Comments on: Let Home Prices Fall

Declan McCullagh Says Further Government Intervention Will Do More Harm Than Good

[txlakeside]

This growth at any cost is now costing us a lot! Controled growth is the only solution. Nothing on this planet grows forever but for some reason bankers, CEO''s and politicians seem to think that growth is infinite! And face it ... not everyone deserves to own a home. Some are better off renting. Get back to the basics and stop lending so much money! That is what gor us into this mess!

[cattiej]

In the town where we live, you can''t build a new house unless you are going to live in it...we have so many homes for sale, that''s what the town council has done to try and perserve our town. We don''t need a bunch of empty houses, I think this was a great idea. You want a home, look at one that is already built to buy...more towns and cities should follow this advice. Empty houses bring blight and trouble with being broken into, the yards look terrible and it brings all the homes around the area down. Stop the building...who can afford a new 4000 square house, or who really needs that big a house anyway...we are such a wasteful society.

[swingset4u]

What a frikkin waste of advertising space that Exxon Mobil placed at the top of this story. Fitting though. Seeing how Exxon JUST posted a $14 Billion profit. Hmmmm, Think oil has anything to do with the recent slow down in our economy????

[swingset4u]

By now it should be clear that our economic woes have been caused in large part by an unsustainable increase in housing prices

LMFAO!!!! Even CBS is DUMB!

[brianbwb-2009]

"...who is going to build new
houses. land prices are dictated by availability.
can''t change that..." Posted by borwell

Those who truly need to build one will do so, in the meantime there are many available houses that were already built, but not sold, or repo''d, that can be used.

As far as prices, availability is only a minor determining factor, pricing is determined when developers price their product, and colluding lenders agree to it. If availability were the factor, then prices would fall when more product is available, this has not been the case in the vast majority of the US market, and will not as the Bush agenda calls for propping them up with your, and my, and our children''s tax money.

As far as workers, illegal immigrant labor and outsourced labor is pushing all wages in all industries toward minimum and below anyway, and none of the anti-union, anti-worker fake neocons including past presidents back to Reagan, seem to care, that argument is basically disingenuous.

[jonsid2]

The fault of this meltdown is due to Florida and their two tier tax system. That''s where it all started, then it went to California and around the country. Few outsiders know that Florida taxes non-residents at a much higher rate than residents. When property values were going up, up, up, out of state speculators were buying and selling in Florida like crazy. Then they got their tax bills and panicked. Taxes went up so high, they had no choice but to dump their properties as fast as possible. The market became flooded with properties and the rest is history. Until Florida taxes non-residents the same as residents, the market will be slow in recovering.

[omded]

It''s all about supply and demand. I say, let the market correct itself. If there''s money to be made, developers will build. If there''s money to be earned, construction workers will still work. I see no need or justification for the government to make the fiscally responsible people in our society share the burdens incurred by those who were not so responsible. By interfering, the government only makes a bad problem worse. It delays what must inevitably happen anyway. And, besides, people will just become even more dependent on the government and they''ll start expecting something - just like the Welfare people used to do.

[brianbwb-2009]

While essentially correct, the author does again miss the actual core of the problem.

Since 1972, the dollar has declined to roughly 23% of its value (or one might say that the US has endured almost 400% inflation) Add to this the fact that earnings have not kept pace with the dollar''s devaluation, and due to union busting, "globalism", and corruption, employment opportunities have shrunk drastically.

Simply put, Americans cannot afford the artificially inflated prices that developers, in collusion with the banks and the "trickle down" advocates, have placed on their properties.

A 30 year mortgage of any type is no longer apropos in an economy where employment duration is less than ten years.

A "free market" dictates that values are subject to what people are willing to pay, artificially sustaining unrealistic prices that lock people into a lifetime of indentured servitude, without the income security that would enable it to be completed, is even worse than the "communist" method.

But the solution is correct, let prices fall to where they will, perhaps even targeted boycotts of developments and banks will help drive prices down to affordable levels.

everyone has simple answers to complex problems.
if housing prices drop. who is going to build new
houses. land prices are dictated by availability.
can''t change that. all workers involved in the
building industry are not going to be happy at
minimum wage. so there you are. another quandry.

[uh60drvr]

Wow - this is the very first time I have heard such an intelligent response to the housing crisis. The author nailed this one.

Housing prices are still overly inflated and until they are allowed to fall into line with income the market will not recover.

Great oped

[timothyone-2009]

When will these BLAME-THE-DEM Bush apologists finally shut up? Now it''s BARNEY FRANK''S fault and not the greedy and corrupt money changers who dwell deep within the rich Republican base. The unnecessary trillion dollar war had nothing to do with it either, did it?
I could sit here and name dozens of major multi-billion dollar economic crimes committed by these right-wing fools, and in Declan McCullugh''s mind Barney Frank is the man to blame. Idiot!

[presjfk]

A large part of the housing problem was caused by a, "bubble." A bubble that has burst cannot be fixed by manipulating the markets to continue with irrational values. The bottom must fall out of the housing market and replaced with the true market values. Anything less and the pain will continue on...

[wl7bzh]

You know what? I WILL enjoy drinking beer & watching football! You go ahead & enjoy biting your pillow & watching Dancing With the Stars.

I''''ll bet those mean jocks really did a number on you!! LOL!!!

