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If you subtract government employment from the July jobs numbers (to correct for the distortion of census hiring and firing), then you find that the private sector of the U.S. economy has created jobs at about a 1% annual rate in the past six months. This is the same answer you get regardless of whether you look at the household survey or the establishment survey of jobs, so I think this is a number you can have confidence in. With average hourly earnings and weekly hours coming in somewhat above expectations, I think the jobs news was somewhat positive on balance, but it did fall short of anything impressive.
This rate of growth is unlikely to bring down the unemployment rate from its current 9.5%, because the U.S. labor force tends to grow about 1% per year just due to population growth. So unemployment is almost guaranteed to be quite high come November, and this is going to be bad news for the Democrats.
But if jobs continue to grow at 1% and productivity going forward equals its long-term historic average of about 2%, then these numbers added together give you real economic growth of 3%. I think we can do a bit better than that, so I'm sticking with my expectation that growth will be 3-4%. This is not much to cheer about, but it's better than the 2% or so that the "new-normal" crowd is expecting.
Still, numbers like these mean that politicians are going to be desperate to "do something" to make things better. Unfortunately for the party in power, it's very late in the game to make changes that will show up convincingly in the next three months. A modestly growing economy and high unemployment are essentially baked in the cake for the rest of the year no matter what kind of legislation gets passed between now and the elections.
So the important changes on the margin to look for are in the policy area. If Congress decides to only do more of the same (e.g., more transfer payments, more handouts for special interests), then the market is going to be disappointed because the economic fundamentals are unlikely to improve. The $1 trillion that was spent last year on "stimulus" was never likely to help the economy, and I actually think it has been a major factor in retarding growth. Taking money from those that are working and giving it to those that aren't working simply can't make the economy bigger. You have to do things that encourage people to work and invest more.
If policy discussions instead turn (as they appear to be doing) to things that can positively impact incentives (e.g., extending the Bush tax cuts, cutting spending programs, cutting corporate taxes, and not raising tax rates on capital significantly), then there is reason to be optimistic. I still hold out hope for the latter, and in the meantime I think the economy is doing somewhat better than most observers give it credit for, so I remain optimistic.
41 comments:
Aggregate hours worked and aggregate weekly payrolls were
decent numbers....
I agree the cake is now cooked for November. I find your productivity number interesting, not fundamentally against it, but we are seeing earnings doing well, but top line growth is really not that spectacular. With some job creation, little real rise in final demand, there seems to be very limited room for productivity growth, since the only real source of growth has been wage and job compression.
Like you I don't believe in a double dip, yes housing is horrible, but it is now such a small percentage of the economy anyway, that it has no rel impact on the numbers.
My gut feeling is that the numbers that count will be credit creation (or destruction). As for November, the Democrats have not delivered in the past 18 months (not sure they could but that is moot). It is for the Republicans to win this one, although they do seem to have a rather spectacular ability to misjudge the electorate over the past decade
You fail to notice, or chose to ignore, yesterday's jobless claims which is ticking up again, or Tuesday's personal income which didn't grow at all, or the pending home sales which continues to make new lows. I seriously suggest you read John Hussman's weekly comment to learn how to understand economy beneath the headline numbers on the surface, and how to properly value equities. Unlike some economists who talk without responsibility, John Hussman manages money and has the track record to back up his statements. It's time for some education.
Unlike what is believed by some people, housing matters a lot. Big banks still have billions of mortgage loans on their books and they are releasing reserves in their earnings hoping the housing market has bottomed. If they are proven wrong and the housing market turns down again, the banks will have to reverse course and start writing down assets again. Does that have no impact on the economy? Think again.
Some one explain this one to me....
Nonseasonally adjusted July Nonfarms is virtually the same as
July 2009 nonseasonally adjusted nonfarms and yet tax withholdings
and employment taxes are 10 billion greater in 2010 than in 2009....
Eggo,
You make some valid points, particularly about paying attention to the opinions of those who manage money and report their performance. Mr. Hussman is a very bright man and has done well with his business. Keep in mind that money managers target their services to specific market segments. Mr. Hussman is somewhat risk averse and his results reflect that. He tends to underperform in up markets and outperform in down ones...nothing wrong with that. It fits the investment temperment of a lot of people these days.
