Capitalist Crisis

[Mikebert]

My second published paper. This one is about the inequality turnaround of a century ago that was completed during the last 4T.
It does not yet bring the S&H theory into the mix, (this is for the third paper that I am still working on).

http://escholarship.org/uc/item/42p5m46m

[ChrisP]

(07-07-2017, 03:31 PM)Mikebert Wrote: My second published paper. This one is about the inequality turnaround of a century ago that was completed during the last 4T.
It does not yet bring the S&H theory into the mix, (this is for the third paper that I am still working on).

http://escholarship.org/uc/item/42p5m46m

I enjoyed the paper.  Why do you believe the next recession will necessarily lead to an extremely large stock market correction (55%)?  Why can't economic rents accruing to the market power of large corporations continue keeping profits elevated above historical means (correcting for recessionary effects, of course), as well as the Fed buying up debt, equities and who knows what else to keep the ship from sinking?

[pbrower2a]

(07-10-2017, 09:05 PM)ChrisP Wrote:

(07-07-2017, 03:31 PM)Mikebert Wrote: My second published paper. This one is about the inequality turnaround of a century ago that was completed during the last 4T.
It does not yet bring the S&H theory into the mix, (this is for the third paper that I am still working on).

http://escholarship.org/uc/item/42p5m46m

I enjoyed the paper.  Why do you believe the next recession will necessarily lead to an extremely large stock market correction (55%)?  Why can't economic rents accruing to the market power of large corporations continue keeping profits elevated above historical means (correcting for recessionary effects, of course), as well as the Fed buying up debt, equities and who knows what else to keep the ship from sinking?

Rents are to a large extent a premium that the poor pay for living in the same world as wealthy landlords. To the extent that they are not simply a return on investment (making an allowance for costs of insurance and taxes that landlords pass onto tenants) as on investments in securities, they are almost private taxes that people pay for living where the opportunities are good. Rents are incredibly cheap in Youngstown, Ohio and brutal in San Jose, California. Want to be rich in Silicon Valley? Don't be a software engineer, someone who does high-level intellectual work that creates genuine wealth; instead be born into a family who owns rental properties that one leases to people like software engineers. As a landlord you will collect perhaps as much as half of what the software engineer earns, and software engineers make very good money. Subtract insurance, depreciation, property taxes (property taxes can be very low in California for the value of real estate because of Proposition 13 that froze many property taxes at 1978 levels -- it's no wonder that California schools are below average, well suited to turning out restaurant and retail workers brought up in the middle class, people who would be priced out of the area except that they can live with parents until the parents are 60 or so) -- and you can see where the money goes.

Landlords are not most people's favorite capitalists. They aren't innovators; they sell the same thing over and over. Media bigwigs must create new intellectual property. Car companies must upgrade car models. Energy companies must explore for new resources of fuel. They simply take a bite out of earnings of people who may be a captive clientele. That's in a good place. In a bad place like Gary, Detroit, or Newark they are slumlords.

Economic imbalances do not last forever. People cope in the short term, but in the long term they make choices that make things better. Maybe we will need more decentralization of economic activity so that people don't pay such high rents. There are parts of Michigan that are very attractive -- the lake-shore areas.  The difference between Michigan's shorelines and California's ocean beaches? Michigan has a real winter and no good nearby ski slopes (the closest good ones are in New York or West Virginia). Costs of living are much lower, and (outside of such social cesspools as Detroit, Flint, and Saginaw) K-12 education is far better -- so your kids will have a chance. So you will need three wardrobes for living in Michigan, at the least: summer, winter, and fall/spring. OK, there is nothing like San Francisco...

Should America have an FDR-like President (and Donald Trump is the antithesis of such a President), then a high priority will be the alleviation of poverty. Count on huge investments in the poorest parts of America in the alleviation of poverty. Remember that the Tennessee Valley Authority had its focus in the Middle South, then one of the poorest parts of America.

After only the speculative profits of the boom that went bust, economic rents are the first sorts of profits to vanish -- and stay vanished -- in a long depression. It may be that the best thing for the long-term heath of American society in 2009 would have been a second Great Depression that would have leveled economic results as did the first Great Depression and would have improved America by forcing a humbling of multitudes of narcissists.  We came out of the recovery of the Little Depression much worse in character. It's not that Obama was an incompetent, dishonest, venal blunderer; he wasn't. But Donald Trump is as incompetent, dishonest, and venal a blunderer as America has ever had for President and he has plenty of companions enabling his incompetence, dishonesty, venality, and blundering. Whether we fault President Obama or not, the political companions of Donald Trump mostly arrived in their roles while Barack Obama was President.

