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The Economy This Week: Prior Week's Archive
By John Tuccillo, PhD
Get Rid of Them All
April 30, 2008
The employment picture is terrible (job losses in each month of the first quarter), consumer confidence is at six year lows, the housing market continues to suffer, and the economy is almost definitely in recession. That’s Rome burning. The Congress proposes a sham stimulus package that has more to do with job creation in China, and the President asks for more and more tax cuts for his friends. They both point fingers at each other, seeking to affix blame for the current economic slough. That’s Nero fiddling. The prospects for the new president are almost as grim, as no one is talking about real solutions for now and for the future. Aren’t we getting a little tired of giving our money to politicians and a government bent on playing its own silly intramural blame games? God help the republic!
By John Tuccillo, PhD
Get Rid of Them All
April 30, 2008
The employment picture is terrible (job losses in each month of the first quarter), consumer confidence is at six year lows, the housing market continues to suffer, and the economy is almost definitely in recession. That’s Rome burning. The Congress proposes a sham stimulus package that has more to do with job creation in China, and the President asks for more and more tax cuts for his friends. They both point fingers at each other, seeking to affix blame for the current economic slough. That’s Nero fiddling. The prospects for the new president are almost as grim, as no one is talking about real solutions for now and for the future. Aren’t we getting a little tired of giving our money to politicians and a government bent on playing its own silly intramural blame games? God help the republic!
What's John Thinking: Archive
By John Tuccillo, PhD
Froth and Bubbles, Bubbles and Froth
May, 2008
There are two key ideas in economics that shed a great deal of light on the times we have been experiencing. The first of these says that when too much money chases too few goods, inflation results. No, we are not returning to the bad old days of the early Eighties, although I’ll say more about that later. Rather, we have experienced serial inflation in the price (if not the value) of technological industry stocks, real estate, and now commodities. We have gotten caught up in the last two and forgotten about the others. Yet each of these stems from the axiom stated above: too much money chasing too few goods.
Read More (pdf)
Making Sense of the Current Real Estate Market: Slowdowns, Foreclosures and the Future
March, 2008
It’s a mess. It’s a complicated, expensive, painful mess. And it’s still got a ways to go before it becomes untangled. “It” in this case is the mortgage, housing, economic slump currently weighing down on all Americans. It’s time to step back, see where it came from, figure out what to do about it and try to predict when it will end.
Read More (pdf)
Ignorance
August, 2007
One of the most striking features of this underperforming economy is the redistribution of income from the middle to the rich. Between 1995 and 2005, the share of income accounted for by the highest 20 percent (quintile) of the population (roughly those making above $ 100,000 per year) has increased by almost two percentage points. Thus, by 2006, the highest quintile received a little over half of all income, a record percentage. In contrast, the income share for every other quintile in the income distribution fell. Additionally, hourly wages have been stagnant in real terms. To put the cherry on the sundae, all this has occurred while productivity has grown at an historically high rate.
Read More (pdf)
The Great Meltdown of ‘07
April, 2007
It’s not the end of the world. In fact, you can’t even see the end of the world from there. But it’s pretty darn worrisome. I refer, of course, to the implosion of the mortgage market taking place during this year. The symptoms are patently obvious: mortgage companies failing, foreclosures rising, and Congressional concern (Note to readers: Congress becomes concerned not because there are real problems, but because it receives a lot of letters and e-mails about a particular issue). Could we have seen this coming? Yes. Could we have prevented it? Yes. Can it be solved? Again, yes.
Read More (pdf)
Populist Libertarianism: The Economic Lesson of the Fall Elections
December, 2006
President Bush finally, this fall, lived up to his promise to be a unifier. He single handedly united liberals, social conservatives and fiscal conservatives against him and in the process destroyed his party’s majority. Most of the attention was focused on the role of opposition to the Iraq War as the driving force of the Democrats’ victory and that may be so. But the returns also tell another story, an economic tale of voters rejecting big government (and the corruption it spawns) and globalization. In short, there was a strong tide of populist libertarianism that swept the polls.