Posted by easeup at 05:00 PM : Nov 26, 2008

Dancing with the stars? I''ve never seen it. Is this a jock thing?

"Did a number"? No, these are the alcoholic losers, with the bad knees, backs, marriages and old photos of themselves in uniform when "coach promised them they could go pro" if they gave it all for the team that I have to tolerate now.

You seem to be living in the past. It''s you deadbeats in the present making life miserable now.

[seafang]

That''s right let them crash. After all, when those people went to the bank and were told they couldn''t afforda $100,000 house but the bank would lend them the money anyway; and then turn the whole mess over to fanny mae, and let the taxpayers worry about it; they figured.
Well if this guy will let me buy a 4100,000 house I can''t pay for, I might as well go for a $500,000 house I can''t afford either.

So they are the ones who drove the house price up to where legitimate buyers couldn''t afford them; so let them fall, let them file for bankruptcy, along with the crooked banks that loaned them the money they knew would never get paid back.

After all of the bailouts of these deadbeats; who is going to be left to bail out the taxpayers.

[easeup-2009]

Whatsa matter yard ape-Not accustomed to someone talking back to you? Why don''''t you get the little woman to get you and the boys anuther beer cauz thar''''s probably a game on somwhar. eeeehaw

I bet life don''''t better than that do it bubba?

Posted by wl7bzh at 03:28 PM : Nov 26, 2008

You know what? I WILL enjoy drinking beer & watching football! You go ahead & enjoy biting your pillow & watching Dancing With the Stars.

I''ll bet those mean jocks really did a number on you!! LOL!!!

[bjcone8559]

"Any bailout punishes renters and Americans who were fiscally responsible by taxing them to benefit those who weren''t. "

This has forever been the battle cry of the greedy, religious? right. It is the same old, ''I''m not my brother''s keeper'' song. "I want everyone to have the best health care possible... as long as it doesn''t cost me anything." "Those people are homeless and starving because they choose to live that way." "Why should my tax dollars be used to pay for food stamps?"

It is high time that republicans come out of the closet and admit that they are NOT christians. To state, now, that the government should stay out of the mix and let the masses lose their homes and then, possibly, go hungry because of mistakes the government has made is simply evil. The majority of people who are losing their homes now DID NOT cheat to buy more home than they deserve (as republicans claim). They bought homes based on their optomistic expectdations of the future. It''s called the American dream! Their dreams have been dashed, not by their unwillingness to work to obtain it, but by those at the top who are greedy. Jobs have been moved to slave-labor nations by greedy corporations. In millions of households incomes have dropped or eliminated!

I sincerely wish that every one of you republicans (who place so little value on the dreams of others) lose your homes and your incomes, and your savings and your investments. You should get a taste of your own medicine.

[htcarter]

Part 2 of a 2 part comment: Isn%u2019t the truth that those folks in Washington right now decided that their relative wealth and power (and that of their business class brethren) is better preserved by attempting to avoid (postpone?) a depression marked by a reshuffling of the capital market deck (and particularly the financial services deck)? Of course, but are you better off? Why would the treasury not offer to lend to business people who have clearly demonstrated the ability and proper temperament to make overall sound investment and business decisions and let them find the bottom for all of these various asset classes rather than put money into companies that we know have bad assets and we know have flawed decision making and compensation systems? For every reason I have heard about propping up AIG and Citi, I can think of an alternative fix coming from outside this firms. Same with GM, Ford and the warranties. What I have not heard is a sensible argument about why we should price fix with housing housing (I know this is a result of Greenspan fixing the price of money at 1% and that was nuts too). Housing values are a function of incomes and interest rates. By fixing U.S. housing values we are by extension pretending to be able to fix U.S. incomes. Does anybody believe that we can fix (put a floor in on) U.S. incomes and at the same time participate honestly and sustainably in a global free market economy? I would like to be enlightened on this. Tom Carter

[htcarter]

Part I of a 2 part comment: I do not pretend to be the most studied person on the planet with respect to macro economics but I am a successful business person and investor and that success includes success in real estate and finance. Today I own and operate a firm that lends to growing businesses because that is a far less efficient market than even real estate. I think the author here is directionally correct. Should we not be absolutely outraged that politicians are deciding that it is better for all of us if we are propped up as consumers as long as we can be propped up whatever the tangible costs, ripple effects, or unintended consequences? If you are a capitalist, how do you now discount for that the fact that politicians are clearly willing to change even the basic free market principles that have been at our country''s core? Capitalists now have to weigh the wildcard of government bans on short selling, bailing out clearly flawed businesses and asset classes that are clearly overvalued. Do we really expect financial markets to more efficient today or going forward? How do we price the uncertainty of government action or inaction %u2013 with a higher discount rate or lower discount rate?

[stomarin]

Letting housing prices drop in theory sounds good but the problem is in the details. The issue is the "toxic" assets that have debt attached to them that now is so far under water it threatens the financial system. Then it is not just Wall Street''s problem, it is our problem if the financial system melts down. So we can''t just allow all the prices to drop without taking those toxic assets off the books of the stupid financial institutions that funded them. Or you have to do something to stabilize the housing pricing market which is what they are trying to do. Was the financial system tied to the debt associated with financing tulip purchases?

[fridak-2009]

Yeah, let them fall. So what if half the county is living under bridges. Chance to make a big fortune buying their forclosed homes and renting them back to them. (That''s what makes America GREAT!!)