Your fundamental assessment in this case appears to have been the argument that since people are paying more of their income to live in houses, particular lower-income families, then the American dream of owning a home must be a hollow myth.

But you’re analysis is looking at entirely irrelevant information. If people are willing to spend more in order to live in better areas, then that is a seperate issue.

Once more; unless you can demonstrate that the trend is towards fewer people owning homes, and more people being unable to make their payments, then your argument has no substance.

And lo and behold, the trend would appear to be an inching in the upward direction for homeownership over the last forty years.

This is precisely what I meant by judging things on their internal logic alone. You speak of the “relative inhumanity of the U.S. in its refusal to care for its own in comparison to most European countries’ insistence upon it” as if insistence were the most important aspect of this subject. But to my mind, the most important thing is the bottom line–how many people are unable to afford to either buy or rent a place to stay, and in what countries has the material condition of the average citizen improved the most, in every segment of society, over the long term.

You do not address these issues; you simply spoke of lower taxes, the fact that few very poor people end up with children who are at the other extreme of the material spectrum, and the fact that people are paying more of their income for homes, and act as though any of this had any real meaning.

If inhumanity is what you’re trying to demonstrate, then you have failed. All you have done is shown that we give less money to our government than we used to, our paupers may have to live with becoming middle class rather than princes, and more people are paying more money so that they can achieve their dream of owning a home. You haven’t even bothered to try and compare that to the conditions in Europe.

So I’d say that so far your fundamental assessments seem to be fairly lacking in supporting evidence.

Judge by internal logic? As opposed to some other standard? What does that even mean? Is that meant to be a real criticism?

My original statement, which has probably been lost in the comments and retitling of the subject, was that home ownership is a far-off dream for many. Judging by the current housing bubble we’re in, rising interest rates, the number of people overextended in their housing costs (which is measured by consensus, not choice), and the increase in foreclosures (see foreclosure weblog mentioned above), I think my statement holds true.

It’s obvious that the housing market has adapted by offering questionable mortgage instruments and that individuals take on (by choice or per force, I’m not sure it matters) risky behaviors. There is still a sizeable portion of the populace that is excluded from even considering buying into the American Dream of home ownership by the current economic climate and housing market. You’ve asked a lot of questions, but I daresay you haven’t dispelled any of the fundamental assessments leading to my claim.

Who decides what a good reason is? And on what basis?

or ones that we want to encourage as part of national policy

What on Earth does this have to do with national policy? Do we need to encourage a monolithic standard way of being?

If, as in California, it’s because lenders are pushing complicated and risky lending, that’s not so good.

Once again, I think you’re making too many assumptions. Assumptions about how much influence the “push” factor play, assumptions about what “risky lending” is, and assumptions about how you judge any of these things at all.

In this discussion, you and Brutus have had a tendency to judge things based entirely on their internal logic. While I do enjoy going into that, it is ultimately useless unless you can demonstrate that your understanding of the flaws of any given way of doing things (be it “risky lending” or what have you) translates into measurable, real-world scenarios.

The ‘problem here’ is not that Brutus’s model is right; it’s that the reasons people here are willing to pay more are not always good ones, or ones that we want to encourage as part of national policy. (For example, if Americans just like bigger houses than Europeans, okay, whatever. If, as in California, it’s because lenders are pushing complicated and risky lending, that’s not so good.)

Welcome to this week’s edition of the Carnival of the Vanities. I’m sticking with my usual method of hosting a carnival — listing a summary of each piece with the author’s reason for submitting the post to the carnival (for

You have to realize this post comes in the context of a discussion with Brutus about the American social model vs. the European one. My argument is comparative in nature.

I’m not saying “we should have more freedom and a focus on higher standard of living.” I’m saying, “Allowing people the freedom to choose for themselves from the options available to them is an approach that can be demonstrated to bring more material prosperity to more people across the board than a top-down, steep taxes to pay for generous government programs approach.”

Once again, this isn’t a matter of “Either we focus on personal choice or we focus on standard of living.”

This is about demonstrating that the latter follows from the former.

When A excludes B, then if you propose A and B, you are proposing them as an either/or situation.

Again: you proposed that we should leave people alone to choose to spend more money on housing. You then expressed concern for the exceptions where those people got into bankruptcy or a lower standard of living. (Though surely the latter includes perfectly-acceptable standards of living, just with more money spent on housing?)

So, really, you answered your question “What’s the problem here?”

