According to data from Zillow.com, home prices fell 3% in the first quarter of 2011. This is the largest decline since 2008, and, says the Wall Street Journal, is causing some economists to take a more pessimistic view of how far we are from the market's bottom.
Four years on, why is the housing market still falling? The obvious culprit is the homebuyer's tax credit. Even as it was enacted, a lot of people were complaining that gimmicks like this (and the Cash for Clunkers program) weren't providing useful stimulus; instead, they were distorting the market by pulling demand forward from future years.
That seems to be even truer than most people expected. In DC, this actually caused an uptick in prices, because the buyers were concentrated into a pretty short time frame. A lot of the properties coming on to the market were short sales and foreclosures, which take a very long time to close. That meant that a lot of people were getting into bidding wars over the relatively small number of properties available. The bidding war was frantic enough to cost them money--but not to clear the short sales, which were often more than $100,000 underwater. I myself got caught by the tail end of it--because the comps that we were using were inflated by the tax credit, we probably overpaid for our house.
In most other places, the tax credit was simply keeping prices from falling too much further. But the mechanism was ultimately the same: we crowded a larger number of buyers into the market without enough time for supply to really respond, because too many of the houses that needed to be sold were encumbered by underwater mortgages.
After the credit, it all collapsed again. There were a few months of confusion, because it took a while for prices to adjust to the new reality: supply was higher, but all the buyers were gone. Almost everyone who had intended to buy in the next few years had moved their purchase forward in order to get the tax credit.
The tax credit was no doubt a fine thing for people who managed to sell their homes in that narrow window. But of course, there are parallel losses--the people who have lost jobs, or gotten transferred, or gotten a divorce, in the intervening year, and need to sell their houses, and face a market with virtually no buyers. It's hard to argue that the program improved much. I mean, you could posit that it somehow allowed us a more orderly transition, but we still have a large backlog of foreclosures, and judging from the recent declines, we simply moved moved some of the pain into the future. We didn't actually make the process less painful.
As this graph from Barry Ritholtz shows, house prices are still well above their historical levels. The government cannot legislate that imbalance away. You don't have to be a "Work the rot out" liquidationist of the Andrew Mellon school to think that eventually, prices have to fall to market clearing levels, and that slowing the process down might not improve it much.
“Don’t underestimate me,” declared newly announced presidential candidate Bernie Sanders to George Stephanopoulos on Sunday. That may be good advice.
By conventional standards, Sanders’s candidacy is absurd: He’s not well known, he doesn’t have big money donors, he’s not charismatic, and by Beltway standards, he’s ideologically extreme. But candidates with these liabilities have caught fire before. Think of Jerry Brown, who despite little funding and an oddball reputation outlasted a series of more conventional candidates to emerge as Bill Clinton’s most serious challenger in 1992. Or Pat Buchanan, who struck terror in the GOP establishment by winning the New Hampshire primary in 1996. Or Howard Dean, who began 2003 in obscurity and ended it as the Democratic frontrunner (before collapsing in the run-up to the Iowa Caucuses). Or Ron Paul, who in 2012 finished second in New Hampshire and came within three points of winning Iowa.
After viewing news photographs from China for years, one of my favorite visual themes is "large crowd formations." Whether the subject is military parades or world-record attempts, mass exercises or enormous performances, the images are frequently remarkable. The masses of people can look beautiful or intimidating, projecting a sense of strength and abundance. Individuals can become pixels in a huge painting, or points on a grid, or echoes of each other in identical uniforms or costumes. I've gathered some of these images below, taken around China over the past several years. (Note: a few of these images can create a dizzying effect when viewed while scrolling, which is fun, but could be surprising.)
What is the appropriate penalty for having sex on the beach? This is a story about how that offense, like so many others, allows a penalty far longer than is just.
Were I a cop who stumbled on a couple hooking up beneath a blanket at night I'd look away. Confronted with people going at it during daylight hours in view of passersby, I'd think, "The abrasiveness of sand dissuades most people from doing this and the best outcome would be for Fark.com to mock their breach of community standards, but I suppose I'm obligated to make them stop and issue a ticket."As a prosecutor, I'd seek a sentence of community service plus one weekend of house arrest with the Jimmy Buffett song "Who's the Blond Stranger?" played on repeat over and over and over. A person never forgets that.
Two years ago, a Dutch creative agency opened a concept restaurant in Amsterdam that would be, in the words of its founder, “the perfect place to dine in pleasant solitude.” The restaurant is called Eenmaal—this name has been translated into English as “dinner for one”—and was launched in an attempt to start dissolving the stigma attached to going out alone. Apparently picking up on the same cultural drift, a new fast-casual restaurant in Washington, D.C., has tiered, bench-like seating with individual trays, an arrangement that caters to solo diners.
