I agree. There are plenty of graphs out there showing that when Freddie/Fannie started going insane (as opposed to using sound lending practices) the prices of homes grew much faster than inflation creating a market where homes were just flat out over priced which hurt young families forcing them to have either two person earners or rent (sometimes both.)
With two parents earning a paycheck, no one was left to raise the children except people without a vested interest in the children’s best interests at heart. (Not saying they wanted to harm kids, just no one wants to make your child’s life as good as it can be except you or your genetic mate in MOST cases, yes, its a generality and yes, there are some off the wall, weird and uncommon examples where this is not true. Please do not expound upon how evil XYZ Daddy was to illustrate that point.)
With people paid to make sure you didn’t die and those who loved you (ostensibly) and wanted your best interests (ostensibly) forced to work to afford to purchase food, shelter and clothing (Maslow’s lowest priority on the triangle of needs) and maybe a few other echelons up the ladder, it can be easier to understand why children stopped doing as well as they did before it became commonplace, even expected, for two parents to be working.
Which raises an interesting point, we are talking about the children of the Baby Boomers who seem to have an ill fitted grasp on reality. These are the ones who think they should be able to afford a 52" LCD/Plasma HDTV with full 7.1 Dolby Digital Surround, a top of the line gaming laptop and a three quarter million dollar home working at Starbucks part time. (Congratulations, that WAS an exaggeration being used to make a point.)
So, perhaps, this collapse of the housing market is the best thing that could happen? Especially if what I read to be true is going to be true. Many banks are stashing the bailout checks instead of lending the money because they expect the market correction to continue. Bank of America just released a press release (according to Quicken 2009 that downloads these things if you own the stock) that they expect the housing industry to drop another 35-45% before it bottoms out. They say the bottom would be close to where housing prices would be if the value followed inflation like it did before the 1970s (give or take half a decade.)
If that is the case, then it seems reasonable that we could have a decade and a half of resettling. Many will lose their homes, only to get virtually identical homes for a third of the price (two thirds?) which on paper would look horrible (“You defaulted on a mortgage and lost your house!?!”) but in reality may not be too bad for the people (“Wow, you lost a 3 bedroom, 1000 square foot home, but you got a 4 bedroom 1750 square foot home!”)
Of course, that assumes that small businesses are not crucified as the government attempts (and this is under either party, so not a political statement so much as a statement of fact) to balance the books. Yes, big business would get hit too, but having owned a small business, I can tell you that 2% impact to small businesses is a lot worse than 2% is to a large business, even though the large business is shelling out more greenbacks, they have more ability to shrink to compensate. Also, according to the Small Business Administration, small businesses employ the vast majority of Americans right now, so if they start dropping like flies we could have a much more serious problem.
However, assuming the government takes some Valium and relaxes (maybe some Tramadol or Vicodin for the pain as well) and small businesses survive we could have some new large businesses, a more realistic housing market (price wise) and be able to keep one parent at home to raise the children while the other works 60-90 hours a week to bring home the “bacon” as they say. The parent at home could watch the children, handle their own cleaning and cooking, which in turn would be a healthier environment and probably healthier food which would help children be ABLE to learn better - not to mention having someone there making sure that homework is done and to help children understand the assignments better.
With children better fed, living in healthier environments, around a person who (ostensibly) loves and cares for them, in a home reasonably priced; it seems logical that American’s “education” level would improve and thus we may experience a “Pax Romana” return to a society which made us great.
(Above is red because it’s a long statement and some readers may only want the nugget, not the fruit around the nugget.)