Lereah and Blago, separated at birth

   Just when we thought we would never have David Lereah to kick around anymore, the former chief economist for the National Association of Realtors has decided to reinvent history and try to restore his good name by letting the Wall Street Journal interview him a couple of weeks ago.  Nice try.
    Lereah left the NAR in 2007 -- he says voluntarily -- after pumping sunshine into the housing market despite the gathering gloom and all logic, data and the opinions of respected economists to the contrary.  Consider this flight of Lereah fantasy from January 2007, as the market was beginning to cave in on itself: "It appears we have established a bottom."  But by April 2007, home sales had fallen almost 11% from the year earlier and over 2.5% from the prior month.  Lereah left the NAR that month; even they couldn't handle it anymore, which is saying a lot.
    But borrowing a page from the Rod Blagojevich playbook -- or maybe it is the other way around -- Lereah told the WSJ in its January 12 article that he really didn't mean to sound so positive, that his bosses made him do it.  According to the Journal, Lereah says that "because the NAR represented the interests of Realtors, he was pressured to say positive things about the association's data releases, but that he pushed back in some instances" and that "he sometimes asked the public-relations department to tone down the quotes about the housing data releases they had written for him." That sounds somewhat like Blago's line that he angered the state legislature because he tried to do good things for the people of Illinois.  Lereah's old buddies at the NAR have denied the allegations, and according to the "impeached" economist, they are not returning his phone calls or inviting him to their parties. 
    I listened to Lereah on some business shows as the storm clouds were forming in 2006 and 2007, spouting his irrational crap about the housing market.  None of his PR handlers were on stage with him.  He could have been more measured in his comments, but he was Pollyanna on steroids. I know little about economics, but Lereah moved me to write in this space in February 2007, "David, just shut up and the market may get better."  I added that, "If there was a way to short the real estate market every time Lereah says ‘the end (of the bottom) is near,' we'd be rich."  Yet the mainstream media kept turning to him for comment, feeding the irrational exuberance that has indirectly hurt so many people.
    Now the media are turning on him, with his cooperation (echoes of Blagojevich there too), reminding us that bloggers had dubbed him Liar-reah and Baghdad Dave for his spate of disinformation.  Under the headline "The Bottom is Near," the Journal on January 11 printed excerpts from Lereah's comments of January 2006 through his "we have reached a bottom" comment exactly a year later.  Lest we think the NAR has learned any lessons from the Lereah legacy, look only so far as the man who replaced him at the NAR.  In Lawrence Yun's latest comments on the market, he says sales of homes might increase by more than 10% with a "proper real estate focused stimulus measure."  Whatever that means.
Note:  If you cannot access the Wall Street Journal articles referenced above, let me know and I will email them to you.