WSJ:"Immigrants Can Help Fix the Housing Bubble."
March 23, 2009, 12:17 AM
A+
|
a-
Print Friendly and PDF

The Wall Street Journal has run the inevitable op-ed arguing for more immigration in order to reinflate the Housing Bubble: "Immigrants Can Help Fix the Housing Bubble." The authors are totally disinterested patriots:

Mr. LeFrak is chairman and CEO of LeFrak Organization, a real estate builder and developer. Mr. Shilling, an economic consultant and investment adviser, is president of A. Gary Shilling & Co.

Actually, the Housing Bubble was a bad thing, so why do we want to fix it? The huge inflation in home prices in a few states made it difficult for prudent savers to purchase a home, while making it easy for gamblers and liars to buy several.

Moreover, this is a good example of why I keep harping on where the Um, 66% of all home value inflation during the Housing Bubble took place in the state with by far the highest percentage of foreign-born resident of any state in the union, California. Roughly the same percentage of all money lost on home mortgage defaults since then has been in California.

87% of all home value inflation from 2000-2007 took place in just four heavily immigrant states: CA, AZ, NV, and FL, with equivalent losses on foreclosures over the last two years.

So, how'd that immigration/home price inflation strategy work out for us the last time we tried it?

Somebody should summon the ghosts of Henry George and Benjamin Franklin to explain why high land prices are not a good thing for America. It's funny how the first great work of social science theory in American history, Franklin's 1751 Observations Concerning the Increase of Mankind, which Malthus credited as the precursor to his work, has been written out of America's intellectual history largely because of its call for immigration restriction.