Another fine example of woolly thinking

Discussion in 'Economics' started by fearless9, Sep 21, 2008.

  1. A quote from NY Times today .....

    Alan S Blinder is an economist at Princeton and a former vice chairman of the board of governors at the Federal Reserve.

    “It’s easy to forget amid all the fancy stuff — credit derivatives, swaps — that the root cause of all this is declining house prices,” Mr. Blinder said.

    comment .....
    Well I would imagine that the root cause is that US citizens are living above and beyond their means ... declining house prices being just one of the outcomes albeit a very large one of this root cause.
    Wait until we watch the declining retail market really kick in ... maybe that is as a result of effect global warming on Santa Claus.

    Alan goes on to say...........
    “If you can reverse that, then people start coming out of their foxholes and start putting their money in places they have been too afraid to put it.”

    No problem with this but an increasing number of people no longer have any money and a small group have more now than ever....... asymmetrical thinking in my view that will not put the chu chu (US economy) back on the tracks.