This alone is proof of God's existence.
Was he tired of losing his self-respect and credibility through shameless servitude to his evil masters at the NAR, or did they can him because nearly all of his bold "predictions" (cheerleadings) turned out to be so horribly wrong and destructive to those who harkened them?
I believe that both are true, and that being a "cheerleader" Economist (vs. a real Economist) for any special-interest group presents its challenges. However, there are many industry cheerleaders who conducted themselves far less shamefully than Mr. Lereah did.
Ah, Dear Old David, I Wish I Hardly Knew You:
David Lereah, given his widespread "tell-them-what-they-want-to-hear" media coverage, played a significant role in inflating the housing bubble, tirelessly (despite an overwhelming majority of real, independent Economists stressing otherwise) proclaiming that housing "never goes down" and that it's always a "good time to buy" in the housing market, even if that purchase is a one-way ticket to financial ruin and decades-long house poverty.
Like any clown, he used multi-decade historical norms and tried to apply them to an anomalous short-lived situation and, circularly, then tried to claim that the anomaly was the new norm. I have to believe that even a dunce like him is smart enough to have seen the folly in his arguments, which is what made his disingenuous claims so sickeningly disturbing.
He helped to put housing out of reach for countless young families and low-income Americans (unless they wanted to take some kind of toxic, subprime, neg-am option-ARM "death spiral" loan). Housing hasn't been so expensive, dollar-for-inflation-adjusted-dollar of income, since the early 1980's, during the most severe economic contraction since the great depression. When housing lost its affordability, Mr. Lereah simply changed the definition of affordable - Presto! Problem Solved! As a testament to this new measure of "affordability," foreclosure rates are now exploding as record numbers of households default under their loans, their lives, for all intents and purposes, ruined, and all this despite a healthy economy and ultra-low unemployment.
His fear-mongering books, quotes, data-manipulations and half-truths led millions of Americans to believe that they'd be "priced out forever" if they wouldn't spend 50% of their incomes on housing immediately, for fear that it would get worse (despite the fact that the very claim itself is a logical absurdity). Out of fear, many desperately jumped head-first into ruinous financial commitments simply to obtain shelter, now doomed, at best, to years or perhaps decades of indentured servitude. All during this charade, Mr. Lereah, his faithful Realtors and their Mortgage Broker buddies were laughing all the way to the bank - at the expense of everyone else.
It was only a matter of time before the mania subsided and truth boiled to the surface. Housing has gone down plenty of times when inflation is factored in, and now it looks like (uniquely) housing will fall in nominal terms this year. Thanks to you, David, for doing your part in pushing our economy to the brink of disaster. Thanks for helping us to flush trillions of dollars worth of capital down the toilet, leaving us with nothing but a massive, useless oversupply of housing. No, it's not all your fault, but we couldn't have done it without you.
I sincerely hope you left because you couldn't live with watching the pain that you helped cause, and couldn't do the bidding of your employer any longer in good conscience. If you were forced out, you now have a golden opportunity to redeem yourself. Let's just hope your replacement finds his or her way more quickly.
Hat-tip to Housing Panic for the wonderful graphic.
A periodic blog dedicated to providing commentary and encouraging debate on topics in Economics and Finance.
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