Are Bubbles Good?
You all may recall a few months back when a book was released stating that bubbles are good for the economy because they produce infrastructure that can be used in the future.
Today I read this : The $11 trillion dollars that was pumped into the real estate market is probably the greatest waste of capital investment in the nations' history. It hasn't produced a single asset that will add to our collective wealth or industrial competitiveness. It's been a total bust.
This made me think a bit. Is there any asset that the housing bubble has produced which will benefit us in the future? Are we better off because of increased granite mines (counter tops), or maybe we've increased the efficiency of our stainless steel foundries (refrigerator anyone)?
Unless McMansions will somehow benefit the economy 10 years from now by using more electricity, I can't think of a single advantage this bubble will ever bestow.
Today I read this : The $11 trillion dollars that was pumped into the real estate market is probably the greatest waste of capital investment in the nations' history. It hasn't produced a single asset that will add to our collective wealth or industrial competitiveness. It's been a total bust.
This made me think a bit. Is there any asset that the housing bubble has produced which will benefit us in the future? Are we better off because of increased granite mines (counter tops), or maybe we've increased the efficiency of our stainless steel foundries (refrigerator anyone)?
Unless McMansions will somehow benefit the economy 10 years from now by using more electricity, I can't think of a single advantage this bubble will ever bestow.
Comments
I doubt that Angelo Mozilo shares our sentiments however.
It looks like the bubble was quite advantageous for him. :roll: