Geez, no time this week. Sorry all, but busy season came in something fierce (I've been using that phrase ever since I started watching "Firefly"). So here's my quickie chart, no doubt some of you have seen from the genius Robert Shiller. Sometimes economists just need a quickie.
Interersting chart, but its not quite as dramatic as it looks. The y-axis starts at 60, not 0 as it should.
ReplyDeleteSmors, yes you are correct, unforutnately I did not make the chart.
ReplyDeleteJaeger,
Yes, one and the same. That Robert Shiller, boy was he off on that dotcom mania thing!
I think something important is missing from the context of this chart.
ReplyDeleteI believe the 1996 tax bill raised the level for capital gains taxes to $650,000. from $150,000.
Which is what started the boom. The cap gains tax is now 15% but i believe it was 28% at the time.
The fact is price is always related to the level of regulation and taxation on our property.
Remember during all this time we also have seen the great ethanol scam develop. Which continues to greatly raise the levels of farm property. Thus the underlying property values everywhere are going way up..
Then you have the fact that local governments have increased the quanity of land no longer available for devolopment.
I could go on endlessly with examples where the intrusive gov't causes the prices to continuely rise.