Read More (pdf)
Roosting Chickens
November, 2006
There’s a current ad on TV for an anti-cholesterol drug that discusses the causes of high cholesterol. While we know that eating fatty food can raise your levels, heredity also plays a key role. The pitch is that Grandma Minnie can be as responsible for your problems as the quart of ice cream you ate last night. What ails you might have roots in the distant past as much as in your current behavior.
Read More (pdf)
Potted Frogs
August, 2006
There’s an old story about adaptation that concerns a frog and a pot of water. The story goes that if you put a frog into a pot of boiling water, the frog will jump out and scurry away. But if you place the frog into a pot of cold water and raise the heat under it, the frog will adapt to the rising temperature and boil away, yielding frog soup or whatever. I think of this story often when I read the manner in which news is reported. For example, recently the administration trumpeted the fact that that tax collections are up this year, so the Federal deficit will only be about $300 billion. The news reports were virtually breathless at the good news. I never thought I would see the day when we would be glad to see a deficit of only 300 billion! The fiscal conduct of this administration and this Congress has been disgraceful and they have bartered away our childrens’ future. So, we’re happy that the deficit is only $300 billion.
Read More (pdf)
Searching
February, 2006
Sometimes you have to wonder where all this recovery is. The administration tells us often how much better off we are. So maybe it’s in Washington. The Beige Book, the compendium of reports to the Federal Reserve Board from the twelve regional Federal Reserve Banks, continues to be a happy document. It tells of sales growth, employment stability and manufacturing expansion. So, maybe the recovery is to be found in these. But then again, there are other numbers, ones which speak of a different economy. These leave you scratching your head about where and when this economy will reach its full potential.
Read More (pdf)
Opening the Door
December, 2005
The old model of the real estate business was the Realtor as door-opener. The basis for this was that the real estate industry controlled information about properties for sale and anyone wishing to buy or sell would have to pass through the Realtor’s door. That “monopoly” of information was broken with the development of the Internet, so that now most property information is freely accessible to the public. In fact, through its own policy, the National Association of Realtors has accelerated this process.
Read More (pdf)
Eating Our Seed Corn
November, 2005
Consider the things that concern us as a nation, as represented in the news media:
It’s An Ill Wind
September, 2005
The Tragedy of Hurricane Katrina is still with us and is likely to be for a while. The physical devastation and human suffering that the storm caused has eclipsed the Galveston flood of 1900 and the San Francisco earthquake of 1906. It is, simply, the worst natural disaster to affect the United States ever. New Orleans, that great city, has ceased to be what it was, and it’s unclear what it will be in the future. The adjoining gulf coast was equally as devastated. Read More (pdf)
The Economy at Midyear: How the Price of Oil Tells Everything There is to Know about the American Economy
July, 2005
There’s a terrific new book out, Freaknomics, that tells you all you need to know (as if you wanted to) about how economists think. I mention it here because the authors take the approach of relating seemingly unrelated phenomena to answer interesting and off-beat questions. Inspired by this, I’d like to take a look at the economy in midyear using the concept that the price of oil encapsulates all that’s encouraging and troubling about the American economy. Read More (pdf)
Ten Trends That Are Shaping the Real Estate Business: Part II
March, 2005
As you may recall from my last column, I believe there are ten trends that are currently shaping the future of the real estate business. The first five—described in that column—are:
We Are the World—Darn It!
