7 ms·

People choose to live in more expensive homes I didn't choose anything for my rent to skyrocket because suddenly I live in a million dollar 1-br. Everybody ha

People choose to live in more expensive homes I didn't choose anything for my rent to skyrocket because suddenly I live in a million dollar 1-br. Everybody has to live somewhere. And by speculatively inflating the cost of housing (and getting out of it before the burst) a speculator effectively strips general public of their cash. You don't have a choice: unless you live on the street, you're participating in this game and you're getting screwed even if you rent. Imagine this: assume I have many billions of hypothetical dollars to play with. I go and buy a lot of houses and rent them out. Then I start giving out loans with 50yr/0% APR to everybody. Guess what happens to the houses I already own? Their value will skyrocket. So I can sell my loans to the next guy (who's hoping to re-sell them as well, since prices are going up) and I sell my expensive real estate too. When everything goes to hell, everybody will be poorer but me, including poor souls who's been paying insane rents and refused to invest in the bubble. So yes, we have a problem because the system allows this to happen.

jseliger 17y ago
A single person as an individual doesn't choose to live in more expensive houses necessarily, but we as a society do: take a look at the graph attached to Virginia Postrel's "A Tale of Two Houses:" http://www.theatlantic.com/doc/200711/housing http://www.theatlantic.com/doc/200711/housing . Notice how much it costs to build in many of America's most expensive cities. If you take a desirable, urban place to live and slap extensive controls on building height and the like, you get expensive housing. Much of our housing problem is self-made. This has been chronicled extensively by urban planners, economists, and on blogs like The Bellows: http://www.ryanavent.com/blog http://www.ryanavent.com/blog . But relatively few people trace the cost of houses back to the fundamental issue of land controls.
nazgulnarsil 17y ago
you're ignoring the risk involved in loaning money. government effectively removed this risk for the lending institutions. therefore, moral hazard.
cookiecaper 17y ago
We have a problem because we allow this to happen. The system doesn't exist as an independent entity. The system, however constituted, is a reflection upon those upon whom it operates. We choose what we allow to fly, and our generations are stuck with the responsibility, however you slice it. For instance, people could look at a 50yr/0% loan and say, "There's no way I am going to wager on something for 50 years, that is crazy, also 0% APR means a tricky, tricky bank". Instead, we eat that kind of stuff up, because all we think about is getting what we want and getting it now. People are too excited to think ahead. Same goes for government. You can wax on about corruption in politics all the day long, but as long as you're propping up the same institutions by electing the same incumbents or their alter-egos in the two main parties or patronizing major media corporations, you're a part of the cause. If the people were unwilling to accept corruption, there wouldn't be any. The solution is to change the system by the individual action and perspective that will diminish the entrenched badness, and to spread these philosophies among friends. Alteration by artifice as government intervention is not effective -- whatever laws you pass, the same practices will resurface in new robes because the population can still be exploited. The population will remain exploitable until they change their conceptions and actions, no matter what you do with the government. The reaction to the housing crisis is a dog and pony show meant to appease populist fervor without causing significant disruption in "business as usual" for either the consumer or its providers. It has done no good, and it could not have done any good. We need an ideological shift, not band-aids, talking points, or press releases.
- old-gregg 17y ago
  The solution is to change the system by the individual action and perspective that will diminish the entrenched badness, and to spread these philosophies among friends. So you're suggesting to combat crime with spreading proper philosophies among friends? Good luck with that. What do you think will happen if rape or theft was legalized tomorrow?
  - cookiecaper 17y ago
    Of course. Is law more than canonized moral philosophy? I don't think rape or theft would be legalized tomorrow, because I don't think the people would accept rapists or thieves among them publicly. If the state refused to act upon its mandate to enforce the canonized moral code of the people (read: the law), the people would enforce it themselves and install a new state that provided the services desired. The law and other social constructs reflect their society, not the opposite. That's my whole point.

jseliger 17y ago

A single person as an individual doesn't choose to live in more expensive houses necessarily, but we as a society do: take a look at the graph attached to Virginia Postrel's "A Tale of Two Houses:" http://www.theatlantic.com/doc/200711/housing http://www.theatlantic.com/doc/200711/housing . Notice how much it costs to build in many of America's most expensive cities. If you take a desirable, urban place to live and slap extensive controls on building height and the like, you get expensive housing. Much of our housing problem is self-made. This has been chronicled extensively by urban planners, economists, and on blogs like The Bellows: http://www.ryanavent.com/blog http://www.ryanavent.com/blog . But relatively few people trace the cost of houses back to the fundamental issue of land controls.

nazgulnarsil 17y ago

you're ignoring the risk involved in loaning money. government effectively removed this risk for the lending institutions. therefore, moral hazard.

cookiecaper 17y ago

We have a problem because we allow this to happen. The system doesn't exist as an independent entity. The system, however constituted, is a reflection upon those upon whom it operates. We choose what we allow to fly, and our generations are stuck with the responsibility, however you slice it. For instance, people could look at a 50yr/0% loan and say, "There's no way I am going to wager on something for 50 years, that is crazy, also 0% APR means a tricky, tricky bank". Instead, we eat that kind of stuff up, because all we think about is getting what we want and getting it now. People are too excited to think ahead. Same goes for government. You can wax on about corruption in politics all the day long, but as long as you're propping up the same institutions by electing the same incumbents or their alter-egos in the two main parties or patronizing major media corporations, you're a part of the cause. If the people were unwilling to accept corruption, there wouldn't be any. The solution is to change the system by the individual action and perspective that will diminish the entrenched badness, and to spread these philosophies among friends. Alteration by artifice as government intervention is not effective -- whatever laws you pass, the same practices will resurface in new robes because the population can still be exploited. The population will remain exploitable until they change their conceptions and actions, no matter what you do with the government. The reaction to the housing crisis is a dog and pony show meant to appease populist fervor without causing significant disruption in "business as usual" for either the consumer or its providers. It has done no good, and it could not have done any good. We need an ideological shift, not band-aids, talking points, or press releases.

old-gregg 17y ago
The solution is to change the system by the individual action and perspective that will diminish the entrenched badness, and to spread these philosophies among friends. So you're suggesting to combat crime with spreading proper philosophies among friends? Good luck with that. What do you think will happen if rape or theft was legalized tomorrow?
- cookiecaper 17y ago
  Of course. Is law more than canonized moral philosophy? I don't think rape or theft would be legalized tomorrow, because I don't think the people would accept rapists or thieves among them publicly. If the state refused to act upon its mandate to enforce the canonized moral code of the people (read: the law), the people would enforce it themselves and install a new state that provided the services desired. The law and other social constructs reflect their society, not the opposite. That's my whole point.