Back in January 2008, nearly two years after the housing bust began, and six months after home prices peaked in the Seattle area, Washington State Governor Christine Gregoire was hitting the campaign trail with a reelection message powered by complete denial:
Addressing the politically powerful Washington Realtors, the Democratic governor said she sometimes wishes people wouldn’t watch the evening news because of all the “doomsday” talk of a home mortgage meltdown and a pending recession.
Gregoire said that in actuality, the state economy has seldom been so strong, with record low unemployment, 222,000 new jobs created in the past three years, and national publications praising the business climate here.
She conceded that the national news is having a psychological effect on home buyers, even though there are relatively few mortgage failures here.
“This is a very frustrating time,” the governor said, adding “Our economy is strong – buy your home. … There is no good reason for a slowing of home purchasing in the state of Washington today.”
No good reason at all! …Except the major recession that was just around the corner that would lead to nearly 200,000 lost jobs in Washington by January 2010 and a 29% drop in prices over the next four years after she delivered her little pep talk.
Is it really any surprise that Mrs. Gregoire, who has overseen a 33 percent increase in state spending since taking office (source), would want people to ignore the “doomsday talk” and just buy, buy, buy? What do you suppose has enabled spending to increase by so much? Could it perhaps have been the high-flying home prices and red-hot pace of home sales in 2004-2006 (every one of which puts more money into the state coffers)?
And now Mrs. Gregoire wants us to ignore reality so she and her pals can fund their pet projects. Yeah, that sounds like a great reason to keep this bubble alive. Who’s with me?
I wonder why Gregoire decided not to run for another term in 2012?
It still astonishes me that anyone was surprised by the last four years of constant downward adjustments in our state’s budget. Apparently nobody in state government had ever heard of The Ant and the Grasshopper before.