Al Fin

Will Commercial Real Estate Defer Recovery?

Charles, it is clear how badly you are straining in order to put a shiny gloss on this economic morass. I sympathize with your good intentions. But the only way out of this mess is to face reality squarely.

The growth in private schooling only reflects the failures of public education -- a public educational system that is draining ever larger amounts of scarce resources. Spending on power generation sadly reflects unwise investments in government favored and unreliable wind and solar generation -- a wasteful diversion of increasingly rare resources away from more productive power generation like nuclear.

And those are two of the brighter aspects of the economic picture. Commercial real estate is nowhere near the bottom, and is closely tied to a gloomy employment future. Unemployment is driving home foreclosures now, and could become a positive feedback phenomenon as weak banks grow ever weaker. China's bubble is growing more transparent by the day. Europe shows superficial gains, but there is nothing it can do about its own demographic crisis and the fallout it will create.

American voters might have considered the rest of us when they voted last November.