Translation/explanation needed

by Chris Bertram on July 11, 2008

One of the benefits of a blog like CT is that non-specialists can always ask specialists to explain stuff. Here’s Martin Wolf, “writing in the Financial Times”: about Britain’s housing bust:

bq. If economists differ on whether house prices are now reasonable, they differ still more on whether a house-price collapse must spell ruin for the economy. A decline in prices brought about by a big boost to supply ought to be beneficial. *Even a correction in a bubble should not bring pain: for owner-occupiers, the lower value of their houses is offset by the lower implicit cost of renting them from themselves.* [My emphasis] Moreover, the losses of those cashing out of the market are offset by the gains of those buying into it. This is why it is mad to applaud ever-rising prices.

So what on earth does he mean? If I were feeling pain (which I’m not because I’m not going to sell my house any time soon), how would my agonies be offset by a reduction in the implicit cost of something that isn’t actually happening? Enlighten me please.

Origins of the netroots

by Henry Farrell on July 11, 2008

I have a Bloggingheads dialogue with Eric Posner up, where among other things, we talk about the “origins of the netroots”: The (not very original, I suspect) theory that I put forward in the dialogue is that this wasn’t the result of any necessary affinity between the left and the Internet, but instead a historical accident, resulting from the emergence of a new medium at a moment when US progressives were (a) extraordinarily frustrated with the Iraq war, and (b) deeply disenchanted with the traditional means through which they might have found expression of their views in happier times (TV and purportedly ‘left’ newspapers like the _New York Times_; the Democratic party). This is less a political science judgement than a semi-journalistic one – I haven’t done enough specific research to really do more than articulate my best guess as to what happened. I am interested in working more on this in a more serious way at some stage though, and would love to both people’s views (preferably good disagreements with my argument) and any evidence for or against that they can think of. More generally, there is a lot of work to be done updating the social movement literature to deal with these new Internet mediated movements – at the very least, there are a few dissertations in it.