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Good morning. TGIF, my friends. A few things to get the day started:
Let’s rethink the cult of home ownership (LA Times)
Even in the middle of this collapse, when people were asked about their expectations for house price appreciation over the next year, the answers shock. Zillow.com reports that at the end of 2008, with prices falling, 70% of those surveyed said they did not think their house price would decline over the next six months, and more than a quarter expected it to actually increase.
As they say, it ain’t a river in Egypt.
Washington is taking over wide swaths of the for-profit economy, including major portions of the mortgage, automotive and energy industries, the health care field and the banking and insurance sectors. The question is whether the balance between the private sector (profitable by nature) and the government (unprofitable by nature) has shifted so much that there won’t be enough rebound to cover the overhead, to pay the economy’s fixed costs while it digs out from recession. There’s no room in the private sector to boost Washington’s already insatiable tax extraction–Secretary of State Hillary Clinton is right when she says that “we tax everything that moves and doesn’t move”–yet there’s no will to shrink government.
Gov’t should address the jobs problem directly (Krugman/NYT)
…we could have policies that support private-sector employment. Such policies could range from labor rules that discourage firing to financial incentives for companies that either add workers or reduce hours to avoid layoffs.
And that’s what the Germans have done. Germany came into the Great Recession with strong employment protection legislation. This has been supplemented with a “short-time work scheme,” which provides subsidies to employers who reduce workers’ hours rather than laying them off. These measures didn’t prevent a nasty recession, but Germany got through the recession with remarkably few job losses.
Do we Goldbugs finally have your attention? (Seeking Alpha)