The dismal quality (“Little boxes made of ticky-tacky”) and mind-boggling prices of San Francisco area housing are famous. “They took the Earthly Paradise, and built New Jersey,” one appalled visitor recently remarked.

Ordinary people are completely priced out of this market, and the Sunday Chronicle reports the situation has inspired the traditional local activist response: Start a Web-Site!

Phil Zarboulas is mad as hell about Bay Area housing prices.

And he doesn’t want you to take it anymore.

What started as an open letter of frustration about the region’s exorbitant home values was reborn last month as www.boycotthousing.com, a Web site that urges people to stop buying Bay Area real estate, report overpriced properties and spread the word about cracked foundations, leaky roofs and rundown surroundings.

A software entrepreneur who was outbid several times during his two-year plus home search, Zarboulas admits he wants to hasten a slowdown in the market and thereby help regular folks (and himself) onto the home-ownership bandwagon.

Through the site — which seems a natural fit in the technology/real estate/advocacy-obsessed Bay Area — Zarboulas also hopes to educate overextended homeowners about the possible disadvantages of tapping equity that may not be real.

“There’s no fundamental reason why house prices are this high — it’s just a mentality,” Zarboulas, 40, said during a wide-ranging interview at a coffee shop in San Francisco. “We want to change that mentality.”

In a housing-strapped region with a population of nearly 7 million and growing, economists doubt Zarboulas’ site will have a measurable effect — not to mention the difficulty of organizing any kind of boycott on something as fragmented as a market with tens of thousands of housing sales each year.

But if even a relatively small slice of those sales are affected by his grassroots effort, Zarboulas is convinced a sense of reason could return to a market gone haywire.

Since its introduction in mid-May, almost 24,000 have visited the site and nearly 1,000 have signed up to voluntarily avoid purchasing a home in the Bay Area for some period, ranging from three months to more than a year.

Obviously, starting web-sites, signing petitions, even linking arms and singing Kumbaya, is not going to bring down Bay area home prices.

What would is what the Bay Area moonbat population would never consider for a New York minute: reducing the San Bruno Mountain-sized pile of building regulations, and opening up some of vast reservoir of safely squirreled-away “open space” where no one is permitted to build.

Unfortunately, the drastic shortage drives prices of existing homes into the stratosphere (Fido’s doghouse would go for $500K if it were on the Peninsula), and creates a gloating constituency of existing homeowners. “I’m on board, Captain, pull the ladder up,” is the real motto of the Golden State.

The SF Peninsula is not an enormously large place, but three preservation organizations alone have taken 125,000 acres, 200 square miles, of land out of circulation.

Peninsula Open Space Trust 55,000 acres

Midpeninsula Regional Open Space District 50,000 acres

Peninsula Watershed 23,000 acres

You won’t read it in the Times or the Washington Post, but Investor’s Business Daily reports that Bush may keep his promise and halve the deficit three years early

Aided by surging tax receipts, President Bush may make good on his pledge to cut the deficit in half in 2006 — three years early.

Tax revenues are running $176 billion, or 12.9%, over last year, the Treasury Department said Monday. The Congressional Budget Office said receipts have risen faster over the first eight months of fiscal ’06 than in any other such period over the past 25 years — except for last year’s 15.5% jump.

The 2006 deficit through May was $227 billion, down from $273 billion at this time last year. Spending is up $130 billion, or 7.9%.

The CBO forecast in May that the 2006 deficit could fall as low as $300 billion. Michael Englund, chief economist of Action Economics, has long expected a deficit of about $270 billion this year. Now he thinks there’s a chance the “remarkable strength in receipts” will push the deficit even lower.

With the economy topping $13 trillion this year, a $270 billion deficit would equal less than 2.1% of GDP, easily beating the president’s 2.25% goal. Bush made his vow when the White House had a dour 2004 deficit forecast of 4.5% of GDP, or $521 billion. The actual ’04 deficit came in at $412 billion, or 3.5% of GDP, before falling to $318 billion, or 2.6% of GDP, in 2005.

A CBO analysis last week noted that withheld individual income and payroll taxes are up 7.6% from a year ago, with the gains picking up in recent months.

Byron York on NR’s The Corner posts an ECONOMICS QUIZ:

Q: Was U.S. economic growth higher during the time John Snow was Treasury Secretary, or during the time Robert Rubin was Treasury Secretary?

A: It was the same, 3.8 percent.

The government of Zimbabwe cannot afford to print enough paper currency to meet the needs of its runaway inflation.

Official sources said the recent 150 percent pay rise for soldiers, teachers, policemen and nurses had put a strain on money supply.

Reserve Bank officials told IRIN that plans to print about Zim$60 trillion (about US$592.9 million) were briefly delayed after the government failed to secure foreign currency to buy ink and special paper for printing money.

Inflation has shot to 1,042 percent and is still climbing as the economic meltdown continues, putting Zimbabwe’s rapidly dwindling working class in an ever more precarious position.

Clive Crook remembers Galbraith:

‘In all life one should comfort the afflicted, but verily, also, one should afflict the comfortable, and especially when they are comfortably, contentedly, even happily wrong.’ John Kenneth Galbraith, who died at the age of 97 on April 29, said that to Britain’s Guardian newspaper in 1989. Was any American economist of comparable esteem so wrong — so comfortably and contentedly wrong, and for so many years — as Galbraith himself? Verily, I cannot think of a rival.

