Monday, November 03, 2008
The Way Out, pt IV
There's an obscure English cliche, "Where there's muck, there's brass." It means that wherever there's difficult or dirty jobs to be done, there's money to be made. The problem with the economic pessimists is that they always tend to underestimate the muck to be shoveled away if people are fairly compensated for doing it. It's a forgivable error. The statistics so beloved of economics measure this poorly, if at all. Free market types are often ridiculed for using phrases like, "unleashing the power of the markets" but sometimes that's just the plain truth of the matter.
What does this have to do with the price of tea in China? According to Glenn Reynolds, Obama leads in 18 out of 19 states with the largest decline in housing prices (and presumably will win most of them). Thirteen out of the fourteen states where housing values have declined the least, McCain leads.
Now, do we suppose that when The One takes office, and is confronted with the hordes angry at what they see (with some justification) as $700 Bn of free government money for Wall Street, he is somehow not going to try to dole out some largesse to his supporters? I doubt it. The piggy bank ought to be empty for such maneuvers, but somehow I doubt that it really is. The point is, such things cost more than money. They accumulate cottage industries built around the preservation of inefficiencies. But the way out is for people who see opportunities and materialize them.