patrick.net

elliemae says

Now, THAT’s anger. And overkill.

Seriously. I actually strongly agree with the second part of his post:

It’s funny how all those socialist countries can support all that demand for upper class housing and still provide health care for everyone. Very strange……….

The whole idea that having heavy government regulation in some industries spells the death of capitalist economies, and lowered prosperity is not backed up by the evidence.

HousingWatcher says

How come there are never any positive articles linked to on the housing crash page? Why must everything be gloom and doom? And also, why is Patrick supportive of Socialst health care, but is not for the same policies when ti comes to bailouts? It seems to me that Patrick supports Socialism when it benefits him and then supports the free market when it benefits him (in housing).

I may not agree with Patrick on political matters, but I agree with his view on housing/real estate.
From my point of view, our doom and gloom started when prices became disconnected from fundementals back in late 90s. The RE industry was working on borrowed time and marching toward day of eventual reckoning. As such the "Crash" is the long awaited correction much needed to keep our SV industries competitive and keeping jobs locally. High home prices have put both employeed renters and homeowners at high risk. All the pathic hype we heard over the past 10 years to justify high home prices have also crashed. The few who saw through this should be commended. Kodus to Patrick!

priya22222 says

i definitely missed the bottom bec of all gloomy news..

Baby! you havent seen anything yet!

http://www.housingbubblebust.com/OFHEO/Major/NorCal.html

I do the same thing on my posts.

cool_cat_me says

Patrick has done that ever since I started reading the articles on his site. I don’t think it is new and I definitely don’t see it as a problem.

I got no problem with it.

But if you’re sick, there is no choice and no free market for you. You are forced to pay whatever they say or die, very similar to armed robbery. Sure, there’s some personal responsibility for your own health (obesity and smoking for example) but lots of health problems are just random bad luck, followed by confiscation of your assets by the insurance industry.

NOT similar to armed robbery. You see in armed robbery a guy forces you to pay or he threatens your life. Getting sick or hurt is somewhat out of your hands, but no one is forcing you to pay. It is your choice to seek treatment or not (and what type of treatment you wish to pursue).

The confiscation of assets by the insurance industry is EXACTLY what the Bill in Congress would do. It would mandate that millions more healthy Americans contribute to the corporate interests. It would be a boon for HealthNet, Argus, Medco, Aetna etc... and for this increased cost you can expect longer lines at providers offices, and more Denial of Benefits. Give insurers more power and you can expect more of the same.

How about scrapping the insurance system all together? Allow everyone to deduct the entire expense of their health care from "earned income," (so you are not penalized for paying out of pocket) develop an optional public plan if you like but let people opt out too if they don't want to be a part of the state plan. (otherwise the state becomes the armed robber patrick).

At some point, enough Teabaggers will be bankrupted by the insurance oligopoly

At some point our government will be bankrupted (perhaps in our lifetime) and then it will be a moot point.

San Francisco isnt like the other global cities. A minor player! I havent seen rows of Million Dollar yahts parked in the harbor like on the Italian Riveria. A 2/2 900-1000 sq ft condo before the bubble were running under $200K before the bubble. Not much has changed to justify today prices!

Sale History & Tax Info Sale History
04/17/2003: $510,000
02/26/1999: $300,000
07/19/1996: $178,000
http://www.zillow.com/homedetails/1885-Turk-St-1-San-Francisco-CA-94115/15085005_zpid/
2 beds, 2.0 baths, 1,010 sq ft

The pimps in Cads are long gone, replaced with "slick willy" in a shinny Bimmer who have to
maintain their high standard of living pimping RE. Somethings never change!

It's your choice whether to pay the robber or die. Same thing.

There are many bills in Congress at the moment, not just one. Any that would force us to pay for private insurance which has no real competition are definitely a step backwards. I never said I liked that.

I do like optional federal and state insurance plans. If they're optional and funded entirely by premiums instead of taxes, then they do provide some competition without force.

300 3rd St APT 1204, SF, CA
Sale History
07/14/2009: $550,000 Flag Close
12/16/2003: $475,000 Flag Close
08/18/2000: $500,000 Flag Close
04/04/1996: $210,000

300 3rd St APT 504 San Francisco CA 94107
Sale History
06/26/2009: $440,000
06/26/2009: $440,000
12/31/2008: $608,811
12/14/2005: $660,000
12/05/2003: $409,000

not even 2000-2001 prices are that sustainable.

