Lots of Structural Unemployment, Especially in Coral Gables and South Florida

I was interested in the comments in an interview on CNBC of the President of the Federal Reserve Bank of St. Louis, James Bullard, who talked about structural unemployment in the construction sector.  This is very relevant to Coral Gables and South Florida.  What he says is that there are lot of workers who have been in the construction sector, that this sector will not likely come back, and that these people need to be retrained, to be literally moved to other types of employment.  They will not be able to get back to construction work.

Who in the State of Florida is doing anything about retraining these surplus workers and getting the local economy on another footing with new and more dynamic sectors.

I don’t hear anyone in the City of Coral Gables talking about this problem and how Coral Gables might promote new, dynamic sectors (or what is called today “clusters”–synergistic groupings of complementary businesses).

More from Krugman: Is He Wrong?

I know what some players both at the Fed and in the administration will say: they’ll warn about the risks of doing anything unconventional. But we’ve already seen the consequences of playing it safe, and waiting for recovery to happen all by itself: it’s landed us in what looks increasingly like a permanent state of stagnation and high unemployment. It’s time to admit that what we have now isn’t a recovery, and do whatever we can to change that situation.

via Op-Ed Columnist – This Is Not a Recovery – NYTimes.com.

Housing Prices over 60 Years

More evidence that home prices have been, more or less, constant since WWII.  The bubble was completely unusual so be sure that your house will not be a good long-term investment.  There is a good chance that someday the government will decide that it is a huge give away to subsidize people’s homes with large interest rate deductions.  Imagine when the choice is between the home deduction and paying for medicare and social security in the future.  The latter two are likely to win in the future as the deficits have to be faced realistically.

…home prices have actually been pretty steady over time. In fact, if you look at a fifty-year period after World War II, home prices were absolutely steady. In 1947 the Case-Shiller index stood at 110, and in 1997, adjusted for inflation, it stood at 110 again.

via Chart of the Day: Housing Prices Since WWII | Mother Jones.