[quote=sdrealtor][quote=CA renter]Yes, there’s the psychological component, but one might argue that an economy that depends on psychology vs. fundamental economic health is a very sick economy.
Again, people spending what they don’t have is the **problem.** IMHO, we need to get rid of the notion that some illiquid asset (especially a primary residence) somehow equates to “wealth” (an arbitrary number pulled out of the air, like when a neighbor sells for $XXX,XXX to a buyer who cannot afford the agreed-upon price without a “toxic” mortgage) when it’s not realized.
IMHO, this psychological aspect is what’s so ponzi-like about our economy. Everything depends upon the next person overpaying for an asset using increasing amounts of debt. That is simply not sustainable.[/quote]
And some might argue that denying psychology is and always will be a primary driver of the economy is living in denial. Its not a sick economy its human nature at work. When we fell good we spend and when we dont we conserve whether we have money or not.[/quote]
But you’re missing my point. We should all feel better when our jobs are secure, and when we’re sure we’ll be able to afford the basic necessities (plus some extra) for our families by way of our wages and benefits. Most people would give up (volatile) asset price appreciation for steady, dependable, secure employment (including health benefits and defined-benefit pensions), IMHO.
After all, it’s this “security” that everyone is whining about on the anti-union threads. Now that asset prices are depreciating, they realize how valuable a “secure” job and benefits are. Funny how nobody complains when gambling is favored over work; but once the casino closes, everyone is out to tear apart the workers who chose to work instead of gamble during the good times.
