dean baker vs. the dot com and the tulip bubbles

[Charles Brown <cbrown@xxxxxxxxxxxxxxxxx>]

  Oh , I see what you mean on demand.

People are paying more for homes, because the cost of money is down ? How
long can the cost of money stay down in a creditor class dominion ? How long
? Not long ? They $hall overcome.

Then again who is selling the houses ?

Is Dean Baker of Univ of Mich ?



Charles

by Michael Perelman

He is saying that lower interest rates & higher incomes increase demand.  In

itself
that is reasonable, but the question is whether it is enough to explain the
soaring
costs of housing.  If you know nothing about economics & you have to choose
between
Dean Baker & someone who predicted a 36,000 NASDAQ ....


On Tue, Jul 27, 2004 at 03:48:50PM -0400, Charles Brown wrote:
> by Perelman, Michael
>
> -clip-
>
>
> Mr. Hassett of the conservative American Enterprise Institute thinks
> housing prices will be pretty much O.K. He acknowledges there might be
> some bubble dynamics at play in some regions. But he argues that for the
> most part people are paying more for homes because their incomes are
> higher and interest rates are lower, reducing the cost to own a home.
>
> ^^^^^
>
> CB: Sounds like he is saying people are paying more for homes because the
> cost of them is less.
>
> Isn't the market theory of prices supposed to be determined by  supply and
> demand ? Yet supply of houses is not less, and demand is not more, so why
> higher prices , by that theory ?