Wednesday, November 30, 2011

Who Profits from the Recession?

Reading Google News this morning, I noticed a headline:

Home Prices Continue to Fall:
D.C. Bucks Trend

I was particularly struck by it because yesterday, driving back to our temporary home in Fairfax from a visit to D.C., my wife commented on the amount of new construction we saw. The economy may not be doing so well, but the government industry is booming

Or, to quote my wife, "People talk about Main Street vs Wall Street. It should be Main Street vs the Beltway."


Miko said...

Wall Street is doing pretty well too:

Perhaps it ought to be Main Street vs. the Beltway and Wall Street, because those last two are certainly on the same side.

Eitan said...

Interestingly another profession which "profits from the recession" is economists. How many economists sold oodles of books with their take on the causes of the recession?

Anonymous said...

Or, to quote my wife, "People talk about Main Street vs Wall Street. It should be Main Street vs the Beltway."

And that's why she's David Friedman's wife. I bet Paul Krugman's wife would look at the same thing and say "You see, the government knows how to keep the economy going, just look how well they're doing in D.C.".

Andrew said...

Wall Street's not doing THAT well. This year's bonuses are projected to be the lowest since 2008!

Anonymous said...

Hi David Director Friedman this is my first visit to your blog. Love the intro about who you are "not"! lol I wonder why you didn't use your full middle name;Director. It is so unique! I haven't read all your work, yet, so point me in that direction if the history of that name is already told somewhere.
From what I have read
I wonder about your premise that "everyone can't have what they want" and ask if perhaps you will reconsider in light of the technological advances made and also your wisdom gained from having lived longer and experienced such success and abundance in your life.As Bill Gates says Super Rich isn't any better than Rich.
I conjecture that even the most homer simpsonian members of our race who perhaps "want" to be funnel fed caviar champagne and chocolate all day while receiving a massage or similar, could today have those wants fulfilled through resource planning and robotics.
I am exploring creation of a project to take the largest and perhaps the first census of "what exactly do people want" ever undertaken in Human History.
Through this census a global network of sorts can be achieved with the possibility of everyone creating their own social contract. The first actual social contract!
I am just beginning work on this project wonder if you would deign to have a look and give me any feedback. You will also find that I have placed links to your site there and blogged about seasteading.

Anonymous said...

apologies correct blog title is

Unknown said...

I'm a (libertarian) realtor and blogger in DC and all my customers more or less work for the government or the Democratic Party. My two listings under contract now belong to an EPA policy writer and a CIA Arabist, both lovely people.

My clients are usually World Bank, IMF, Justice Department, presidential appointees, lawyers or lobbyists. That's who has money o buy.

This info needs to be de aggregated though. If you live in a posh Dc hood like American University Park or Cleveland Park, where all the mainstream media journalists live, you are on a subway stop and prices continue to go up. If you are in a Virginia suburb not near a subway, where many of your neighbors are immigrant construction workers, there are 6 units like your home in foreclosure every week for sale for about 40% of their 2006 price.

TGGP said...

I just watched your talk at Cato (hat tip to EconLog), and paused when you discussed car insurance companies. You mention that almost no cases between such companies actually go to court. Might that be an artifact of the abnormally costly court system provided by the government? Even in criminal law prosecutors really want to avoid court and focus on plea bargains. So in the anarchy analogy, protection firms may be more likely to go to (perhaps limited) war. I know war tends to be one of the costly and wasteful of human activities, but just thought I'd throw that out there.

Anonymous said...

Yeah, and I was walking by Royal Exchange in SF at 5pm on Wed and it was bursting at the seems. Should it also be Main Street vs. California Street or we'll just keep sharing meaningless anecdotes?

Anonymous said...


Not quite. You are equating economists with business-cycle macroeconomists. A subfield of one field. In reality, a lot of state schools haven't been hiring much last few years, and private endowments down which created a very tight junior market for economic PhD's.

neil craig said...

Yeah but government profits from a boom too.

More seriously I suspect those in government who really enjoy being part of the power elite (most at the top) rather like recessions because the differences are more stark and the common people more suggestible.

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary."Henry Louis Mencken....

It is obvious that almost every leader of the Green movement fears that a wealthier society will reduce this disparity and that they make their livings from such hobgoblins.

On the other hand it is a balancing act - make the recession too bad, or make it too obvious they aren't trying to end it and they are toast.