It’s your choice whether to pay the robber or die. Same thing.

In this case, doctors, hospitals, pharmacies and anyone who works to support these industries are robbers. (*addendum for Ellie this is a joke)

Perhaps we should make practicing medicine for a fee illegal? (**so is this) "You will fix my gall bladder or we will shoot you." Now who is the robber?

That's why I asked about the housing prices per square foot in the rest of the country. London is $6,191/sq ft; Tokyo $2,334/sq ft, San Francisco $426/sq ft...

Salt Lake City (in my home state of Utah) is the closest thing we have to San Francisco, so I'll use that to compare. Please stop laughing now - I realize that the cities have little in common. However, it's the biggest city at 178,858 ppl spread over 109 square miles (1666 people per mile) compared to SF with 744,041 ppl spread over 45 square miles (16,636 per square). This is hardly scientific - the population numbers come from 2006 census info and we're only talking the actual cities.

According to http://realestateblog.slcagents.com:

Average List Price $273,277
Average Sale Price $264,398
Sale Vs List 97%
Average Sq. Ft. 2,619
Price Per Sq. Feet $101
Days on Market 88

However, when we look at 1.5 million dollar homes, the numbers are different:
http://realestate.yahoo.com/Utah/Salt_Lake_City/41-e-churchill-dr:6a95b5989783c88a326aba1883a87b65
$321.00/sq ft

AdHominem says

It’s your choice whether to pay the robber or die. Same thing.

In this case, doctors, hospitals, pharmacies and anyone who works to support these industries are robbers.
Perhaps we should make practicing medicine for a fee illegal? “You will fix my gall bladder or we will shoot you.” Now who is the robber?

Oh, my gawd! I'm a robber! Well, slap me silly and call me Susan... But the only way to ensure we continue to have competent physicians is to pay them. An unpaid all volunteer physician "force" wouldn't work.
AdHominem says

It is your choice to seek treatment or not (and what type of treatment you wish to pursue).

Not always. Discounting the complete silliness of your comment, what about those people who are in accidents and brought to the hospital without their knowledge or consent? And what about the municipalities that are charging for emergency response, even if the victim didn't call for it or want it?

So far as to whether it is one's choice to seek treatment or not - when a person is in excruciating pain or physical distress, it's no longer a choice, it's an imperative.

I am a avid reader but don't get involved with the posts at all.

Reply to the original post: I agree with Patrick's changes to the headlines. If he was wrong, then I would have a problem but there is no spin; just truth.

Reply to the hints in social health care: Be careful of what you want. Military health care is a perfect example of social health care. Service is very poor quality. Just take a look at the VA health care. The VA is socialized health care. The best doctors in the VA are the ones who volunteer from their great paying jobs to do some work for the vets. The system sucks!

elliemae says

So far as to whether it is one’s choice to seek treatment or not - when a person is in excruciating pain or physical distress, it’s no longer a choice, it’s an imperative.

Right you are ellie. Just like the good Samaritan it is YOUR responsibility to help those around you who you find in need. Not government, not "society". YOU. So if you see a problem with people in need why don't YOU find a way to fix it? That I would like to see rather than this socialist b.s. "if we just all had the same government health care plan everyone would be happy." B.S.

And you know what? Many Europeans and Canadians might be happy with their plan, but it doesn't matter, THEY HAVE NO CHOICE. Dig below the surface of the official media reports and you will find a bunch of people who slip through the cracks just like here.

RE: original post

Just for the record Patrick I find your rewriting the headlines to be an interesting addition to the site.
Thanks!

Take a look at Patrick's avatar photo. Now, is that the face of someone who's up to no good? A common prevaricator? A reckless scoundrel?
What is his crime? That he prowls the dank, wet alleys of hopelessly unreal estate?
Oh, the humanity. Who among us is even worthy to ask on our knees if we may be permitted to lick his boots with our worthless and inadequate tongues?
His insight touches the soul like a butterfly's wing touches the wind, to sing a song of truth to those who have ears to hear.
His words dishonor no one but the jackals who feed on the rotting corpse of iniquity.

