The Big Picture

While statistics are tricky, I think there's a decent chance your entire premise - that we have all had a modest cut to our hours in exchange for less consumer goods - is untrue.

http://www.mybudget360.com/wp-content/uploads/2011/07/index_weekly_hours.jpg

http://bigpicture.typepad.com/comments/images/wsj_prod_vs_hours.gif

https://qzprod.files.wordpress.com/2014/09/average-annual-hours-worked-per-employed-person-1979-2012_chartbuilder.png?w=640

especially for allegedly supervisory positions with job security & a salary, which no longer have to pay overtime; Hours worked per full-time employee has gone up, while part-time hourly positions have become much more common. Hourly jobs we now expect to work just enough that no benefits are offered (~39.9 hours), and double up to 78.8 hours over two jobs if we want to actually support a family... the better half of retail jobs will respect that sort of arrangement, while the worse half will require you to work 25-39 hours virtually "on-call", coming in whenever a gap presents itself, if you want to achieve that many hours.

The death of the labor movement has not helped the situation.

The best I could find to support your argument is

http://b-i.forbesimg.com/theapothecary/files/2013/07/PTEconomic.png

http://ibankcoin.com/news/files/2013/04/labor-force-participation-rate-march.png

The author is absolutely right - we knew this was coming. Another item he might have mentioned to bolster his claim is that there are other unemployment related statistics that are more meaningful than this one, commonly referred to as the "headline" number.

In fact, I googled as I was writing this post and found he addressed this 6 months ago, and made exactly the same case I'm about to make- the U3 number that is the "headline" number should be ignored, and we should focus attention on the U6 number. (http://www.ritholtz.com/blog/2008/06/unemployment-reporting-a-modest-proposal-u3-u6/)

A quick synopsis of the U6 measurement from his post: "U6, on the other hand, is the broadest measure of Unemployment: It includes those people counted by U3, plus marginally attached workers (not looking, but want and are available for a job and have looked for work sometime in the recent past), as well as Persons employed part time for economic reasons (they want and are available for full-time work but have had to settle for a part-time schedule)."

He also links to a nice chart: http://bigpicture.typepad.com/photos/uncategorized/2008/06/06/alternative_measures_of_labor_under.png

Better than the past, certainly, but by no means a sure deal. And while prices to buy are falling, so are prices to rent.

I suggest the OP use this great NYTimes tool to evaluate the buy vs. rent options: http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?_r=2&oref=slogin

Keep in mind that the historical rent-to-buy ratio in San Francisco is something around 20x. http://bigpicture.typepad.com/comments/2008/05/housing-price-t.html

Nationwide it's 10-14x http://bigpicture.typepad.com/comments/2008/05/buy-vs-rent-red.html

And when you do, try to consider all the value possibilities (appreciation vs. depreciation), not just the rosy ones. Worst case scenario, the Californian government screws up its coming reorganization, and San Francisco could end up like Detroit. A more likely possibility might include more declines due to future mortgage resets and such.

Anyway, no way to know just what's coming, so it's a guess in the end, but a big purchase deserves deep consideration.

Finally, I recommend Redfin (http://www.redfin.com/city/17151/CA/San-Francisco) as a realtor, as they use the web to cut your realtor fees by thousands.

The cost of renting did not go up correspondingly with cost to own. That's how we know it was a bubble.

http://bigpicture.typepad.com/photos/uncategorized/2008/05/13/price_to_rent_ratio.png

If you did not join in this fiasco, you risked losing purchasing power compared to everyone else. This is equivalent to you putting your money in a 0% interest account while everyone else puts it in a 5% interest account.

Yes, I would have lost if housing turned out to be a good investment. This does not change the fact that your "legitimate buyers" were speculating.

Also, if you are comparing scalping to text message prices, that analogy would only make sense if a single scalper (or a small number of scalpers) holds a monopoly over the market (either in tickets or houses). That's obviously wrong.

Here are the blogs I'd start with:
For behavioral and general economics, my two favorites are Tyler Cowen and The Big Picture

http://www.marginalrevolution.com/

http://bigpicture.typepad.com/

For Development/Macroeconomics two great ones (besides Becker/Posner) are Greg Mankiw & Danny Rodrik

http://gregmankiw.blogspot.com/

http://rodrik.typepad.com/

Mankiw is a bit more traditional than Rodrik, so they tend to have some great back & forth, and when the discussion jumps above college-level they tend to link/explain things.
</econ nerd>

I'm completely against it, but there is a theory that it was a stop-gap to what is being called a "financial" terrorist attack.

Most of the short sales put on this month were from overseas, mainly coming out of London and Dubai. It's still a longshot conspiracy theory.

Even so, the broker/dealers and the SEC have been far too complicit in naked short selling. The rules against this have been in place for years, just never enforced.

Sources: http://bigpicture.typepad.com/