Martin Feldstein

Other than Andrew and Pete, it's not often that I disagree publicly with an economic icon, especially when it's Martin Feldstein.

But Feldstein's article from The Wall Street Journal about homeowner's who are underwater, that is, whose mortgage is greater than the value of their home, has troubled me greatly since it was published last Tuesday.

The article is based on the premise that homeowners who who are underwater have a strong incentive to walk away from their home and instead rent a place to live.  That only makes sense if the homeowner bought the home to sell it and make a profit and now wants to cut his or her losses by getting out from what was a very bad investment.