WB: That Old Time Religion
Billmon:
Posted by b on September 1, 2006 at 4:43 UTC | Permalink
« previous pageStill some very large hole in Malooga [and Debs] argument:
1. Still not demonstrating a causal relationship between trends of rising female wages and rising house prices. "I did it once and couldn't post it; why don't you replicate it yourself' is not sufficient. Again, one could claim a causal relationship between any other emancipated demographic and the rise in housing prices. [Here Debs and annie chime in, "But blacks, immigrants etc aren't as impactful a demographic as women, who are 1/2 the population. Sorry, you've come a long way baby, but not long enough yet: you still have the glass ceiling the wage gap the feminization of poverty and the continuous dropping out of the paid workforce by the most educated and economically advantaged married women when they become mothers. Employed women's lack of impact can be seen in the consistently male face at the top every single profession even the pink collar ones. I am describing a lamentable condition that needs to be remedied, so FYI that's not a sexist comment, annie.]
2. Comparing apples to oranges in describing those trends by conflating all women's [both homeowners and non, both married and non] wages with the much smaller subset of married women homeowners's wages. After all, the argument you make is that housing prices rose because the second income helps married Mister homeowner spend more for his house than single Mr. or Miss homeowners can. [Annie and conchita and fauxreal, and I suppose Debs too, chime in: Those dreadful double income marrieds, don't they see how unfair that is to us poor singles?] Not all women wage earners are married contributing to 'family income'. Not all married women homeowners earn wages. Not all single women earners own homes. Some single women earners may actually increase their wages if they reamin unmarried. Indeed married women still bear the full brunt of the wage gap, single women having finally closed the wage gap with both married and single men. So in economic terms, secondary incomes are de facto smaller in aggregate than primary women earners incomes. [Here annie and conchita might again chime in, 'but I know somebody married who makes more than somebody single I know'. That individual counter-example would be irrelevant to the aggregate data.]
3. Conflating dual earner couples [more likely to fall into lower income brackets, less likely to become home owners, and less likely to bid up home prices] with single earner couples [more likely to fall into higher income brackets and more likely to bid up home prices].
4. Over-reacting to the use of the word sexist to describe statements about the impact of women's incomes that upon scrutiny do not hold economic merit but that do imply that if only women had never entered the male sphere of paid employment, more people could afford to become homeowners.
Posted by: gylangirl | Sep 7 2006 20:29 utc | 103
@gylangirl - your arguing is beyond ridiculous.
If you just want a fight, and that how it looks, please go elsewhere.
Thanks!
b,
While I'm as hopeful as anyone that this dies down, holding gylangirl, alone, responsible seems dubious to me. There is a lack of backing down by several parties here.
Posted by: Rowan | Sep 7 2006 21:11 utc | 105
I thought it was a given that all, or nearly all, people are sexist. I'm still waiting to find out what gylangirl means by "sexist". Without that sort of work to specify the way GG means to reduce what she calls the sexism of discourse here, how can her interlocuturs discuss the substantive points GG alllows herself to argue in #1-3, you know, less sexistly?
My best guess is that its the sort of critique that would agree that "woman" itself is a patriarchial construct. But if those are the terms of discussion, gylangirl's critique itself seems to need her critique. Heck, she'd have to change her handle too.
Posted by: citizen | Sep 7 2006 21:51 utc | 106
@rowan -
gylangirl came up with the personal attacks instead of arguing the economical observation made (and as Malooga and I provided, debs' observation was not made baseless but is established economic opinion).
She is still going on with this in her last comment which is about 10% to the issue and the rest to attack others in person and not for argumenting the economic point made.
Now I would like to hear why the argument made by debs' - higher family income did lead to higher house prices - is wrong. One might attack in general the "higher income increases willingness to pay" and "higher demand induces higher prices" analysis in economic theory. Thick books have been written about those pro and con and I would welcome a discussion.
Debs build on a PROVEN sociological observation, more double income families in the 50s/60s/70s, and he applied income/demand relations following the sociology reason to analyse a market development. That is science. Pure and simple.
