Focus, People! American Housing Obsession Unhealthy: Expert

Enough already!

That's the clarion call of Amity Shlaes, economic historian with the Council on Foreign Relations and Brooklyn Heights resident, who argues, with the help of Nobel laureate and economist Edmund Phelps, that Americans need to stop obsessing about the "housing crisis" and focus on things more integral to our economic health -- like, oh, say, productivity?

"It used to be said that the business of America was business,'' Mr. Phelps told Ms. Shlaes, in her column for Bloomberg News. "Now the business of America is homeownership.''

Ms. Shlaes elaborates:

Like an apartment building, the Phelps argument works on multiple levels. The first is obvious. The federal government allocates too many resources to housing. Back in 2005, when the troubles of Fannie Mae and Freddie Mac weren't yet commanding the front page so regularly, the government was already spending about $41 billion to subsidize housing directly....

More than triple that amount, or $147 billion, was foregone on indirect tax subsidies to homeowners. That chunk of change might have been used for any number of government projects that would appeal to everyone from Laura Bush to Dennis Kucinich: pounding percentages into fifth-graders' heads, lowering the capital-gains tax, declaring summer gas holidays -- you name it.

Interesting. Might the apparent novelty of the idea point to some sort of underlying truth?