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I’d Be Gloomy Too, If I Were These Guys

The New York Times published a front page story earlier this week suggesting “Gloom Grips Consumers” because their home values have plunged.

“The United States has a confidence problem: a nation long defined by irrational exuberance has turned gloomy about tomorrow,” the Times says. “Consumers are holding back, businesses are suffering and the economy is barely growing.”

Sounds like this story could make sense, right?

But not when you see where and who the Times chose to illustrate the plight of the American people: a stonecutter, an appliance store owner and a guy who makes his living selling pool supplies in Orlando, Fla.

Orlando was one of the cities that benefitted most from the housing bubble and the reckless lending that created it.

The explosion of new homes financed by subprime and adjustable-rate mortgages (that couldn’t possibly be repaid, thank you Countrywide) encouraged tens of thousands of families to move to the Sun Belt.

All three of the business owners quoted by the Times made a handsome profit selling granite countertops, high-end appliances and pool supplies for all of those new homes being built.

Now the bubble’s burst. The foreclosures are well underway. Construction has practically stopped and home prices have plunged.

In fact, the bust has been so bad that, as the Times points out, “the total value of area homes has fallen blow the total mortgage debt on those homes.”

Look, we don’t wish anyone ill will, especially those who have faced financial ruin.

Are these people gloomy? Who wouldn’t be?

Do they think things will ever be as good for them as it was during the housing bubble? Of course not.

I absolutely believe the guy who installed countertops when he says: “We’re never going to get that big again. I was someone employing people and taking people to the good life. Now I’m just trying to survive.”

But should they be held up as reasonable representatives of America’s “confidence problem?”

Absolutely not.

This is what happens when well-meaning people build their lives on an unsustainable boom fueled by irresponsible debt.

Their despair and disappointment should strengthen our resolve to never let something like this happen again.

Why the Times think they’re a good example of anything else is beyond me.

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