John Steele Gordon has done a favor to all who wish to understand economics in a historical sense (“The Problem of Money and Time,” May/June issue). However, he falls into an old trap set by real estate speculators since Og said to Mog, “There aren’t any more caves being built, people keep moving here to hunt the mammoths!” If Peter Minuit had offered the Indians twenty-four of today’s dollars for Manhattan Island in 1626, and they had invested it for a return of only 6 percent, and never touched the principal or interest, they would have nearly thirty-seven billion of today’s deflated dollars!
Too many people think that because land is a fixed-supply item, and because people willing to buy it continue to increase, it will always increase in value. Many of us in Texas made this same error of judgment prior to the oil bust. Have we got a deal for you!