Tuesday, July 12, 2005

Red Flag? Bush Admin Says It's All Good

An Associated Press
story today highlights the Bush administration's keen review of the housing market, and reports that all is well. It downplays the significance of speculative buying (the flipper factor) and continues to trumpet job growth, low interest rates, blah blah blah blah drone drone drone drone:
"While speculative behavior appears to be surfacing in some local markets, strong economic fundamentals are contributing importantly to the housing boom," said Bernanke in his first speech as the new chairman of the White House's Council of Economic Advisers.
Federal Reserve Chairman Alan Greenspan has even tempered his frothy comments:
Greenspan has said there are signs of "froth" in some local markets where house prices seem to have risen to "unsustainable levels." It doesn't appear likely, however, that a national housing bubble, which could pop and send prices tumbling, will develop, the Fed chief has said.
Why do we bother reporting these ridiculous statments? They mean nothing. What do you expect? Does anyone in their right mind truly anticipate an interview with a member of the Bush administration to yield a comment like: "Oh my God, there's a housing bubble, don't buy houses!" Their job is to spin, and the job of a journalist is to separate the reality from the nonsense. Someone's not doing their job. As for Greenspan… Need we remember things like his speech to the Boston College Conference on the New Economy on March 6, 2000:

... I see nothing to suggest that these opportunities will peter out any time soon.

Indeed, many argue that the pace of innovation will continue to quicken in the next few years, as companies exploit the still largely untapped potential for e-commerce, especially in the business-to-business arena, where most observers expect the fastest growth.

The dot-com bubble burst four days later, on March 10, 2000. Thank you Alan.