Re: “Save subprime borrowers, not bloated bankers” by Dean Baker
On Aug 21, 2007, at 3:24 PM, Jordan Hayes wrote:
I’m not sure why shortening the time period gives you more reliable results.
Because the world has changed?
As they say on Wall Street, some of the most dangerous words in the
language are “This time it’s different.”
Hell, let’s look at real estate prices over the last 5000 years. That ought to be the same, right?
No. Capitalism is, at a stretch, 800 years old. The U.S. has had a
national economy really only since the end of the Civil War.
It’s the same reason you can’t look at combat casualties over the last 100
years: everything has changed.
See above. In any case, asset prices do follow patterns over time.
Despite everything having changed, you couldn’t tell a stock market
chart from the 1920s from one from the 1980s or 2000s.
There’s that 1% long-term trend followed by a really anomalous period again.
I don’t get why you keep saying that a house beats inflation by 1%
over the long term and then come to the conclusion that it’s no way to “get rich” … Give me 1% over inflation any old day!
GDP averages 3.5% over inflation. Productivity, over the long term,
about 2%. Stocks, around 7%. Houses are a real laggard.
Doug