[quote=sdrealtor]BY saying it could have been worse you have proven my point. By definition, a collapse is when things are allowed to freefall to the lowest point possible. That didnt happen. They intervened and kept things artificially higher than they would reached.[/quote]
Yeah, I think that is what I said. I started out disagreeing, but apparently changed my mind while I was typing. The only disagreement I have is with your definition of collapse.
col·lapse
1. To fall down or inward suddenly; cave in.
It wasn’t a complete collapse, I think that’s what you described (to the lowest point possible). But it did collapse. The difference is minutia. We’re pretty much in agreement.
I don’t think I was among those that claimed the government wouldn’t step in and fix it. (I really don’t remember.) I remember thinking that there was no way to fix it. And in that regards, we were both right. They tried, but success was limited. It could have been just as effective, or probably even a little bit more effective, with a whole lot less money.
In a larger sense (and this is really addressing issues points made in a handful of current topics being discussed), what government intervention didn’t and can’t really control are the more important problems underlying the weak economy. It partially affected the crisis in housing prices. It can’t fix the problem with housing construction. That’s a much bigger problem going forward in rejuvinating the economy. Higher house prices won’t help (much). If we don’t need more houses, then we don’t need more houses, regardless of the price. Shifting demographics predict that we don’t, or at least probably won’t.
I don’t know that I agree with Roubini that it’s worse now than in 2008. (Actually, that BS, as much as I respect NR, in 2008 the economy had a heart attack. Now we’re 3 years post heart attack and only at risk for another heart attack. Which one is worse?)
But the key predictors aren’t any better. The difference is that the current economy is stable but bad instead of in crisis and bad. I think we have lower (but very real) risk of additional crisis. The over/under is pretty damn close.
