rule.
posted by blucevalo at 4:11 PM on January 2, 2010
Just turn it upside down and you'll get China's growth chart for the same period.
posted by tommasz at 4:52 PM on January 2, 2010
posted by tommasz at 4:52 PM on January 2, 2010
I figure the administration's program is doing just fine. It is slowing the wave of foreclosures to an somewhat manageable rate while keeping families in their homes. The experts, whoever they may be, are right that many people will ultimately lose their homes and be forced into cheaper rental situations. It would be better, however, if everyone in danger of foreclosure didn't all do so at once.
Also, the NYT article makes the point that houses are currently too expensive, which is true, but the process of allowing the housing stock's value to drop too quickly could have real nasty consequences - as we've seen. What makes more sense is to keep housing prices as stable as possible for as long as possible. This does, however, undermine the concept of 'house as investment' in favor of 'house as home.'
Why should tax paying renters who did not act stupidly during the housing boom be expected to help keep their grasshopping cousins from losing houses they never should have bought in the first place? Seems to me that the sooner houses become affordable, the sooner they start to sell and do all the good economy generating things that house sales are supposed to do. Dragging out the pain in the hopes that buyers will be willing to shoulder the bad "investment" decisions of others seems a little wrong headed. As said earlier, keeping people in these places with new and different pipe dreams is not really doing anyone any favors.
As to mechanics of the whole thing, my own guess(*) is that banks are slow to foreclose in part because it looks better to have a "$500,000" house on the books than to have to admit that the place wouldn't sell for more than $200,000. That and not having enough people to do the actual foreclosing part. Or even the guts to do it. A smart realtor tells me that some bankers' know damn well their holding on to unrealistic valuations, but they don't have the nerve to tell the senior execs. Bank jobs are hard to come by these days. Keep your nose clean. Let's just let the home "owner" keep the band aid on a while longer and see what happens. Last year about this time the forecast was bottom in '09. This year, forecast is a bottom in '10. Cross your fingers.
Mind you, this being an election year, I see small chance of any significant government action.
(*) Please correct me if I'm wrong.
(And let's don't complain about the aughties as a name unless we have something better to suggest. (What did they do the last time this came up?))
posted by IndigoJones at 5:47 PM on January 2, 2010 [3 favorites]
Also, the NYT article makes the point that houses are currently too expensive, which is true, but the process of allowing the housing stock's value to drop too quickly could have real nasty consequences - as we've seen. What makes more sense is to keep housing prices as stable as possible for as long as possible. This does, however, undermine the concept of 'house as investment' in favor of 'house as home.'
Why should tax paying renters who did not act stupidly during the housing boom be expected to help keep their grasshopping cousins from losing houses they never should have bought in the first place? Seems to me that the sooner houses become affordable, the sooner they start to sell and do all the good economy generating things that house sales are supposed to do. Dragging out the pain in the hopes that buyers will be willing to shoulder the bad "investment" decisions of others seems a little wrong headed. As said earlier, keeping people in these places with new and different pipe dreams is not really doing anyone any favors.
As to mechanics of the whole thing, my own guess(*) is that banks are slow to foreclose in part because it looks better to have a "$500,000" house on the books than to have to admit that the place wouldn't sell for more than $200,000. That and not having enough people to do the actual foreclosing part. Or even the guts to do it. A smart realtor tells me that some bankers' know damn well their holding on to unrealistic valuations, but they don't have the nerve to tell the senior execs. Bank jobs are hard to come by these days. Keep your nose clean. Let's just let the home "owner" keep the band aid on a while longer and see what happens. Last year about this time the forecast was bottom in '09. This year, forecast is a bottom in '10. Cross your fingers.
Mind you, this being an election year, I see small chance of any significant government action.
(*) Please correct me if I'm wrong.
(And let's don't complain about the aughties as a name unless we have something better to suggest. (What did they do the last time this came up?))
posted by IndigoJones at 5:47 PM on January 2, 2010 [3 favorites]
Why should tax paying renters who did not act stupidly during the housing boom be expected to help keep their grasshopping cousins from losing houses they never should have bought in the first place? Seems to me that the sooner houses become affordable, the sooner they start to sell and do all the good economy generating things that house sales are supposed to do. Dragging out the pain in the hopes that buyers will be willing to shoulder the bad "investment" decisions of others seems a little wrong headed. As said earlier, keeping people in these places with new and different pipe dreams is not really doing anyone any favors.
