Friday, May 04, 2007

Duelling Dumbness

The Wall Street Journal today has an example of an increasingly common kind of piece: middle-class people who wanted to ride real-estate to riches are getting caught in the housing downdraft and trying to bail out. Many of the buyers are suing developers to get out, some on grounds of trivial non-performance (a door to a common area that turns out not to be lockable), others on grounds that they, the honest middle-income folks, didn't make enough money to make the home purchase they did and should have been turned down. "You gave me what I asked you for, but you shouldn't have. Why did you? See you in court!" It's hard to know who to root for in this one, since all parties were working every angle to cash in big. One builder spokesperson summed up the other side by saying "These are not situations where a woman bought a unit and she's now a widow and can't pay," he said. "These are people who don't want to close because they can't flip and make $100,000."

The LA Times had a piece about child care that will no doubt disappear immediately. But it shows how state funding for child care would actually help the economy by freeing up parents to work longer, take better jobs, or something similar. I bring this up because every day the news has been showing the depressing shift in middle-class thinking from public services as their platform of life-and-work satisfaction and affluence to depending on price inflation in things they own. In the 1990s they looked to stocks, in the 2000s it has been real estate. Either way the middle-class now associates their own affluence with buying something cheap that they can then sell dear. They don't associate their well-being with social development or the general welfare.

The whole scheme works for a while but not for long. It works for some but not for all. Any chance we'll figure this out in time?

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