To attack such with personal slure is dumb and deserves harsh responses.
Thanks to those folks who provided that.
I'm not convinced increased family incomes led to higher real estate prices beyond what would be expected due to inflation.
I'm sure there's an answer for this.
Posted by: slothrop | Sep 7 2006 22:09 utc | 108
p.s.
By above "#1-3" in my last post, I meant GG's #1-3 in her post #103
Glad that's all cleared up!
Posted by: citizen | Sep 7 2006 22:17 utc | 109
it makes sense to me that it would be a factor, but i am open to finding out it is not. i am not an economist - had only one disastrous course in macroeconomics 30 years ago - i found b's citation credible and would have left it there, but since this thread has continued and others whose opinions i respect have questioned it, i have continued to reach out. jerome posted about the housing bubble there (maybe in response to here?) and i commented last night asking if anyone there had any thoughts. i'll post the responses later when i get home. i also reached to bonddad at dkos and he has responded that he does not have the demographic info that he needs to answer the question. i will post his email from today when i get home in a couple of hours.
Posted by: conchita | Sep 7 2006 22:18 utc | 110
Income is income slothrop. X amount of money bids for x amount of housing. Increase family income without decreasing the desirability of housing and you'll get higher bids. Just like you got higher bids when the financing cost decreased in 2001. That didn't have to happen either. But since the other variables stayed the same, it did.
Posted by: Guthman Bey | Sep 7 2006 22:20 utc | 111
sure sure. but housing prices have outpaced inflation. that's all i'm saying.
the zoning issue and speculation/credit expansion seem to me most likely culprits.
Posted by: slothrop | Sep 7 2006 22:41 utc | 112
If you just want a fight, and that how it looks, please go elsewhere.
Amen to that. This has been my feeling for a while.
Posted by: | Sep 7 2006 22:51 utc | 113
I forgot about this guy glaeser who connects http://www.ksg.harvard.edu/ksgnews/PressReleases/010506_rappaport_study.htm>zoning restrictions to the housing supply crisis.
speculation made possible by easy credit explains much of the demand-side cause of housing costs (investors can buy for the cost of merely closing a sale), as well as adjusted rate mortgages.
these are the causes of escalating housing costs, correct?
Posted by: slothrop | Sep 8 2006 0:01 utc | 114
this is how bonddad (dkos economist) responded to my more specific query about whether the increased presence of women in the workforce in the u.s. has had an effect on the housing bubble in the u.s. when i wrote to him yesterday i referenced debs is dead's original post and he responded that he did not know the demographic well enough to comment. he responded somewhat similarly today:
If the number of women in the workforce increased the total number of real estate purchasers and the amount of real estate for sale did not increase enough to supply the increased demand, than yes that statement is true. However, there are a lot of variables in that preceding sentence that I can't quantify.
this is the basic concept behind my commonsense approach to the question and it corresponds with bernhard's posts. wondering - is anyone here able to quantify the variables?
Posted by: conchita | Sep 8 2006 0:05 utc | 115
oh, and government backed loans at freddy mac, fannie mae, exacerbate the bubble, right?
you'd think there'd be a groovy website nailing this stuff down. but i can't find it.
Posted by: slothrop | Sep 8 2006 0:06 utc | 116
i could not find one either which is why i turned to bonddad. he has written extensively about the bubble and i thought he would have the numbers at hand.
i just went through the following paper "Exotic or Toxic? An Examination of the Non-Traditional Mortgage Market for Consumers and Lenders" by Allen J. Fishbein and Patrick Woodall (May 2006) which someone linked to upthread and i downloaded awhile ago. they look at the income level, credit scores, and ethnicity of non-traditional borrowers, but not gender. finding this info may require significant digging and number crunching.
