Monday, April 14, 2008

George Will on the Economy: We're all Soft

George Will writes in this week's Washington Post that we are all soft on the economy. That our economic woes aren't that bad and that if you look at the problems we face today in a historical context, we aren't in bad shape at all.

Some of his arguments about the need for a housing price correction are dead on. However, he trots out a few examples of what our economic panic has led to. This is classic conservative deflection:

Declines in housing values and the stock market are causing some Americans to delay retirement. A Kansas City man had been eager to retire to Arizona but now, the Journal says, "figures he'll stay put for another couple of years." He is 59.

He uses this as a example of how American Paranoia is fanning a minor flame into a wild fire. Will's problem is that he takes the example of a relatively affluent American as an example of our ills. What Will fails to mention, of course, are the millions of Americans who had but one financial asset, their home. Their home equity was a failsafe in an economy that is factually, losing jobs. Will doesn't address the rising cost of fuel, food, healthcare and college education. All while wages for middle class Americans are flat.

The housing crisis, isn't simply a crisis in an of itself. If middle class Americans had other economic resources to draw on perhaps this wouldn't be the problem that it is. I would ask him not to parade out only examples that serve his purpose, but also to acknowledge the larger economic issues facing many Americans.


Adam said...

Just an upfront: WARNING, conservative commentary (or blasphemy in some circles)

While I don't discount that home equity is of particular importance to many individuals. The reality is that the current value of these homes is greatly inflated. The now non-existent credit value in many homes does not justify some kind of bolstering response from the government (just take a look at how well that worked for Brazil in the past among other currency subsidizing countries) to assuage the masses. Our housing market cannot operate outside of the bounds of the economy. People expect to have losses in the stock market; my question is when did people start expecting the housing market to be any different?

In parting I leave you some commentary from my favorite economist:

JamesBedell said...


Great comment. I absolutely agree with your assessment of a need for market correction in the area of housing values. I suppose my critique of the George Will column was more in his characterization as if people weren't really hurting because of this. He took specific examples to make an argument that we are panicking. Whereas I think middle class Americans are hurting for a number of reasons this being one.

Adam said...

And I agree with you on that point; I think it was something of a soap box for George Will. He is attempting to apply the whole depression-era Social Security "entitlement" debate to the current crisis. An application, which I think fails primarily because this government bail-out is just a drop in the bucket and little more than pandering. I do, however, agree with him on the points of the fallacious idea of retirement at 65or younger, but I digress.

JamesBedell said...

Adam, if you get a chance shoot me an email at, there's something I'd like to discuss with you offline.