Actually, the trouble in the U.S. economy is that we have, for the last 20 years, subsidized the most unproductive form of capital accommodation. This housing capital gives you some, you know, utility services, but it's not productive in terms of increasing the productivity. We've not invested enough in machinery and other stuff and more in housing stock.

And I think to try artificially to prop up the housing market doesn't make sense. There's still a huge excess inventory of homes.

And I think we at some point realize that probably continuing subsidizing of property is not going to be the right solution. There has to be a price adjustment. The inventory has to be worked out. This housing recession is going to continue for a while. Home prices have fallen from the peak already 25 percent. My own work suggests they're going to fall another 15 percent, 14 percent, just to bring it back to what the real home prices were before this bubble started.

So we have a huge bubble, and we should not do things essentially artificially to try to prevent that market process from occurring. And I think that, over time, actually, if we have less homes and less investment in housing and more investment in productive capital, that's going to be good for the U.S. economy.

Recently:

Chop, baby, chop, and chop now.

And before:

"Soy! Soy! Soy! Soy! Soy!"

Where Do We Go from Here?

Alex Blumberg and NPR's Adam Davidson—the two guys who reported our Giant Pool of Money episode—are back, in collaboration with the Planet Money podcast. They'll explain what happened this week, including what regulators could've done to prevent this financial crisis from happening in the first place.

And if you call now, you'll receive a lovely, cuddly, NPR horse blanket.

Another Frightening Show About the Economy | This American Life

Laurence J. Kotlikoff:

Recapitalizing the banks and working out mortgages will take time, but the financial system will not collapse -- the government won't let it.

The markets, of course, seem to be factoring in some probability of collapse. Why is this wrong?

In short, Uncle Sam is becoming our new bank. He has also become our new insurance company.

This may sound like socialism or state capitalism, but it's simply rearranging the financial furniture.

So after scaring us half to death, this would be a good time for our other uncles -- Hank and Ben -- to make clear that we're heading for a safe landing and that there is no way in hell they will let this economy go down the tubes.

If you shout it from the rooftops it becomes true.

No Depression: Uncle Sam Has Got Our Back

There is a fashion these days for apologies: not apologies for the things that one has actually done oneself (that kind of apology is as difficult to make and as unfashionable as ever), but for public apologies by politicians for the crimes and misdemeanours of their ancestors, or at least of their predecessors. I think it is reasonable to call this pattern of political breast-beating the False Apology Syndrome.

What is this all about, and what does it signify? Does it mean that at long last the powerful are making a genuine effort to see things from the point of view of the weak, or is it, on the contrary, a form of moral exhibitionism that subverts genuine moral thought and conduct?

From the archive:

Lisa: "Can't you see the difference between earning something honestly and getting it by fraud?"

Bart: Hmm, I suppose, maybe, if, uh ... no. No, sorry, I thought I had it there for a second."

"Society just can't accept the idea that 50 percent of the population could die ... I'm sorry if I'm making people a little frightened, but I feel it's my role."

False Apology Syndrome

Chuck Klosterman issues his predictions for the coming century. Featuring robot wars, near annihilation, and President Tom Brady.

A Brief History of the Twenty-first Century

An eemadge is a beautiful description.

This whole website is an eemadge collection that anyone can edit.

eemadges: Beautiful Descriptions

Steven Pinker:

Voters judging Ms. Palin’s performance should focus on the facile governing philosophy that is symbolized by her speech style, not the red herrings of accent or dialect.

Everything You Heard Is Wrong

How does it feel to be a negative externality?

Francis Fukuyama explains.

The choice we face now goes well beyond the bailout, or the presidential campaign.

It will be an uphill, years-long struggle. And we cannot even begin until we clearly understand what went wrong—which aspects of the American model are sound, which were poorly implemented, and which need to be discarded altogether.

Like all transformative movements, the Reagan revolution lost its way because for many followers it became an unimpeachable ideology.