What you suggest about banks releasing reserves is correct. It is also correct about what would be required if there is meaningful deterioration in housing prices in the future. I would point out however that there has been and continues to be marked improvement in those areas. The data is clear and it is showing up industrywide.
There is no shortage of doubters these days. Pessimists are in the majority which makes me more comfortable. When the optimists rule and start telling the pessimists to 'get some education' it will be time to worry.
Weak is the new norm, I guess.
I can remember when we added 200,000+ in real private sector payroll jobs every month, and ran a federal surplus. It was those long-ago 1990s, when Clinton was president.
Now, we are told some crappy little employment growth is okay, and a Dow below where it was in 1999. Your house,, factory or storefront might be worth less every day, but hey, it's okay.
Unfortunately, the federal deficit spending bullet has been overused. Bush jr. ran deficits even when the economy was growing, sucking money out of job-creating private sector development that would have made us a stronger nation. We are over-indebted now, and so that option is not usable.
That leaves us The Fed.
I see a long deflation stag-recession, unless the Fed get creative and active. They are talking about it, and some Fed regional presidents, such as Bullard, are advocating it. You have the AEI Mankin guy talking about it, and some Cato people too.
Things have become so politicized in America, that if an active Fed is seen as a Democratic idea, then some people do not like it--whether or not it works.
More QE by the Fed is actually an a-political idea. I am glad to see some real conservatives embracing greater Quantitative Easing and other actions. I hope being a conservative does not presently mean we must be nihilists.
I sense some people actually want the American economy to tank, due to far left-wing and right-wing agendas.
P.U. to them is what I say.
Benj,
P.U. to them indeed, sir.
I agree the Fed will embark on a QE2 of some form, but I differ in the belief it will provide long-term benefits.
In fact, I think their tinkering along with Congress is exactly as Grannis describes it, sucking good money out of the productive hands, and placing it in the hands of the weak and beleaguered.
I harped on this well over a year ago, but bailing out the banks et al to the degree we did will end up disastrous for our future economy.
The Government + Fed monster consumes more and more of our money, energy, and time. The answer is to let the market weed out the weak and embolden the strong. Interventions do the complete opposite.
I maintain that a Main Street Depression is imploding America...
Benj,
You are apparantly in Goldman Sach's camp (or they in yours?!). I am reading where they have (again) downgraded their estimate of GDP growth to 1.9% for 2011 and expect the Fed to embark on another round of QE. The expected action is Treasury bond purchases and the amount mentioned was $1 Trillion! The timing of the actions was not mentioned. The person at GS named as the author is Jan Hatzius - I do not know his/her position with them.
Increasing the money supply still does not provide incentives to business to invest and hire. Adding yet more cash reserves to banks' balance sheets seemingly does little to stimulate borrowing and spending/investing. I do, however think the equity market would like it.
This obviously is someone's opinion and is most assuredly not a done deal. But it is looking increasingly possible to me the Fed will do SOMETHING.
Scott is still on vacation and may not be in a convenient position to comment but his take would be most interesting.
I thought you might find it of interest since you have recently posted of the need for this type of action.
One other thought on the above issue. It seems to me that pessimism and fear of deflation, our economy becoming 'japanized' (locked into a purgatory of low/no growth for long, indeterminant periods of time) is a large part of the problem. Should the Fed clearly signal that they are willing to allow some inflation and are prepared to relentlessly increase the money supply (by QE measures, not lowering interest rates) until the desired results are attained it might go a long way toward changing expectations and relieve some of the pessimism gripping many businesses and consumers.
Just a thought. I'm still not convinced it is likely or necessary but it clearly (to me anyway) it is another 'bullet' the fed has to shoot should it become necessary.
John,
You are exactly right. Short term pop, long term problems unresolved. We continue to pay banks $3B per annum to sit on our money.
Where are the market incentives in this country? Straight transfers of wealth to the really rich and the really poor. Horrible.
Public,
The banks' balance sheets were decimated during the recession. The Fed is allowing the banks to re-liquify by holding rates down while the banks earn a spread on their reserves. Inflation is very low so the burden (and I concur, it IS a burden) on consumer savings is lessened. Something very similar occured in the early-mid 1990s after the S&L crash.
I am in agreement with you that we have significant unresolved problems and there will be consequences to all the interventions. I, too would prefer to allow the market to reward the efficient and punish the slovenly. However we live in a democracy and the political powers-that-be are determined to meddle. We have to evaluate the consequences and position ourselves accordingly.
