Economic (and financial crisis) links

[erudito]

The economics of spam.

Zimbabwe’s public hospitals are collapsing.

One can listen to Sir Bob Geldof’s $100,000 speech against poverty here.

About the border fence and legal and illegal immigration from Mexico to the US. A school district in Dallas has been issuing fake Social Security numbers to get illegal immigrants on the payroll.

UN study

Comments

[taavi]

Supply restriction by officials is superfluous to your explanation. Land is naturally restricted (we can't make more of it) and markets have shown a natural tendency to boom and crash with or without regulation.

[tyggerjai]

Actually, I live and work on reclaimed land. I'd say approximately 40% of the total land area of Macau is reclaimed land, with more planned.

Not sure what the percentage is in Hong Kong, but it's significant, and has been going on for at least a hundred years.

Not housing particularly

[erudito]

Housing bubbles are not a recurrent feature of housing markets, except in recent years.

And we can see quite clearly in the US, that housing markets where officials do not have discretionary control over market entry have not had housing bubbles.

The same distinction can be seen between the UK -- as linked above -- and Germany, where the "right to build" is built into the Constitution and house prices move about the rate of inflation. (Or a bit less, after the substandard East German stock was added in.)

Clearly, the discretionary power of officials over land use does make a difference. After all, land can have a wide variety of uses. If a use much in demand is restricted, that has an effect.

The dynamics are the same with taxi licenses (now about the same value in Melbourne as the median house).

Presumptions

[erudito]

If one has a presumption that markets/private action is fundamentally disfunctional, then any case of disfunction just gets treated as "natural tendency" and does not have to be inquired into further.

If one notes that markets can be highly functional, then disfunction becomes rather more analytically specific, so having specific reasons to be inquired into.

And asset bubbles certainly occur periodically, but are far from a normal state of affairs, so must have specific causes. That we have had quite a lot in recent years is striking, but that just makes inquiry into causes that more fascinating.

Re: Presumptions

[taavi]

You can presume all you like about my POV on whether markets are "fundamentally" functional or dysfunctional, but you'd be wrong if you think I agree in any way with your first sentence. And I'm not too sure about the second either

Re: Presumptions

[jordan179]

Bubbles and crashes are an intrinsic feature of normal market behaviour.

Yes, they are, because they result from over-valuation of the future growth of elements of the economy, resulting in malinvestment and paper wealth which must be liquidated in the crash in order for the economy to eventually recover. However, state intervention can inflate bubbles higher and make the subsequent crashes much worse, by artificially propping up these over-valuations and delaying the crashes.