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The irrational step is when people start to believe that they need money, when in fact they need fish. When people start to believe that they need loans, when i

by barnacs 10y ago

The irrational step is when people start to believe that they need money, when in fact they need fish. When people start to believe that they need loans, when in fact they need nets and boats. In the end, they deem this made up number called GDP more important than fish and hunger. See, with fish, it's obvious that catching more than the community needs to survive and piling it up in one's basement is wasteful and counter-productive. Yet, with money, not only does it seem like a good idea but it quickly becomes the ultimate goal of the participants. Money (especially with positive interest rates) is a terrible abstraction of value.

delackner 10y ago
This is the most spot on comment in the whole discussion. We have become so utterly focused on the specifics of lending rules and incentives, yet the biggest problem is more simple: there are not actually enough homes available to house all the people that want to buy a home to live in. There would be no housing crisis if we had a regulatory environment that encouraged the housing market to produce enough homes to actually meet demand, at prices people can afford. That means smaller individual spaces (be they single family or multi-family buildings, built with vastly more automated processes, and streamlined permitting and approval processes. It is mind-boggling that today that in a major city today in the US a working person should have to pay 30+ years of income just to afford a space to sleep. Travel a little to actual first world countries and it is not hard to find places with far more sane balance of housing construction to population, with prices at far lower multiples of average income.