Morning reading
1. The Federal Reserve and its role in the housing bubble. Artificially low interest rates create excessive demand for long-term assets (like real estate), until the inflationary pressure spreads to other sectors, driving rates back up, causing a painful “readjustment” in long-term asset prices. Like my house. That was appraised at $236,000 in January 2006 and now refuses to sell at $199,500. Via the Austrian Economists.
I blame myself, as well as the Fed for the mess I’m in now. Which leads me to wonder if people who are partial to a philosophy of individual responsibility will be more likely to mis-attribute their failure or success to their own actions, even if they are the victims of luck, circumstance, or bad Fed policy.
2. Tyler Cowen on the development of social conventions such as tapping your foot to signal your interest in gay escapades with your stall neighbor. Seriously, what bold pioneer was the first to initiate such behavior and how is it codified? Or is there a secret gay planning committee that governs the conventions of sexual solicitation? I favor a spontaneous order explanation.