The "Science" of Economics - Wrong Again

From Chicago Tribune

"I'm projecting the first [nationwide] price drop since the Great Depression," he said. "We're going to have negative home prices in 2007."

His comments seemed uncharacteristic for Lereah, whose mostly blue-sky forecasts have long been criticized for stoking the fire as home sales bubbled to stunning -- and unsustainable, even by his own account -- levels. He had been the public face for the Realtors since the housing boom began in 2001.

"The media regularly turns to him for real estate quotes," said David Jackson, who created the hypercritical David Lereah Watch blog because he believed the economist was churning the housing market. "Lereah tells half-truths and manipulates facts and figures. He cannot be trusted, as he is a paid shill."

Most critics are less incendiary, though frankly uncomplimentary.

They often cite as Exhibit A his 2005 book, "Are You Missing the Real Estate Boom?" subtitled "Why home values and other real estate investments will climb through the end of the decade."

"He promotes housing," said Washington economist Dean Baker, an outspoken housing-market bear. "Certainly, people who were making decisions to move, they either heard David directly or from someone who heard from David that home prices will never fall, don't worry, the market will stay strong. So they paid too much for a house."

Lereah, in an interview Wednesday, shrugged off the criticism. "I feel confident I did a very good job forecasting and reflected what was happening in the marketplace," he said.


Anonymous said...

You are way late on this story and a previous post concerning CFLs. A person versed in Austrian economics, which many on this site are ignorant of, saw this bust long ago. In fact writers over Ontheborderline have been touting the housing bubble for at least a year or more. They also have talked about a stock market bust and the coming pension crisis. The CFL story was printed over there several weeks ago.

Chicago School of BS said...

Hey, if you geniuses ontheborderline are so brilliant, why did you lead bloggers buy into the Stonepine "Bright City on the Hill?" Why didn't you call out the Realtors who were regurgitating Lereah B.S.? Our the banks lending money to unqualified borrowers with ballooning rates?
All you guys did was whine about your taxes, schools, teachers and anybody who dares to support them.

Alan Brownspan said...

Yeah, and the other genius Chris has been gloating about the "booming" American economy for 9 months too.
More B.S.
Just heard the inflation figures this morning. Their flat. Why? Because Food and gasolene are included in the index. Another Admin. lie!

Anonymous said...

A transaction between a lender and debtor is a voluntary action between two adult parties. It is of no concern what I or anyone else thinks.

Val Yum said...


If you search back in our archives, you will see that we were reporting on this in 1998. As to what is posted ontheborderline, I only go there when my meds run out. That way I can have empathy for those who sharpen the tips of their crayons to participate in the cesspool of propaganda.

Dewey Cheatum and Howe said...


You say:
"A transaction between a lender and debtor is a voluntary action between two adult parties. It is of no concern what I or anyone else thinks."

Just because the thief ( who lies, and misrepresents a transaction ) is an adult doesn't make it morally acceptable. You guys and your objectivist ethics are OUT TO LUNCH!
This guy in the article portrayed himself as a "economist" who supposedly gave "scientific" forcasts( economics is a science according to you guys obeying the ifallable laws of the market). In reality he was a manipulating shill whose aim was to feed the real estate frenzy and consequential bust. It's most telling that now he's moving on to a different line of work. The Gravy Train is on a different track now.
I'll be watching for this guy to be touting hedge fund investment for public pensions. Just watch him.

Anonymous said...

So sre you insinuating that the lenders did not disclose the terms of the loan. I will call BS on that one. I am sure the terms were fully disclosed. It is up to the lendee to understand clearly what they are getting into. If you don't understand then hire someone to help clarify the terms for you.

Oh and as far as hedge funds, some government pension accounts are investing up to 30% of their funds in hedge funds.

Dewey Cheatum and Howe said...

I am saying that confusion is the preditory lender's friend. I've spoken to a local notary who handles closings of mortgage lenders. There are some they refuse to do closings with any further because of their unfair practices.

