Imagine a story about collapse of the real-estate markets that states: “Most of the millions piled up in paper profits had melted away, many of the millions sunk in developments had been sunk for good and all, the vast inverted pyramid of credit had toppled to earth, and the lesson of the economic falsity of a scheme of land values based upon grandiose plans, preposterous expectations, and hot air had been taught in a long agony of deflation.”

A story written in 2008? No, an extract from Frederick Lewis Allen’s 1931 book Only Yesterday. The real-estate boom and bust we are now experiencing had a spectacular predecessor during the 1920s and 1930s. History may not repeat itself exactly, but episodes composed of speculative mania, construction boom, financial misfeasance and malfeasance, and expansive monetary policy do recur from time to time. More . . .

–A NEW article by Robert Higgs