JG: Does the brain respond differently to abstract versus representational art?
SZ: Yes, it seems to. Portrait paintings activate a specific part of the brain, landscapes another, and still lifes yet another. Abstract art seems to lead to very little activation, presumably because in the contrasts used to elicit the activation, the ubiquity of what is shown in abstract paintings (that is to say the features there that are also common to landscapes and still lifes and portraits) lead to activity being cancelled out in the subtraction process.
In 1997, inflation-adjusted house prices were close to their average levels over the previous half-century. Only four years later, the price of the average home nationwide exceeded anything ever seen before in the United States. Prices continued to rise for another five years, peaking in 2006 at nearly twice the average price in 1997 ...If house prices are heading back to the levels seen in 1997, then we are facing catastrophe.
1. The main cause of the subprime crisis was a housing bubble. This was primarily a land bubble. On p, 64:
It used to be that the underlying land typically constituted only 15% or so of the value of a home in a typical city...now that land value...is often over 50% of home value
If house prices were determined by construction costs, then you would not have a bubble, because prices would depend on supply and demand of factors of production. But when house values consist mostly of land, then the price today depends very much on the price you expect tomorrow. We have had plenty of land bubbles in the past, and we probably will in the future. Shiller displays on a graph the simultaneous land bubbles in Boston and London.
Most economists will tell you that the real problem with Social Security is demography. ... The fraction of people over 65 will keep rising, implying a growing dependency ratio.
The problem is that this is only the ratio of retirees to working-age people. But wouldn't a better measure of dependency just be the ratio of workers to people? When you think about it this way, the aging of the population is balanced by (a) the fall in the fraction of children, and (b) the rise in female labor force participation.