Holman Jenkins is one of my favorite columnists, until today. In today’s article he recommends destroying tens of thousands of new, but vacant, homes as a way to buoy home prices, restore confidence in home buyers and to sure up the many financial institutions that have a horse in the housing race.
For someone that understands the price system so well, I am shocked that he prefers the destruction of resources to the lowering of prices. For the sake of some messed up financial institutions that made horrible decisions? For all the WSJ does to convince us this is not the 1930s all over again, bulldozing thousands of homes sounds a lot like plowing under every third row of crops and slaughtering your baby pigs just to keep farm prices high.
There is no constitutional right for financial firms to not lose their shirts. Nor is there a natural law that says house prices cannot plummet. Even if developments were built dozens of miles from existing communities, if prices are permitted to fall deeply enough, you will enable families to own homes that are currently not able to afford them. Are these families any less important than the families that are affiliated with the financial corporations?