Caution: Do not operate heavy machinery while reading this post. Void where prohibited by law.

boscowashere says

I am a avid reader but don’t get involved with the posts at all.
Reply to the original post: I agree with Patrick’s changes to the headlines. If he was wrong, then I would have a problem but there is no spin; just truth.
Reply to the hints in social health care: Be careful of what you want. Military health care is a perfect example of social health care. Service is very poor quality. Just take a look at the VA health care. The VA is socialized health care. The best doctors in the VA are the ones who volunteer from their great paying jobs to do some work for the vets. The system sucks!

I have to laugh about the VA reference. I work at OHSU. On our campus we also have a children's hospital (Doernbecher's), a Shriner's Hospital, the VA, and various other clinics. I often have the dilemma of keeping quiet or speaking the truth when one of my patients says "I will never be a patient over at that VA hospital, those doctors...blah, blah, blah". Unbeknown to my patient, IT'S THE SAME DAMN DOCTORS. We share 'em;O)

You have to cut the VA some slack, though. Much of their budget has been diverted to combat wars at the same time the need for VA care has gone up due to folks losing their bennies due to unemployment therefore tapping in to one of their supposed guarantees of health care for serving their country and secondly, good gawd, look at the number of injured troops returning from the Middle East! Thanks to the advances in battle field medicine we are able to save these men and women when otherwise they'd just be dead (cheaper to care for:O( but not only do we have the physical wounds of war we have PTSD.

According to a bulletin I received last year, PTSD is now classifed as a Mental Illness. It's about damn time - that means that treatment can be obtained for PTSD, rather than an aside.

elliemae says

According to a bulletin I received last year, PTSD is now classifed as a Mental Illness. It’s about damn time - that means that treatment can be obtained for PTSD, rather than an aside.

I know the fight to get it classified therefore covered began with our Viet Nam vets. What hell to go through and then to get brushed off by the very folks who promised to take care of you for serving our country. It was officially classified in 1980 (DSM -III).

I did hear some good news about a study being done on the battle fields as we speak. Loading the victim with heavy doses of morphine greatly reduces the severity of PTSD. Here's another thought...bring them home...I'm really into preventative medicine:O)

I think that, if we gave them all marijuana, their symptoms would be greatly reduced and they wouldn't feel like fighting. Both sides of the conflict.

elliemae says

I think that, if we gave them all marijuana, their symptoms would be greatly reduced and they wouldn’t feel like fighting. Both sides of the conflict.

When can we start the fly overs?!?! Free bongs all around! I'll start baking the brownies;O)

I bet that if all men on both sides were sexually pleasured thrice daily in a male-selfish manner, there would be no war. For the same reasons ellie suggested.

Do you mean that those boys in high school who told me they were going to join the army and I should sacrifice myself for my country before they left... weren't lying?

Bap33 says

I bet that if all men on both sides were sexually pleasured thrice daily in a male-selfish manner, there would be no war. For the same reasons ellie suggested.

Great, now you are blaming women for all the world's problems....hahahahah (JK)

Bap33 says

I bet that if all men on both sides were sexually pleasured thrice daily in a male-selfish manner, there would be no war. For the same reasons ellie suggested.

Hey, don't we still have the "Don't ask, don't tell" policy;O)

Regarding European Health Care:

No one slips thru the cracks unless they want to.

The malaise that affects the USA also effects the world e.g. about 20 years or so ago even if you were not a UK citizen you could get free treatment there (e.g. had a heart attack, broke a leg) now that is not the case, now you must be a UK citizen or carry medical papers issued by the EU government (or private insurance). In emerging nations the provisions were so low that they are still improving but don't expect that to continue in future.

What I mean is that in the west the drop in health care "care" has been universal but because it was already so low in the US its deficient nature become apparent even to the covered.

People say government systems don't work but civilization is the product of government. The reason funds like social security and pensions are bust or going to be is because they have been raided repeatedly to finance other arms of government. Precisely why there is never a lack of funds to bail out industry and finance wars.

Kevin says

I happen to agree with Krugman on this issue, but by and large I don’t care for his opinions because his track record is pretty average among economists. I’m particularly annoyed at him because he refuses to admit when he’s wrong, and he acts like winning the “Nobel Prize in economics” makes everything he says the gospel.

