Our housing boom and bust has created a nasty side effect -- unemployed workers are pinned to their houses and can't follow the jobs. There is an extra reluctance to move now because all their money is tied up in the house and they abhor selling at a loss. Will Wilkinson of The Week makes a claim, which I won't comment on. He thinks the housing boom was in part fueled by federal housing subsidies and they should now be eliminated? To put it another way, what's wrong with renting? The reason why I won't comment is because I own a house with no risk of losing it. Home ownership has been very good to me.
Follow the link to a graph of this economic mess and the ones in 1990 and 2001. The lines show the number of job losses since peak employment and how long it takes until we return to the previous level. In 1990 we leveled off in about a year with 1.5 million jobs lost. We regained that in less than 2 more years. In 2001 the rate slowed after a year and hit over 2.5 million jobs lost after 2 years before taking another 2 years to make up the loss.
And in 2008 we've lost 3.5 million jobs in 14 months and still heading south.
I wish the chart had showed the job losses in percentage of total workforce for a more accurate comparison, but it probably wouldn't look so dramatic. And the way things are going in the Senate right now, dramatic is good.
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