6 Comments
Oct 6Liked by Kevin Erdmann

I'm not sure I'm thinking about this correctly, but it seems like what you're highlighting here is even worse in real terms than nominal. Given the massive destruction of housing value between 2007-2009, 2007's $261,000 house could have been had for far less in 2009, and $327,000 went a really long way in 2009's market.

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Yes. You’re thinking about it correctly. It is worse than it seems in that way. The histograms in this post account for that change. The distribution of prices is specific to each year.

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Oct 6Liked by Kevin Erdmann

"We killed half the market"---I wonder if there's anyone who says that with a sense of pride; smugly convinced that they saved millions of families from the burden of a mortgage that might have been slightly higher than what they would pay in rent.

The guest post at Slow Boring by Wally Adeyemo seemed to be scratching at the idea that certain financial entities aren't delivering the goods on credit for housing purchases. Based on the numbers he was citing, the FHLB's (which you've never mentioned before) haven't been much of a player for decades. I suppose any reform helps, but if Yglesias is going to give somebody a guest post, it should be you.

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Oct 6·edited Oct 6Author

I think the person in your first paragraph is common. I think they mostly just convince themselves that this was all a reversal of 2000s excesses. If they see my work, they think the numbers I cite are somehow misleading in a way they can’t confirm, but it feels better to believe that they are so they do.

Edit: I should add that a lot of people who think it was just a reversal of 2000s excesses just haven’t seen the evidence and a lot of people who see the evidence change their minds!

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Oct 7Liked by Kevin Erdmann

I noticed on Twitter you called out Hank Paulson. Geithner was also a bubble fear monger. I think the Wall Street types regard most of the little people as incapable of understanding debt and credit and should just rent forever.

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Paulson was the Steve Jobs and Geithner was the Tim Cook of our housing crisis.

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