Krugman's track record is awful.
Here he is in 2001 urging for Greenspan to cut rates as fast as possible.

However, let's give credit where credit is due: Mr. Greenspan has cut rates since then. And while some of us may have been urging him to move even faster, the Fed's four interest-rate cuts since the slowdown became apparent represent an unusually aggressive response by historical standards. It's still not clear that Mr. Greenspan has caught up with the curve -- let's have at least one more rate cut, please -- but the interest-rate cuts do, cross your fingers, seem to be having an effect.

Here he is in 2001 urging for housing to be pump primed.

I think frankly it's got to be -- business investment is not going to be the driving force in this recovery. It has to come from things like housing, things that have not been...Will the Fed cut interest rates enough? Will long-term rates fall enough to get the consumer, get the housing sector there in time?

Again, in 2001, he wanted to stimulate housing even more.

I'm a little depressed. You know, inventories, probably that's over, the inventory slump. But you look at the things that could drive a recovery, business investment, nothing happening. Housing, long-term rates haven't fallen enough to produce a boom there. The trade balance is going to get worst before it gets better because the dollar is still very strong. It's not a happy picture.

Still, wanting to stimulate housing more.

Consumers, who already have low savings and high debt, probably can't contribute much. But housing, which is highly sensitive to interest rates, could help lead a recovery....Sooner or later, of course, investors will realize that 2001 isn't 1998. When they do, mortgage rates and the dollar will come way down, and the conditions for a recovery led by housing and exports will be in place.

btw...that export led recovery never came. We just continued to outsource.
Still wants to promote spending on housing in late 2001

In time this overhang will be worked off. Meanwhile, economic policy should encourage other spending to offset the temporary slump in business investment. Low interest rates, which promote spending on housing and other durable goods, are the main answer.

Of course, he'll never admit he said any of this. He even claims that he saw the housing bubble coming before this. I can find a bunch of quotes from him 2003 screaming his head off about the deficit and how it is going to create a giant fiscal crisis. If you ask him today, the deficit doesn't matter at all. He's a liar, plain and simple.

theoakman says

Here he is in 2001 urging for Greenspan to cut rates as fast as possible

And that was the correct thing to do. 2001 wasn't the problem. And low interest rates weren't the problem either--it was poor underwriting standards.

theoakman says

Of course, he’ll never admit he said any of this. He even claims that he saw the housing bubble coming before this. I can find a bunch of quotes from him 2003 screaming his head off about the deficit and how it is going to create a giant fiscal crisis. If you ask him today, the deficit doesn’t matter at all. He’s a liar, plain and simple.

You really don't get it at all. Different things matter at different times. Deficits, for example--during boom times like 2003, you should be running a surplus. So the fact that we were running huge deficits during a strong economy is a very bad thing. But during recessions/depressions, deficits are a necessary evil. You have to run a deficit in order to make up for the lost demand of the private sector...

So if he said the budget deficit was bad in 2003 but OK now, he's be entirely correct.

Has anyone bothered to run these numbers? At $6,191 per sq ft, 1.5 million dollars buys you a 242 sq ft apartment, that's a 10 ft x 24 ft room!!! On the low end of the sale, Tokyo at 2,334 sq ft gets you 642 sq ft apartment. My first house was 850 sq ft living space and I had a full basement to boot. I can't imagine living it such a small space. My new house is 4 times larger now, not including a stand up attic, full 9 foot ceiling basement and a 3 car garage. Also my property is larger, I had a 50x175 lot (8750 sq ft), and now I have a 108,900 sq ft lot, 12 times the size.

I concur with tatupu. There is no such thing as a permanent position in economics; it is primarily the science of analyzing, inducing or responding to changes. Krugman got carried away with his response to the 2001 tech bust, but also remember, most of those articles were written before 9/11, the ensuing wars and the surge of outsourcing to China.