Posted by: conchita | Sep 8 2006 0:22 utc | 117
here are responses to my post on eurotrib:
Cause of US housing bubble
Just wondering what the opinion might be here. There has been a rather raucous discussion at MoonofAlabama.org about the cause of the housing bubble. One commenter ventured a theory that the increased presence of women in the work force has contributed to the rise in housing prices. A New Zealander he also cited immigrants and speculation as other factors. The statement about women in the work force has raised a few hackles and I am wondering if the economists here have any thoughts about it.
* Re: Cause of US housing bubble
Not an economist but to the extent that that increases household income it would have an effect. Plus working women are more likely to get out of bad marriages than those who are dependent on a husband's income so that could contribute to a rise in the number of households, thus increasing demand. More immigrants also means more demand. Still, it seems like a strange way of looking at it, especially as both have been going on since well before the current housing boom.
by MarekNYC on Wed Sep 6th, 2006 at 11:17:47 PM EDT
* Re: Cause of US housing bubble
also housing is going up rapidly in size. The Shiller study looks at the same houses, but most Americans are demanding 3000+ ft2 starter homes vs. 1000 or so in the 50's. That is also skewing some price analyses and why Shillers is so cool.
I think women working is more in reaction to a demand for a higher standard of living for the family. People (especially modern women) won't accept a 50's lifestyle. that and it's hard to make it on one paycheck in urban europe/america.
Blaming speculators is just leftwing paranoia. Speculators can create a bubble but not a long term price shift. They can't hold on forever in a market where rents don't cover operating expenses and interest costs. We're seeing some nervousness on that front here in Hawaii.
by HiD on Thu Sep 7th, 2006 at 05:10:25 AM EDT
* Re: Cause of US housing bubble
Part of the bubble was too many dollars lent out chasing too few goods.
Posted by: conchita | Sep 8 2006 0:27 utc | 118
Jeez. It's not that hard to find data.
In 1900, nearly half of the U.S. population lived in households of six or more people; by 2000, more than half lived in households of one, two, or three people
Wow! Seems like them married girls contributing to household income may not have been the only change in the market. What else changed?
The United States population more than tripled from
76 million people in 1900 to 281 million people in
2000in every decade of the 20th century.
Supply and demand! More people, smaller households.
The growth of metropolitan areas in the 20th century was essentially a
growth of the suburban population (defined here as the
metropolitan population living outside of central cities),
especially in the latter half of the century. In 2000, the
central city population represented a smaller share of
the U.S. population than it did in 1950. By the end of
the century, the percentage metropolitan in the regions
ranged from 74 percent in the Midwest to 90 percent in
the Northeast. Eight states—California, Connecticut,
Florida, Maryland, Massachusetts, New Jersey, New
York, and Rhode Island—had all reached at least 90 per-
cent metropolitan population by 2000.
More people, smaller households, population shifts to suburbs. How did those working married women impact the market?
Married-couple households declined from more than
3 out of every 4 households (78 percent) in 1950 to just
over one-half (52 percent) in 2000.
How about that? If second income middle class families (the sole object of concern in this middle class conversation) was driving the market it was not doing it obviously.
That's all from http://www.census.gov/prod/2002pubs/censr-4.pdf
What else changed? Since the 1970s - median family income has stagnated.
According to the Economic Policy Institute, "Between 1947 and 1973, median family income grew from $20,102 to $40,979, or by 104%. This growth rate worked out to 2.8% a year on average, or a doubling in income every 25 years. After 1973, however, the growth rate…slowed markedly. Over the 24 years from 1973 to 1997, median family income rose an average of 0.35% a year. At this rate, it will take 198 years for family income to double." (1)
But during the same period median house prices shot up (see
So the thesis that middle income women entering the workforce increased family income which drove up house prices seems, in a word, silly.
Posted by: citizen k | Sep 8 2006 0:29 utc | 119
Sorry. Not able to lock horns like the rest of you but isn't the issue: charges of "sexism" against DiD?
1 : prejudice or discrimination based on sex; especially : discrimination against women. 2 : behavior, conditions, or attitudes that foster stereotypes of social roles based on sex.
