Last night, we came back from my Palm Sunday dinner at my mom’s and I quickly popped in front of the computer to check the blog and e-mails. I yelled to Steve who was getting Jonah to brush his teeth, "JP Morgan just bought Bear Sterns for $2 a share." He dropped what he was doing and started scrolling through messages on his Blackberry.
I don’t usually post about big economic events on this blog, because so many people out there do it better than I can. I can blog about the bread-and-butter issues – the impact of economy on the middle class and their families — but the details of the sub-prime mortgage meltdown isn’t my bag.
I can also share some anecdotal stories.
My husband who works on Wall Street says that the investment houses are in risk management mode. He worries about another house going down soon. He’s started making references to the Great Depression.
Regular people are terrified, too. When our electricians came in, they gossiped with the plumbers about the slow business. Our contractor is worried that he won’t be able to sell a McMansion that he just built. One contractor down the block hasn’t worked in so long that he has had to barter for services, like getting their family car fixed.
Krugman says that we need a major bailout. "And we need it quickly: things are falling apart as you read this."
Apt. 11d 
Anecdata! you want it? The McMansion a block from me has not sold for five months (for $1.45 million) and my contractor, who usually has eight months work backed up, is down to a month. The Latin market ten blocks from me used to be out of day laborers waiting for jobs by mid-morning on a decent day, now there are still 30 guys waiting.
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My husband was laid off last July. Still no full-time job. He has recently taken some consulting work. The severance package, unemployment and our savings are the only thing keeping our heads above water. We can last until October. If he doesn’t have a job by then, we are in serious trouble. My husband has a degree, plus 20 years experience. Ageism is a factor, but so is the economy.
Looking through the jobs in a variety of places (internet, paper, job service) is bleak not just for jobs for him, but for others. They aren’t pages long anymore. And the jobs that are there are mostly low paying service industry.
Yeah, I take Tylenol PM to sleep some nights.
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Krugman wants a bailout? Ugh.
These high-level economic issues are really way beyond me, but I’m convinced of the following things:
1. Institutions that made bad loans and now are coming begging should be laughed at and sent away empty-handed.
2. The government shouldn’t be picking winners and losers, but should be as far as possible acting as an impartial referee to make sure rules are being followed.
3. The government should provide a predictable legal environment.
4. Recession is inevitable. The only question is how long and how severe it will be. A lot of people make the argument that our current credit crisis was caused by making money cheap in an effort to encourage consumer spending and avoid recession after 9/11. Credit was easy and loose and a lot of people went up to their eyeballs in debt, often via HELOCs. In hindsight, those efforts to hold off recession were not a good idea. Let’s not do that again–let’s just get the inevitable recession over with and move on.
5. Affordable housing would be really swell, especially for young families. There’s going to be a lot of affordable housing available in the next few years. (Jobs are another story, unfortunately.)
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big hugs for Lisa V.
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