Updated historical home price graph

For those who are interested, I have finally gotten around to updating my home price graphs. The national graph now has a new feature: pre-bubble trend lines.

Click on the graph to view the full-sized version.

PETA is sexist

People for the Ethical Treatment of Animals (PETA) degrades women. Ha!

Money is the root of much good

Despite the widespread belief that "money is the root of all evil," The Economist points out that money's virtues outweigh its vices:

There is a tendency to look back on the pre-industrial era as an idyll. But if you think life was great before sordid commericalism appeared, you should try being a peasant. Life was a combination of back-breaking work, few human rights, illiteracy, short life expectancy and little chance for advancement (especially for women). It is no coincidence that all these things have improved in our more sophisticated economy. ...

Societies that have destroyed their money, like Zimbabwe, have not moved into a post-materialist world; they are full of famine, disease and brutality.

Most people recognize that it is better to be wealthy than to be poor. However, far too many people think of the world's wealth as being fixed—that if you have more money, it forces me to have less. That is not the way the economy works. Humanity grows wealth over time. The more productive we are—through harder work, better education, greater innovation, and more efficient use of resources—the faster the economy grows and the wealthier we all become.

Without money, wealth, and economic growth, we would not have refrigeration for food, airplanes for travel, running water for sanitation, or computers for learning. Man's desire for money, and his willingness to employ his productive resources in order to obtain it, gradually makes the world a better place.

Public schools: Elites vs. the middle class

Another reason to favor school choice over the public school monopoly, from Wikipedia:

Randall Collins contributed the idea of credentialism to the study of class-based differences in educational attainment. Collins maintains that public schools are socializing institutions that teach and reward middle class values of competition and achievement. Anglo-Protestant elites are selectively separated from other students and placed into prestigious schools and colleges, where they are trained to hold positions of power. By teaching middle-class culture through the public education system, the elite class ensures a monopoly over positions of power, while others acquire the credentials to compete in a subordinate job market and economy. In this way, schools of medicine, law, and elite institutions have remained closed to members of lower classes.

Thus, as I interpret this paragraph, the hypothesis says prestigious private schools teach how to lead, while the public school monopoly teaches how to serve.

How to attain social status

Scientific American has an interesting article on what causes people to have or lack social status:

Recent work by social scientists has tackled the topic, elucidating behavioral differences between low-status and high-status individuals, and the methods by which those at the bottom of the totem pole are most successful at climbing to the top. ...

Low-status people are much more sensitive to being socially rejected and are more inclined to monitor their environment for threats. Because of this vigilance toward protecting their sense of self-worth, low-status individuals are quicker to respond violently to personal threats and insults. ...

Those who are effective in attaining status do so through behaving generously and helpfully to bolster their value to their group. In other words, low-status individuals’ aggressive and violent behavior is precisely the opposite of what they should be doing to ascend the societal totem pole. ...

People afford greater status to individuals who donate more of their own money to a communal fund and those who sacrifice their individual interests for the public good. Demonstrating your value to a group—whether through competence or selflessness—appears to improve status. Anderson and Aiwa Shirako suggest that the amplifier for this effect is the degree to which one has social connections with others. ...

They showed that individuals who behaved cooperatively attained a more positive reputation, but only if they were socially embedded in the group. Those who behaved cooperatively, but lacked connections went unnoticed. ... Those who were selfish and well-connected saw their reputation diminish. ...

The sum of these findings can begin to explain the troubled circumstances of those lowest in status. ... Instead of ingratiating themselves to those around them – this is the successful strategy for status attainment – low-status individuals may be more prone to bullying and hostile behavior, especially when provoked.

So, to attain a high socioeconomic status, in addition to getting an advanced degree in a high-paying field, you should be helpful to those around you.

The November 2009 unemployment rate declines

The economy keeps getting better (or less bad). The unemployment rate actually fell in November, down to 10.0% compared to 10.2% a month earlier:

The year-over-year percent change in initial jobless claims has fallen below zero, which means employed workers are safer than they were a year ago:

November's month-over-month change in nonfarm payrolls was just about zero, the best it's been since December 2007:

Compare the above graph with a graph of ADP's numbers.

The year-over-year percent change in aggregate weekly hours worked is rising:

Permabears must be growling at the improving data.

November 2009 monthly job loss numbers from ADP

According to the ADP Employment Report, the month over month rate of job losses continued to decline in November. This graph shows the number of job losses in thousands:


Here are ADP's comments on the numbers:

Nonfarm private employment decreased 169,000 from October to November 2009 on a seasonally adjusted basis, according to the ADP National Employment Report®. ...

November was the eighth consecutive month during which the decline in employment was less than in the previous month. Although overall economic activity is stabilizing, employment usually trails economic activity, so it is likely to decline for at least a few more months.

Keep in mind that we need 100,000-200,000 job gains each month just to keep up with population growth.

Prof. Brent White: Walk away

A law professor encourages people to walk away from their homes:

Go ahead. Break the chains. Stop paying on your mortgage if you owe more than the house is worth. And most important: Don't feel guilty about it. Don't think you're doing something morally wrong.

That's the incendiary core message of a new academic paper by Brent T. White, a University of Arizona law school professor, titled "Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis."

White argues that far more of the estimated 15 million American homeowners who are underwater on their mortgages should stiff their lenders and take a hike. ...

Better yet, you can default "strategically." Buy all the major items you'll need for the next couple of years — a new car, even a new house — just before you pull the plug on your current mortgage lender.

Scenario #1: You walk into a bank and take a bunch of money that doesn't belong to you. This is called theft.

Scenario #2: You take out a loan, promising to pay it back. Then, after you have the money, you decide not to pay it back. How is this not also theft?

I can completely understand not paying back a loan if you lose your job and are unable to pay back the loan. I can also understand if you get sick and end up with huge medical bills that make it impossible to pay back a loan. I can even understand not paying back a loan if the bank deceived you regarding what your payments would be.

However, if you decide not to pay back the loan simply because you overpaid for your house, then I consider that the moral equivalent of theft.

Keep in mind that being underwater doesn't mean you can't afford the monthly payments. It just means that the value of your house has fallen by more than the amount of your down payment (and any subsequent principal payments). A person who stiffs their lender because their investment didn't turn out as expected is scum. Just because you can steal from a bank doesn't mean you should steal from a bank.