To use Alan Greenspan's words, the Fed is a 'creature of Congress'. The political powers are demanding that the problem of weak economic growth and high unemployment be addressed and solved. As Benj has said, the fiscal bullets have been fired and what is left is monetary stimulus.
I always appreciate your posts.
Brodero,
I would like to see an explanation of that myself.
Re aggregate weekly payrolls: I have read that it is a leading economic indicator...the only one in the jobs release. In your experience is that accurate?
The Fed is allowing zombies to walk the land of the setting sun. Japan II here we come.
Gross out today with Fed on hold for 2-3 years. This is implied by the 2YR rate sub 50bp.
We need to pull the plug asap or this is going to end with 2 decades of Japanese malaise.
As you noted, there are no small business incentives to speak of. We will continue paying the banks until we finally realize in a decades time they need to write off the bad debt.
Printing money does nothing to solve a credit problem and allowing banks to muddle along will take a decade to unravel.
The best way to understand a man is to understand his incentives...
Public,
In the early 1980s we were locked in a highly inflationary environment. The 'psychology' was that inflation was intractable and expectations were for prices to rise persistently. The Fed chairman in those days was Paul Volker (today one of the administrations advisors and now in his eighties). The problem was how to break the 'psychology' of inflation. The way the Fed engineered it was to raise interest rates and to signal the market that inflation was not tolerable and rates would rise relentlessly until inflation abated. It worked. Not immediately but the market finally got the message Interest rates crashed lower and equities began a multi year bull market.
We have the same problem today, only from the other side. The market fears DEFLATION or stagnation. If the Fed so chose, they could take a page out of the 1980s beige book and announce that they desired INFLATION and would not tolerate deflation. To accomplish this they would purchase treasury bills and/or bonds UNTIL THAT RESULT IS ACHIEVED. No mention of unwinding, no mention of how much, when, what maturities, nothing. Give the market NO KNOWLEDGE of their specific intentions. Anybody willing to bet against us, have at it. If I had a huge portfolio of deflationary positioned securities a statement like that would scare the bejusus out of me. Mindset change? For me, in a heartbeat.
There would be many who would say (with justification) that there would be vast negative consequences down the road (you undoubtedly among them). However, the choice is between deflation/stagnation and inflationary growth. The political reality demands the latter. There are too many people out of work, and THAT is the mandate.
I am not predicting this is how the Fed will act...in fact it likely will not be. But if they did, they really may not need to actually buy many treasuries. The THREAT may be enough to change the minds of enough market people to accomplish the job.
John-
I think you hit the nail right on the head--a big QE move, and also other actions targeting nominal GDP in the 5 to 6 percent range, or, if you prefer, signaling inflation of 3 percent. That, and hope for recovery.
Yes, of course, the Obama health plan is poorly timed, and did not address costs. It was and is a bad idea. So is the continuing involvement in Afghanistan--the CBO says those two wars will cost $3 trillion--that was $3 trillion sucked out of private investment in the USA. That never gets mentioned.
And Obama's populist rhetoric, while hardly flamethrowing, is noisome, and outdated. The enemy is never someone who invests or works. Period. All workers and investors are good guys, by definition. I hate when either side starts bashing all unions or oil companies, etc etc etc. What a waste of time.
But now we need growth.
Public Library-In a perfect world, I agree with much of what you say. In a perfect world, we would have no military at all. But it ain't a perfect world.
Right now, we need an aggressive Fed. People do not live forever. Our lives are short. If we enter a long recessionary-deflation, the voters may lose faith in capitalism. They will need and want safety nets. If you don't have a job, but your child is ill, suddenly national health insurance seems like a great idea. All the preaching in the world ain't going to change your mind on that one.
We simply have to get this economy kick-started pronto. People think the Republicans will benefit from a recession, and that's good. Jeez.
It could completely go the other way (not that the R-Party has really stood for free enterprise in a while, but perhaps better than the Dems).
All you need to do is peer across the seas to Japan to figure out ZIRP and QE doesn't work.
We are supporting failed institutions everywhere and hoping somehow by giving these failures more money they will magically right their ship.
All you get from this is subpar growth from mismanaged companies subsidized with low rates and a willing Fed. Giving them more actually gives us less.
Assuming you can employ the reverse of Volcker is merely a shot in the dark.
