A crash would definitely jolt the economy out of something, but I don't know what it would jolt it into. It could something much worse.
One possible scenario is that those who are too narcissistic and born-to-rule to get the message if/when the bubble bursts could go full-on Trump or even Weimar Republic. They'll continue to blame anything and everything for the sudden loss of their wealth, except themselves.
I liken it to a financial equivalent of the Ku Klux Klan, which went out of its way to bring back the old order in the American South following the Civil War.
Ironically a crash also goes a long way to restoring faith in free markets, the much vaunted "correction", setting everything to rights again.
And because what we have right now isn't much of an actual free market. I worked out early on that it's more like a rentier system where those lucky enough to inherit wealth and/or get in 20+ years ago wilfully pull up the ladder behind them, and then have the cheek to lecture the rest of us about "honest hard work".
There is a norovirus outbreak at the Republican National Congress. To be fair, uncontrollable vomiting and loss of bowel control would be a reasonable response to the contents of the convention's first day.
"This is insane," I tweeted yesterday as I watched three people get up and tell their stories under the banner 'Victims of Illegal Immigrants', but it was in keeping with the constant tone of fear and hatred that underscored the day's theme of Make America Safe Again.
How long before they start blaming undocumented (and disgruntled) migrants for conspiring to poison them? Or the OSHA/FDA officials who try to prevent it happening in the first place?
A 40% correction would take almost all of our equity. We’d just hang on. There would be a certain justice in it, since that 40% represents gains that we made for nothing more than buying back in the noughties and holding on. It might bring property prices back to the affordable range for young families. So long as they still have jobs, something it’s hard for me to see as likely if the economy had just taken a hit of that magnitude.
A great deal of it is likely driven by those who haven’t learned much from Chase Corp and Equiticorp. It's gotten to the point where a hyper-correction is the only thing that'll jolt them out of Nero-grade denial.
Look, I live in Sydney because there are relatively few people doing my sort of work in NZ and if I want one of those jobs I’d have to be willing to live in Wellington or Auckland on half the money I get now.
A big contributing factor is that those in a position to invest in NZ's productive sector have instead put everything into the housing bubble since the 1987 Crash, and the fact that DFC NZ had no serious replacement after it collapsed.
The problem in this case really is that "the people", specifically, those who vote in council elections, don't want intensification. The people who want that generally don't live where it's proposed to happen. Which is one problem that the super-council is designed to solve. I think there is a real need for larger-scale planning than we get with lots of little sub-city councils. But at the same time, anything the democracy-hating elitists want strikes me as a bad idea purely for that reason.
Once again, Generation Rentier wants it both ways. They're happy to preach the virtues of von Hayek/von Mises and the vices of Big Government to the rest of us, but they're equally happy to use Big Government to shift the goal posts when it suits them. All they're doing is sending the message that honest hard work counts for nothing, and dumb luck and knowing all the right people is everything.
Call me nihilistic, but I look forward to the day the bubble burst jolts Generation Rentier back to reality. That is, if they don't dig deeper into denial and go full-on Trump.
Since Dallas there's been a copycat shooting of cops in Baton Rouge east of the Texan border. In both cases, is this the "taking up arms against a tyrannical government" that the NRA & GOA had in mind? Or are they browning their pants that their self-proclaimed copyright on the 2nd Amendment might be well and truly infringed?
I recently read a piece by Greg Pritchard and Stephen Jennings quotes and found myself agreeing with what I thought was common sense. This requires work from all political parties, but instead it will become a messy and ugly election issue (and looking at Brexit and Trump, I am scared of how ugly NZ has the potential to get).
When Business Roundtable types are saying the Auckland housing bubble is inflating too much, you know that a turning point is coming. It's single-handedly sorted out the genuine free-marketeers (who are usually OK with building upwards) from the Generation Rentier crowd (who speak von Mises but will cry "SLUMS!" at the very mention of density).
Here's a clue: the pundit is a she, and isn't a big fan of Jeremy Corbyn. Here's a selection of her words on Brexit, and Google can tell you the rest. To me it came across as Blairite blame-shifting.
The trouble occurs when progressive parties become the property of Pioneers (middle class liberals). Pioneers don't just disagree with the working class base, they disapprove. They are less likely than others in the potential support base to understand that someone could comprehend the facts yet reasonably disagree with them.
The Remain campaign in Britain was at its least successful when it was run by and for the Pioneers. Fifty six per cent of voters said concerns about immigration contributed to their voting choices in the past election, but they felt it was a subject you shouldn't talk about. They trust Boris Johnson, who fronted the Brexit campaign, not because they agree with him, but because they think Boris is "prepared to say unpalatable truths".
Settlers and Prospectors link immigration to changing demographics at local schools and access to health services. Pioneers make a progressive case for immigration that misses these concerns and drives Settlers and Prospectors to support right-wing populists.
The New Labour faction is desperately trying to pull off their coup against Corbyn. At the moment their best hope is enforcing a ruling that he'll require the support of 51 sitting MPs to even appear on the ballot paper. This is a bizarre coup, not least because Corbyn’s main policies align perfectly with core Labour party policy.
Opposing Corbyn is Angela Eagle. She backed the Iraq War, voted to bomb Syria, is pro-Trident and abstained on the vote proposing cruel Tory welfare cuts. She's about as far right as you can get whilst masquerading under a Labour banner.
It goes to show that with each passing day, Tony Blair's New Labour doctrine is looking increasingly like a product of its time. Just like "Cool Britannia". The turning point was most certainly the Second Iraq War.
Closer to home, one of its holdouts - a semi-regular pundit on TV & the Web - had the cheek to insinuate that champagne socialists were responsible for UK Labour turning its back on the working class, allowing Brexit to happen and that all Brexit voters were insular bigots. What said pundit was really describing was the aforementioned New Labour.