Another last Tuesday, another positive report on the S&P Case-Shiller Home Price Index. The 20-city composite was up 1.2% in August, putting it 4.85% above its April low. That’s a long long way from the heights of 2006 (it’s now 29% 
below the July 2006 peak) but it’s increasingly looking like this is not just a blip in the data.
17 of the 20 cities recorded gains. Charlotte, Cleveland, and Las Vegas were the only unfortunates. Charlotte and Cleveland don’t have much to worry about, they were both up more in July than they were down in August, and overall they saw relatively modest declines in the bust.
Vegas, on the other hand, can’t seem to snap its losing streak. This makes three solid years of down months. The only consolation seems to be that Sin City was down only 0.3% in August, breaking up two years of monthly losses greater than 1%. It’s now down 55% from the peak. Yikes.
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The buzz article of the month seems to be Time’s Why It’s Time to Retire the 401(k) which came out October 9th. It is not to be confused with Time’s Should the 401k Be Killed? from last winter. And I am sure the serious print 
journalists at Time would be offended if I likened their work to the 60 Minutes piece from the spring Retirement Dreams Disappear With 401(k)s. (See my comments on that here.)
I suspect there are many more such articles and TV news segments out there telling us how 401(k)s are terminally broken. I don’t have the heart to search for them. These particular three say roughly the same thing, with similar quotes from experts and profiles of folks in their sixties who are poorer than they expected to be and, we presume, than they deserve to be.
There is an unavoidable, and I think completely unhelpful, undercurrent in this genre that the 401(k) is not a good idea with some serious implementation issues, or even a noble experiment that failed, but a scam perpetrated on workers by Evil Big Business. 401(k)s, we are told, were designed by our beneficent law givers in Washington as a nice side dish to the main retirement course of corporate pensions. Somehow, when we weren’t paying attention, employers pulled a switch on us and passed off the side dish as the whole meal.
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Free Money Finance last week pointed me to an AP article from the end of September headlined “Income gap widens as poor take hit in recession”. (Your 
local news outlet may have used a different title.)
The piece recounts how the recession has lowered incomes across the board but hit the deserving poor and ever-wholesome middle class harder than the fat cats on the top. Kinda ho-hum as mainstream media reports on the Great Recession go. The AP story was run in a few places (see link above and here and here too) but hardly made a splash. Why would it? It just confirms what everybody knows to be true.
But it isn’t true. Or, at least, the conclusions in the article are completely unsupported by the data it pretends to be based on.
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Last Friday a dandy bit of numerical fiction hit the wires. I thought it was inflammatory and misleading on an issue of great national importance. On the other hand, I was looking forward to pointing out what a crock it was.
So you can understand my disappointment when it got only limited play and was more or less gone and forgotten by the weekend. Oh well.
As a consolation to myself, I’m going to write it up anyway. This won’t cure the letdown, but it may make me feel a little better.
The Reuters story had what I thought was a can’t-miss headline. "No Health Coverage Tied to 45,000 Deaths a Year". How could that not be the lead story for every Saturday paper in the country? Admittedly, for many blue-state types in the media it may have had a certain dog-bites-man aspect. But still, I would think that a dead body every 12 minutes would make great copy. I guess this is why I am not an editor.
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As I wrote on Friday, lists of lessons we have learned from the current economic troubles have been enjoying a vogue lately. A dim view of my fellow humans prevents me from being so optimistic as to believe that we are going to emerge from this fiasco meaningfully wiser. But I do have a list of lessons that we could learn from recent experience. But probably won’t.
In the best case scenario, regulators are just as smart and capable as the people they regulate. And, just to be clear, best case scenarios are rare. Many of the complaints about how the Fed, SEC, et al. blew it by not foreseeing and preventing the Wall Street meltdown are unfair. If the thousands of people making seven figures at meltdown ground zero didn’t see it coming, why would we expect the hundreds of government employees watching them from the outside to pick up on it?
25 years is not forever. Amongst my many brilliant theories is this: especially in the realm of culturally significant business phenomena, if something has been going on for more than 25 years people will mistake it for a permanent always-has-been-always-will-be thing.
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below the July 2006 peak) but it’s increasingly looking like this is not just a blip in the data.
Government, Housing | Frank Curmudgeon | 
October 27, 2009 10:59 am | 
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