Get Real! when you are ready to close on a house your whole life is dependent on making the housing transaction work.
These closings can take up to 100 documents. Even professionals give them little more than a terse glance. The bottom line is you agree to the terms or not, and if not you add tremendous disruption to you own life. This is not a level playing field and you know it!
Are borrowers partly responsible. Yes. But with market manipulating "economists" like the one in this post giving ridiculously rosey forcasts, the gullable and not thoroughly informed are drawn in like flies to shit. This guys job is to create false demand, manipulate the market, and get out before others realize he's full of it.

As far as hedge funds, You're right! It's one more arrow in the quiver of the economic elite. These pensions should have been funded by taxation. Now, they are foolishly trying to make up lost ground with high risk investments.

Anonymous said...

pensions should be funded by taxation. Wrong! They should be self-funded. Where in the world do you believe a person has the right to tax another individual so that person can retire. Retirement comes thorugh hard work and thrift, not by stealing. No one owes anyone else leisure

Dewey Cheatum and Howe said...

Cut the Objectivist Crap! You guys are the thieves and you try to pawn that moniker off on public employees.B.S. For them,retirement is a condition of employment, it's contractual. You guys simply suffer from pension envy. Too bad you don't have a BIG ONE. You deflect people's ire from employers and CEOs earning over 300 times the average worker's wage, yet they whine they can't afford to fund pensions.
How do you earn your living, investment advising?
It's been proven a monkey does a better job picking stocks than an investment advisor otherwise known as a waste of oxygen.

Once the SHRUB is gone you guys will be relegated to the scrap pile of history and I say good riddens. Never has such ignorance ruled this country. Enjoy the next few months of the SHRUB's term after that it'll be a long time before you come to power again.

The Principle said...


About pensions, they are part of an employee's compensation package, regardless of the employer. Some employers offer pension options, some don't. Some offer helath benefits, some don't. Some offer free ice cream, pop and coffee in the breakroom and some don't.

In this sense, pensions are self-funded. However, the employer is holding the money bag. Of course, as we've seen, some high-profile employers have renigged on the pensions. Maybe what Anon is saying is that pensions should be self-managed.

Of course, Dewey would be against this because people aren't smart enough to plan for their future and investment their money. He wants big brother to hold their hand and make sure they don't get any boo boos on the road of life. They can't afford to read the fine print and therefore are innocent by reason of laziness.

Dewey Cheatum and Howe said...

The Principal said:

"They can't afford to read the fine print and therefore are innocent by reason of laziness."

Well I can assure that you can be included in the "lazy bum club".
Are your running Windows XP on your computer.
Have you read your EULA lately, (or ever) Do you have any idea what rights you've given Microsoft by clicking I Agree? I doubt it, along with the vast majority if not a near totality of Windows users.

Here a small example of what you are not aware of in the "fine print"

"By changing that term in the PUR, Microsoft has found a creative way to obtain authorization from users to access their workstations at will," he said. "How many customers are going to review this PDF file and realize they've given Microsoft this right? And all the risk for the security and privacy violations due to this are neatly put on the customer's shoulders, not Microsoft's."

After the reader shared his discovery with me, I asked some other Microsoft volume license customers if they were aware of the PUR term. Not surprisingly, most were only vaguely aware of the PUR's existence, much less the terms in the XP section. But they had plenty of concerns once they read it, the most obvious being the damage the most benign of automatic OS upgrades could cause in a corporate environment. "The idea that Microsoft can change our software without notifying us is totally unacceptable," said one corporate IT manager. "Any alteration to our standard configuration can only be rolled out after careful evaluation and testing. Does Microsoft have no clue?"
Do you have a clue to what you agreed to by installing Microsoft Window's XP?

I doubt it you lazy bums. Start taking responsibility for understanding what you've agree to.
You're a consenting adult, are you not.
You guys are idiots! or live in some self induced utopian fantasy.
Read the fine print!

Dewey Cheatum and Howe said...

No response Anon?

Reading that Window EULA must be taking longer than expected or did you uninstall Windows XP after you realized what you've been agreeing to?