So Maybe The Housing Slump Is Not Causing A Depression

There are some out there who are hoping for a new depression to come out of the housing slowdown. Well kids, after reading the tea leaves, things are not going to be so bad. When all the experts were stating we were in a recession, the economy grew .6 percent.

So it is a rosy time? No. But with a Republican President leaving office the media always talks down the economy to boost the chances of the Democrats. Not trying to be political but the press corp is about 85 percent Democratic and they do have a dog in the fight so the newsrooms are full of people talking about how bad the economy is and how the only thing that will save us is a Democratic landslide in the next election. Needless to say, the bad mouthing of the economy will end in November with rosy projections coming later.

Gerald Baker captured some of these feelings in a editorial in the London Times today.

I don’t know about you but I feel a bit cheated. There we all were, led to believe by so many commentators that the sub-prime crisis was going to force the United States into a new era of dust bowls and breadlines, a slump that would call into question the very functioning of the capitalist system in the world’s largest economy. Carried away on the surging wave of their own economically dubious verbosity, the pundits even speculated that this unavoidable calamity might presage some 1930s-style global political cataclysm to match.
Well, it’s early days, to be fair, but so far the Great Depression 2008 is shaping up to be a Great Disappointment. Not so much The Grapes of Wrath as Raisins of Mild Inconvenience. Last week the Commerce Department reported that the US economy – battered by the credit crunch, pummelled by a housing market collapse and generally devastated by the wild stampede of animal spirits – actually grew in the first three months of the year.