efbdergraf

Housing Bubble: Two-Thirds of the Way Back to 2000

Whether Case-Shiller is perfectly accurate is of little importance. It is enough to know that historically housing costs (after to food the most essential of human needs) have tracked but seldom outpaced inflation. A roof was always a necessity and with the exception of specific markets not considered fair game to speculation. Greenspan's free money and Bush's no-tax but mega-government expenditures and deficits only encouraged speculation and rampant greed amongst citizens, contractors, brokers and bankers. Wrong-headed legislation sought to correct that by creating the "sub-prime" category of buyers rather than closing the money spigot. Poorer or otherwise unqualified people were given keys with no downpayments or legs - but ARMs. Legitimate wage-earning families were squeezed out and deprived of reasonable cost housing. The only long-term remedy is to allow the market auction mechanism to rediscover the "right" price - probably not far from where normal inflationary pressures would have evolved after 2001. Trying to protect unqualified "owners" will only prolong the agony.