Destination Parks if oil gets scarce?

Now that this thread is resurrected: NPR had an interview with Bjorn Lomborg this weekend---a political scientist currently at the University of Copenhagen. The title is "Cool It: The Skeptical Environmentalist's Guide to Global Warming"

Based on the NPR teaser for the interview, I expected the guy to be a raving lunatic. But, he was remarkably sane. His central thesis would appeal to Rob: namely, we're going about emissions control all wrong. His approach appeals to me: very data-driven and empirical.

I'm guessing it will be a good read.

^^^^Oh, I'm likely making a mistake getting too much into this, but I just cant help myself...

Re Abortion and Crime: Was Freakonomics written by Bill Bennett? (I best stop here or I'll say something naughty...)

Re the Economy: It's not just where you are physically that affects your perecption of the economy, but also your station in life. If you are in a lower wage job, you are seeing prices on food and gas increasing faster than your paycheck. If you are in certain sectors (government being one) you likely are not feeling any crunch at all.

Re the Stock Market: Yes, the market is historically high (and I'm not sure the fundamentals actually support it being as high as it is), but if you are not invested in the stock market, that really does you no good. In fact, it's likey to make you feel like the richer are simply getting richer at the expense of those on the lower rungs.

The truth of the matter is, there was over-investment in the housing sector. Home prices were going up at astonishing rates. Anecdotally, houses in my neighborhood (the other-where mentioned Fairfax County, VA) that sold for ~$250K in 2001, sold for ~$400K+ in 2004, a 60% increase in a scant three years. Who *wouldnt* want to get in on that gravy train? (In contrast that self same house sold for $174K in 1994 and ~$100K in 1981...43%/seven years and 70%/thirteen years)

So many banks offered and buyers accepted "creative financing" for their mortgages. Both are to blame for sure. In light of the market 'expansion' the Fed had to start worrying about inflation and moved interest rates up again. Which put pressure on those with ARMs and also eliminated some people from being able to afford mortgages in the first place...thus removing potential buyers from the housing market. Predictably, housing price growth slowed, and in some markets started to decline. People whose ARMs increased, but whose paycheck didnt, were now in some trouble. Some were really bad and had to enter foreclosure.

NOTE: I *do* believe there should be 'personal responsibility' and the banks that gave out shoddy loans and the people who didnt take the time to really understand their risk should be held accountable. But I understand, that will not be the reality.

So now banks who had to foreclose are being a bit more *stingy* with their loans. That, coupled with higher interest rates caused even more people to not buy homes, also further depressing existing home prices / reducing new construction sales / and even slowing home improvements as home equity loans are more expensive.

Now here come the investors! Investors in Bank of America want to see BoA as lenders, not owners/sellers of foreclosed properties. Investors in Ryan Homes want to see robust construction and sales. Investors in Home Depot want to see sales of new kitchen cabinets. When these start to go away, Investors take their money elsewhere....then people start to lose jobs!

If left unchecked, it's possible that the market will indeed iron itself out. I'm not much of an economist to know the market with that much certainty. But I do know that there will be a lot of voting-age people who will be affected during the 'market correction' period. And in an election cycle, with a reasonable solution available (i.e. Fed influence), you *had* to know an interest rate cut was coming.

Someone said it before, they knew the goverment would "bail them out". I dont believe it was any individuals that the gov wanted to help, but rather the housing/real estate sector. Individuals who benefit is a fringe benefit.

Okay, I've really taked too much for someone who doesnt even read the paper daily...;)
lata, jeremy

I'm getting old and dumb...I forgot about this thread for a couple days!

RGB:

This is not personal, but your thought process seems all over the board. I'll just use the page three quotes to point out the inconsistency. As far as I can tell, the underlying theme is you are mad at a lot of things...but I'm not sure why!

Of course people need a large house to be comfortable. If people had a normal size house, there'd be no place to walk or sit with all the stuff they have crammed in there. Multiple TVs, stereo systems, and computers. Every appliance and machine known to man, every gadget advertised on those multiple TVs.

Seems here you are an advocate for less is better.

My own company has been hit hard by the latest non-existent crisis. We've had to lay off a substantial number of our employees, because not only are housing starts off, people are getting leery about construction in general. Clients with projects in progress have been slow to pay, and many of them have cut back or cancelled projects because they know they're not going to make as much money building houses now.

Now you seem to be an advocate for "more is better."

I see this phenomenon a lot. Many tend to look at those who have more than themselves, and deride these people/businesses as wasteful, non-caring bastards.

Then when business climate changes and staffing is adjusted accordingly, those with more are still non-caring bastards.

There is no winning...

Nobody is denying that we are in the middle of a bubble burst. My point was that media loves to overblow the negative...especially if they can lay it on Bush.

When times are good, people and businesses over-splurge. When times change, they downsize. Given your arguments above RGB, I would think you would be happy with all this downsizing. Society and businesses have obviously been living above your approval standard. A regression seems to fit your philosophy...no?

Jeff:

I agree that the president has no real affect on the economy. There are indeed too many outside influences.

However, media attention affects the economy, and affects election results even more. Depending on who is in office, the media will change their emphasis. If it can help "their guy" then we will get tons of coverage about "its the economy stupid." If it hurts their guy, we will get over-exagerations and blame for "subprime lending practices" that should have been caught by the leaders in charge...all in the midst of record economic performance.

*** Edited 9/26/2007 2:54:29 PM UTC by Jeffrey R Smith***