• Austrians Who Predicted the Housing Bubble

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    Robert Wenzel in this blog mentions the “the success of the Austrian forecasters” in predicting the housing bubble. Now, of course, praxeology is not a predictive science; the Austrian forecasters who succeeded in predicting the housing bubble did this not as praxeologists, but qua thymologists, or economic historians. Nevertheless, credit should go where it is due, and, certainly, these Austrians deserve every accolade for their understanding (verstehen) of the economic realities. I have tried to amass a bibliography on this, and have done a pretty thorough job of it, if I say so myself.  Below, I share this information with my tentative listing. Please, if I am in error in any of this, either by omission or commission, do correct me. I would like to have as accurate a record of this wonderful episode in Austrianism as possible. Here goes:

    Blumen, Robert. 2005. “Housing Bubble: Are We There Yet?” May 8;

    Corrigan, Sean. tba

    De Coster, Karen. 2003. “The House that Greenspan Built: Irrationally Exuberant Wall Street Welfare Parasites and Their Fed-God” September 12;

    Economics of contempt. 2008. “The Unofficial List of Pundits/Experts Who Were Wrong on the Housing Bubble” July 16;

    Englund, Eric. 2004. “Monetizing Envy and America’s Housing Bubble” July 19;

    Englund, Eric. 2005A.  “Houses Are Consumer Durables, Not Investments” June 8;

    Englund, Eric. 2005B.  “Diminishing Property Rights Will Lead to a Higher Rate of Mortgage Defaults

    Englund, Eric. 2005C.  “When the Housing Bubble Bursts, Will President Bush Practice Mugabenomics?” July, 19;

    Englund, Eric. 2005D.  “When Will America’s Housing Bubble Burst?” November 4;

    Englund, Eric. 2006. “The Federal Reserve and Housing: A Cluster of Errors?” April 22;

    Englund, Eric. 2007.  “From Prime to Subprime, America’s Home-Mortgage Meltdown Has Just Begun” September 24;

    Englund, Eric. 2008. “Countrywide Financial Corporation and the Failure of Mortgage Socialism” January 28;

    Mayer, Chris. 2003. “The Housing BubbleThe Free Market. Volume 23, Number 8 August;

    Murphy, Robert P. 2007 “The Fed’s Role in the Housing Bubble” December 28;

    Murphy, Robert P.  2008. “Did the Fed, or Asian Saving, Cause the Housing Bubble?” November 19;

    Paul, Ron, 2002. Testimony to U.S. House of Representatives, July 16; text of speech in Woods (2009, 16-17):

    “The special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.

    “Despite the long-term damage to the economy inflicted by the government’s interference in the housing market, the government’s policy of diverting capital to other uses creates a short-term boom in housing. Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged overinvestment in housing.”

    Rockwell, Llewellyn H, Jr. 2008. The Left, the Right, and the State Auburn, AL: The Mises Institute

    Schiff, Peter. Undated A.

    Schiff, Peter. Undated B.

    Schiff, Peter. Undated C.

    Schiff, Peter. Undated D.

    Schiff, Peter. 2006. Mortgage Bankers Speech to the Western Regional Mortgage Bankers Conference in Las Vegas; November 13;

    Schiff, Peter. 2007. Crash Proof: How To Profit in the Coming Economic Collapse New York, N.Y.: Wiley

    Shostak, Frank. 2003. “Housing Bubble: Myth or Reality?” March 4;

    Shostak, Frank. 2005 “Is There a Glut of Saving?” August 4;

    Thornton, Mark. 2004. “Housing: Too Good To Be True” June 4;

    Thornton, Mark. 2009. “The Economics of Housing Bubbles” 

    Thornton, Mark. Undated.
    See also Woods (2009, p. 188 for a further bibliography on this)

    Woods, Thomas E. Jr. 2009. Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse Washington D.C.: Regnery Publishing


    9:43 pm on December 14, 2010
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