Note that I am not a big Krugman fan. Paul occasionally highlights important issues, but he also enjoys the limelight too much for my tastes. He'll oversimplify complex issues just to make a splash in his own column, even though he often dismisses dissenters as oversimplifying things. His Nobel Prize gets waved around too much---I'd like to hear what other laureates of the Nobel Prize in Economics have been saying for the past few years.

tatupu70 says

theoakman says

Here he is in 2001 urging for Greenspan to cut rates as fast as possible

And that was the correct thing to do. 2001 wasn’t the problem. And low interest rates weren’t the problem either–it was poor underwriting standards.
theoakman says

Of course, he’ll never admit he said any of this. He even claims that he saw the housing bubble coming before this. I can find a bunch of quotes from him 2003 screaming his head off about the deficit and how it is going to create a giant fiscal crisis. If you ask him today, the deficit doesn’t matter at all. He’s a liar, plain and simple.

You really don’t get it at all. Different things matter at different times. Deficits, for example–during boom times like 2003, you should be running a surplus. So the fact that we were running huge deficits during a strong economy is a very bad thing. But during recessions/depressions, deficits are a necessary evil. You have to run a deficit in order to make up for the lost demand of the private sector…
So if he said the budget deficit was bad in 2003 but OK now, he’s be entirely correct.

Actually, if you look at the bubble, real estate was already at its inflation adjusted all time high. The last thing we needed is to pump prime the housing market in 2001. And FYI, poor underwriting standards occurred in the latter stages of the bubble beyond 2003, not the early stages. If you don't think low interest rates fueled the housing bubble, you are nuts. In fact, every real estate pundit told people to "buy now while rates are low".

As per deficits, spoken like a true Keynesian. If you read Krugman's writings via 2003 on the deficit, he claimed that the government possesses no ability to pay off the debt without printing lots of money and causing lots of inflation. Now, both you and Krugman seem to think that a deficit 4 times larger doesn't affect that cold hard fact simply because we are in a recession. The US still can't pay it's bills and stands no chance.

Btw...it's hilarious that you think the economy was strong in 2003.

Brand says

I concur with tatupu. There is no such thing as a permanent position in economics; it is primarily the science of analyzing, inducing or responding to changes. Krugman got carried away with his response to the 2001 tech bust, but also remember, most of those articles were written before 9/11, the ensuing wars and the surge of outsourcing to China.
Note that I am not a big Krugman fan. Paul occasionally highlights important issues, but he also enjoys the limelight too much for my tastes. He’ll oversimplify complex issues just to make a splash in his own column, even though he often dismisses dissenters as oversimplifying things. His Nobel Prize gets waved around too much—I’d like to hear what other laureates of the Nobel Prize in Economics have been saying for the past few years.

Every "Nobel" in economics in the past 20 years has had a god awful track record of economic forecasting and some of them have gone on to bankrupt giant funds multiple times. Krugman's forecasting record is god awful, yet somehow he manages to avoid criticism because he's got followers that blindly believe everything he says today while forgetting everything he said beyond 1 year ago.

The shifting of positions is a "non sequitor". If bankrupting yourself as a nation, you're bankrupting yourself. It's ludicrous to assume you aren't bankrupting yourself because you are in recession. In fact, it makes the fact that your pursuing the same policies even more ludicrous. Besides, they already tried the Keynesian remedy in 2001. We ended up with more unemployment, more inflation, and bigger deficits a mere 7 years later.

theoakman says

Btw…it’s hilarious that you think the economy was strong in 2003.

Really? How do you measure strength? GDP growth is what I use and it was pretty robust in 2003.

theoakman says

If you don’t think low interest rates fueled the housing bubble, you are nuts.

I guess I'm nuts then because I think it had a very small effect. The data doesn't support your view, btw.

theoakman says

Now, both you and Krugman seem to think that a deficit 4 times larger doesn’t affect that cold hard fact simply because we are in a recession

That's not at all what I'm saying. Please read it again. I'm saying that in 2003 we should have had a surplus that would cover the deficit spending that we have to pursue during the next recession. But even if we don't have that surplus, we still have to fix the economy.

theoakman says

Besides, they already tried the Keynesian remedy in 2001. We ended up with more unemployment, more inflation, and bigger deficits a mere 7 years later.

Nice try. You can assume cause and effect there, but it's still not true. I'd say--we tried deregulation in the financial industry in the early 2000s and ended up with more unemployment and bigger deficits a few years later.

And more inflation?? Are you kidding? Um, try more deflation.