Just imagine someone like Donald Trump being elected President in 1940 because the economic elites recover first as in this decade and get their old power back to enforce an anti-human economic agenda. The world would be very different. A hint on such a world: there might be places in America with names as infamous as Dachau, Buchenwald, and Auschwitz, where Jews, blacks, and political offenders met their doom. April 20 (birthday of you-know-who) would be more important than July 4, the latter having lost all meaning. We are just lucky now that the closest thing to Hitler or Tojo is some punk kid in North Korea.

National character matters greatly in a Crisis... and the character of our political, cultural, and economic leadership is deep in a sewer.

[Warren Dew]

pbrower2a - You've never owned a building and had to maintain it and keep it up to date, have you?

[David Horn]

(07-10-2017, 11:02 PM)Warren Dew Wrote: pbrower2a - You've never owned a building and had to maintain it and keep it up to date, have you?

He's not a landlord, but those who own rental property are -- by choice.  Keeping ones property in properly maintained form is implicit in the rental agreement.  Landlords tend to get wide discretion form the legal community, but that discretion does not waive their obligation to provide the product that agreed to provide.

[pbrower2a]

(07-10-2017, 11:02 PM)Warren Dew Wrote: pbrower2a - You've never owned a building and had to maintain it and keep it up to date, have you?

I am a home-owner, and, yes, I know about maintaining a property. For a landlord that is a normal cost of doing business, as are taxes and insurance. Utilities, too, if such is a part of the deal.

Yes, I would warn tenants that increased taxes are likely to result in higher rents, so think carefully about voting for the millage. There's no such thing as a free lunch.

[Warren Dew]

That's not the part of pbrower2a's post that is erroneous.  Rather, it's this paragraph that is mistaken:

Quote:Landlords ... aren't innovators; they sell the same thing over and over. Media bigwigs must create new intellectual property. Car companies must upgrade car models. Energy companies must explore for new resources of fuel. They simply take a bite out of earnings of people who may be a captive clientele.

In fact, landlords have to do just as much upgrading of properties as car companies have to do of car models, and they have to manage repairs in a constantly changing service and regulatory landscape as well.

[pbrower2a]

(07-12-2017, 09:25 PM)Warren Dew Wrote: That's not the part of pbrower2a's post that is erroneous.  Rather, it's this paragraph that is mistaken:

Quote:Landlords ... aren't innovators; they sell the same thing over and over. Media bigwigs must create new intellectual property. Car companies must upgrade car models. Energy companies must explore for new resources of fuel. They simply take a bite out of earnings of people who may be a captive clientele.

In fact, landlords have to do just as much upgrading of properties as car companies have to do of car models, and they have to manage repairs in a constantly changing service and regulatory landscape as well.

I recognize a tendency toward oversimplification to discuss an economic or business  model.

The general pattern of real estate in some places has gone like this:

In Chicago, some rail tycoon builds a mansion just outside of the city's populated fringe around 1880, its grounds being transformed into a park-like environment. Around 1910 the area around the mansion starts losing its  rural character. Some time in the early twentieth century the tycoon for whom it is built dies, and the family of the tycoon sells it to get proceeds for... whatever. Real-estate developers buy the whole property, cut down  the trees and start building cheap apartments on the grounds and start subdividing the mansion into smaller pieces for renters. What was once a beautiful mansion becomes a slum. But more money changes hands with more residents; the deal turning a mansion into slum apartments is profitable, so it is done. Historical preservation? That's too modern for 1915 or so.

...Architectural upgrades of rental properties are rare except in 'rescues', also known as gentrification these days. A landlord has every cause to charge as high a rent as possible and keep maintenance to a minimum -- doing so only to keep an apartment habitable as defined by the standards of the time. More likely, any building that isn't expensively maintained (let us say a state's legislative house or a first-rate museum) has an obvious limit to its lifespan, one in which

rent receipts = costs (insurance, property taxes, maintenance costs, business costs)

defines the end of profitability. As a general rule, costs of maintenance rise and revenue from leasing falls, and when they meet... an apartment owner wants to sell out. Ignore depreciation, more a convention of accounting as a recovery of investment cost than an assessment of deterioration.