Welcome to this week’s edition of the Carnival of the Capitalists. My name is Dane Carlson, and I’ll be your host today. This is my fourth time hosting the Carnival (the previous 1, 2 and 3) and it just keeps getting better.
There were…

That is a false dichotomy. Simply stating that it’s an “either-or” situation does not make it so.

I believe that there are moral reasons to argue in favor of such a reason. I also think that there is serious evidence that that system produces the best material results for the most people. If you could disprove the latter, then I think it would be quite difficult to argue in favor of the former.

Unless you believe that there is no such thing as pragmatism at all, and that the debate can only be concerned with whether or not it is inherently right to provide people with that choice.

Sorry, did we shift into a capitalism vs. communism debate here? My point was only that you can’t really have it both ways: either we trust people to make their choices and pay the price for their risks, or we care about negative consequences and we start putting our thumbs on the scale.

I see what you’re saying. But I’m afraid you’ve misunderstood my perspective.

See, while I admit I’ve got an emotional attachment to a philosophy of freedom and personal responsibility, ultimately I try not to be a zealout. In a discussion like this, I think it’s best to look at the pragmatic bottom line.

And if people are so inclined to take stupid risks that the average American is gambling their way right to homelessness, then I think it would be time for me to back off of my free-market high horse and accept the need for reform.

But the whole point of the free market is that it is self-regulating, and far more effective at improving the material conditions of the vast majority of the economic actors than any centralized system of control has ever demonstrated itself to be.

So I’m not asking you to judge our system on whether or not it places an emphasis on personal freedom. I’m asking you to provide evidence that that emphasis results in a lowered standard of living, if that is what you believe.

Again, there is no problem if you don’t care what the results of the risk-taking are. But in your original post, you turn around and worry about bankruptcy or a lower standard of living. If people are making a calculated risk, why should we care if they go bankrupt or lower their standard of living? That’s the chance they took, right?

“We’re taking a risk, but it’s a calculated risk,” Howard, 37, said. “It’s a way to get our foot in the door. We’ve been all over the world, and we want to live in San Francisco.”

With an emphasis, I think, on the “calculated risk”.

Your example provides no evidence that people will be unable to afford their homes at a later date. Just that they might accidentally spend more money than they would have if they’d chosen the perfect approach. But there’s always going to be a margin of error–so long as people can afford to buy a home, and so long as they are allowed to decide for themselves how much or how little risk they want to take…I ask you genuinely: what is the problem?

Brutus: an interesting blog, and I’m not going to argue that forclosures never happen–but I suppose the question, how bad is it, is it any worse than it used to be, and how bad is it in relation to Europe?

Also, who are most effected? The poor, or the middle class who get too exuberant in their spending?

You can, but that’s not what you said. You said “what’s the problem here?” if people want to spend more on a home; did you mean this as a genuine, not a rhetorical, question?

If you can’t provide evidence that people are unable to make their payments

I’m getting the impression you didn’t actually read what I wrote. The problem is that people who are able to make their payments now will not be able to do so when the market cools, interest rates rise, and their interest-only or ARM mortgage payments rise. Such mortgages have been pushed here in California, where the market has been overheated for a long time, in order to get marginal buyers to buy more home than they can actually afford. Here’s an example.

http://getforeclosures.blogspot.com/

There is apparently a thriving market in buying foreclosed property. The headlines of the blog entries (I didn’t read far) report high levels of foreclosures all over N. Amer. Of course, it’s only a blog. Could be lies.

Apparently, I can’t want people to be free and have material success?

I can only hope that you’re being sarcastic.

Here, a big chunk of the problem is not just what people pay for housing, but how. All kinds of freaky mortgage schemes have sprung up, which allow people to buy far more house than they can actually afford…but the pain is delayed, because they pay only interest right now, or are pegged to a favorable market rate. The bait is that they can sell and move before their payments shoot up, or before interest rates make their mortgage payments unbearable.

Easy to say. But as I pointed out, you’d have to demonstrate to me that there’s a pervasive problem with Americans who are unable to make their payments on time and are therefore experiencing a loss in the quality of their life.

If you can’t provide evidence that people are unable to make their payments, then I hardly see how people are buying more “than they can actually afford”.

I can also tell you do not live in California.

Here, a big chunk of the problem is not just what people pay for housing, but how. All kinds of freaky mortgage schemes have sprung up, which allow people to buy far more house than they can actually afford…but the pain is delayed, because they pay only interest right now, or are pegged to a favorable market rate. The bait is that they can sell and move before their payments shoot up, or before interest rates make their mortgage payments unbearable.