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.