Less is more. The market needs to a chance to work its magic in its entirety, not partially subsidized in major sectors of the economy.
If the Fed and Gov continue meddling in the economy, we will have a decade to argue about the ills of subpar growth and high unemployment.
Your cries for more government are no different than GM and AIG asking for saviour. It does not strengthen America.
Public Library-
The Japanese did try some QE, but their central bankers could not get rid of the idea that no inflation was desired, or even deflation was okay. Central bankers think about deflation the way I think about spending the night with Jennifer Lopez--oh, could it really happen? Really? It would be so exciting.
It takes both QE, and a flat statement from the Fed they are seeking inflation and growth.
Japan has a lot of problems also, declining workforce, no immigration, very high savings rate etc.
Benj,
You're a smart guy. I just can't agree to more technocratic mismanagement of the American economy.
Japan is leading the way by providing horrible incentives for the market to build a strong foundation. It is all about subsidization to the bottom.
Heck, they've been bilking the locals to buy JGB's to keep their financing cheap whilst they send the country down the crapper.
The same nonsense trust in bankers over markets is occurring here. The government is the problem, not the solution.
Give us incentives to save and invest without the government distorting the universe and you will see a solid foundation for growth.
Otherwise it's chase the federal reserve hot potato straight to the bottom of the sea...
Public Library-
No smarter than you.
Well, believe it or not, the Fed is not taking its cues from me, so it doesn't matter what I pen here.
Thanks for listening to my bee-in-my-bonnet ideas.
I hope for the best.
Egg, John Hussman has a track record of being permanently bearish and never making any money for his (extremely) small group of clients. If you want to believe the worst case
outcome all the time you will miss most opportunities to profit in life. While it may be intellectually satisfying to constantly be on the side of the pessimist of critic it is seldom profitable. BTW I ran a hedge fund hundreds of time larger than Hussman's firm for 17 years. Now I am enjoying a brief respite while looking at the best environment of my life to start businesses. If you have faith in the future. Also, housing should be a small percentage of economic output. The root cause of the recent financial crisis was the miss allocation of capital to very low return assets i.e. houses that produce little if any multiplier in the real economy. Thank you government for that distortion.
Don-
Does the home mortgage interest tax deduction play a role in the over-allocation of capital to housing? Especially in the upper-end?
Re Fed on hold for 2-3 years.
Generic Fed Funds Futures are higher than in last crisis, so mkt really expects that rates will be even longer on hold as when S&P was 700.
But even in Japan were good rallies.
When DY > BY equities tend to go well.
That happened in 1998-2000 and 2003-2006, return was ca 75%+.
"Non-farm payrolls fell by 131,000 which to those unfamiliar with the US system means that this is the number of jobs lost by the US economy in July. To add to the gloom the fall in employment for June was revised up to 221,000 from the previously reported 125,000".
The percentage of US adults employed continues it's downward trend. The BLS estimate of those not in the labour force has risen from 79.61 million in July 2009 to 82.62 million now. The official unemployment rate would be much higher if these were included. These figures also don't count the under-employed.
Though there were private sector job gains, the US economy overall has lost 352,000 jobs in the last two months.. and if previous reports hold true, next month will bring a downward revision in this month's numbers.
It was a horrible report. I'm expecting Bernanke to do something at the Aug 10th FOMC meeting.
My take: In short, banks are not loaning to either consumers or businesses, and slowly but surely the economy is constricting. Higher prices for basic goods such as gas and grains will add to the problems at the retail level. Housing prices will be coming down, and if this constriction continues and unemployment continues to constrict, they'll fall pretty hard.
So long as debt levels remain very elevated as compared to historic norms, there will be only further constriction. If the November elections bring us divided government (and I expect they will) then gridlock will ensue in DC and all talk of further stimulus will be shelved.
Don,
John Hussman's funds have excellent records. His growth fund returned almost 8% annually for the last 10 years. His total return fund also return over 7% annually. What is your track record for the last 10 years? According to his valuation models, he did turn bullish in early 2009. Clearly you don't know much about him.
The total asset of his funds is over 8 billion. If your hedge fund was hundreds of times bigger, the total assets must have been at least around 1 trillion. Even if your fund was 10 times bigger, it would need to have 80 billion assets. The last time I checked the largest hedge fund in the world only has assets around 50 billion.
If you want to lie or boast, at least make it sound reasonable.
