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It is not just mortgage banking that suffers from having to deal with such long-lived assets; insurance companies face this dilemma every day as do airlines. Established airlines often face the prospect of having to match low fares with a new startup airline, even when the startup has not properly factored in the true long-term costs of its airplane fleet including real depreciation and maintenance costs. You can run an airline for a while and cover your fuel costs through low fares, but it is quite another challenge to constantly have to be the low-fare provider and allow sufficient capital funds in the future for fleet maintenance and replacement.

For health care and artificially high pharmaceutical prices, look no further than the American Medical Association and the Pharmaceutical Research and Manufacturers of America lobby as well as the HMO and hospital corporation lobby. Concerned about high gas prices? Some of the biggest lobbyists in Washington are the oil and gas lobby and the automakers’ lobby. Are you concerned about global warming? The utility lobby, including Edison Electric Institute and the coal lobby, are extremely deep-pocketed lobbyists.

There is something certainly unique about living in San Francisco or New York City, but when the housing prices in those cities become tremendously high relative to the national average, people will live elsewhere. And great new cities will grow, sometimes even from the desert. Las Vegas, Miami, Phoenix, and Seattle are all examples of wonderful cities that have grown up almost from nothing in the past 20 years and now rival New York and San Francisco and all the great cities of the world as far as the lifestyle desirability and quality.