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December housing starts were less than expected (657K vs. 680K), and were 70% below their early-2006 peak; a pessimist would say that's pretty grim. But an optimist like me is quick to note that last year housing starts rose by a very impressive 25%. The big housing bust that began in early 2006 likely ended about a year ago—5 long years of terrible destruction for the residential construction industry. But it's over, finally.
For all those who have been saying that we'll never get a decent recovery until the housing market starts improving, your time to turn optimistic about the future has come.
For all those who say that those on the right of the political spectrum are hoping for a lousy economy so that Obama can be forced out, I want to emphasize once again that I think the economy is improving not because of anything Washington is doing but rather in spite of all the things that Washington has been doing to try to help. As I said in my forecast for 2012, "Left to its own devices, and given enough time to adjust to adversity, the U.S. economy is perfectly capable of growing—and that is what is happening now. No reason this can't continue." This is an organic recovery, if you will. The U.S. economy is by nature dynamic; it never pays to underestimate it. The economy will probably be doing a little better come November, but I suspect that Obama will find it difficult to turn that to his advantage. Unemployment is still going to be high, the deficit will still be gigantic, gasoline prices will be high, the dollar will still be relatively weak, and government's presence in our midst will still be oppressive.
6 comments:
I am no fan of Obama--he perpetuates totally outdated encrusted, hoary left-wing shibboleths that somehow "business is bad."
I am pro-business, and I wish the D-Party was too. They are missing a huge opportunity to unite the country again. (Just as Bush jr. missed a great opportunity to restructure and streamline the military to meet the very small modern-day "threats" we face.
That said, I want recovery now, yesterday, tomorrow and always. Give to me boom times and you can put a chimpanzee in the White House for alI I care.
I sense many on the right are howling about inflation and the need for tight money to get Obama out. After a GOP regains the White House they will say it is time to ease up.
But really, I don't know if Romney and the GOP will be any better.
Both parties are not really attractive.
@Benjamin, the Democrates are for "big government" and the Republicans are for "big business" -- both are bad choices for liberty and grassroots economic growth in America -- I would not be surprised to see "big government" and "big business" merge into some obscenity that will force society to its knees, or to arms...
Doctor, we are already there. We have massive government domains overseeing industry cartels such as agriculture, education, energy, health care. We have massive government domains conducting social engineering through businesses.
The hope and change of 2008 was to block attempts to slow down moving to a model of more and more people being dependent on the rich and the government. The majority of people in the U.S. are Greeks. That is the status quo and has been for decades. Economic indicators are exploding upwards. Soon, the negative economic theories of excessive debt and excessive spending will look foolish and the status quo will rule. We needed a real crisis to be able to institute reforms that would take us away from the social benefit savior state central planning model.
Scott,
I hope you're right about Obama. I'm a Romney supporter and will hope he can win, but when a majority of the population doesn't pay any income taxes and receives substantial benefits from the government I'm afraid it's unlikely he'll be voted out of office. I also think that as long as the economic trends are positive it's going to be very difficult to unseat the incumbant. We'll see.
Bill is right.
i wonder if some guy who worked for the federal government for only 20 years, but gets lifetime pension and medical coverage at that point, will ever vote for real change.
I just described the several million people who served as uniformed employees of the federal government---and they vote.
Let's face it, neither the Democrats nor the Republicans are pro small business -- far from it -- I advise investors to remain suspicious of both parties and to build a portfolio that depends on neither party to perform...
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