A Million Jobs Lost And A Severe Recession Likely Over Housing Crash?

http://www.laborradio.org/node/6847

By Doug Cunningham

We’ve only seen the beginning of the collapse of house prices and the impact will be severe and far-reaching – costing roughly a million jobs and seriously impacting consumption – the driving force of the U.S. economy. That’s according to the Center For Economic Policy and Research economist Dean Baker. Baker says the Fed estimates that each dollar of housing wealth translates into 5 cents of consumption. He says a loss of $4 trillion in housing wealth – a price drop of 15 percent over three years adjusted for inflation - will cause a reduction of approximately $200 billion in annual consumption. And that, Baker says, virtually guarantees a recession - quite likely a very severe recession. Baker says the Fed under Alan Greenspan could have reigned in this housing bubble by regulating predatory mortgages and taking other steps, but failed to do so.

will be protected and the average joe/jane will take it in the shorts as usual.

that Edwards will combat!

Frankly, I hope home prices fall because I can't afford anything right now.