*Warning: This is a dismal entry, and doesn't compare at all to cute pictures of smiling children. Sorry.*
Yes, I know that I'm slowly turning this blog into a family soapbox, but hey, at least Joseph and Emma have an opinion on issues that matter. :) And I usually include a photo - isn't that consolation enough?
Take a look at this chart: http://www.speculativebubble.com/images/homevalues1.gif
This man charted the prices of homes since 1890. He has factored in the rate of inflation, which means the prices reflect the changes in the value of the dollar over time. He says that, in 1890 if a "standard" house sold for $100,000 then, according to history, in 1920 the same-standard house would have only sold for $66,000.
The point, however, is that you'll notice the huge (enormous!) spike in home prices since around 1997. They have increased 83 percent! You want to know why? I read a quote from an up-scale home builder. He says that what they sell is not shelter, but an eg0-driven, look-at-me lifestyle that has a very high price-tag.
Think about that. Ultimately, because of the typical American mindset of "I deserve anything I want", there has been an 83% spike in the price of homes. People are so eager to be envied, to have lives better than the Jones', that they are willing to pay outrageous prices for a home that they can't afford (heard of ARMs?).
Why is this post titled "The Decadence of Rome"? Because this spike in home prices merely reflects a decadent, greedy, self-centered attitude in America; similar to how the Romans became at the peak of their Empire. They were indulgent, lazy and selfish. And right about then came the Fall of the Roman Empire.
In 2004, my capstone professor at OU prophesied that if Americans didn't change course soon, that our own civilation would decline and fall, just like the Romans. There are rumors and whisperings of recession. Does anyone else see the direct link between our greed and this bad economy? I'm no expert (not even close!), but I do know that HGTV, banks, schools, the government, McDonald's, magazines - and even churches - have been telling us that we deserve to be happy. And look where it got us.
3 comments:
With respect to Dr. Shiller, I'm not sure this graph indicates quite what you're describing. It looks like housing prices have gone up 50% over the last ten years. Are we really any more decadent than we were in 1998? Is it that odd to see that fancy new houses built during a huge boom (the '90s) become expensive existing houses the following decade?
It also seems that this may be deceptive since it is "inflation adjusted," despite the fact that one of the major components of inflation is housing prices. For example, if food prices were actually going down, then comparing housing prices to non-housing inflation rates could exaggerate the increase in housing prices.
There is no doubt we live is a wealthy, decadent culture. It may even be that we are about to enter the decline of American supremacy (which, I think, isn't necessarily a bad thing). But I find it hard to believe that we are that much more decadent than we were in the 1920's.
-BTW, Kelly, how are you? It seems we never visit anymore. Sad.
Hey Norman!
Sorry it took so long to comment back to you. I was crossing my fingers, hoping you might respond. Thanks!
Honestly, a lot of what you said is way over my head. But, hey, that's what I was hoping for - someone who is way over my head but might be able to translate for me. :)
As per the housing prices. From the chart, it looks like the median home price in 1997 was 110,000. And in 2006, it was just under 200,000. Take 83% of 110,000 and you'd get about 200,000, right?
I think it's odd that the "average" housing cost has inreased so significantly. What he doesn't do in the chart is define his standard. Do his findings suggest we're willing to pay more, or that there's a new average?
I don't understand the inflation thing - explanation?
One point I'd have to absolutely disagree on is that we're not more decadent than we were in 1890. Norman? People lived on their farms, growing their own food, modestly clothing themselves and cheaply entertaining themselves. If they lived in the city, they certainly weren't buying new buggies and horses every year, or buying homes they coudln't afford, or clothes and gadgets for that matter. Am I missing something?
Oh, you said 1920. I said 1890. Does that make a big difference?
And to answer your other question: I'm doing fine! :) I'm elbow-deep in the "living out your faith" part of motherhood: diapers, whining, feedings, nappings, discipline. But, thankfully, God is supplying me with ample smiles, laughs, milestones, hugs, cuddles and a wonderful husband. :)
How are you??
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