The Washington Post tells us that new measures to counteract the recession have become necessary "as the scale of the crisis has become more apparent." Actually, the scale of the crisis was apparent long ago to any competent economist. The collapse of an $8 trillion housing bubble has an enormous impact on the economy. The potential lost wealth comes to $110,000 for every homeowner. It is equal to almost 60 percent of GDP. The real news is that so many people involved in designing economic policy apparently didn't notice this bubble. The Post's reporting on the economy would be improved if it did not rely exclusively on economists who somehow managed not to see this enormous bubble.
--Dean Baker