Single-family, owner-held houses can last seemingly indefinitely (which explains why one finds such houses from the eighteenth century in New England and some original houses in the rural Great Lakes region), but apartment houses don't have such a long life. Owner-occupants have an obvious reason to do maintenance on their own. Tenants call the landlord when the plumbing springs a leak. The IRS classifies some residential rental properties with lifespans for depreciation of up to 30 years. To be sure, some investor might buy a property with a scheduled depreciation of 30 years in the 25th or so year of its existence, but by then the building might not be worth much not only on the books but also in reality.

But here is what the IRS has as depreciation schedules for residential rental properties:

https://www.irs.gov/publications/p946/ar02.html

Figure that high-end rental properties, such as those that Donald Trump has for high-rent customers have the longer terms of depreciation; Section-8 housing  that builders practically concede as slums so that the landlords can get big shares of their rentals as federal or state subsidies get very short terms for depreciation. Obviously were I a landlord I would prefer high-end renters because the revenue streams would be higher, and the tenants of such places generally don't do as much damage as low-end tenants more likely to damage the appliances through misuse. But if I have thrown together a bland box of apartments, I am likely to have trouble in a few years with losing high-end tenants and ending up with low-rent tenants.

Of course if the developer guts and refurbishes a property he may have a new basis for depreciation

It's telling that shopping malls (which Donald Trump avoided, for which I will have to give him some credit as an investor in real estate) that someone in his early 60s remembers being built as marvels of commercial success  are dying after about 40 years of existence. These places have high costs of maintenance, and the rental revenue from stores as tenants either is shrinking or is failing to keep up with maintenance costs. (But a discussion of moribund shopping malls would be a good topic for creation or revival. Consumer spending is a relevant part of economic life to the Turning Theory. Shopping habits are not what they were in the 1980s, and will probably not even be parallel to those until the 2060s).

As developers, real estate people may indeed be innovators. They may also be that if they refurbish old buildings that have architectural merit. But in general, few people want upgrades in the apartments in which they live because that raises the rent.

[Warren Dew]

You haven't been a landlord.

My city was mostly built around 1930.  The buildings are all still standing, and still used as residences, either by owners or tenants.

I have a gas light boss in the ceiling of the room I'm in, but somewhere along the line, someone put in electricity - and then, later, replaced the the original electrical system with shielded cable.  The kitchens are 1970s era, and the bathrooms are modern; that wasn't cheap.  I'm sure there was a lot more work I wasn't aware of.

Aside from normal maintenance, I've done a lot of things that would qualify as improvements that would have to be depreciated under IRS rules.  I've put on a new, modern, roof; it looks the same but it has water impervious extra layers and a foam based ridge vent that is of recent technology.  I've replaced all the windows with superefficient triple paned argon krypton windows.  I've added fiberglass roof insulation, blown in wall insulation, and then another type of reflective mylar roof insulation.  I've replaced the siding with energy efficient siding, and it wasn't the first time that was done.  I've put in central air conditioning, switched the heating from oil to natural gas, put in high efficiency water heaters and then replaced them with even more efficient versions when they reached end of life.  I've put more money into the house than I paid to buy it.

Landlords in the area put even more money in.  There are a lot of college rentals here; walk into an empty rental place in the middle of the summer and you're likely to find a kitchen or bathroom being entirely replaced, floors being sanded and refinished, walls repainted.  And I'm sure the landlords are making all the energy efficiency improvements too, especially if they pay utilities.

You can argue that some of these things only restore value lost to wear and tear, but a lot - the new kitchens and bathrooms, the energy efficiency improvements - genuinely increase the value of the property.

Yes, there are cycles.  But there are cycles in other industries too.  You should be old enough to remember the junky cars Detroit turned out in the 1970s; that was as bad as landlords who let their properties turn into slums.  Landlords are as innovative and productive as other industry owners; they just get a bad rap because tenants like to blame everything on the landlord, and the landlords don't bother to argue.

[Mikebert]

(07-10-2017, 09:05 PM)ChrisP Wrote:

(07-07-2017, 03:31 PM)Mikebert Wrote: My second published paper. This one is about the inequality turnaround of a century ago that was completed during the last 4T.
It does not yet bring the S&H theory into the mix, (this is for the third paper that I am still working on).

http://escholarship.org/uc/item/42p5m46m

I enjoyed the paper.  Why do you believe the next recession will necessarily lead to an extremely large stock market correction (55%)?  Why can't economic rents accruing to the market power of large corporations continue keeping profits elevated above historical means (correcting for recessionary effects, of course), as well as the Fed buying up debt, equities and who knows what else to keep the ship from sinking?