Posted by: beq | Sep 8 2006 0:35 utc | 120
oh, and government backed loans at freddy mac, fannie mae, exacerbate the bubble, right?
bigtime check out the state of the nation housing.
demographics is another good one. check out changing household composition.don't be too shocked.
the harvard joint center for housing studies 'buying for themselves, an analysis of unmarried female homebuyers' pdf file linked to in post 100 has some interesting points. it addresses married women's increase of income on pg 4
women make greater financial contributions to the household than in the past,as higher education attainment and entry into the labor force have raised women's share of household earnings.
Posted by: annie | Sep 8 2006 0:37 utc | 121
righto. this is what happens when a bunch of english majors do economics, myself included. but, I think we dispatched the arg that women's incomes somehow directly cause (in part, even) increasing housing costs.
Posted by: slothrop | Sep 8 2006 0:46 utc | 122
whoa there, slothrop. i'm not ready to go there just yet.
Posted by: conchita | Sep 8 2006 0:53 utc | 123
there you go annie.
Until 2000, nationally weighted average home prices rose
closely in line with median household incomes and general
price inflation. Since then, however, house price appreciation
has shot ahead of these benchmarks, outstripping income
growth more than six-fold from 2000 to 2005. As a result, the
median house price exceeded the median household income
by at least four times in a record 49 of 145 metro areas, and by more than six times in 14 metros (Figure 10).
from your linked report. thus, wage inflation cannot explain skyrocketing housing costs.
Posted by: slothrop | Sep 8 2006 0:57 utc | 124
except what wage inflation contributes generally to price inflation
Posted by: slothrop | Sep 8 2006 1:00 utc | 125
i'm so bad w/economics. why did house appreciation go up?
what drove the market? are you saying that the wages women earned didn't go into the buying pot? or does that mean they didn't earn more than in the past. somebody borrowed all that money. was it the husbands?
Posted by: annie | Sep 8 2006 1:17 utc | 126
slothrop 122. i don't remeber how to copy from the pdf file. pg4 of that harvard womens housing report under 'the rise in female home buyers'said that married women account for 26% of the 'householders' in 03 up from 11% in 93. thats over double in a decade.it also said married women who are not identified as the 'householder' are making most of the major housing related decisions women like real estate.it also said the are 20% more single women then there were a decade ago, which accounts partly why they are the fastest growing demographic of new homebuyers.
if demand drove the market, i'm not clear how we couldn't have impacted it.
Posted by: annie | Sep 8 2006 1:32 utc | 127
nono. I'm saying wage inflation is generally a cause or complement of price inflation for all commodities, not just real estate. put another way, the expansion of the workforce to include women does not ipso facto mean more demand for housing, but all commodities. remember also, the increase of female and immigrant and elderly employment does not also mean greater productivity and wealth. as we know, wage rates have been suppressed in part by rising competition for jobs. two wage earners in a family required to meet a standard of living achieved two generations ago by one male income, as ck points out.
the key point is: housing costs outpace inflation. so, what is the cause? it cannot be wage inflation. zoning and easy money are the sources of the housing crisis.
but, i welcome disabuse.
Posted by: slothrop | Sep 8 2006 1:32 utc | 128
like i said, on the demand side of this is credit expansion, on the supply side is zoning.
Posted by: slothrop | Sep 8 2006 1:34 utc | 129
and i'll repeat what i alluded to above. credit expansion is the source of a massive swindle as wealth is transferred from working families to financial institutions, all mediated by the government's ownership of mortgages. a crash, pop or leak in the bubble, will be paid for the same working families via recession and local deflations of property values. there goes the nestegg, as deanander fears. I see in the linked to harvard thing that in sdan fran 1990-94, values plummeted by 12%. fine, if you don't sell, but those arm's are hard to pay off when you're unemployed.
Posted by: slothrop | Sep 8 2006 1:53 utc | 130
billmon has some nice posts http://billmon.org/archives/001867.html>here, http://billmon.org/archives/002692.html>here, and the inimitable http://billmon.org/archives/001867.html>blue yonder remains for me a constant refresher on the macro-variables and crises of the boom.
