On Tuesday, December 17, 2002 at 08:27:59 (-0800) Devine, James writes: >... >Okay, my thought, about one "fundamental" which could be behind the bubblish >data: one of the things that also happened is the widening gaps in the >income and wealth distributions that has been sustained over the last 25 to >30 years (with a temporary narrowing of the income gap during the late >1990s). The people on the low end of the income and wealth distributions are >more likely to be renters, while those on the top are more likely to be >buyers, of housing. Because the supply of housing does not shift between >rental units and to-be-purchased units very quickly, the resulting shift in >the distribution of demand would lead to increasing gap between the rental >and purchase price of housing. > >In this view, it's also quite possible that there's a bubble going on. But >it does suggest that the situation is not as dire (in terms of bubble >economics) as sometimes thought. It also suggests that the Bush program of >cutting taxes for the rich (and, now, raising them for the poor) would have >the effect of keeping the bubble from deflating, or at least from not >popping. That it would also intensify injustice is also clear. > >any thoughts?
It appears to be a sound analysis. Of course many elites will be glad that inequality, a fundamental of the economy, is "improving". Bill
