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.
White House Press Secretary Sean Spicer’s assertion that the National Mall was "full when the president took the Oath of Office" is demonstrably false.
On January 21, White House Press Secretary Sean Spicer issued a statement criticizing journalists for their coverage of President Trump's inauguration. Some media outlets, Spicer claimed, were using photographs of the event in misleading and deceptive ways. To back this claim up, Spicer made a number of assertions that turned out to be false. He offered incorrect D.C. Metro-ridership numbers, and said that white ground coverings had never been used on the Mall during Inauguration before, when they had been employed in 2013. Two days later, during his first press conference, Spicer blamed the bad Metro numbers on an "outside agency" and stated that his claim about the "largest audience to ever witness an inauguration, period," was meant to include all viewership, in person and online, rather than referring to the in-person crowd specifically.
The technology has been used to create sped-up videos that falsely depict a response to stimulus.
One of the first measures that Republicans in the 115th Congress proposed was the “Heartbeat Protection Act.” On January 11, a group led by Steve King of Iowa introduced a bill that would require doctors nationwide to “check for a fetal heartbeat” before performing an abortion, and prohibit them from completing the procedure if they found one. In December, Republicans in the Ohio state legislature put forth a similar measure. Governor John Kasich vetoed it, observing that such a law would almost certainly be struck down as unconstitutional, but approved a 20-week abortion ban.
Opponents of the heartbeat bills have pointed out that they would eliminate abortion rights almost entirely—making the procedure illegal around four weeks after fertilization, before many women realize that they are pregnant. These measures raise even more elementary questions: What is a fetal heartbeat? And why does it matter?
Overshadowed by headlines about chaos and infighting, the new administration is notching a string of early victories.
From some angles, the Trump presidency is off to a rocky start. There were the somewhat disappointing crowds at the inauguration, and then the needless lies about them, presented as “alternative facts.” There’s the controversy over Trump’s remarks to the CIA, and precisely who in the crowd cheered his visit. On Monday, the president repeated a dumb and unnecessary lie about illegal ballots having cost him the popular vote during a meeting with members of Congress. The Washington Post reports in detail on White House infighting and an attempted reboot—just four days into the administration. ABC’s The Notefrowns, “He can’t help himself, and he isn’t helping himself.”
But what if the Trump presidency is actually off to a surprisingly effective start? For months, Trump has shown a perverse ability to overshadow his own message with chaos and disorder, and the first five days of his administration fit right into that pattern.
The Trump administration seems wedded to a political strategy of lying to the public, challenging the media to adjust.
Kellyanne Conway, Trump’s senior counselor, called Press Secretary Sean Spicer’s first official press conference a “tour de force.” That’s not strange, because Trump advisers’ main rhetorical approach is to reflect their boss’ penchant for exaggeration. What’s strange is that much of the media seemed to agree.
Two days earlier, reporters from mainstream outlets had panned a bizarre appearance by Spicer in which, flanked by photographs of the inauguration, he loudly berated the media, saying that the press had “engaged in deliberately false reporting” for failing to note that “this was the largest audience to ever witness an inauguration––period––both in person and around the globe.” Spicer also berated a reporter for erroneously reporting that Trump had removed a bust of Martin Luther King Jr. from the White House, even though the reporter had apologized on social media, an apology Spicer accepted.
The White House didn’t release the text of the executive order at first.
Updated on January 24 at 2:45 p.m.
On Tuesday afternoon, President Donald Trump signed a memorandum ordering the Secretary of the Army to expedite approval of the Dakota Access Pipeline, a 1,100-mile pipeline linking the North Dakota oil fields to a river terminal in Illinois. The U.S. Army Corps of Engineers denied final approval to the project late last year, after months of protests from the local Standing Rock Sioux tribe and from Native people nationwide.
As the party struggles to agree on a replacement, a group of GOP senators unveil a bill that would give states the option to keep it.
The vast majority of Republicans in Congress haven’t budged from their longstanding vow to completely repeal the Affordable Care Act. But as the party struggles to write a replacement, a few GOP lawmakers are declaring their support for keeping the law on the books in some form indefinitely.
A group of senators on Monday unveiled legislation that would give states the option of preserving Obamacare, securing federal support for a more conservative health-insurance system, or opting out of any assistance from Washington. Offered as a middle ground in the partisan health-care fight, the proposal breaks with years of Republican orthodoxy on the 2010 law, which party leaders have pledged to rip out “root and branch.”
The president repeated his belief that the U.S. should have taken Iraq’s oil, ominously adding that the CIA may “have another chance.”
Every American, regardless of who they voted for in the election, should be furious with President Donald Trump for what he told the CIA during a recent meeting at its headquarters. I do not mean his digressions about the size of the crowd at his inauguration and the number of times he has appeared on the cover of Time magazine, although it does not inspire confidence to see the president waste fleeting time with national-security employees on his vanity rather than our security.
It’s his comments on Iraq that ought to make Americans apoplectic, for in the space of seconds, Trump managed to utter words that are 1) morally repugnant, 2) certain to be exploited as a recruiting tool by America’s terrorist enemies, and 3) likely to help foreign adversaries diminish America’s reputation and power. For the sake of an indisciplined, self-indulgent riff, Trump made Americans less safe.
Narcissism, disagreeableness, grandiosity—a psychologist investigates how Trump’s extraordinary personality might shape his possible presidency.
In 2006, Donald Trump made plans to purchase the Menie Estate, near Aberdeen, Scotland, aiming to convert the dunes and grassland into a luxury golf resort. He and the estate’s owner, Tom Griffin, sat down to discuss the transaction at the Cock & Bull restaurant. Griffin recalls that Trump was a hard-nosed negotiator, reluctant to give in on even the tiniest details. But, as Michael D’Antonio writes in his recent biography of Trump, Never Enough, Griffin’s most vivid recollection of the evening pertains to the theatrics. It was as if the golden-haired guest sitting across the table were an actor playing a part on the London stage.
“It was Donald Trump playing Donald Trump,” Griffin observed. There was something unreal about it.
A No. 1 bestseller by a respected physician argues that gluten and carbohydrates are at the root of Alzheimer's disease, anxiety, depression, and ADHD. What to make of the controversial theory?
“If you could make just three simple changes in your life to prevent, or even reverse, memory loss and other brain disorders, wouldn’t you?”
So asks Dr. David Perlmutter, in promotion of his PBS special Brain Change, coming soon to your regional affiliate. Three changes. Simple ones. Wouldn’t you?
The 90-minute special is a companion to Perlmutter’s blockbuster book on how gluten and carbs are destroying our brains. In November it became a New York Times number one bestseller. Since its September release, as Perlmutter told me, “It’s never not been on the bestseller list, frankly.”
“Is it still number one?” I asked. A pause over the phone as he checked. In modern interview style, we were both also on our computers.