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>As others have noted, it was wealth Americans never really possessed This is one thing that definitely rings true to me. I grew up in a wealthy community that

• guelo 14y ago
  > rings true to me The problem with complex macroeconomics and popular politics summarized in one phrase.
  • jlgreco 14y ago
    I wonder if we are best served by a democracy when, with perhaps the most important political issue there is, common sense and anecdotes provide little value and a higher education in a particular field is required to make an informed decision.
    • guelo 14y ago
      Well, that was the reason for the creation of the Fed in the first place, the idea that you could have technocrats setting macroeconomics policy without political influence. But then Allan Greenspan happened, an ideologue disciple of Ayn Rand. When the federal budget was running a surplus in 2000 he told congress that budget surpluses were dangerous, then he pushed for Bush's tax cuts and then he helped inflate real estate and ignored everybody that was saying it was an out of control bubble. So no, unelected elites aren't going to save us either.
      • rubashov 14y ago
        The Fed was founded because in fly-over country the financial system was rickety. Off the coasts, banks were regularly going bust and taking people's savings with them. This almost always happened during harvest season when demand for currency was high. In the urban centers the banking system was working fine. The problem to solve was a ridiculously inefficient and inept banking sector in large swathes of the country. As soon as the idea of some sort of federal level reform got going the House Of Morgan and friends seized control and the Fed became a tool of the major banks, which were already working fine, to increase their profits and control. Almost from the start it was the case the Federal Reserve Bank of New York really ran the system, which was entirely not the original idea. The idea of the Fed originated from a temporary problem unique to a particular period of American history, but was immediately usurped by clever power and money hungry people.
    • aggronn 14y ago
      That was, in an antiquated sense, the premise behind the US being born a republic. Not macroeconomics in particular, but insofar as it is a compromise between technocracy and majority rule and self determination. Philosophers and political theorist have been struggling with this since before Plato's Republic. Its a very very real question, though the consensus that democracy is the best thing we've got has been building for centuries.
    • rubashov 14y ago
      For calling the last three recessions surveys did better than economists' forecasts. You see similar results for forecasting and reporting current price inflation. I don't really buy that the common American man is an idiot. "Elites" have pushed most idiotic economic and foreign policy initiatives against the popular will. Americans have generally had to be tricked by lies and expensive PR campaigns into supporting wars, for example. Their initial judgments were sound.
• cynicalkane 14y ago
  This is an interesting topic but I'm not sure it has much to do with the fluctuations of nominal wealth. The trouble isn't people realizing that they're less wealthy in a philosophical sense, it's that they're realizing they're less wealthy in the ordinary dollar sense.
• krschultz 14y ago
  My mom used to push my dad to buy a 2nd house in Florida. They wanted to retire there and the prices were rising so fast she believed they never would be able to afford it if they didn't get one in 2005 or 2006. (They are retiring in the next 2013-2014 range). My dad always refused. He ran a medium sized manufacturing business (about 100 employees) and is certainly in the top 5%, but not the 1% of people in the country in terms of income. His rational at the time for not buying the house was very simple: "There aren't that many people in this country that can afford a house this expensive. It just doesn't add up to me. I know that most people don't make what I make, and if it's a struggle for me to do it rationally, something is wrong here". They didn't buy the house, but we all thought he was being too pride bound at the time. Now they're looking at what used to be 1.5 million dollar places that are going for $550-$600k. Meanwhile our house in New Jersey dropped in price roughly $100k because the bubble economics didn't take hold here as much. The bubble was absolutely crazy. At the end of the day there were a lot of people buying houses that they could only afford assuming the value of the house increased signifcantly before they sold them. Essentially they could only pay the carrying costs - and that was before the jobs market tanked.
• eli_gottlieb 14y ago
  The two factors aren't actually linked. My father got his original training as a city planner before going into IT, and NIMBY, combined with the desire for high property values, is the single most powerful political force in America. We simply don't have urban planning as it is practiced in most other countries, nor the land-value tax used in many places to drive urbanization. Though you may be interested in reading the essay, "The Problem of Scarcity".