Danny ChaiWow. Christoper Buckley (William F. Buckley’s son!) endorses Obama and leaves the National Review. The number of prominent conservatives that have been defecting to Obama is shocking. To me, this is even more shocking than Henry’s tepid move.
There are 4 people I hugely respect in the economic world, and if you’ve read my blog for a while you’ll know that I link to them all the time. I respect them all because they’re all highly intelligent, have great track records, are prescient, and everything they say makes sense. One is John Bogle, founder of Vanguard, inventor of the index fund. Another is Warren Buffett, the richest investor in the U.S. Read what they say/write and you’ll know everything you ever need to know about investing.
In terms of making economics understandable, I love Paul Krugman and Robert Shiller. As I said before, both have great track records (they repeatedly warned against the stock market bubble 10 years ago and the housing bubble after that (SN: On the flip side, Kevin Hassett wrote a book Dow 36,000, published in 1999, that predicted the DJIA would hit 36,000 within 3 to 5 years. Whoops. He is currently a senior economic advisor to John McCain. Just saying), are highly intelligent (Krugman just won the Nobel this year) and make things easy to understand. Read them, and you’ll know a lot of what you need to know about the economy.
As I’ve said before, one of my beliefs is that it matters more *who* says something that how many people say something. Nowadays, you can find anyone to support any point of view. Shiller and Buffett insisted that fundamentals still matter when many (most?) people were saying it’s a “new” economy in the midst of the stock market bubble. Shiller and Krugman insisted that housing prices were severely inflated when many (most?) people insisted that national housing prices couldn’t fall by double digit percentages because they never have. Listen to the people who, by their intellect, esteem, and track record, know what they’re talking about.
Anyway, Shiller wrote a great op-ed explaining why the bailout is not socialism, as some people have been complaining about. Furthermore, people need to realize that (at least as it’s structured now) it’s an investment, not a gift. There is an excellent chance the government will get its money back, and a good chance it will even profit from it. Unlike McCain’s absurd bailout plan, which is strictly a giveaway.
Also, this is old, but this Krugman column about a Washington D.C. babysitting co-op has helped me understand monetary policy better than anything I’ve read before or since.
Not that anyone is still reading, but here’s some of what they would say: Only buy index funds. For the long term. When you factor out the increase in house sizes through history, housing prices in an area tend to exactly match inflation. Sounds crazy, but it’s true. For an idea of how much housing prices need to fall to get back to historical norms, here’s a chart of housing prices over the last 116 years ending in 2006. The U.S. financial could use more regulation, especially with regard to derivatives.
