Housing Trends

Syracuse Real Estate

I think that graph says it all.

Back in 2006, when I bought my house, I knew Syracuse was a good place to buy a house. Why? The simple reason that there never was a housing bubble here to burst. This past year has seen the prediction come true. As housing prices tumble around the country, Syracuse remains.... well... not "strong" per se.... but stable. Syracuse remains stable, and slowly rising. The trend especially becomes visible when you click on the "10yr" button above.

(Thanks goes to Zillow for their handy graph.)

Growth

Capitalism needs to expand to survive. Capitalist economies were first set up during the Colonial Era. Companies took resources from around the world and made a profit off of them. This ended when governments were established around the globe. However, free market policies turn governments into the next resource to exploit. The intent is to hollow out governments so they only exist to collect taxes and manage contacts. Contract out health care. Create vouchers for private schools instead of having public schools. Hire mercenaries instead of using our own military.

Without continued expansion, capitalism starts collapsing. We all saw it with the stock market this fall. One horrible day spirals into another horrible day, which continues the trend. Capitalism is a positive feedback loop: growth creates more growth, decline creates a further decline. And in nature, there is only one thing that following a positive feedback loop: cancer.

The ultimate problem here is that we live on a finite world with finite resources. Markets can't grow forever. The planet has been exploited. Governments are being exploited. I can only guess at what next the market will go after in its continuing quest to expand.

Economics is Politics

This summer I read Naomi Klein's The Shock Doctrine. It was intense. The Shock Doctrine shows how the driving force behind many recent political maneuverings have been about an economic showdown. One on side of the ring you have the regulatory Keynesian economic policies. On the other you have the unregulated free market policies of Milton Friedman.

Before reading this book, I was like "well, some regulation is good to protect the environment but welfare does not work, our school system has a lot of problems, and government is bloated and ineffectual." I said this from experience: I worked in government. However, reading this book made me realize that I wasn't thinking about the implied values of each system.
The private sector largely has one bottom line: Increase revenues.
The public sector also has a bottom line: Protect the health, safety and welfare of its citizens.
Is this a simplification? Yes. But at its core the difference is there. When push comes to shove, a company needs to either stay profitable or go bankrupt. Governments are built to answer to their constituents.

Klein uses the formerly-communist countries of South America as one case study. Under Keynesian (socialist) policies, these democracies were approaching First World status. People didn't want free market policies. The US had to forcibly replace democracies with dictators because no freely elected politician would sell out his/her people. These coups weren't about Cold War influence - it was about pushing through economic "reforms." (Also: note the language American media uses toward the contemporary socialist: Hugo Chavez)

With free markets, the poor got poorer and the rich got richer. The middle class vanished and things became very dog eat dog. As a whole, the country became more poor. That is what pure capitalism, without regulation brought to South America. Look around. It's happening here in the US too.