patrick.net

If anything, it makes me want to make sure that when the bust comes we keep these jerks pent up and responsible for their reckless actions, no mercy.

I couldn't agree more. There should be no free ride for irresponsible spending. I'm hoping the new bankruptcy laws keep more people accountable for their stupidity.

Thanks, Sacto! There's is quite possibly nothing we haven't discussed yet, but still. :-P Here are some thoughts on negatives, plus a few positives:

Negatives I've observed:
1. the more people have, the more they want.
2. Marriages strained due to long work hours and struggles to afford BA cost of living
3. kids who have very little time with their parents
4. people with more of a grasping, greedy mentality than I've ever seen before
5. Extended families being more spread apart because of inability to afford living in the same places...so, kids growing up with no grandparents around
6. Older people trapped in houses bigger than they need, or in declining neighborhoods, because they can't afford to move with current prices and the tax situation

Positives:
1. more immigrants spreading out to affordable middle America, creating more diversity there and giving them a better chance to realize the American dream (I hope)

I'm trying to think of some other positives (and negatives), but I've gotta go for now. Later.

There have been plenty of social effects attributable to the RE bubble in the BA and other bubble-markets. I assert that these effects range from terrible, socially disruptive to benign to positive. As with most economic forces, there are winners, losers, and structural change.

For me, the worst losers in the BA have been those caught in the increasingly fragmented sections of the socio-economic strata. Put simply, as nominal prices have increased rapidly in low-wealth areas (price increases as a percentage risen fastest in poorer communities), people with the least means have been permantly cut off from an important source of personal wealth generation within the US economy. Although we tend to focus on the educated class (formerly known as the middle class) and their problems buying into RE, most in this strata will nonetheless be successful in generating personal/family wealth over their lifetimes. It is the working class that are now all but completely cut off from any hope of generating wealth in excess of income.

And I don't think a correction will help. Unfortantely, it will be the poor who take the brunt of the restructuring that will occur post bubble, as many of the higher paying jobs available to them evaporate. They simply won't be in any position to exploit lower RE prices given lower expected incomes and higher cost of debt.

The biggest positive effect of the RE bubble has been the degree to which real wealth has been created. A significant portion of GDP growth post 2000 has been derived from US consumer spending and RE growth. Although RE deflation will halt this, and asset values will decrease, it won't erase the real gains in capital stock that have accumulated within the economy. So long as we don't enter a period of prolonged recession, stagflation, or worse, then this will turn out to have been a lasting positive effect of the rapid RE appreciation.

But, back to my main worry. I really fear that major political, legal, economic restructuring will be necessary within the next couple decades to deal with the growing population segment that will in effect become permanent rentors. We will likely see many areas push through more forms of rent control, rentor protections, etc.--perhaps more akin to mainland Europe. I won't argue the merits of that system, but it will be a major cultural and structural shift for the US system of "perceived social mobility".

(just my opinion, it's worth what you paid)

Well, this one, from my extreme perspective, is too easy.

It's not really the housing bubble.

It's America. It's diseased, and it has been for a long time.

The housing bubble is merely a bed sore on America's rotting ass.

The "social" affect will be simple. Write this down moderates, so you'll remember me later . . .

This country is going to collapse. Not recede. Not recess. Collapse. That we create a void. What will fill the void is the only question.

Among the obvious options . . . Hillary and her communist friends. Very conservative religious folk.

And let me throw this out there to Jamie . . .

as for "diversity spreading to middle America", what do you mean by "diversity"?

Diversity of skin color?
Diversity of culture?

Because I gotta point out, the first is silly, and the second is probably unwanted if that culutre resembles the immigrant culutre in Cali, which is significantly mexican.

Diversity for the sake of diversity is one of the great leftist con jobs of the last 30 years.

MIT, for example, has 20% "underrepresented" minorities. Boy, if it wasn't for them damn asians, they wouldn't be obliged to use the word "underrepreseted". In any case, this diversity for diversity's sake is destructive.

In the ideal society, there would be no diversity; everybody would be a good person looking to care for ems neighbor.

And I don’t think a correction will help. Unfortantely, it will be the poor who take the brunt of the restructuring that will occur post bubble, as many of the higher paying jobs available to them evaporate. They simply won’t be in any position to exploit lower RE prices given lower expected incomes and higher cost of debt.

I agree.

Furthermore, this zero-sum game (sorry) is about taking from the poor and giving to the rich. No evil force at work here. Just a natural tendency. There is nothing particularly wrong about it. Just make sure we position ourselves and play accordingly.

"There is nothing particularly wrong about it"

I can't agree. When they're, in the aggregate, less intelligent, less educated, and biologically less able to compete with you and me, is it, in the end, ok to take their money?

Diversity for the sake of diversity is one of the great leftist con jobs of the last 30 years.

Well said. True diveristy comes naturally. Diversity for the sake of diversity is just a trick to get votes.

The “social” affect will be simple. Write this down moderates, so you’ll remember me later . . .

This country is going to collapse. Not recede. Not recess. Collapse. That we create a void. What will fill the void is the only question.

I'm sorry, I'm driven by logical arguments, data, and facts. If you assert that the country will collapse then state your hypothesis so we can test it. Otherwise, it's so much hot air.

As to diversity: the perception of social mobility has been a driving economic force in this country since the early Industrial Revolution (ala Horatio Alger). This implied diversity because the new stock of workers were immigrants, first form Europe, later from Asia and the Americas. Although I'll agree that social-engineering of diversity doesn't work, the claim made here was that economically-driven diversity is a good thing. I challenge you to logically deny this fact...and if you can, go submit yourself for a Nobel prize in Economics. "Leftist con jobs" lol. The industrialist Oligarchs who imported millions of workers from Asia were leftists as much as I'm short-winded.

I can’t agree. When they’re, in the aggregate, less intelligent, less educated, and biologically less able to compete with you and me, is it, in the end, ok to take their money?

It is an amoral act. Hey, I thought you are a libertarian. ;)

I do not agree that poor people are necessarily less intelligent as a group. However, they are not well aligned with the game. It is not really their fault. They just have a different philosophy about life that may turn out to be ... right.

Remember Condoflip.com (and all those RE get-rich-quick seminars that have sprouted like fungus everywhere)? Now meet "GotExit?": www.gotexit.net

"The GotExit? real estate exit strategy seminar series is designed to help people just like you design unique and appropriate exit strategies for their appreciated investment real estate.

We also offer additional “exit strategy” seminars and consulting on other important personal and business transition events including business succession, family legacy planning, and general asset protection techniques."

Escaped,

I get your point about the "diversity" trap and the idiocy of government-mandated PC-ness, lack of border enforcement, etc,, but aren't you overreaching just a tad by blaming it all on the lefties? (Personal disclaimer: independent who's as likely to vote Republican as Democrat.) As Randy H pointed out, the far-right/pro-business-at-any-social-cost crowd is almost as rabidly pro illegal immigration as the far Left. Great way to bust unions and lower wages, which is usually the single largest cost of business.

RandyH "the perception of social mobility has been a driving economic force in this country since the early Industrial Revolution"

This sounds like a sociologist, which are about a half rung up on the science ladder from astrologists.

If what you mean here is . . . "people won't work hard to get wealthier if they don't believe the system allows them to get wealthier," then I agree, and I also agree that water is wet.

"If you assert that the country will collapse then state your hypothesis so we can test it."

Premises- People are, with very few exceptions, stupid animals who behave in extremely self-destructive ways. Given multiple options of governement in a democratic system, stupid animal people will always tend toward voting for a more socialist system. Given economic severity, this propensity will worsen. Progression toward socialism is equivalent to distance from economic prosperity. We are currently in a condition of worsening economics.

Hypothesis - This society is unsustainable and will crash.

"economically-driven diversity is a good thing. I challenge you to logically deny this fact"

How can a person logically deny a fact? To deny a fact is, quite obviously, Bones.

How about this. I'll refute your argument? Let's start with this . . .
I have no idea what you mean by "economically-driven diverstiy". If you clarify what that turn of words means, I'll do my best to answer your challenge.

It’s America. It’s diseased, and it has been for a long time.
The housing bubble is merely a bed sore on America’s rotting ass.

This country is going to collapse. Not recede. Not recess. Collapse. That we create a void. What will fill the void is the only question.

Wow, Escaped, you make me feel like a RE Bull by comparison! ;-)
Seriously, this country has a lot of problems, but I don't think they're all unsurmountable. Our major problems today are mostly or completely within our control as a nation to do something about, if we choose to: national debt/overspending, zero savings rate, credit-fueled RE Bubble, obesity epidemic, extremely inefficient sick-care system, etc...

I never thought I'd ever say this here, but lighten up, ok? If the WWII generation managed through a great depression & world war, we should do fine --IF we get our priorities sorted out (a big "if" I agree).

Harm, I'm sorry if what I wrote seemed to imply that I blame the leftists 100% for the state of America. I don't.

I think that there have been many things that have contributed to the fall of this country. Among them, and of critical importance in my view, are . . .

Decline of basic morality/decency/respect for family.
Slide of government toward socialism.
The Fed.

Those who are "on the right" can't claim the highground. In fact, often, they must admit that they treated people like crap for their own gain.

I am a libertarian, and between the two evils - the right's mistreatment of those who are different, and the left's relentless pull toward the economic cliff, I have a hard time deciding which is worse. From a moral perspective, it's certainly the right. From a practical perspective. It's the left.