Well, our post yesterday elicited three comments within a 45 minute period! This is quite a record here at the RC and we are elated. It normally takes roughly three weeks to get that many comments!
Picking up on that same post, the RC today wants to discuss one of the key points in the article that was cited.
Some economists (such as the execrable Paul Krugman) feel that the recession was caused by greedy middle and lower class folks who wanted homes of their own. Imagine that. Wanting a home of your own. Tsk, tsk.
If the RC understands the argument correctly, they are not just talking about people who couldn’t afford homes and got them anyway. No, they are talking about the idea that most of us aspire to have a home of our own.
This, they say, is bad. It causes banks to lend us money and then we and the banks make bad choices, which led to the recession.
For now, the RC will overlook the point that the government forced banks to lend money to people with no jobs and no credit, which created the toxic loans. The banks did not do this on their own.
But let’s leave all that behind and accept their premise. For the sake of argument, let’s acknowledge that the economy would somehow be better off if fewer of us owned homes and more of us lived in cinderblock sardine tins in New York City.
If that were the case, then the RC is compelled to ask: what good is a strong economy, then? I mean, the reason the RC wants the economy to be strong is so he can have a job and make a decent living and provide a good life for his family. The RC is not really all that interested in a good economy merely for the sake of a good economy. In fact, the RC could really care less about the economy except to the extent that it effects the lives of real people, especially real people he knows.
The RC really doesn’t care, and he imagines most people agree, what GDP and trade and deficits and 2nd quarter growth numbers and price-earning ratios are if they don’t benefit real people and make their lives better.
So, if giving up a decent lifestyle will help the economy, then the RC sees no reason why a good economy is all that important or desirable. If it will only benefit a few rich folks (who often seem to be the ones who want to control the rest of us) then count him out!
An economy is not a museum piece or an independent work of art to be stared at and admired by a few educated elites. The economy is not an end in and of itself. The economy is means to an end and that end is this: to provide individuals and families with better lives. And for many of us that includes a house of one's own.
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In the past couple of years Leon and I pondered buying a home and have several times decided against it, for more then one reason, we could get financing but it was risky, we kept getting prompted to wait and now we are glad that we did. We would have probably lost a house when the market crashed.
ReplyDeleteSee--you had the freedom to choose and you made a good decision. You didn't need someone telling you that you couldn't. The whole thing works when you let free people make informed choices. RC
ReplyDeleteVery colorful and true:
ReplyDelete"cinderblock sardine tins in New York City."
And I know whereof your speak!
"An economy is not a museum piece or an independent work of art to be stared at and admired by a few educated elites. The economy is not an end in and of itself. The economy is means to an end and that end is this: to provide individuals and families with better lives. And for many of us that includes a house of one's own." Beautifully stated!