I agreed with you, it is not fair to pay for people who made stupid decisions during housing boom. But if we don't help them what would be the alternative? The situation is already so bad, it would be much, much worse if we don't stem the tide of foreclosure. You mentioned the bank, I also think the creative fiction the bank now used on their book about the housing price is laughable. But if the Feds force bank to revalue their accounting, some of the banks will collapse (think Bank of America and Citigroup). When that happens even the sane tax paying renters will be screwed.
I wish there is better alternative than what Fed currently is undertaking but getting angry at bank or the irresponsible home owner won't solve the problem.
posted by Carius at 6:48 PM on January 2, 2010 [1 favorite]
I agreed with you, it is not fair to pay for people who made stupid decisions during housing boom. But if we don't help them what would be the alternative? The situation is already so bad, it would be much, much worse if we don't stem the tide of foreclosure. You mentioned the bank, I also think the creative fiction the bank now used on their book about the housing price is laughable. But if the Feds force bank to revalue their accounting, some of the banks will collapse (think Bank of America and Citigroup). When that happens even the sane tax paying renters will be screwed.
I wish there is better alternative than what Fed currently is undertaking but getting angry at bank or the irresponsible home owner won't solve the problem.
posted by Carius at 6:48 PM on January 2, 2010 [1 favorite]
When people are starving the important question is not whether or not they had it coming.
posted by Pope Guilty at 6:57 PM on January 2, 2010 [5 favorites]
posted by Pope Guilty at 6:57 PM on January 2, 2010 [5 favorites]
Why should tax paying renters who did not act stupidly during the housing boom be expected to help keep their grasshopping cousins from losing houses they never should have bought in the first place?
One can equally well ask 'Why should people without school-age children be expected to pay taxes that keep public schools open?' Or 'Why should common tax payers pay to clean up the messes of the mining/lumber/etc industry?'
While I agree with you on some level, this is really exactly what government exists to do: pick up the slack for the things that Everyone expects that Somebody should do, but which Nobody will actually do unless there's either some kind of coercion (ie, regulation). And sometimes it's cheaper and/or easier to just foot the bill than to coerce. After all, if the government required the successful investment banks to provide the capital to bailout their failing cousins, it would raise a shit-storm of lawsuits, effectively keeping any bailouts from happening in the desired payout time frame of sometime between now and yesterday.
posted by kaibutsu at 7:24 PM on January 2, 2010 [2 favorites]
One can equally well ask 'Why should people without school-age children be expected to pay taxes that keep public schools open?' Or 'Why should common tax payers pay to clean up the messes of the mining/lumber/etc industry?'
While I agree with you on some level, this is really exactly what government exists to do: pick up the slack for the things that Everyone expects that Somebody should do, but which Nobody will actually do unless there's either some kind of coercion (ie, regulation). And sometimes it's cheaper and/or easier to just foot the bill than to coerce. After all, if the government required the successful investment banks to provide the capital to bailout their failing cousins, it would raise a shit-storm of lawsuits, effectively keeping any bailouts from happening in the desired payout time frame of sometime between now and yesterday.
posted by kaibutsu at 7:24 PM on January 2, 2010 [2 favorites]
But if the Feds force bank to revalue their accounting, some of the banks will collapse (think Bank of America and Citigroup). When that happens even the sane tax paying renters will be screwed.I don't see the big problem with banks collapsing. Depositers will get their money back and they can deposit it into banks that have clean balance sheets. Equity holders get wiped out and so do other bank lenders. It wasn't so long ago that Wall St was preening about how good the shadow banking system was because private parties had money at risk and would bring lending discipline to the banks. Having a big bank fail would represent progress rather than something bad.
posted by drscroogemcduck at 9:36 PM on January 2, 2010
Why should tax paying renters who did not act stupidly during the housing boom...
Hold it right there, Padre. People who bought houses were doing so under the advised consent of pretty much all of western civilization... everyone from the Government to the Discovery Channel was advising you to buy some property. Taking out an arm mortgage was the smart thing to do unless you were pathologically paranoid or insecure in ways that make shrinks think, "I have a paper for my doctorate, now!"
I was pathologically insecure, so I rented. This doesn't mean I'm secretly sane, this means that I. Got. Lucky.
And to be brutally honest, if I buckled down, straightened out my credit, and bought a place in '98, I'd be in fine shape (well, no, I'd still move to New Orleans, as I saw the Technocalypse coming from a mile off. I was just convinced that only Boston, Austin and SF would be decked when the bubble popped, not the nation entire.)
So, the smart money was in buying and flipping houses. There were entire shows on TLC about it. The lucky money wasn't a part of it. You get no credit for luck or poverty.
