As the housing bubble expanded in 2004, 2005, and 2006, NPR almost never could find any economists who thought an unprecedented and unexplained $8 trillion run-up in house prices was a problem. This morning, NPR again was unable to find any economists who thought that the bursting of this bubble would continue to be a serious problem, even after the federal takeover of Fannie and Freddie. All the economists who discussed the impact on the housing market and the economy thought that this marked a major turnaround for the housing market. While the takeover did eliminate a major source of uncertainty, there is still a massive oversupply of housing by every measure and house prices are still far above trend levels in many parts of the country. Furthermore, the economy is continuing to shed jobs, which will put more downward pressure on the housing market in the months ahead. After having largely excluded those warning of the housing bubble from its airwaves when the bubble was expanding, NPR is again presenting the same chorus of wrong economists.
--Dean Baker