Inventory rebuilding contributed more than half of the GDP growth of the last 2 quarters, which grew only 3.7% and 2.4%. Now the inventory rebuilding phase is almost done and the stimulus effect is about gone, I don't see why people still believe the GDP can growth 3%-4% in the next few quarters. It's beyond my imagination.
I'm done commenting here. Good luck to the bulls and wishful thinkers.
Don, You wrote: "Also, housing should be a small percentage of economic output." While I agree that housing *consstruction* is a small percentage of economic output, isn't new housing generally a very signficant factor behind economic activity driving the demand side? Monetary velocity? Therefore, isn't a stagnant housing stock a relative drag on economic activity/GDP growth compared to a growing stock beyond the difference in construction activity? Isn't that a major factor in the malaise we're experiencing in addition to the past misallocation of capital?
Mark
Eggo,
Speaking only for myself, please reconsider your wish to stop commenting. There are many of us on this fine site that disagree and maintain cordial, even friendly relations. Mark Gerber, Public Library and I differ significantly in our outlooks and opinions yet we respect each other and get to see and try to understand those outlooks. I frequently disagree with Benjamin but we have good, lively, friendly discussions with each other. PLEASE go back and read our conversations if you doubt this. We all post here with the good graces of our blog host, and he is VERY tolerant of differing opinions.
I have much respect for Mr. Hussman. I frequently read his commentary. In my opinion there are MANY investors who could do MUCH WORSE than allow him to manage their money.
I respectfully ask you to please reconsider.
Don,
Thank you for taking time to post. As I indicated above, we respect others opinions here and value thoughtful contributions. Yours, in my opinion, certainly qualifies. Please join us in conversation whenever the mood strikes.
Egg,
Perhaps I miss spoke regarding the assets Dr. Hussman manages. Obviously the financial crisis has helped his firm to attract substantial assets. You are also correct that his flagship fund has compounded at just less that 8% for the past 10 years. However, the psst 1,3,5 years are as follows -.70% -.70% 1.38% respectively. While that may compare favorably to the long only world of mutual funds and other forms of benchmark management, I would argue that protecting capital in adverse markets is only half the game. The point of investing is to make money . To your question of track records I would simply say that ours is higher for all periods.
I do not believe that GDP will grow at 3.5% to 4% for the current quarter or the Q4 but I am confident that we will have a resurgence in confidence among business and consumers as the year ends. This I believe will be a result of regime change in congress, a truce in the war on capitalism and the resilience of the american economic system. If this comes to pass the earnings leverage that American companies have will prove to be substantial. I have been in the money management business for 28 years and I have lived through the demise of the American economy and the end of opportunity four or five times. It just doesn't pay to be long term bearish of capitalism. Also, stick around we can all learn from each other.
Brodero: how can the same number of people pay higher taxes? Easy: productivity is up, and real incomes are up. Unproductive jobs have been replaced by more productive jobs. That's all part of the economy's adjustment process. This is a very healthy sign.
All: I want to thank the majority of commenters here for the generally high level of discourse on this blog. Many good points are raised and discussed. We can all learn from reasoned discourse like this.
Benjamin, Mark
Tax policy distortions certainly do play a roll in the constant over allocation of capital to the housing market but there are many other factors as well. I would like to start this discussion with the premise that the housing stock of a country adds no value to it's overall stock or more simply stated it's overall wealth. Adam Smith wrote in The Wealth of Nations "The stock that is laid out in a house, if it is to be a dwelling house of the owner, ceases at that moment to serve in the function of a capital, of to afford any revenue to it's owner. But it gets worse. Smith continues with "If it is to be let for rent to a tenant, as the house itself can produce nothing, the tenant must always pay the rent out of some other revenue which he receives from either from labor, stock or land. A house therefore cannot yield any income to the public, nor serve as a capital to it, and the revenue of the whole body of people can never be in the smallest degree increased by it.
It is therefore not the construction of new homes alone that is a mis allocation of capital. Homes are after all very useful and necessary as are food and clothing. It is the whole premise of home ownership in general. The American people have been deceived for decades that investing the largest portion of their wealth into assets that cannot produce anything that will add to their wealth or to the overall wealth of the country is not overstating the problem. Add to this the innumerable Government intrusions that distort the market for homes and we find ourselves in the unfortunate position of havening our economy overly dependent on the continued miss allocation of capital to the housing market.