 1. Because the market is overvalued and only a large adjustment will bring it back into line. My thinking is in accord with that of Benjamin Graham (Warren Buffet's mentor) who said that the market is a voting machine in the short term, but a weighing machine in the long term.

2. The share of output that goes to workers is already low, making the impact of recession on consumer demand greater than normal. A larger than normal stock market decline will have a similar impact on investment.  Both of these will affect aggregate demand making for a stronger-that normal recession, which is turn feeds into a deeper bear market and greater job loss, which increases recession strength.  That is, the normal recessionary cycle of reinforcing negative impacts will simply be strong, setting the stage for a stronger rather than weaker recession.


3. The Fed WILL intervene.  But the effectiveness of such intervention has been declining.  After the stock market bubble burst in 2000, Fed action converted what should have been a fairly strong recession into a mild one by stoking a "counter bubble" in real estate.  But this led o a real estate bubble which after it popped, led to a much stronger recession.  The Fed again acted but interest rate reductions were unable to reduce the recession strength. Instead there was financial panic and a seemingly permanent reset to a weaker growth mode.  THe Fed followed with massive money creation during the expansion that worked only weakly. Next time the Fed policies will be even less effective.

[pbrower2a]

(07-13-2017, 08:30 PM)Warren Dew Wrote: You haven't been a landlord.

There are many things that I have never been, but that does not mean that I cannot discuss them. Leasing of extant properties is one of the easiest business activities to treat as a model. Most people rent or have rented, and we all know renters. In general, I have never known of many renters to fully trust a landlord to do what is best for any but the landlord. For many people, property rent is the biggest chunk of their post-tax expenditures. I also recognize that given a choice, people would generally rather buy something modest than rent something better. We have often heard the adage that rent is money down the drain, and a mortgage is an investment. To be sure, there are times (like overpriced housing about to collapse in value) in which renting is wiser than buying, as before the real estate crash of 2007-2010 in some cities in southern California.

OK, so rent is a built-in cost of living in places with vibrant economies, like New York, Boston, San Francisco, and Washington DC. But who wants to live in Youngstown, Ohio, where one can have a well-paid job only if one commutes to and from Cleveland or Pittsburgh? Of course, real rent is much higher in an America with 300 million people than in an America with 150 million people.

Quote:My city was mostly built around 1930.  The buildings are all still standing, and still used as residences, either by owners or tenants.

I know of a town nearby that largely named its streets after Presidents of the United States. It is telling that the most recent President for which a street is named is "Roosevelt", as in "Theodore". Most of the building ended when nobody needed a street named after "Taft", "Wilson", "Harding", or "Coolidge". To be sure, houses did fill in until the 1930s, but most houses are turn-of-the-century... that is, when William McKinley was President.

I know of another town of similar size fairly close to me in which practically all houses were built around 1880 at the latest. That's when the town quit growing. It still has cobblestone streets.

OK, so experiences with the real estate stock will differ from region to region, state to state, and (as if this doesn't tell all) economic history to economic history.

Quote:I have a gas light boss in the ceiling of the room I'm in, but somewhere along the line, someone put in electricity - and then, later, replaced the the original electrical system with shielded cable.  The kitchens are 1970s era, and the bathrooms are modern; that wasn't cheap.  I'm sure there was a lot more work I wasn't aware of.

Few would rent a house without electricity, an obsolete kitchen, or obsolete toilets.  I'm guessing that there are lower rents for people willing to make such compromises, but few renters make those. I can also expect fewer landlords having a desire to lease such dubious bargains. But if you want a newer kitchen or better shower in an existing complex you will pay something mroe than what one had been paying.

Quote:Aside from normal maintenance, I've done a lot of things that would qualify as improvements that would have to be depreciated under IRS rules.  I've put on a new, modern, roof; it looks the same but it has water impervious extra layers and a foam based ridge vent that is of recent technology.  I've replaced all the windows with superefficient triple paned argon krypton windows.  I've added fiberglass roof insulation, blown in wall insulation, and then another type of reflective mylar roof insulation.  I've replaced the siding with energy efficient siding, and it wasn't the first time that was done.  I've put in central air conditioning, switched the heating from oil to natural gas, put in high efficiency water heaters and then replaced them with even more efficient versions when they reached end of life.  I've put more money into the house than I paid to buy it.

