How did a drop of a percent or two in US home prices cause whole countries in Europe to go bankrupt?Suggesting that the economic disease may be coming to the US from Europe, rather than the other way around. Not so unreasonable, that, given the full speed rush of the Obama reich to nationalise the economy -- just like in Europe.
Actually, how do we know the bad thing spread from the US to the rest of the world, and not vice versa? I invite you to look at the data. If you do, you will find that Europe's economic decline started before, and is deeper than, the US's.
Look at the 2nd quarter of 2008, for example. In that quarter, the US economy grew 0.7%. Yet the economies of France, Germany, Italy and Japan all shrank by 0.3% to 0.9%. In fact, the average for the Euro area was an economic shrinkage of 0.2%.
Those European economies that shrank in the 2nd quarter also shrank in the 3rd. By that time, so did the US's economy - but by just 0.1%. The Euro area's average shrinkage was twice that. The economies of Germany, Italy, Japan and the United Kingdom shrank five to six times as fast. _AmThink
Is it really such a good idea for government to get so deeply involved in the running of corporations?
Is Obama's plan to stabilise the mortgage markets a stroke of genius, or the brain stroke of a feeble mind?
Should we look at historical housing booms and busts to get a better feeling of what the home markets are doing?
Everyone in Washington DC appears to be in the handwringing mode to "do anything, even if it's catastrophically wrong!!!" In the case of Obama and his congressional cronies, you can almost bet on his remedies being much worse than the disease they are meant to cure. At least, that seems to be his plan.