In this week's column on the Obama foreclosure plan I write:
This is all significant progress over the callous inaction of the Bush administration. But though the Obama foreclosure plan threads the needles of the various interests, there is still a lot of painful stitching left. The main problem at the heart of the real estate and financial crises is that hundreds of billions, perhaps trillions, of dollars that were once part of the economy now aren't.
Dean Baker writes in to gently chastise me for my hedging:
there is no "perhaps trillions" about the money lostin housing. House prices are down around 30percent from where they were two and a half years ago. That translatesinto a loss of more than $6 trillion in housingwealth. There is no "perhaps" in that sentence, it's straight arithmetic.
Good point. My hedging was meant to indicate that we don't know how much or how long it will take for the housing market to rebound. But as a descriptive statement about the present: it's pretty straightforward. At least $6 trillion in housing wealth has vanished.