I usually agree with Sowell, but in this case his thinking is flawed (IMHO). If you put a home on every green space and preserve in the SF area, the prices of homes would still be going up and or down.
Pointer: the point is the magnitude n' velocity of the move in prices. Demand for housing is the PRIMARY factor driving housing prices over the last few decades, (Dr. Sowell would have done a better job with his article to acknowlege that fact).
Here in this very Liberal upside down town that I live in the prices have been dominated by one REAL BIG FACTOR. Microsoft millionares, (ya know that lil' bity company that did not exist in 1975 when I got me degree in Communism from the University of Washington). The Libs here in Gods' Country have greatly aggrivated the problems with very stupid land use policies dominated by their Liberal sensabilities, (some of wich I may actually agree with). If there were less "Growth Managment" policies here in Western Washington the homes would be 25% or more cheaper because the supply would be allowed to expand to accomidate the huge demand.
George Soros crushed the Pound Sterling in the late 1970s or early 1980s, and Asian Currencies in the mid to late 1990s by applying this very corncept. The 'robber barrons' of the late 1800s also used this tactic (the biggest n' by far the NASTIEST gun bein' none other then: Jay Gould!) Mr. Gould brought tears to the eyes of many famous industrialists, (Mellon, Vanderbuilt, Astor et al) by using his wealth at the margin to tip the price up or down DRAMATICALLY!!!! Teddy Roosevelt, (not "Olsmobile), passed anti trust laws to curtial this kinda stuff. THAT IS WHY THESE SOVERIEGN FUNDS I ALSO MENTIONED IN THIS THREAD (THAT PW2 POO POOs) ARE SUCH A BIG DEAL. Some of you will never get it, (the corncept I'm poundin' here), without some serious homework. And even after some studies this may be tooo heavy a corncept fer some not familier with financial corncepts cornnected with market moves, (PW2 seems to struggle with understanding this). Dr. Sowell is a very smart cookie and apparently assumes his readers are aware of the financial fundamentals about asset moves I cornsider VERY BASIC, but my background is financial, and I can see PW2 does not get it.
These areas are limited to a radius of economic feasability and access to jobs. I am not so anti-government as to not understanding the principals of proper land use planning. Green spaces (in the right measure) enhance our lives, but take up so little of the available space as to be economically insignificant.
Totally agree: Pointer, (IF THE LAND USE PLANNING IS RATIONAL AND NOT DESIGNED TO LIMIT HOMES BUILT n' FORCE PEOPLE OUT OF CARS n' FORCE CENTRAL CITY DENSITY), ya just have to live here on the Left coast fer a bit to see what Dr. Sowell is talkin' about. IT IS VERY CLEAR TO ME. If the Libs get carried away as they do here in Seattle n' San Francisco the price moves in a very strong market are very big, (MUCH BIGGER THEN THEY WOULD BE OTHERWISE).
Now when someone wants to build a hospital and are blocked by an insect nobody ever heard of, in the middle of the desert, I get cranked.
Only Libs drunk by the Corntrol they have do that kinda thing, (maybe a stupid Cornservative could do it too). Ya know: Power Corrupts.
Sowell's link is tenuos at best. He has a point and maybe he is not presenting it well, but taxes, and dumbarse building codes based on political science are greater effects than what he is espousing. I am sure his model can be made to fit in several locations but in the USA as a whole, he misses the mark. Our major cities are now "metropolitian areas". They concompass dozens of smaller municipalities, each with the power to regulate construction based on their models. Some good - some bad. But each offset each other and fails to meet Sowells one size fits all economic explaination based on regulation. Detroit would let you build a home in the middle of a grade school playground right now.
That maybe true Pointer. My perspective is decidedly Left Coast n' Dr Sowell is spot on fer the Seattle area. I thought he was pointing to the largest problem areas with interest only loans in the article.
Housing prices went threw the roof for the same reason the dot coms did. Speculation. Yes, government regulation did play a part, but hardly enough to justify what was not short of spectacular increases.
As I said: Dr Sowell is a mainly a political pundit, and he is taking a valid matter (on the margin in many markets), and calling it a PRIMARY problem. If I wrote the article, I would not have done that. That undoubtably does hurt his very valid thesis.
With the insane rush to flip homes/invest and turn big profits in just a few months, joined with the frenzy to buy more than one could afford in very specific areas, there came a point of saturation and down came prices. And those idiots who thought that these "creative" financing alternatives were actually viable, they get what they deserve. But I am sure the government will be there to "ease their pain" with free money. It's the election season right around the corner. And socialists, will act like socialists.
