Tuesday, May 08, 2012

The Bubble Inevitability

The ‘folly’ of the U.S. housing bubble - The Washington Post

Good little article. Now that all the scapegoats have been herded up and duly flogged -- if not prosecuted, let's realize that we have met the enemy, and as the inimitable Pogo pointed out long ago, "he is us".
Foote, Gerardi and Willen admit that economists are no closer to explaining the U.S. house mania than they are to understanding the tulip mania in Holland almost four centuries ago. They think the Federal Reserve’s interest rate policy or Fannie Mae’s interventions might have helped start the madness but can’t account for its timing or momentum. 
We can clean up the housing mess and learn from it. But even the most enlightened policy can’t guarantee it will never happen again. Folly is human nature, and you can’t regulate human nature.
As much as "progressives" believe you can regulate, educate, tax, fine, etc it away, the enemy is STILL us! ... worse, the "progressives" are at least as bad, and likely worse, since they STILL don't understand that "bubbles", "irrational exuberance", "x is ONLY going to go up in value", etc are endemic to the human creature.

Government spending / debt is just one more bubble -- the fine people of Europe decided to thumb their nose and say that "what has gone up is going to keep going up FOREVER" -- but it still won't. Reality bites -- and it cares not for the opinion of even the "wisest" man on the matter.

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