You are not the first to have discovered misinformation on a random internet blog. I hope this doesn't surprise you.
Chromatic is not just some dumb fool blogger - even bondbubble Jay was talking to this guy for knowledge - he is well read in rothbard - who do you think gave a better history than rothbard?
amazon.com
Rothbard opens with a theoretical treatment of business cycle theory, showing how an expansive monetary policy generates imbalances between investment and consumption. He proceeds to examine the Fed's policies of the 1920s, demonstrating that it was quite inflationary even if the effects did not show up in the price of goods and services. He showed that the stock market correction was merely one symptom of the investment boom that led inevitably to a bust.
The Great Depression was not a crisis for capitalism but merely an example of the downturn part of the business cycle, which in turn was generated by government intervention in the economy. Had the book appeared in the 1940s, it might have spared the world much grief. Even so, its appearance in 1963 meant that free-market advocates had their first full-scale treatment of this crucial subject. The damage to the intellectual world inflicted by Keynesian- and socialist-style treatments would be limited from that day forward.
About the Author
Murray N. Rothbard, the author of 25 books and thousands of articles, was a historian, philosopher, and dean of the Austrian School of economics. The S.J. Hall Distinguished Professor of Economics at the University of Nevada, Las Vegas, he was also Academic Vice President of the Ludwig von Mises Institute in Auburn, Ala.
The simple truth is that during the Great Depression, people with money could easily purchase a home for 80% or 90% less than they previously sold for.
In some places sure.
My Grandparent's purchase of a home in Hancock Park in Los Angeles for $550 cash, which had previously sold for $6,200 in 1927, was hardly a fluke - but rather a common experience for those with money.
California and florida both went through boom busts - I wonder how much danville property went boom/bust or all the other places not in your limited vision?
query.nytimes.com
Beginning with 1930, when the median home value was $4,800, the census data show clearly that prices move down, as well as up. By 1940, the median value had dropped more than 50 percent to $3,000. It shot back up to $7,400 by 1950, then climbed at a more gradual pace to $11,900 in 1960 and to $17,000 in 1970.
That is when prices began to soar. By 1980, the census data show that the median price had almost tripled, to $47,200. Data obtained by census using the same techique show that the median price had climbed to $73,536 by 1985.
And the volatility of prices has been much greater in some areas, particularly California, New England and the New York metropolitan region. The price swings around New York are reflected in research by the Housing Information Committee, a group of New Jersey realtors that commissioned a title search on a large four-bedroom house in Westfield, 20 miles southwest of Manhattan.
The group said the Westfield house was typical of homes in affluent suburban neighborhoods that are within easy commuting distance of New York City.
The search found that that title to the house was transferred in 1932, when a savings bank foreclosed on a $12,000 mortgage outstanding on the property. Later the same year, the savings bank sold it to another real estate concern for $11,500. In 1937, with its value still sinking, the house was sold to a family for $10,900.
(No 80% haircut there!)
That family kept the house for 12 years, selling it in 1949 at a time of rapid suburban growth after World War II. It was sold twice in 1949 - for $18,000 in January and for $22,500 in June.
IN 1953, a family bought the house and kept it for 28 years, profiting handsomely when it ultimately put it on the market. The family paid $32,000 in June 1953 and sold it for $166,500 in March, 1981. But while the value of the house rose rapidly in three decades, its price surged even faster in the 1980s. It sold in February 1987 for $390,000, more than double the price six years earlier. Its current owners paid $530,000 in August 1988.
The Real Estate Research Council has maintained an index of "same home" prices for Los Angeles County since 1895 maintained by by the top appraisers in Los Angeles. This index re-appraises a large number of homes once every six months.
One county out of a whole nation does not make a good statistical sample eh? Perhaps if trends continue I can go buy some of these condos around me in fla for pennies on the dollar - that does not mean I am gonna get an 80% price cut on a nice new or existing 3 or 4br home near shopping and schools.
http://www.csupomona.edu/~rerc/
The RERC "same home" index indicates that between 1927 and 1933 home prices in Los Angeles County declined by 55%. More expensive homes in areas like Hancock Park, where the stock market crash took the biggest toll, saw much larger declines in home valuations.
Yet most middle class people wethered the depression just fine.
I do not doubt that there are any number of "internet blogs" which disagree with this,
Perhaps - but it shows your laziness that you didn't go in and read chromatics sources and dismiss them with such shallowness. Getting lazy and tired comes with old age - sucks I know.
Here is another guy talking about boom/busts and kuznet cycles - you know Kuznet right?
safehaven.com
Here are people agreeing prices are going too high:
trinity.aas.duke.edu
This paper employs a simple intertemporal model to show that presence of liquidity constraints can depress the price of a durable good below its net present rental value, regardless of the overall supply elasticity. The existence of price effects implies that the relaxation of liquidity constraints is not Pareto improving, and may in fact be regressive. Historical evidence, which exploits the fact that a clearly identifiable group, war veterans, enjoyed the most favored access to mortgage credit in the postwar era, supports the model. The results suggest that more recent mortgage market innovations have served primarily to increase prices rather than home ownership rates, and that such innovations have the potential to exacerbate socioeconomic disparities in ownership rates. (JEL D91; E21; G21;R21)
or claim that the government is run by Martians, or definitively prove that there are no bugs in Florida.
I think maybe there are bugs in your head! Old age does that to you. Its like ahaha - he may know many things - but the cobwebs in his brain has made him unreliable for new education or ways of doing things.
Foolishness abounds, and quoting it merely makes you seem foolish.
I agree - you sit around waiting for you 80% price drop like grandma got - I will keep on trucking with spock and Gates.
None of this changes the obvious demonstrable facts - average home prices declined by 55% in Los Angeles County between 1927 and 1933, with larger declines seen in wealthier areas.
I know your whole world centers around LA county, governator, latin housekeepers and humiliating Grace - but LA county and its real estate is not the center of the universe and if a nukular bomb took it off the map tomorrow in an osama wet dream - life would go on for billions of people who would still make profit.
Remember that kuznet:
Message 22129759
To understand why the government measures the economy the way it does, it helps to go back in time to the 1930s. The Great Depression had the nation in a death grip, and government planners and politicians lacked the tools to answer the big question of the day: Was the economy getting better or worse? To find out, the Commerce Dept. brought in economist Simon KUZNETS , then at the National Bureau of Economic Research, to calculate for the first time the nation's income and output -- the purchasing power and production of the U.S. economy. Setting such a benchmark would allow the government to figure out if the economy was growing or shrinking.
A BREAK WITH THE PAST
KUZNETS' work set the tone for the rest of the century, not to mention helping win him the Nobel prize in Economics in 1971. Machines and buildings were counted as future-oriented investment, but spending on education, training, and R&D was not. No attempt was made to judge the social utility of expenditures. For example, the $6 million cost of building the Flamingo Hotel, the Las Vegas casino opened by Bugsy Siegel in 1946, was tallied as an investment. But AT&T's funding of Bell Labs, where the transistor was invented around the same time, wasn't even included in GDP. KUZNETS himself acknowledged the limitations of his system, yet it stayed basically the same for most of the postwar period.
But times change elroy jetson - old ways of doing things are no longer relevant - and while Gates dresses up like spock and laughs at all his power and wealth from his knowledge business - I guess all those LA county real estate investors can only gape with awe and envy while waiting for 80% price drops. I got my robot dog AIBO - do you Elroy? Where is astro? |