Posted by: slothrop | Sep 8 2006 2:08 utc | 131
and zoning keeps the riffraff away from the gated community.
Posted by: slothrop | Sep 8 2006 2:11 utc | 132
well, i guess i could say thanks for clearing that up although i am very stubborn. as long as its crystal clear the people who bought the real esate and signed all those shitty loans and borrowed all that money against their not always male owned properties played no part and hold no responsibility then i can concede. but if they did
then damn if all the women who pulled themselves up by their bootstraps and worked their asses off to buy their properties and gained their independence in their marriages and on their lonesome (maybe i should call it loansum) should get credit where credit is due. even if being a part of this fiasco is not something to be proud of. cuz we sure as hell are going to be putting in our share of the suffering along w/the guys.
Posted by: annie | Sep 8 2006 2:30 utc | 133
then damn if all the women who pulled themselves up by their bootstraps and worked their asses off
well, this is another way to say many women have found in being a man--this horrible, empty dissimulation of freedoms offered by capitalism--was worth all the sweat & tears. women lose doubly in all this, fighting gender construction on the one hand, and the ideologies of bourgeois freedoms on the other hand. a disaster, plain & simple.
Posted by: slothrop | Sep 8 2006 2:39 utc | 134
another way to say many women have found in being a man
it's not in being a man, it's in taking care of yourself and your family. just making it.
that's not a man thing, it's a mature human thing.
not trying to nit pick but my radar it on bigtime.
Posted by: annie | Sep 8 2006 3:26 utc | 136
sticking to the question of what triggered the housing bubble, i can contribute this: kevin phillips, in american theocracy, writes that the current housing bubble was part of the greenspan ("chairman bubbles") effort to keep churning the economy in the transition from the then collapsing stock expansion into credit (or more accurately, debt) & housing expansion. very low interest rates were one key factor. also, w/ the ongoing expansion of debt & the concomitant influence/domination of the financial services industry, there's the constantly creation of new products designed to enable/encourage individuals to take on ever more debt (artificial purchasing power).
The underlying Washington strategy, which succeeded in stimulating the economy, was ... to create a low-interest boom in real estate, thereby raising the percentage of American home ownership, ballooning the prices of homes, and allowing householders to take out some of that increase through low-cost refinancing. This triple play created new wealth to take the place of that destroyed in the 2000-2002 stock-market crash and simultaneously raised consumer confidence.But the benefits did not end there. The lowest interest rates in four decades - the Fed's overnight funds rate dropped to 2 percent in early 2002, hit 1 percent in 2003, and stayed in between through late 2004 - also revitalized stocks by (1) giving business cheap capital, (2) allowing debt-burdened corporations to refinance, and (3) motivating individual investors to buy stocks instead of leaving cash in money-market accounts that paid negligible and even negative real interest. ... As a result, $4 trillion of the $7 trillion shrinkage in stock valuation was regained, and rising home prices more than made up the difference.
Nothing similar had ever been engineered before. Instead of a recovery orchestrated by Congress and the White House and aimed at the middle- and bottom-income segments, this one was directed by an appointed central banker, a man whose principal responsibility was to the banking system. His relief, targeted on financial assets and real estate, was principally achieved by monetary stimulus.
and, more succintly,
From 2001-2004 - and especially after September 11 - the Federal Reserve managed an economic architectural triumph on the scale of the Great Pyramids at Luxor. The financial and real-estate base of American wealth was rebuilt, shifting primacy from stocks back to home values.
Posted by: b real | Sep 8 2006 3:27 utc | 137
annie, slothrop, citizen k, b real - my computer battery ran out last night after that last post and i then realized i had forgotten the power cable at the office. looks like you all settled one question. i am still reluctant to go there and hope to find time to follow all the links and read further, but, realistically, given my work and school schedule, i don't know how quickly it will happen. if i learn anything applicable i will post.
