Buying versus renting

Following a worldwide collapse of housing prices and mortgage-based securities, it may no longer be necessary to point out that it’s not always better to buy a home than to rent. But for a refresher on the reasons, check out this recent post by Seth Godin.

I posted about this issue a couple of years ago (What should I pay for that condo?) and just noticed that the New York Times has updated its handy renting-vs.-buying calculator. 

Thoreau on Gessner

In February 1860, Thoreau devoted a couple of cold winter days to reading the 16th century Swiss naturalist Conrad Gessner (or Gesner).

“We cannot spare the very lively and lifelike descriptions of some of the old naturalists,” he wrote. “They sympathize with the creatures which they describe.” Thoreau goes on to quote Gessner on antelopes, apes, and beavers, acknowledging the fanciful nature of some of Gessner’s accounts, but admiring their energy and imagination.

It would seem as if the more odd and whimsical the conceit, the more credible to the mass. They require a surprising truth, though they may well be surprised at any truth. For example, Gesner says of the beaver: “The biting of this beast is very deep, being able to crash asunder the hardest bones, and commonly he never loseth his hold until he feeleth his teeth gnash one against another. Pliny and Solinus affirm, that the person so bitten cannot be cured, except he hear the crashing of the teeth, which I take to be an opinion without truth.”

Although Gessner doesn’t believe the beaver can bite this hard, he doesn’t appear to question the story that a group of beavers may load wood onto another beaver’s belly and use it as a kind of raft (if I’m reading Thoreau’s quotation from Gessner correctly), pulling it by the tail to where the wood is needed for building.

After reading about Gessner in Thoreau, I was pleased to see this slide show at the New York Times. Some of Gessner’s illustrations (like the beaver, fox, chameleon, and various domestic animals) are quite accurate, while others (walrus, whale, monkfish, unicorn) are more creative. 

It’s the regulation, stupid

In his recent column on why Georgia leads the country in bank failures, Paul Krugman makes the same point he made in his column on the situation in Ireland.

You don’t need fancy derivatives to break the financial system. All you need is a lack of regulation.

So what’s the matter with Georgia? As I said, banks went wild, in a scene strongly reminiscent of the savings-and-loan excesses of the 1980s. High-flying bank executives aggressively expanded lending — and paid themselves lavishly — while relying heavily on “hot money” raised from outside investors rather than on their own depositors.

It was fun while it lasted. Then the music stopped.

Why didn’t the same thing happen in Texas? The most likely answer, surprisingly, is that Texas had strong consumer-protection regulation. In particular, Texas law made it difficult for homeowners to treat their homes as piggybanks, extracting cash by increasing the size of their mortgages. Georgia lacked any similar protections (and the Bush administration blocked the state’s efforts to restrict subprime lending directly). And Georgia suffered from the difference.

What’s striking about the contrast between the Texas story and Georgia’s debacle is that it doesn’t seem to have anything to do with the issues that have dominated debates about banking reform. For example, many observers have blamed complex financial derivatives for the crisis. But Georgia banks blew themselves up with old-fashioned loans gone bad.

Seth Godin is on a roll

If you’re interesting in marketing and communications, it’s worth checking out the daily blog of Seth Godin, author of Purple Cow and many other useful books.

Lately Seth has been on a roll, posting a number of unusually intriguing observations.

He explains just why Apple was able to sell $150 million worth of iPads in one day (it’s not just because it’s a cool product). He reveals how the ”Levy flight” describes the behavior of animals foraging for food and Internet users foraging for information.

He argues that companies prosper by focusing more on their social responsibilities than on their “rights.” And in ”When in doubt, disaggregate” he reiterates the main point of his book Purple Cow: that it’s no longer possible to success by selling average products and services to average people.

Ngũgĩ wa Thiong’o in New York

The Kenyan writer Ngũgĩ wa Thiong’o, whose memoir Dreams in a Time of War I recently reviewed for The Quarterly Conversation, will be appearing this week at Judson Memorial Church in Washington Square. The reading is a benefit for Revolution Books.

For more about Ngũgĩ and his memoir, check out this BBC interview or one of the interviews available from the Revolution Books site.