My 2p, FWIW:
I do think it's important to alert people to the vested interests of the "experts". But it's important not to make fallacious
ad hominem arguments while doing so:
QUOTE
A Circumstantial ad Hominem is a fallacy because a person's interests and circumstances have no bearing on the truth or falsity of the claim being made. While a person's interests will provide them with motives to support certain claims, the claims stand or fall on their own. It is also the case that a person's circumstances (religion, political affiliation, etc.) do not affect the truth or falsity of the claim. This is made quite clear by the following example: "Bill claims that 1+1=2. But he is a Republican, so his claim is false."
There are times when it is prudent to suspicious of a person's claims, such as when it is evident that the claims are being biased by the person's interests. For example, if a tobacco company representative claims that tobacco does not cause cancer, it would be prudent to not simply accept the claim. This is because the person has a motivation to make the claim, whether it is true or not. However, the mere fact that the person has a motivation to make the claim does not make it false. For example, suppose a parent tells her son that sticking a fork in a light socket would be dangerous. Simply because she has a motivation to say this obviously does not make her claim false.
So, when an estate agent claims that house prices are unlikely to crash, simply stating "Well, you are an estate agent, so you
would say that" is not a sensible line of argument. Instead, we need to establish
why this person believes that prices will not fall, and present facts, analysis and logical arguments that undermine their claims.
Common fallacies of argument that are often levelled at the housing-bear case include:
- Straw man: The bears' argument can easily be caricatured, to make us look like raving madmen who blow everything out of all proportion. Opponents like to latch on to the most extreme predictions and debunk those, without tackling the real argument which is more moderate.
- Appeal to authority: Such-and-such a person is cited as a "market expert", and therefore everything they say must be true. Or, the "consensus among analysts" is that prices will not fall. Of course, these experts - vested interests or not - are human and fallible and may be mistaken.
- Post hoc, or "questionable cause": HIPS is a good example of this. The recent downturn in house prices as reported by Rightmove et al. has widely been blamed on HIPS, with little supporting evidence. Just because A occured before B does not mean that A caused B.
- Confusion of cause and effect: Similarly, it is commonly argued that there cannot be a house-price crash without a recession, and often that a recession must be the cause, not the effect. This is demonstrably false by counter-example (look at the US right now). Furthermore, economic recession and falling asset prices may both have the same underlying cause - the credit crunch. They will certainly be interrelated events, but it is erroneous and naive to assume that one must be the cause of the other.
One of the arguments the presenter made during FP's Sky News piece the other day I found particularly irritating: "People have been wrong with their predictions of house-price crashes before - why should we believe you now?" Really, such a statement is beneath contempt and I shouldn't have to point out all the flaws in it, but it is essentially an
ad hominem attack by association ("look at all those loonies who've been saying this on HPC.co.uk for five years!"). Don't rise to it.
As for non-fallacious arguments - the significance of low rental yields cannot be underplayed. This is the clearest evidence we have that there is no real housing shortage and that house prices are significantly overvalued. And the conditions and triggers for a fall in prices are falling into place right now.
Good luck!
- nice one!
.