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Kunstler on the U.S. housing market
Tuesday, February 23, 2010
Before leaving the topic of the latest Case-Shiller home price data (the S&P site is still unavailable, at least from my computer) and looking at the most recent consumer confidence data that can only be described as "disastrous", it seemed worthwhile to share a few of Jim Kunstlers thoughts about the nation's housing market from his most recent missive.
That about sums it up but, you're unlikely to hear similar candor from the vast majority of the mainstream media. Moreover, most government economists still seem to think that the fundamental problem here is that home prices have already fallen too far and another leg down could spell doom for economic growth as we once knew it.Faced with the hangover of a housing bubble, the president's team has insidiously nationalized the racket and is doing everything possible to keep housing prices unrealistically inflated, so that nobody still lucky enough to have a median income can afford the median price of a house.
Meanwhile, the agencies used to facilitate this accounting shell game -- Fannie Mae, Freddie Mac, Ginnie Mae, etc. -- are choking on worthless mortgage contracts and generating ever more new toxic mortgage paper.
Has the disconnect between policymakers and the real world ever been any greater?
3 comments:
Yeah, Jim gets it. The bottom half of the population has a below median income, and even the median income can't afford the median home. The obvious conclusion is that over half the population has been priced out of the market.
The experiment of trying to gentrify the entire nation via zoning has resulted in unaffordable homes. Creative financing magnified the problem many fold. How many jobs do the price happy gentrifiers think the average person can work? What quality of life will result from so many hours toiling as debt slaves?
Let them build homes in the $70,000 range. That is the CPI equivalent of the new price of a circa 1950 Levitt style home. Above all stop printing. Let the average consumer benefit from productivity gains via lower CPI prices. Stop letting the bank confiscate the entire productivity gain via the printing press. There is nothing wrong with CPI prices going lower as technology improves production. Computers are one example. All products should get more affordable as technology improves.
Welcome to the socialist club America.
Marx was right. Some countries will so mismanage their capitalism that the economy will implode due to runaway excesses. Giving way to socialism as fake wealth vaporized and ex-capitalists clamoring for bailout by the state.
America took pleasure scorned the the world's country that deviate from their superior Utopian economy for decades as 'socialism'. Now that the USA is a socialist country, I wonder if it will scorn at the world's economies as dreaded 'capitalism'?
"Has the disconnect between policymakers and the real world ever been any greater?"
Yes: Berlin 1945.
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