Here are the five stages of housing grief:
1. Housing bubble? What housing bubble? "A national severe price distortion [in housing] seems most unlikely in the United States." (Alan Greenspan, October 2004)
2. "There's a little froth in this market," but "we don't perceive that there is a national bubble." (Alan Greenspan, May 2005)
3. Housing is slumping, but "despite what you hear from some of the Eeyores in the analytical community, a recession is not visible on the horizon." (Richard Fisher, president of the Federal Reserve Bank of Dallas, August 2006)
4. Well, that was a lousy quarter, but "I feel good about the U.S. economy, I really do." (Henry Paulson, the Treasury secretary, last Friday)
5. Insert expletive here.
We've now reached stage 4. Will we move on to stage 5?
In case you're wondering, I don't blame the Bush administration for the latest bad economic numbers. If anyone is to blame for the current situation, it's Mr. Greenspan, who pooh-poohed warnings about an emerging bubble and did nothing to crack down on irresponsible lending.
Ah, but Paul, at whose direction? Are we forgetting that 'moneylenders' are major Repuglican contributors? Remember bankruptcy "reform"?
Still, the bad news will have political consequences. The Bush administration has been trying to shift attention away from the disaster in Iraq to an allegedly booming economy. That strategy wasn't working too well even when the headline numbers were good, because it never felt like a boom to most Americans. But now even the headline numbers have turned lousy.
And if that hurts the G.O.P. in next week's election, well, there's a certain poetic justice involved. The administration tried to claim undeserved credit for the positive effects of the housing boom, so why shouldn't it receive some blame for the negative effects of the housing bust?
I dunno. 'Cuz it was all Clinton's fault?
Please go read the rest.