Generation warfare: youth call to arms!

Usually when we talk about economics, we consider two parties in an exchange. A buyer and a seller. Prices going up obviously help the seller and hurt the buyer. In total, price movements seem to be a a wash. Therefore, when we talk about prices in the business press, it can't be said whether price increases are good or bad, right?

In practice, a newspaper speaking to an every day citizen can and does make value judgements about some price movements. For instance, The US consumes much more oil than it produces, so oil pricesincreases on domestic consumers don't have matching domestic gains. Even when price increase gains are kept domestically, a journalistic still reasonably frames that price change as a negative turn of events. For instance, food price increases can stress all families, while very few of us farm. Therefore, we understand that the journalist frames the issue as 98% of us would see it.

Now let's talk about home prices. As home prices fall, who loses? Home owners, i.e. wealthier older people. Who gains? Poorer people who no longer desire to rent, younger people looking for their first home, vacation home buyers. All gains from home price decline are domestic, and and these gaines are not constrained to a small population of Americans. Therefore, why are falling home prices presented as a bad thing?

Yes, precipitous declines in home prices destabilize the economy. But that's not the whole story. The politicians and the business journalists speaking about the decline are obviously the ones disproportionately affected by home prices: i.e. older, wealthier individuals. The world in which they live is permeated by homeowners; the dinner tabel discussions touch upoin their falling equity. Essentally, the demographic that owns homes is framing the entire discussion over the issue of falling values. As long as this persists, the perspective of those who benefit from lower prices will not be heard and will not influence public decision making.

So all you young people out there, let me tell you how you get totally FUCKED. What is happening is that government is borrowing funds to bail out homeowners and capital lenders. This is explicitly meant to keep home prices up, making things more expensive for you. They are working to make sure they squeeze more money out of you folks in your 20's who will buy a house. And to add insult to injury, the subsidies made to make things more expensive for you are borrowed, and will be paid back at a later date, when you in your 20's are more likely to be in your prime earning years and the current home owners are retired. Wake up, young renters! Everyone is working to fuck you.

Here a couple of policy suggestions that don't screw younger renters:
-Let inflation rise so that housing prices can stabilize nominally but will be cheaper to wage earners.
-Significantly increase the capital gains tax on home sales to pay for the bail out.

But first off, I'd like to begin making our voice heard in that falling home prices is not an automatic disadvantage to everyone. Speak up, and let's begin reframing the housing discussion away from its exlcusive attention on the owners.