QOTD

Tim Duy:

For Bernanke and Geithner, there are no bad assets. Only misunderstood assets.

Alternative:

The saddest part of policymakers who cling to the notion of intrinsic housing values is that economists long ago rejected the notion that such prices existed when they rejected the labor theory of value. Is Bernanke a monetarist, neoclassicalist, or a Marxist? Value is determined by a constellation of social conventions at some point in time. If the social convention is that financing is limited by ability to repay, then cash flow (largely income), not asset appreciation, is the appropriate metric for valuing houses.

There’s something about housing that makes people believe very, very strange things about economics.

[Via the Sultan of Shrill.]

…In fairness, as noted in comments below, the labor theory of value also seems to be making a big comeback among online conservertarians.