Necessary for keeping a building from before World War II livable and marketable, let alone to meet building codes that have tended to become more stringent over time. But depending on where and when you bought the property, it is also possible (especially in California) to be collecting more in one year on a property than one paid for it initially. If he fails to invest in the property a landlord becomes a slumlord. Of course economic realities are very different in Boston than in Detroit...

Quote:Landlords in the area put even more money in.  There are a lot of college rentals here; walk into an empty rental place in the middle of the summer and you're likely to find a kitchen or bathroom being entirely replaced, floors being sanded and refinished, walls repainted.  And I'm sure the landlords are making all the energy efficiency improvements too, especially if they pay utilities.

You can argue that some of these things only restore value lost to wear and tear, but a lot - the new kitchens and bathrooms, the energy efficiency improvements - genuinely increase the value of the property.

...etc., etc.  It's just that property leasing looks like one of the most cut-and-dried  of economic activities. It looks far simpler than property development.  Many developers try to cash out because their expertise is more valuable in building an apartment complex than in leasing it. And, yes, apartments are conduits for taxes, utility costs, and insurance -- as if owner-occupied housing isn't much the same. A landlord has bigger numbers to deal with. One pays the debt or balks and never becomes a customer. One defaults on rent and gets evicted.  

Quote:Yes, there are cycles.  But there are cycles in other industries too.  You should be old enough to remember the junky cars Detroit turned out in the 1970s; that was as bad as landlords who let their properties turn into slums.  Landlords are as innovative and productive as other industry owners; they just get a bad rap because tenants like to blame everything on the landlord, and the landlords don't bother to argue.

I am old enough to remember those bad cars -- gas-guzzling 'mid-size' cars that have less usable space for passengers than current sub-compacts. The Japanese introduced front-wheel drive  that ensured that people could sit above what was a drive-train in a rear-wheel-drive car and not get a sore derriere on a long trip... and more efficient engines. American auto companies simply built reduced versions of larger cars and gave people muscle-car comfort and an under-powered engine, the worst of both worlds. But we know how that went. Demand for crappy American-made cars plummeted, and auto-making jobs disappeared in Greater Detroit.

I'm sure that you can understand the consequences for Detroit-area real-estate. Rentals failed to keep up with costs  because people evacuated Greater Detroit  for places where the jobs were. A high-wage area became a low-wage area. Meanwhile, public costs remained as high as in good times, so the relative share of local taxes increased, raising costs for any property owner.

Without the auto industry, Detroit was not an attractive place for much of anything else. Detroit pols under-invested in education which might have prepared the children of semi-skilled factory workers to be something else.  Detroit pols wouldn't bite the bullet and welcome the sweatshops in which people might have jobs that ensure working poverty.

West Virginia is much the same with coal. (I run into the argument many times that it is that blacks mess up a city when they are the last to leave... race is not the problem in West Virginia).  Ger complacent about a declining industry and treat it as a cash cow, and it is only a matter of time before landlords, merchants, lenders, and public employees get hurt. Detroit now arguably has the biggest collection of ruins in the world.

[ChrisP]

(07-14-2017, 01:23 PM)Mikebert Wrote: 3. The Fed WILL intervene.  But the effectiveness of such intervention has been declining.  After the stock market bubble burst in 2000, Fed action converted what should have been a fairly strong recession into a mild one by stoking a "counter bubble" in real estate.  But this led o a real estate bubble which after it popped, led to a much stronger recession.  The Fed again acted but interest rate reductions were unable to reduce the recession strength. Instead there was financial panic and a seemingly permanent reset to a weaker growth mode.  THe Fed followed with massive money creation during the expansion that worked only weakly. Next time the Fed policies will be even less effective.

I agree that the Fed's interventions are becoming less effective in stimulating economic activity; however, they remain effective in propping up asset markets, namely, the stock market.  It seems clear that the Fed's main task is keeping asset markets elevated.  I would assert that well before the market corrects 55%, the Fed will massively intervene into asset markets, which likely will keep stock market losses well below 55%.  It won't necessarily help the economy recover quickly, but the Fed can't do much about that anyway.

