On: Why the New American Real Estate Dream Is Renting

[barrkel]

If the market were so perfect, why wouldn't it cope with distortions perfectly? In other words, why wouldn't it predict the effects of mortgage tax etc., and still come out OK in the end?

[barrkel → barrkel]

I find it very interesting that when this argument is presented, people don't post a counterargument - they downvote instead?

[modeless → barrkel]

Of course markets aren't perfect. They can cope with distortions like the mortgage tax deduction but the cost is reduced efficiency and resiliency. The mortgage tax deduction didn't trigger the crisis but it amplified the effects by increasing the number and size of mortgages.

(BTW, I'd like to clarify that I didn't downvote you and I agree it was uncalled for. I don't yet have the ability to downvote.)

[cema → barrkel]

Market is not perfect, it works well under certain assumptions which are not always accurate after government interventions.