March, 2005
The fact is that the dollar has fallen by over thirty percent against the Euro is of interest to more people than just those traveling to Europe this year. The weaker dollar and the reasons for it are crucial to the fortunes of the entire U.S. economy. In brief, the weaker dollar will push up interest rates, increase inflation and reduce economic growth. Read More (pdf)
Ten Trends That Are Shaping the Real Estate Business: Part I
February, 2005
I’ve written for years about the future of real estate and continually look for new ideas that will determine how the business is done as we go forward. The pace is fast for a variety of reasons, but most of all because real estate is an information business and the way we convey and receive information is continually being remolded by technology and new business practices. In this column and in the next, I describe what I see to be the ten trends that will shape real estate in the next five years. Read More (pdf)
If Wishing Could Make It So
January, 2005
Every pundit, politician and economist has spoken the same litany for the past two years: this economy will grow strongly, employment will be up and prosperity restored by 2005. They look to the declining price of energy, rising corporate profits, expansion plans by American business and the continued stimulus of tax cuts to pull the economy out of the doldrums. Read More (pdf)
By John Tuccillo, PhD
Froth and Bubbles, Bubbles and Froth
May, 2008
There are two key ideas in economics that shed a great deal of light on the times we have been experiencing. The first of these says that when too much money chases too few goods, inflation results. No, we are not returning to the bad old days of the early Eighties, although I’ll say more about that later. Rather, we have experienced serial inflation in the price (if not the value) of technological industry stocks, real estate, and now commodities. We have gotten caught up in the last two and forgotten about the others. Yet each of these stems from the axiom stated above: too much money chasing too few goods.
Read More (pdf)
Making Sense of the Current Real Estate Market: Slowdowns, Foreclosures and the Future
March, 2008
It’s a mess. It’s a complicated, expensive, painful mess. And it’s still got a ways to go before it becomes untangled. “It” in this case is the mortgage, housing, economic slump currently weighing down on all Americans. It’s time to step back, see where it came from, figure out what to do about it and try to predict when it will end.
Read More (pdf)
Ignorance
August, 2007
One of the most striking features of this underperforming economy is the redistribution of income from the middle to the rich. Between 1995 and 2005, the share of income accounted for by the highest 20 percent (quintile) of the population (roughly those making above $ 100,000 per year) has increased by almost two percentage points. Thus, by 2006, the highest quintile received a little over half of all income, a record percentage. In contrast, the income share for every other quintile in the income distribution fell. Additionally, hourly wages have been stagnant in real terms. To put the cherry on the sundae, all this has occurred while productivity has grown at an historically high rate.
Read More (pdf)
The Great Meltdown of ‘07
April, 2007
It’s not the end of the world. In fact, you can’t even see the end of the world from there. But it’s pretty darn worrisome. I refer, of course, to the implosion of the mortgage market taking place during this year. The symptoms are patently obvious: mortgage companies failing, foreclosures rising, and Congressional concern (Note to readers: Congress becomes concerned not because there are real problems, but because it receives a lot of letters and e-mails about a particular issue). Could we have seen this coming? Yes. Could we have prevented it? Yes. Can it be solved? Again, yes.
Read More (pdf)
Populist Libertarianism: The Economic Lesson of the Fall Elections
December, 2006
President Bush finally, this fall, lived up to his promise to be a unifier. He single handedly united liberals, social conservatives and fiscal conservatives against him and in the process destroyed his party’s majority. Most of the attention was focused on the role of opposition to the Iraq War as the driving force of the Democrats’ victory and that may be so. But the returns also tell another story, an economic tale of voters rejecting big government (and the corruption it spawns) and globalization. In short, there was a strong tide of populist libertarianism that swept the polls.
Read More (pdf)
Roosting Chickens
November, 2006
There’s a current ad on TV for an anti-cholesterol drug that discusses the causes of high cholesterol. While we know that eating fatty food can raise your levels, heredity also plays a key role. The pitch is that Grandma Minnie can be as responsible for your problems as the quart of ice cream you ate last night. What ails you might have roots in the distant past as much as in your current behavior.
Read More (pdf)
Potted Frogs
August, 2006
There’s an old story about adaptation that concerns a frog and a pot of water. The story goes that if you put a frog into a pot of boiling water, the frog will jump out and scurry away. But if you place the frog into a pot of cold water and raise the heat under it, the frog will adapt to the rising temperature and boil away, yielding frog soup or whatever. I think of this story often when I read the manner in which news is reported. For example, recently the administration trumpeted the fact that that tax collections are up this year, so the Federal deficit will only be about $300 billion. The news reports were virtually breathless at the good news. I never thought I would see the day when we would be glad to see a deficit of only 300 billion! The fiscal conduct of this administration and this Congress has been disgraceful and they have bartered away our childrens’ future. So, we’re happy that the deficit is only $300 billion.
