[lbo-talk] Bush touts tax cuts as fuel for house sales

Michael Pollak mpollak at panix.com
Sun Mar 28 06:35:15 PST 2004


On Sat, 27 Mar 2004, Doug Henwood wrote:


> [lovely strategy - throw the government deep into debt to feed a
> housing bubble!]

Stephen Roach said that at Davos, this is the dominant view among the ruling class there in-gathered: that housing is the economic perpetual motion machine, the asset which can never fall:

<quote>

He went on to add that

property cycles had all but been abolished -- that the American home

was a lasting store of ever-rising value. Needless to say, if that's

the case, then I'm the one who's dead wrong. Ever-rising asset values

would then qualify as permanent sources of saving obviating the need

for consumers to rely on traditional income-based saving strategies.

Quite frankly, I couldn't believe what I was hearing. Here we are, just a

few years after Americas most devastating post-bubble carnage, and the

apostles of the New Economy were back with a vengeance.

http://www.morganstanley.com/GEFdata/digests/20040123-fri.html

And for those of us who think, like Roach, that all bubbles burst, Daniel Davies provides an alternate solution:

http://d-squareddigest.blogspot.com/2002_08_11_d-squareddigest_archive.html#80283743

which I thought was pretty funny when he wrote it, although now it doesn't sound like parody anymore, it sounds like the script they're following.

Michael



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