> Collective belief is a pretty fragile foundation to build an economy on, hard to build and easy to destroy.
This, IMO, is what economic bubbles are predicated upon. It's hard to build value in our economy as more people are pushed to the side, so let's give away home loans and tether people in with good feelings, based upon poor reasoning!
It started with an arbitrary collective belief; we all just want nuclear family type lives in these all-services included by nearby strip mall, burb communities. Which is ... patently untrue. But people need a home so if that's where the action is!
And some quaint or wonk starts to see through this with data, and invents credit default swaps.
It's a crappy example; I'm tired, no coffee, and this is HN, not some economic summit, the kernel of truth I believe is there is this: Bubbles are the result of pushing social norms into the purview of utilitarian decision making for the species as a whole.
This, IMO, is what economic bubbles are predicated upon. It's hard to build value in our economy as more people are pushed to the side, so let's give away home loans and tether people in with good feelings, based upon poor reasoning!
It started with an arbitrary collective belief; we all just want nuclear family type lives in these all-services included by nearby strip mall, burb communities. Which is ... patently untrue. But people need a home so if that's where the action is!
And some quaint or wonk starts to see through this with data, and invents credit default swaps.
It's a crappy example; I'm tired, no coffee, and this is HN, not some economic summit, the kernel of truth I believe is there is this: Bubbles are the result of pushing social norms into the purview of utilitarian decision making for the species as a whole.