Tuesday, August 03, 2010


The failure of Geithner to mention housing and foreclosures isn't simply about failing to acknowledge a peculiar form of economic suffering people are facing. The messed up housing market is a giant drag on the economy in a variety of ways. First, people who are locked in can't move. People who are locked in and are living in high unemployment areas both can't move and can't get jobs, of course leading to more foreclosures. All of this also destroys the residential construction industry, usually one of the drivers of recovery. As I've long been saying, failure to appropriately deal with the foreclosure crisis will be the reason recovery fails, if it does.