In a letter to the Wall Street Journal, Mark Skousen notes that even Galbraith confessed recognizing the greater efficacy of freedom:

Mr. Henderson refers to one example where Galbraith changed his mind (about big business facing risk and competition). I can think of another: Which has helped the average person more — economic growth under free-market capitalism or redistribution of income via progressive taxation and the welfare state? In “The Affluent Society” (pp. 96-97), Galbraith wrote:

“Over the centuries those who have been blessed with wealth have developed many remarkably ingenious and persuasive justifications of their good fortune. The instinct of the liberal is to look at these explanations with a rather unyielding eye. Yet in this case the facts are inescapable. It is the increase in output in recent years, not the redistribution of income, which has brought the greatest material increase, the well-being of the average man. And, however suspiciously, the liberal has come to accept the fact.”

Glenn Reynolds notes a good one this morning in Reason by Ronald Bailey:

For the average American living in the United States is like having more than half a million dollars in wealth. So says a new study from the World Bank, Where is the Wealth of Nations?: Measuring Capital for the 21st Century, which makes estimates of the contribution of natural, produced, and intangible capital to the aggregate wealth of 120 countries.

Why are Americans so well off? It’s not just because of America’s fruited plains and its alabaster cities. In fact, it turns out that such natural and man-made resources comprise a relatively small percentage of our wealth.

The World Bank study begins by defining natural capital as the sum of nonrenewable resources (including oil, natural gas, coal, and mineral resources), cropland, pastureland, forested areas, and protected areas. Produced capital is what many of us think of when we think of capital. It is the sum of machinery, equipment, and structures (including infrastructure) and urban land. The Bank then identifies intangible capital as the difference between total wealth and all produced and natural capital. Intangible capital encompasses raw labor; human capital, which includes the sum of the knowledge, skills, and know-how possessed by population; as well as the level of trust in a society and the quality of its formal and informal social institutions.

Christopher Shea reports:

Victor Yakovenko, a physicist at the University of Maryland, happens to think that current patterns of economic inequality are as natural, and unalterable, as the properties of air molecules in your kitchen.

He is a self-described “econophysicist.” Econophysics, the use of tools from physics to study markets and similar matters, isn’t new, but the subfield devoted to analyzing how the economic pie is split acquired new legitimacy in March when the Saha Institute of Nuclear Physics, in Calcutta, held an international conference on wealth distribution.

Econophysicists point out that incomes and wealth behave suspiciously like atoms. In the United States, for example, beneath the 97th percentile (roughly $150,000), the dispersion of income fits a common distribution pattern known as “exponential” distribution. Exponential distribution happens to be the distribution pattern of the energy of atoms in gases that are at thermal equilibrium; it’s a pattern that many closed, random systems gravitate toward. As for the wealthiest 3 percent, their incomes follow what’s called a “power law”: there is a very long tail in the distribution of data. (Consider the huge gap between a lawyer making $200,000 and Bill Gates.)

Other developed nations seem to display this two-tiered economic system as well, with the demarcation lines differing only slightly.

To an econophysicist, the exponential distribution of incomes is no coincidence: it suggests that the wealth of most Americans is itself in a kind of thermal equilibrium. To change it, “you will have to fight entropy,” Yakovenko says. That people aren’t mindless atoms and that governments try limited wealth redistribution doesn’t really matter, he adds: large, complex systems have their own statistical logic that trumps individual, and state, decisions. In March, Yakovenko told New Scientist that “short of getting Stalin,” efforts to make more than superficial dents in inequality would fail. Recent increases in inequality in the United States, he adds, stem from the rising fortunes of the top 3 percent; there has been little change in the rest of the distribution.

Not so very long ago, almost universally accepted common wisdom blamed the Great Depression on “the excesses of capitalism,” and believed that it was Franklin Delano Roosevelt and the New Deal which saved the capitalist system from itself by the addition of social welfare and more intense federal management of the economy. As the Wall Street Journal reports, the world has since turned upside down:

For decades, many economists and policy makers thought the Depression was the inevitable consequence of excess investment, flawed corporate governance and speculation in the 1920s, culminating in the 1929 stock-market crash. That view was reinforced by John Kenneth Galbraith’s 1955 book “The Great Crash, 1929.”

Milton Friedman and Anna Jacobson Schwartz upended that view in 1963. In “A Monetary History of the United States, 1867-1960,” they argued that the Depression was far from inevitable, but brought about by an “inept” Federal Reserve. First, they said, the Fed foolishly raised interest rates in 1928 to end speculation on Wall Street, causing a recession the next year that precipitated the crash. Then, it let thousands of banks fail and the money supply shrink. In part, it thought weak banks should be allowed to fail. It also feared that lower interest rates might lead foreigners to dump dollars, straining the currency’s link to gold.

Mr. Bernanke read the book as a graduate student at Massachusetts Institute of Technology in the 1970s. “I was hooked, and I have been a student of monetary economics and economic history ever since,” he recalled at a 2002 conference honoring Mr. Friedman’s 90th birthday. Mr. Bernanke, by then one of the Fed’s seven governors, told Mr. Friedman: “Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”