NPR Still Hasn't Heard About the Housing Bubble

Morning Edition introduced an interview with George Soros by saying that the United States is still recovering from a financial meltdown. This is wrong. The reason that we have near double-digit unemployment is that we had an $8 trillion housing bubble that collapsed. The financial crisis was secondary.

This is best demonstrated by countries like Spain. Even though it has a relatively well-regulated financial system, and therefore did not have a financial crisis, its unemployment rate is 19 percent. Spain's problem was that it had a horrific housing bubble. It is not easy for an economy to recover from the distortions created by such asset bubbles.

NPR missed the bubble as it grew. It apparently still does not recognize what has happened to the economy.

--Dean Baker

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