Good article Mr. Roush. During the boom there WERE voices speaking out against the irresponsible practices going on in the housing industry, but they were not in mainstream media as none of these people could get anyone to listen. Media, law enforcement, and the govt, looked the other way as consumer advocates and others were trying to warn that we were heading for a national disaster of shoddy construction, foreclosures, and effects that would impact the entire economy. We were called nut jobs. Now it's happening. I hope to see some of the industry perpetrators of this oversized scam put in jail, but I won't hold my breath waiting for a miracle such as that. Too many times we see that the perps are too well connected in politics to ever pay for their misdeeds. E.g. the National Association of Home Builders is meeting with Bernanke of the federal reserve this week. No doubt in my mind this is just one of many industry ploys to get a bailout disguised as being "for the homeowners." Why didn't the industry want the govt anywhere near when consumer advocates were saying tighter regulation and enforcement were called for BEFORE this mess got so out of hand?

I see one reason for the uncritical reporting of the media during the housing boom in the preferred working method of the media: Let the two sides of an issue represent themselves and quote or paraphrase them in your article. There is, however, no organized side that is critical of homebuilders, mortgage brokers, and realtors. There is much to be said about the negative influence of overbuilding, loose lending, and high house prices on society, but there is no organized interest representing that side.

It isn't a matter of not learning from past mistakes, it's the fact that the media is not very bright.

Currently, they are not covering any serious stories to any depth, while frivolous stories are shown every day.
Right now, very serious issues get close-to-no coverage, and usually very briefly:
- Collapse of the Dollar
- Loss of gold standard in every currency
- Inflation, as measured by the pre-Clinton era benchmark at 10% and rising (see shadowstats.com etc. for documentation - the official numbers are bogus)
- Our Debt being bought by foreign forces, including a major communist country
- Middle and lower class workers of America being replaced by foreign workers and monumental rates
- Taxes among the highest overall in the western world and rising while the debt is spiraling
- Close to savings rate in the country compared to others
- etc. etc. etc.

The list goes on and on. But what is on the front page NY Times?
"Audit Faults City on Care of Carriage Horses"
"Bush Accepts Invitation to Beijing Olympics"
"Chrysler Hires a Top Toyota Executive"

No one in this country pays attention to a disaster until it bowls them over, and then wonders how it happened.

This is exactly why I don't bother reading the newspaper or watching network or cable news. There is never any real coverage of the topics presented.

For two years I have been reading the housing bubble blog at http://thehousingbubbleblog.com/

This blog has accurately reported and predicted everything that has happened in the housing market so far. It predicted the mass foreclosures upon the resetting of the ARMs years before there was any mention in the popular press.

The great housing triggered recession now feared in some press was discussed in much detail for over a year at this blog. If you want the real story on the housing bust, start reading this blog.

House prices will drop at least 50% from where they are today (9/6/2007) by the time the bottom hits. The bottom will then flatline for at least a decade.

Nice piece. Everyone blames the media for bursting their bubbles or goring their oxes when it's reality that did the bursting or goring and the media simply reported on it (often much too late after the fact).

I'm wondering if the lack of aggressiveness on the part of the media to report on the housing-bubble collapse is related to the advertising dollars the media gets from the real-estate industry. You can't tell me that stories haven't been spiked by editors because they would scare off or piss off realtors, mortgage companies, and developers. Aren't realtors and car dealerships the biggest sources of revenue for newspapers?

Maybe large, well-capitalized papers like the Wall Street Journal or the New York Times are immune from this sort of influence, but not the majority of smaller dailies and weeklies that depend on money from local advertisers.

Once things get bad enough that no one can ignore the problem anymore, the media now have the cover they need to go ahead and start reporting the bad news. Of course, that's much too late (as you point out) to be of any use to the public the media claim to serve.

Eric

The Baltimore Sun was reporting as far back as early 2006 on the idiocy of option ARMS and other exotic mortgages and warning readers it was suicide to get mixed up with them. I don't think we were alone in this. But at the time we may have been dismissed as cranks looking for a reason to rain on the parade.