Read More (pdf)
Searching
February, 2006
Sometimes you have to wonder where all this recovery is. The administration tells us often how much better off we are. So maybe it’s in Washington. The Beige Book, the compendium of reports to the Federal Reserve Board from the twelve regional Federal Reserve Banks, continues to be a happy document. It tells of sales growth, employment stability and manufacturing expansion. So, maybe the recovery is to be found in these. But then again, there are other numbers, ones which speak of a different economy. These leave you scratching your head about where and when this economy will reach its full potential.
Read More (pdf)
Opening the Door
December, 2005
The old model of the real estate business was the Realtor as door-opener. The basis for this was that the real estate industry controlled information about properties for sale and anyone wishing to buy or sell would have to pass through the Realtor’s door. That “monopoly” of information was broken with the development of the Internet, so that now most property information is freely accessible to the public. In fact, through its own policy, the National Association of Realtors has accelerated this process.
Read More (pdf)
Eating Our Seed Corn
November, 2005
Consider the things that concern us as a nation, as represented in the news media:
- Who “outed” CIA agent Valerie Plame, was there a crime committed and – if so — who will be tried?
- Has the earth evolved, or was it created by some sort of superior intelligence?
- Where lies the major blame for bungling the aftermath of Hurricane Katrina?
- Which TV shows will be cancelled this winter?
- Which teams will play in the Super Bowl?
It’s An Ill Wind
September, 2005
The Tragedy of Hurricane Katrina is still with us and is likely to be for a while. The physical devastation and human suffering that the storm caused has eclipsed the Galveston flood of 1900 and the San Francisco earthquake of 1906. It is, simply, the worst natural disaster to affect the United States ever. New Orleans, that great city, has ceased to be what it was, and it’s unclear what it will be in the future. The adjoining gulf coast was equally as devastated. Read More (pdf)
The Economy at Midyear: How the Price of Oil Tells Everything There is to Know about the American Economy
July, 2005
There’s a terrific new book out, Freaknomics, that tells you all you need to know (as if you wanted to) about how economists think. I mention it here because the authors take the approach of relating seemingly unrelated phenomena to answer interesting and off-beat questions. Inspired by this, I’d like to take a look at the economy in midyear using the concept that the price of oil encapsulates all that’s encouraging and troubling about the American economy. Read More (pdf)
Ten Trends That Are Shaping the Real Estate Business: Part II
March, 2005
As you may recall from my last column, I believe there are ten trends that are currently shaping the future of the real estate business. The first five—described in that column—are:
- There are fewer firms
- Commissions are falling
- Falling standards
- Online or out to lunch
- New business models.
We Are the World—Darn It!
March, 2005
The fact is that the dollar has fallen by over thirty percent against the Euro is of interest to more people than just those traveling to Europe this year. The weaker dollar and the reasons for it are crucial to the fortunes of the entire U.S. economy. In brief, the weaker dollar will push up interest rates, increase inflation and reduce economic growth. Read More (pdf)
Ten Trends That Are Shaping the Real Estate Business: Part I
February, 2005
I’ve written for years about the future of real estate and continually look for new ideas that will determine how the business is done as we go forward. The pace is fast for a variety of reasons, but most of all because real estate is an information business and the way we convey and receive information is continually being remolded by technology and new business practices. In this column and in the next, I describe what I see to be the ten trends that will shape real estate in the next five years. Read More (pdf)
If Wishing Could Make It So
January, 2005
Every pundit, politician and economist has spoken the same litany for the past two years: this economy will grow strongly, employment will be up and prosperity restored by 2005. They look to the declining price of energy, rising corporate profits, expansion plans by American business and the continued stimulus of tax cuts to pull the economy out of the doldrums. Read More (pdf)