Many stories have been written about the victims and losses in the collapse of real estate values, but few about the “winners”. Here’s one:
Coyote Ugly! This fine establishment (I am reminded of the line in Animal House when the fraternity representative is defending the Delta house by saying that it has “A long history of existence”) sits on what would appear to be a very valuable tract of land in the River North area of Chicago. Given that the Coyote can’t be a high rent tenant and it takes up a lot of a city block, you’d figure that some real estate developer would knock it down (wouldn’t take much, the damn thing is practically a tent and it is a wonder that it doesn’t just blow over)and put up a big condominium or the like.
But now that NO ONE can get financing for any type of new construction (and the existing construction is at risk of sitting there, half completed) the Coyote will be protected, likely for many years, since this bust will take a while before the animal spirits of capitalism rise again in the form of easy bank loans to finance condominium construction. In the interim period we will have to rely on the low power of that scavenging, mangy Coyote animal on this prime piece of real estate.
Cross posted at LITGM
4 thoughts on ““Benefit?” of the Real Estate Collapse”
I was just in Memphis on business and spent some time at the Coyote Ugly on Beale St. Too fun.
The big winner, of course, is the aggregate of those who–because of their age or whatever other reason–have not yet bought their first house.
There’s a good argument to be made that increases in housing prices (except for those based on actual physical improvements) do not represent increases to the national wealth but only reallocations of that wealth, particularly across generations.
…meant to say “increases/decreases in national wealth”
Obama promised he would end the cycle of boom and bust because it is so destructive. This can be done only by eliminating booms (because busts can never be eliminated except by creating a boom). Booms are eliminated by taxing boomers at 90% or more. That is what FDR did. FDR is Obama’s hero. FDR never had a boom.
Eliminating booms requires government regulation of all economic activity in order to smooth out bubbles before they burst. This requires central planning. Central planning requires a government that regulates every possible human activity.
Fortunately the US government has Total Power already. All Obama needs do is centralize this power in the white house (using “czars” or dictators) and the totality of central planning results. Many countries have achieved paradise using central planning within a benevolent totalitarianism – China under Mao, Russia under Stalin, Cuba under Castro, Cambodia under Pot Pol all have been lavishly praised (while they were in power) by the Washington Post and New York Times as well as the overwhelming majority of academic scholars.
Do not look for an restart of a building boom. Coyote Ugly will remain until Sharia Law removes it. Sharia law has all the answers because the Prophet, may Allah’s blessings be upon him, wrote them down.
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