As I rather like not worshiping a local warlord's boots, a soft landing really, really works for me a lot better than a short, sharp, shock.
posted by Slap*Happy at 9:52 PM on January 2, 2010 [4 favorites]
Hold it right there, Padre. People who bought houses were doing so under the advised consent of pretty much all of western civilization... everyone from the Government to the Discovery Channel was advising you to buy some property. Taking out an arm mortgage was the smart thing to do unless you were pathologically paranoid or insecure in ways that make shrinks think, "I have a paper for my doctorate, now!"
I was pathologically insecure, so I rented. This doesn't mean I'm secretly sane, this means that I. Got. Lucky.
And to be brutally honest, if I buckled down, straightened out my credit, and bought a place in '98, I'd be in fine shape (well, no, I'd still move to New Orleans, as I saw the Technocalypse coming from a mile off. I was just convinced that only Boston, Austin and SF would be decked when the bubble popped, not the nation entire.)
So, the smart money was in buying and flipping houses. There were entire shows on TLC about it. The lucky money wasn't a part of it. You get no credit for luck or poverty.
As I rather like not worshiping a local warlord's boots, a soft landing really, really works for me a lot better than a short, sharp, shock.
posted by Slap*Happy at 9:52 PM on January 2, 2010 [4 favorites]
It's easy to claim be a genius who realized we were in deep doo-doo after TLC started airing Flip That House, and look down upon the lowest common denominators who bought the story, and glare up at the financial wizards who wrought the destruction. But ultimately a functional economy has to work for the lowest common denominator - we can't assume that everyone is a rational actor and deregulation will solve everything, because that is hella wrong.
posted by mek at 10:14 PM on January 2, 2010 [3 favorites]
posted by mek at 10:14 PM on January 2, 2010 [3 favorites]
"I realize that the article is discussing overall trends, but really, am I the only on who's SIGNIFICANTLY better off than he was 10 years ago?"
Great! You gonna help the rest of us out? paypal address is in profile, tks.
posted by Eideteker at 9:18 AM on January 4, 2010
Great! You gonna help the rest of us out? paypal address is in profile, tks.
posted by Eideteker at 9:18 AM on January 4, 2010
Well, at least some people saw it coming.
posted by vckeating at 8:03 AM on January 3 [+] [!]
When the nation's best political commentary comes from satirists, you know we're in for some rough times.
posted by Mental Wimp at 9:20 AM on January 4, 2010
posted by vckeating at 8:03 AM on January 3 [+] [!]
When the nation's best political commentary comes from satirists, you know we're in for some rough times.
posted by Mental Wimp at 9:20 AM on January 4, 2010
Ten years ago a common dinner time topic for my wife and I was how everyone around us could afford to buy all the expensive homes, new cars, and frippery we couldn't. Now it's clear that most of them really could not afford it. We bought a house that if need be, either one of us could pay for if the other lost his or her job. The bitch is that we still will pay for this bubble through both taxes and the decline in our modest home's value. No jobs, inflation ( if it's as low as the gov't claims why is a soda $1.50 at Wal-Mart?), and a stupid, unnecessary, war, the aught's or whatever you want to call them have my vote for the worst decade of my life.
posted by Tashtego at 12:08 PM on January 4, 2010
posted by Tashtego at 12:08 PM on January 4, 2010
Taking out an arm mortgage was the smart thing to do unless you were pathologically paranoid or insecure in ways that make shrinks think, "I have a paper for my doctorate, now!"
Um, no. Almost all the smart people I knew, and plenty of people on TV / newspapers, knew that ARMs were a bad/dangerous idea. I'm not arguing that there weren't plenty of voices on the other side as well, but there was plenty of info out there on why these were horrible ideas, going back many years.
Here's one from 2003 (ppv sadly, but synopsis is there)
Even better, here's one from 1981!
Google / Google News search for ARM mortgage dangers and you'll find more.
People were willing to ignore the doubters and go with the boosters, but both sides were there (just like with credit as a whole, where people had plenty of info to know why piling up tens of thousands in un-needed credit card debt was a bad idea, but did it anyway). [sometimes credit debt is necessary, IE you have no alternative and need to, say, pay rent, but most of the personal credit issues were not of that kind]
posted by wildcrdj at 7:42 PM on January 4, 2010
Um, no. Almost all the smart people I knew, and plenty of people on TV / newspapers, knew that ARMs were a bad/dangerous idea. I'm not arguing that there weren't plenty of voices on the other side as well, but there was plenty of info out there on why these were horrible ideas, going back many years.
Here's one from 2003 (ppv sadly, but synopsis is there)
Even better, here's one from 1981!
