After reading Edward L. Glaeser’s article on ‘Why We Should Let the Housing Prices Keep Falling’, it is my understanding that his opinion is that it is not the government’s job to regulate supply and demand. If businesses in this field want to gamble on housing prices going higher in the near future, their success or failure rests entirely on the person who agreed to enter into such a venture. Eventually the demand for housing will peak, and their values will either stabilize or fall. According to this author, that is the nature of supply and demand.
It is his opinion that government policies will not regulate a persons greed, and that if someone wants to enter into an agreement that will risk his capital investment, he will do so; the government can’t stop that, and should not be responsible for it when it goes wrong.
I agree with the author completely. I would not sign up for a $1 million dollar mortgage unless I was confident that I could pay for it. Taking the risk that housing prices will go higher, and I will be able to sell in the near future for considerable more than I paid for it is a risk that I have control over.
The governments’ job it to protect and defend the Constitution against all enemies, foreign and domestic. The government is designed to do for its Citizenry what the Citizenry can’t do for themselves. Build interstate roads; manage the taxes collected in order to protect the country from terrorists, provide public education so at least everyone has the opportunity to get a basic education.
It is the churches job to take care of the sick and elderly, feed the poor and build them up in challenging times. And as for the housing market, that is part of the risk of being in business. Whether it is a single home owner, or an investment firm that buys up city blocks, it is my belief that Uncle Sam has no responsibility to bail them out, and place the cost of it on people who have not even been born yet, much less myself.