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While this is interesting, I think it misses the fundamental issue, our (American) view of wealth. If people looked at a home as a consumable with nominal value
by orofino 15y ago
While this is interesting, I think it misses the fundamental issue, our (American) view of wealth. If people looked at a home as a consumable with nominal value, this wouldn't be a problem. The article hints at the core issue, middle class families have on average $100K in savings. If, instead of purchasing large houses out in the suburbs with large yards, they purchased something more modest and within their means, the house wouldn't be the center of their financial universe.
- nhaehnle 15y agoI do believe the article is spot-on about why there is no recovery from the crisis that actually reaches the population at large. The headline is a bit misleading, however. It's not that the bubble destroyed the middle class. The bubble was a way for the middle class to continue living a happy life despite the fact that there income share was continually being reduced. Instead of consuming on income, they consumed on the housing bubble. So it's not the bubble that destroyed the middle class - the article basically says so itself - it just delayed the inevitable and made the decline much more spectacular.