The present crisis has been labeled a “financial crisis”, the conventional wisdom being that its roots can be found in the housing boom and subsequent bust which, on its turn, was the result of lax monetary policy, with the Fed having kept interest rates “too low for too long” during 2002-2005.
I deal with the housing boom. This can be divided in two parts: “Overbuilding” and the “House price bubble”.
The idea that there was a building “frenzy” in the 1990s and 2000s is illustrated in Chart 1. The somewhat cyclical pattern of house starts is broken in 1990, after which starts increase almost continuously for the next fifteen years to 2005.
As Chart 2 indicates, that is consistent with the rise in the rate of population growth, which rose form 1% in the 1965 to 1989 period to 1.2% for the next 10 years. A substantial portion of this…
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Utopia, you are standing in it! 
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