As antisocial as those ideas may sound, it’s surprising that the world hasn’t seen more of them. Today, more than a quarter of American households are home to just one person—a figure that has tripled since 1970. Also, the median age at which Americans get married has recently reached a record high. Given these demographic shifts, one would think that by now, going out to the movies or to dinner alone wouldn’t be the radical acts they still are.
Marilyn Mosby's press conference Friday shocked residents of Baltimore and everyone else watching protests over Freddie Gray's death. Barely 24 hours after police had completed their investigation into the death of the 25-year-old black man in police custody, the Baltimore City state's attorney announced a strong slate of charges against the six officers involved. It wasn't just the speed (Mosby said her office had begun investigations the day after Gray's arrest, and six days before his death) but the charges: second-degree depraved-heart murder against one officer, with the others facing a mix of manslaughter, assault, misconduct, and false imprisonment.
The decision was met with jubilation in West Baltimore, where protestors had rioted just four nights before. But almost immediately, critics began to second-guess Mosby, who's been on the job for just a few months. Were her charges politically motivated, or perhaps calculated to calm protests? Had she overcharged the officers, picking unfair charges, or ones she couldn't win? Did she move too fast to charge the officers?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
In the 2001 movie Donnie Darko, a group of teenage boys are drinking and shooting guns when the topic of conversation turns, as you might expect, to the topic of women. “We gotta find ourselves a Smurfette,” one of them says.
“Smurfette?” his friend asks.
“Mm-hmm. Not some, like, tight-ass Middlesex chick, you know? Like, this cute little blonde that will get down and dirty with the guys. Like Smurfette does.”
“That's bullshit. Smurfette fucks all the other Smurfs.”
This exchange came to mind when watching the actor Jeremy Renner's appearance on Conan this week, during which he called Black Widow, the Avenger played by Scarlett Johansson, “a slut.” He'd already made a joke along these lines a few weeks ago, after which he apologized to anyone who'd been offended. But apparently Renner believed his joke wasn't actually vile—just misunderstood. “Conan, if you slept with four of the six Avengers, no matter how much fun you had, you’d be a slut,” he said. “I’d be a slut.”
The simplest way to reduce the number of Americans who are abused by police officers is not to retrain cops or to reform their subculture. It is to significantly reduce the number of adversarial interactions people have with police.
Questions about how frequently Americans ought to interact with law enforcement are often associated with the debate over Broken Windows theory. Its proponents champion a model of policing where foot patrolmen are a regular presence in high-crime neighborhoods, vigilantly guarding against the sorts of low-level disorder that ostensibly leads to more serious crime if left unchecked.
For now, let's defer debate about Broken Windows theory.
Even if it is correct, there are still a number of reforms that would reduce adversarial contacts with police officers without increasing disorder on the streets.
When I was a teenager, I wished for many things. I was determined to be a historian like my intellectual idol, A.J.P. Taylor, whose television lectures on British and European history held me spellbound. I wanted to lead a political party and deliver speeches to adoring supporters. These were big dreams for a working-class kid from Glasgow whose family had never sent anyone to university.
And yet the dreams somehow came true. I went to Oxford for my doctorate and even got Alan Taylor as my supervisor, before joining the faculty of the London School of Economics. I also established a political party, UKIP, whose goal was to halt the European Union’s encroachments on British democracy and whose fortunes now constitute one of the major storylines of Britain’s general election on Thursday.
Two recent events—the spectacle of Garry Trudeau, the Doonesbury creator, attacking a group of murdered cartoonists for offending his sensibilities, and the protest organized by a group of bien-pensant writers against the PEN American Center for planning to honor those cartoonists tonight in New York—have brought the Charlie Hebdo controversy back to public consciousness. So has the failed attack Sunday in Texas on a group of anti-Islam militants staging a Prophet Muhammad cartoon contest, though, unlike Charlie Hebdo, the organization that sponsored the Texas event is run by an actual anti-Muslim extremist who, I'm proud to say, is a personal nemesis of mine.
Much has already been written about both the Trudeau and PEN controversies. I particularly recommend David Frum on Trudeau, and Katha Pollitt and Matt Welch on PEN, as well as this fine op-ed by Andrew Solomon and Suzanne Nossel, the president and executive director, respectively, of the PEN American Center. These represent only a handful of the many dozens of writers who have risen in defense of free speech, and of Charlie Hebdo’s right to lampoon religion.