[In reviewing what was published here back in April of 2007, it appears that there wasn't a whole lot going on. At the time, we were preparing to pull up stakes in Southern California and head 350 miles north where we would spend the next two years before moving to Oregon and then Montana. Thank God we don't have to move any more! In any event, there will be only a couple of articles from four years ago since early-2008 proved to be a much more interesting period. This first item, originally published on April 3rd, 2007 should serve as a warning to anyone using long-term charts to make a point - they can be very deceiving. Unfortunately, you'll see lots of charts like this to this day, particularly in Washington D.C. as elected officials debate the nation's budget problems.]
ooo
Having seen more than my fair share of multi-decade charts showing one economic statistic or another, the same erroneous conclusions have oftentimes been observed based on a simple misinterpretation of the data.
Call it the “power of compounding” or whatever you wish, but many writers and commentators seem to mistake this very normal effect as a sign of impending calamity, sometimes building long and convoluted cases for or against one thing or another based on a simple chart which has been completely misread.
This same error had been made here on at least a few occasions long ago, before someone graciously pointed out the error of my ways.
Think of this post as a sort of Public Service Announcement for those of you who may feel compelled to make a case based on looking at a single data series on a multi-decade chart.



Somehow these things keep showing up in the mail. It’s starting to feel like companies and individuals are somehow finding our unlisted address and sending them here just so they’ll get posted on the blog, knowing, but not caring, that unkind comments will accompany their publication.
So, the one economist says to the other, “Honey, how do you estimate the fundamental value of a Southern California house?” While it is not known what the response was, or in fact who asked the question, Pomona College economics professors Gary and Margaret Hwang Smith later purchased a $950,000 Southern California property and labored to produce a sixty page report to convince themselves and the rest of the world that they were not the greater fools about whom housing naysayers have spoken so often in recent years.
It chronicles thirty years or so of failures by both the Democratic and Republican parties regarding fiscal discipline and long term planning. It places the blame for our current economic woes squarely on the politicians, political processes, interest groups, and various changes to American culture. The four solutions to all of our problems are:
Volcker was screaming at the top of his lungs “Somebody do something! Now! Before this thing explodes!” and Greenspan was pondering his legacy while at the same time trying to distance himself from the troubled GSEs.
Greenspan Week concluded on Friday when the Chairman spoke about 


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