Yes, I am reviving the “Today’s Housing Bubble Post” that was so popular prior to the (last) crash.
In a local weekend paper today I saw a 3br, 2ba regular old house on a regular old street in a regular neighborhood in Cupertino, CA listed for $1.4 million.
Fed-driven low interest rates lead to asset bubbles. Tax cuts for the rich lead to massive wealth inequality and investors with too much money chasing fad-speculations like birds all flying off a wire at the same time.
We need a different approach. What we need for the economy is a massive infrastructure modernization effort. Since the Reagan tax cuts we have deferred maintaining our infrastructure (and cut education and everything else) and it has caught up with us.
The Congressional Progressive Caucus “Back To Work Budget” immediately hires 7 million people to fix our infrastructure and pays for it by bring tax rates on the wealthy back to Clinton levels, plus new brackets for millionaires and billionaires. And they tax capital gains at the same rate as regular income. But they don’t even bring it back to pre-Reagan levels!