Housing is in effect a form of consumption not a form of saving or investing. Looking at it that way and the government intrusions into the housing markets all the more problematic. Think smart growth land use restrictions, building restrictions, prohibitive taxation ect. All of which do nothing but increase the cost of this consumption and reduce the total wealth. I welcome comments.
Don,
What you are saying here is that in the end a home is an item of consumption, not production.
I seem to agree that consumption is the end result but a home can be lived in for a lifetime. Also, is it not true that the ultimate end of all production is consumption and a higher standard of living? A desireable place to live can, through changing circumstances become more or less so and thus change in value.
I would argue that a family's dream of owning a beautiful home would most assuredly increase their 'wealth' should it become a reality, if one defines it as an increase in the standard of living.
If your point is that housing became a game of speculation rather than consumption (by living in it and enjoying it) you will likely find several here that would agree. We need to get back to that and free our capital for more productive uses.
That would argue for the elimination of the mortgage interest deduction. I seem to remember Scott saying he favored this...I am still on the fence. But I like to think my mind is open.
Don,
Thanks for your thoughtful response and supporting references. I agree with everything you wrote.
But won't the end of the myth of homes as an investment weigh heavily on the economy in a manner similar to the Paradox of Thrift? Isn't the negative wealth effect of the erosion of this myth magnified by the mortgage leverage through which most homes are owned? Thus, aren't we in for a prolonged (decade or more) period of economic adjustment, or a continuation of the 2008 shock if Federal Reserve and Government policies to mitigate (counter balance) the paradox of home ownership reality?
Mark
Don-
I am agreement with your sentiments towards tax distortions, primarily the home mortgage interest tax deduction.
Are we overhoused? Well, let's see.
You can "invest" in a house for 10 percent down (or less), and the government will pick part of the mortgage payments. If the house rises in value, you are leveraged and make a killing. If the house plummets in value, you never face a margin call, and it is a nonrecourse loan.
No matter how large or expensive the house, or how many houses you own, the government will continue to underwrite your mortgage payments (through tax deductions).
Yes, I would say we are overhoused. Instead of starting up a side business, why not buy a second vacation home? Or a third?
BTW, I think Fannie and Freddie should be eliminated. But, in this matter, the No. 1 villain is the home mortgage interest tax deduction. Good luck getting rid of that.
John,
I agree that the desire and ability realized to own a beautiful home certainly will increase ones standard of living. My point is more to the idea that investing in an asset that one is actually consuming (albeit rather slowly) and thinking you are investing in an asset that is capable of producing a real return for the owner and for the whole of the nation, if practiced on the scale it has been in America, leads to a wholesale miss-allocation of capital which in turn reduces total standard of living. Much of my thesis depends on this misuse of houses as investments or recently as trading vehicles drives pricing up which then invites Government intervention which in turn drives prices higher yet. The net result is that we as a nation consume significantly more of our investable capital than we should.
I would think the mortgage deduction should be fazed out over time. I'm not at all sure what the effect would be as my friends in Canada don't have such an incentive and their housing market shows signs of the same problems. I am not saying people should not own homes. I am saying that if we as a people invested the larger portion of our capital in more productive assets we would be more productive and housing cost would be reduced overall. I used to tell friends in the early 00's that rising house prices is a net negative to the overall economy and really not beneficial to anyone..lots of people thought I was out of my mind however I think that has been proven true.
Great post Don. I am 100% in agreement. There has been an egregious over allocation to housing and a blatant abuse of the asset class by owners, governments, and financiers.
Sadly, we are till throwing good money after bad by trying to keep the industry afloat with morally corrupt programs such as the tax credit.
We need to provide businesses with incentives to invest and expand. We do not need to give consumers more ability to purchase housing, automobiles, and pad banks pockets with high interest fees. It is seriously ridiculous and the longer it goes on, the more we will look like Japan everyday.
Don and Public,
I agree with your points in principle. And I agree that the mortgage bamking indusry got far too greedy. However the concept of a home ownership culture, done correctly, is an honorable and desirable one. Given a choice between most Americans being owners or renters I still think it is more desirable to have owners. Sadly, the pendulum is swinging back toward renters.
The problem is not with the issue of home ownership, but with too much government meddling in the markets and distorting them with subsidies and tax breaks. The good news (at least to me) is that this is being recognized by more people and perhaps some good will come from it.
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