[Mikebert]

(07-15-2017, 03:01 PM)ChrisP Wrote:

(07-14-2017, 01:23 PM)Mikebert Wrote: 3. The Fed WILL intervene.  But the effectiveness of such intervention has been declining.  After the stock market bubble burst in 2000, Fed action converted what should have been a fairly strong recession into a mild one by stoking a "counter bubble" in real estate.  But this led o a real estate bubble which after it popped, led to a much stronger recession.  The Fed again acted but interest rate reductions were unable to reduce the recession strength. Instead there was financial panic and a seemingly permanent reset to a weaker growth mode.  THe Fed followed with massive money creation during the expansion that worked only weakly. Next time the Fed policies will be even less effective.

I agree that the Fed's interventions are becoming less effective in stimulating economic activity; however, they remain effective in propping up asset markets, namely, the stock market.  It seems clear that the Fed's main task is keeping asset markets elevated.  I would assert that well before the market corrects 55%, the Fed will massively intervene into asset markets, which likely will keep stock market losses well below 55%.  It won't necessarily help the economy recover quickly, but the Fed can't do much about that anyway.

Fed intervention is ineffective against "damaged" asset classes. Hence the Fed intervention in 2001-2002 did nothing to stop the decline of the stock market (which was damaged because it had recently been in a bubble.) It boosted real estate because it was not damaged (yet).  In the next recession stocks will be damaged, and so the Fed will be ineffective with that asset. Real estate is still damaged (its recovery occurs over a Kuznets cycles--20 years, it won't be back for another decade. So neither of these asset classes are going to respond this time.

[Warren Dew]

The Fed's intervention has been quite effective in preventing a full return of real estate values to their long term values. I'm not saying they'll purposely do that with stocks, but when you can print arbitary amounts of money, you can inflate money valued prices arbitrarily.

Of course it has undesirable side effects, such as the stock market bubble that has accompanied the prevention of further collapse of the housing bubble, so it's better to avoid it if possible.

[pbrower2a]

(07-16-2017, 04:02 PM)Warren Dew Wrote: The Fed's intervention has been quite effective in preventing a full return of real estate values to their long term values.  I'm not saying they'll purposely do that with stocks, but when you can print arbitary amounts of money, you can inflate money valued prices arbitrarily.

Of course it has undesirable side effects, such as the stock market bubble that has accompanied the prevention of further collapse of the housing bubble, so it's better to avoid it if possible.

Low interest rates drive up the value of securities and real estate. The most obvious way to depress the value of housing is to impose rent control.

[Mikebert]

(07-16-2017, 07:48 PM)pbrower2a Wrote: Low interest rates drive up the value of securities and real estate.

When the asset class is not damaged. Real estate appreciation can be suppressed by the existence of a large glut foreclosed properties in a recessionary business environment accompanied by a deep bear market in stocks. The first creates surplus supply. The second creates low demand for homes and properties.  The combination excess supply and low demand means low prices despite low interest rates. Finally a serious bear market suppresses animal spirits, leading to reduced proclivity to invest.

Situations like this typically only arise after a period of malinvestment. My paper shows how the stock market of the 1920's (and today) experienced "stealth overvaluation". Today's market does not look particularly overvalued by conventional valuation. PE is about 22-23 on a trailing 12 month basis. This is high historically, but much lower than it was in 1999-2000. The same thing was true of 1929, when valuations were considerably lower than they had been 25 years earlier. But when you adjust for the effect of reduced capital productivity, the 1929 valuation was the highest in history and the market in that year was prone to a major decline, which is what happened.  Today's P/E, after the same adjustment is about 30--same as it was in 2000. So the market is about as overvalued as it was then.  This same phenomenon shows up in the ratio of market capitalization to GDP.

[pbrower2a]

The best way to get maximal short-term profits as a landlord is to defer improvements as long as one can get away with it. Such is the profit motive, something that does not deserve unqualified faith, as it can as easily bring out the worst in people as it can bring out the best.

There were good reasons for promoting home-ownership in America. Children brought up in owner-occupied houses were more likely to succeed in school. Home owners had less reason to go out on the town, which means that the habit of thrift associated with getting a down-payment for a mortgaged house would remain after the mortgage was underway. Thrift creates savings; from savings comes investment; from investment comes capital; from capital come well-paying jobs.

Except for the mindless conformity, I think that we are going to like the 'Next Fifties'. I'm guessing that what many of us disliked about the 1950s, the last High, will not return because it won't be 'modern'. Thus there will be no more support of the male chauvinism and the last stage of Jim Crow practice of the 1950s than there will be for polio.