Google / Google News search for ARM mortgage dangers and you'll find more.
People were willing to ignore the doubters and go with the boosters, but both sides were there (just like with credit as a whole, where people had plenty of info to know why piling up tens of thousands in un-needed credit card debt was a bad idea, but did it anyway). [sometimes credit debt is necessary, IE you have no alternative and need to, say, pay rent, but most of the personal credit issues were not of that kind]
posted by wildcrdj at 7:42 PM on January 4, 2010
Hold it right there, Padre. People who bought houses were doing so under the advised consent of pretty much all of western civilization... everyone from the Government to the Discovery Channel was advising you to buy some property
You're joking, right? The government? Discovery Channel? Hell, I don't even trust government statistics, much less assume they are offering sound financial advice. We are talking about an institution that can print its own money and that whose accounting methods are widely noted as, shall we say, not conforming to legal standards of the private sector.
Bottom line, people were mistaking a Cost of Living with an Investment. It was one step away from taking the kid's college fund to Vegas. It's pretty basic, and the sooner it becomes widely understood, the better it will be for all.
Banks fail all the time. Let 'em. Other, more sensible institutions will arise in their wake. Presumably ones that won't grow so large as to be too big to fail. It will be painful. But so is what we are currently going through. Pain's one virtue is that it cautions people from making the same mistake twice. Look at Germany's view of inflation. Ninety years on and they still don't make the hyperinflation error.
One can equally well ask 'Why should people without school-age children be expected to pay taxes that keep public schools open?' Or 'Why should common tax payers pay to clean up the messes of the mining/lumber/etc industry?'
I reject the analogies, particularly of that first one. Education and cleansiness are wide public goods. Moreover, the second example generally goes hand in hand with seriously punishing the malfactor (assuming the malfactors is even still in business), sometimes with jail time.
Not a lot of jail time in our current debacle, even though there should be.
posted by IndigoJones at 6:36 AM on January 6, 2010
You're joking, right? The government? Discovery Channel? Hell, I don't even trust government statistics, much less assume they are offering sound financial advice. We are talking about an institution that can print its own money and that whose accounting methods are widely noted as, shall we say, not conforming to legal standards of the private sector.
Bottom line, people were mistaking a Cost of Living with an Investment. It was one step away from taking the kid's college fund to Vegas. It's pretty basic, and the sooner it becomes widely understood, the better it will be for all.
Banks fail all the time. Let 'em. Other, more sensible institutions will arise in their wake. Presumably ones that won't grow so large as to be too big to fail. It will be painful. But so is what we are currently going through. Pain's one virtue is that it cautions people from making the same mistake twice. Look at Germany's view of inflation. Ninety years on and they still don't make the hyperinflation error.
One can equally well ask 'Why should people without school-age children be expected to pay taxes that keep public schools open?' Or 'Why should common tax payers pay to clean up the messes of the mining/lumber/etc industry?'
I reject the analogies, particularly of that first one. Education and cleansiness are wide public goods. Moreover, the second example generally goes hand in hand with seriously punishing the malfactor (assuming the malfactors is even still in business), sometimes with jail time.
Not a lot of jail time in our current debacle, even though there should be.
posted by IndigoJones at 6:36 AM on January 6, 2010
People did see the property bust coming during the boom. My mother's financial adviser (the one who manages the money my dad left her) told us in 2003 when we were selling our house to move across the country that we'd be very glad we were out of the housing market in a few years. He also told us that we'd buy our next house with a higher interest rate but for a lot less money. To the extent that he was wrong about prices declining, it's going to be because there's a deliberate effort to prop up housing costs.
I instinctively reject efforts to do predictive history (grad school in history will do that) but I read David Hackett Fischer's The Great Wave a few years ago and it scared me. If he's right, both about the historical cycles of stability and crisis and about where the data suggests we are in our current cycle, we're pretty fucked. We're going into a period of change and that's scary for a lot of us, especially people who have been winners in the cycle that just closed out (like the US and most of the Western world).
posted by immlass at 9:00 AM on January 6, 2010
I instinctively reject efforts to do predictive history (grad school in history will do that) but I read David Hackett Fischer's The Great Wave a few years ago and it scared me. If he's right, both about the historical cycles of stability and crisis and about where the data suggests we are in our current cycle, we're pretty fucked. We're going into a period of change and that's scary for a lot of us, especially people who have been winners in the cycle that just closed out (like the US and most of the Western world).
posted by immlass at 9:00 AM on January 6, 2010
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posted by blucevalo at 9:14 AM on January 2, 2010