Posted by: conchita | Sep 8 2006 13:30 utc | 139
@gylangirl - your arguing is beyond ridiculous.
If you just want a fight, and that how it looks, please go elsewhere.
Thanks!
Posted by: b | Sep 7, 2006 4:57:31 PM | 104
I am sorry you feel that way bernhard. I will stop posting at and reading MOA immediately. I am extremely offended.
Sayonara.
Posted by: gylangirl | Sep 8 2006 22:03 utc | 140
gylan,
Just want to let you know I appreciate your input and I am sure others do too.
The issue revolves on how increased earning power by women is viewed with respect to the housing bubble. And the sexism factor is always a concern.
Also, I think your point is valid that the bubble is agnostic, regardless of whose paying the note: human, cattle or sheep.
Posted by: jony_b_cool | Sep 8 2006 22:42 utc | 141
http://www.prudentbear.com/creditbubblebulletin.asp>prudentbear:
While conventional analysts go about conjecturing about and debating the extent to which wage growth will impact future CPI, wage/prices spirals, corporate profits, and Fed policy, I’ll maintain a different focus: With Income Inflation having now evolved into a (THE?) prominent Inflationary Manifestation, what are the prospects for and ramifications of prolonging the U.S. Credit and Economic Bubbles? Does Income Inflation now play a prominent role in prolonging the Mortgage Credit Bubble, in the process buoying consumer spending, corporate profits, aggressive stock buybacks, the M&A boom, leveraged securities speculation, government receipts, and Credit Bubble excesses generally? Going forward, will Income Inflation play a pronounced role in sustaining massive U.S. Current Account Deficits? Will U.S. Income Inflation now play a decided role in furthering Global Imbalances, including destabilizing Credit and liquidity excesses round the world? To what extent will Income Inflation temper and offset the impact of the housing slowdown?
I am cognizant that my analysis may very well appear oblivious to the widespread belief that the housing bust is in the process of pulling down the general U.S. economy and, prospectively, a vulnerable global economy too dependent upon exporting to the soon-to-be much less profligate consumer. With market talk turning to recession - and even the occasional whisper of deflation - the Income Inflation issue is sure to get the analytical short shrift. News and “analysis” is always prone to follow the direction of the markets, and I am certainly mindful that U.S. and global bond yields are in retreat, energy prices are in a marked decline, and commodity prices are also seemingly affirming the slowdown view.
Yet, if Income Inflation is today underpinning housing prices, Credit growth, consumption, and Current Account Deficits, we must also recognize that this Inflationary Manifestations is quite likely poised to bolster U.S. and global liquidity.
cogs in cogs. whatever keeps the consumer treadmill spinning.
Posted by: slothrop | Sep 9 2006 1:13 utc | 142
well, coming in late again because I don't have time to read this blog very often, but, gylangirl, do me a favor and don't put words in my mouth. I wouldn't have even come here at all if not, again, someone informed me that I was part of a discussion that I knew nothing about.
What I had to say about this issue before was that I didn't know, didn't have time to find out, but recommended a book by Linda Hirschman who notes that if women want to be serious about themselves and their careers, no matter that the tax code is unfair, they should consider their income and their husband's income as ONE thing and deduct childcare, etc. from the idea of that one combined income, with the knowledge that by remaining in the workforce, a female would increase her income and not drop out and lose those years developing contacts, etc. etc.
I could drop a few choice adjectives your way, but I won't. I will say that you have been very rude to others here who do not deserve such treatment. Not that I think you will care about this.
Other than that, I still do not have anything to say on this subject, but I do have to tell you that you are wrong to include me in it and make assertions on my behalf. So don't do it.
Posted by: fauxreal | Sep 9 2006 3:16 utc | 143
wow, I had no idea ol' time religion was about the housing bubble and feminism
Posted by: gmac | Sep 13 2006 18:09 utc | 145
The comments to this entry are closed.
uh, annie, I think I'm hot for you...lol
Posted by: Uncle $cam | Sep 7 2006 6:03 utc | 101