Déjà Vu All Over Again

Here's a post by Dean Baker on the US housing bubble:

It seems not given the almost complete lack of coverage of the release of data from the Census Bureau showing that the homeownership rate had fallen to its lowest level since the 4th quarter of 1998. I date the bubble as beginning in 1996. It remains to be seen whether all the growth in homeownership associated with the bubble will be reversed.

On a more positive note, the release did show a substantial decline in vacancy rates, although they are still at historically high levels. With most of the air now gone from the housing bubble, we may finally be getting back to a more normal market.

What goes up, must come down. What goes around, comes around. Seems to me this is just Nietzsche's "eternal recurrence" theme.

Oh... and one more cliché... a picture is worth a thousand words:

Click to Enlarge
When my parents died in late 2008 I had to sell their home. They had a 2000 sq. ft. wonderful house in the foothills in Arizona looking out at the mountains. Their house was alway big, fancy, and more expensive than mine. But they died part way into the bubble crash. So I struggled to sell it and finally got $244,000 for it. Three times what they paid to have it built 30 years before (which is slightly less than inflation if you use the BLS calculator). Meanwhile I sold my dumpy old house in the Vancouver area here in Canada. We didn't have a housing crash. I got $800,000 for it. That's over nine times what I paid for it 25 years earlier (and five times inflation if you use the Bank of Canada calculator). And my house was 50 years old, crappy, in a bad neighborhood, only 1000 sq. ft., and had no view.

That's the difference you get if you let your government hand over the keys to the kingdom to Wall Street banks that then run your economy into the ground with bubble after bubble. Luckily in Canada we believe in government and we believe in regulation, so our banks didn't collapse and our housing market didn't collapse. So much for all that chest beating in the US about "free markets" and "shrink government down to the size where it can be drowned in a bathtub" in libertarian and neoclassical economic philosophy. I prefer my government to be robust, effective, and deliver me social services that I find valuable. I enjoy my government supplied universal health care.

I can hardly wait for Wall Street to come up with the next bubble to explode on the long suffering Americans. I've got my popcorn and coke ready. Entertain me!