The Dumbest Activity in the World
I was thinking about the housing bubble today. I've always thought it was B.S. Ask any of my friends, like TMFBent for example. They will tell you I've thought housing was in an overpriced speculative frenzy for the past 5 years (maybe I was early). Of course, I was living in San Francisco at the time, and if prices there fell by 50% it would still be unaffordable for average folk.
Anyway, think about this for a moment: The bulk of the growth in the American economy in the past 6 years has been based on homebuilding. But, not the base rate of homebuilding; rather a huge spike in homebuilding driven by speculation--i.e. the 23% of sales in 2005 that were 2nd home purchases or "investments."
Can you think of a less productive activity for the economy compared to "building homes that no one lives in?" It's hard to do.