Peter Bromberg's UnBlog

You’ll find plenty of blame to go around on this subject, but a little study shows that there were four or five major factors that caused the last big recession, and neither a single president or a single party can be blamed. First, the expanded mandate of Fannie and Freddie - The housing collapse can be traced back the Clinton administration’s pressuring of Fannie and Freddie to encourage more home buying. The Community Reinvestment Act — in which banks were encouraged to lend to people who normally would not be worthy of obtaining home loans — was especially pernicious. The Act had been around for a long time prior to Clinton, but the Clinton Administration turned a once-obscure and lightly enforced banking regulation law into one of the most powerful mandates shaping American cities. This actually started way back in the Carter administration. Second, The FED kept interest rates too low for too long . Keeping interest rates artificially low led predictably to excessive credit a...

People are often confused with biased media reports that "unemployment" is going down, and that's supposedly a good thing. There's much more to the picture - but you'll never hear it from the media. The number of jobs needed per month to keep up with population growth depends on the rate of population growth, and the labor participation rate. CBO estimates show we need 260,000 new jobs per month just to keep pace with population growth (new Americans entering the labor force). It would take 187,000 jobs added per month over the next year to hold the unemployment rate steady if the participation rate rises to 64.6%. If the participation rate stays steady, it will only take 95,000 jobs added per month. If the economy does start adding more jobs per month, one would expect more people will then join the labor force - keeping the unemployment rate elevated. Of course more people could give up, and the labor force participation rate could fal...

"There is an inverse relationship between reliance on the state and self-reliance." -- William F. Buckley, Jr. (who died today at 82) Gasoline prices, which for months lagged the big run-up in the price of oil, are suddenly rising fast. Some experts say they could hit $4 a gallon by spring. Diesel is hitting new records daily and oil closed at an all-time high on Tuesday of $100.88 a barrel. I may have been a year early in my predictions, but my views have not changed. I drive to work in a Toyota Corolla that gets 37MPG. But that's not what I'm worried about. "The effect of high oil prices today could be the difference between having a recession and not having a recession," says Kenneth Rogoff, a Harvard University economist. Wrong, Mr. Rogoff. The effect of high oil prices today could be the difference between the recession we are already in, and a depression of mind-boggling proportions. It's not just oil prices, or real estate down the toilet - its ...