In today’s Sunday Business section of the New York Times, Daniel Akst writes an interesting piece in his On The Contrary column called “Pop Goes the Bubble? Maybe It’s Time to Cheer”

The premise is that having housing markets cool now rather than later is much better for nearly all of us. Here’s a few of the points made in the article about the housing market now:

  • Encourages speculation
  • Promotes sprawl which increases fuel consumption
  • Diverts human capital
  • Weakens financial system by proliferation of creative financing
  • Contributes to social and economic inequality

A few problems with the article, (but not the premise)

  • People have made enormous profits (Thats why speculation is on the rise)
  • A record number of individuals have become first time buyers (Thats why rents have fallen until recently)
  • It has created a lot of jobs (job creation flows to where the money is)
  • Housing has helped the overall economy climb out of a recession with help from the consumer

But as the economist Herbert Stein once dryly observed, if something cannot go on, it will stop.

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