The unedifying response to the Wall Street crisis shows that the biggest change we need to make is in our politics.

Consider:

The path of the righteous man is beset on all sides by the iniquities of the selfish and the tyranny of evil men. Blessed is he, who in the name of charity and good will, shepherds the weak through the valley of darkness, for he is truly his brother's keeper and the finder of lost children. And I will strike down upon thee with great vengeance and furious anger those who would attempt to poison and destroy my brothers. And you will know my name is the Lord when I lay my vengeance upon thee.

...

I been sayin' that shit for years. And if you ever heard it, it meant your ass. I never really questioned what it meant. I thought it was just a cold-blooded thing to say to a motherfucker before you popped a cap in his ass. But I saw some shit this mornin' made me think twice. Now I'm thinkin': it could mean you're the evil man. And I'm the righteous man. And Mr. 9mm here, he's the shepherd protecting my righteous ass in the valley of darkness. Or it could be you're the righteous man and I'm the shepherd and it's the world that's evil and selfish. I'd like that. But that shit ain't the truth. The truth is you're the weak. And I'm the tyranny of evil men. But I'm tryin', Ringo. I'm tryin' real hard to be a shepherd.

The Fall of America, Inc.

Lawrence Lessig's new book goes on sale October 16. Pre-order today.

Lawrence Lessig, the reigning authority on intellectual property in the Internet age, spotlights the newest and possibly the most harmful culture war—a war waged against our kids and others who create and consume art. America’s copyright laws have ceased to perform their original, beneficial role: protecting artists’ creations while allowing them to build on previous creative works. In fact, our system now criminalizes those very actions.

For many, new technologies have made it irresistible to flout these unreasonable and ultimately untenable laws. Some of today’s most talented artists are felons, and so are our kids, who see no reason why they shouldn’t do what their computers and the Web let them do, from burning a copyrighted CD for a friend to “biting” riffs from films, videos, songs, etc and making new art from them.

Criminalizing our children and others is exactly what our society should not do, and Lessig shows how we can and must end this conflict—a war as ill conceived and unwinnable as the war on drugs. By embracing “read-write culture,” which allows its users to create art as readily as they consume it, we can ensure that creators get the support—artistic, commercial, and ethical—that they deserve and need. Indeed, we can already see glimmers of a new hybrid economy that combines the profit motives of traditional business with the “sharing economy” evident in such Web sites as Wikipedia and YouTube. The hybrid economy will become ever more prominent in every creative realm—from news to music—and Lessig shows how we can and should use it to benefit those who make and consume culture.

Remix is an urgent, eloquent plea to end a war that harms our children and other intrepid creative users of new technologies. It also offers an inspiring vision of the post-war world where enormous opportunities await those who view art as a resource to be shared openly rather than a commodity to be hoarded.

From the archive:

All mankind is of one author, and is one volume; when one man dies, one chapter is not torn out of the book, but translated into a better language; and every chapter must be so translated. ...

-- John Donne

Jonathan Lethem wrote this 'remix' in the February 2007 issue of Harper's Magazine.

He elicited a response from Larry Lessig in the April 2007 issue:

In his beautifully crafted February criticism, "The Ecstasy of Influence", Jonathan Lethem teaches more about the importance of what I call "remix" than any other work I have read. Certainly more than my own work.

Remix: Making Art and Commerce Thrive in the Hybrid Economy

Art by R. Luke DuBois:

Hindsight is Always 20/20 examines the history of American political discourse through the metaphor of vision. Drawing from the annual State of the Union (SOTU) addresses given by Presidents to Congress, ‘Hindsight’ consists of a single Snellen-style eye chart for each president who gave SOTU addresses. Instead of the typical characters present in an eye chart, the piece employs words drawn from their speeches, presented in order of most frequent (top line) to least frequent (bottom line) word. The result is a startlingly clear snapshot of the lexicon of each presidency, containing a mix of historically topical keywords and rhetoric unique to each president and the time period in which they served in office.

Hindsight is Always 20/20