The issue is not supply and demand for houses - there are plenty enough to go around (though often in the wrong place).
The issue is that a sizeable underclass is being created that have no wealth, not least because what wealth they did have has been funnelled to the very wealthy. For example, medical bills. For example student loans. For example zero interest rates with zero wage inflation meaning accommodation costs don't fall as a proportion of income.
The solution is to address wealth inequality. This means taking wealth away from those who have amassed too much, and returning it to those who had it stolen from them.
Most Metro areas do not have enough affordable housing. It's well established that local governments cannot build enough new affordable housing, partly because any contractor that bids goes way over the value of a private housing venture.
The idea that there's enough housing but "in the wrong place" is like saying there's plenty of jobs, they're just in third world countries and Scandinavia.
The idea that the solution is "play Robin Hood with the global economy" is literally a fairy tale.
> Most Metro areas do not have enough affordable housing.
There's no such thing as affordable housing[0]. Just housing. You can certainly argue that building a house is too expensive -- and due to NIMBYism, discriminatory policies, and anti-density regulatory environments, this is often true -- but affordability is not an intrinsic value of a building, and the problem is generally that housing stock simply doesn't keep up with demand in places which demand lots of housing (e.g., San Francisco, Seattle, NYC, London, etc.).
It’s exasperating how many people will fight this. I believe it has been supported by research as well. Anecdotal, but I experienced it firsthand:
Several years ago I was living in a lovely, historic, but no-frills apartment in a desirable area (Cobble Hill, Brooklyn) when several new “luxury” apartment buildings opened nearby, all around the same time. They were only a bit more expensive but offered lots of amenities (doorman, elevator, gym etc) that my building didn’t have.
The impact was remarkable: when other apartments in my building went on the market they sat unrented for weeks, when they’d previously rented in hours. The landlord actually lowered the rent on them! In NYC! Our lease was up soon after, and we managed to negotiate that they gut renovate our kitchen in exchange for extending our lease.
Not to be a doubter, but it seems like this note completely changes the context of the problem they stated. A slightly more expensive housing is competitive with the current housing you had. A higher-end luxury building being built costing 10x as much would likely have different effects.
Come tell that to the residents of Vancouver. We've had countless luxury condos made year after year for two decades and we're at around 3k/mo for a 1br.. tell us more about how building units that "regular" people can never afford that it's always helping them.
> tell that to the residents of Vancouver. We've had countless luxury condos made year after year
Developing in Vancouver is outrageously expensive. Its voters chose a lengthy approval process for new housing. High housing costs are a political choice.
It's like induced demand, but for houses! "Just one more house!"
At some point the market would flood and there wouldn't be as much demand anymore, but if every single person in Canada wants to live in Vancouver everyone is in for a world of hurt until Vancouver has 30 million dwelling units.
Where exactly do you think the people who afford those luxury condo live right now? In the woods? And just because "countless" have been built doesn't meant that there have been enough to meet demand.
> affordability is not an intrinsic value of a building
Value is, by definition, "An amount, as of goods, services, or money, considered to be a fair and suitable equivalent for something else; a fair price or return." Having the money to buy a house (for its advertised value) or not is what determines if you can afford it or not.
If you can't afford a house it's not affordable. If your city has housing, but a large population who can't afford said houses, then you have unaffordable housing. If you don't have any housing at all, you still don't have affordable housing.
This isn't really something worth debating. Affordable housing is a very well established part of the governance of cities, regardless of what contortions a blogger wants to use to reframe a discussion away from economic inequality.
That's a pithy, contrarian slogan, not a statement of fact. "Affordable Housing" is a term of art with a specific definition, and yes, it really exists, all over these United States.
Also, if you want to use it colloquially, then housing is, by definition, affordable for most of the people who live in housing and are not running a spending deficit.
Affordable housing is defined by the U.S Department of Housing and Urban Development
(HUD) as housing that does not require a household to spend more than 30 percent of its
gross monthly income on housing costs. For rental housing, these costs include monthly rent
and utility payments; for owner-occupied housing, these costs include mortgage payments and
additional expenses associated with homeownership. A household that spends more than 30
percent of its gross monthly income on housing costs is considered “cost-burdened.”
It appears to me that the definition is compatible with the poster's notion 'affordability is not an intrinsic value of a building' in the sense that the definition depends on income as well as the housing itself. Problems could be addressed by increasing housing or by increasing household income, or by decreasing price, or some combination thereof.
That definition really has no value outside the context of analyzing a given household’s situation. In the context of housing regulation, zoning, etc it really isn’t helpful since all housing is both affordable and unaffordable. Schrödinger’s housing.
> all housing is both affordable and unaffordable. Schrödinger’s housing.
Ah, more pithy, meaningless slogans.
Surely municipalities and landlords know the median gross incomes of households in the areas they serve. Surely there are bands of income where certain types of housing are classified as "affordable" and then "cost-burden", and the quantity of households which fall into these bands are well-known to those who serve them. Landlords set the market rent based on what the market will bear. HUD sets the allowances according to market rent as well.
Yes, to a homeless bum, all housing is unaffordable. To George Soros, it's all affordable housing. But you need to remember that the definition is proffered by Housing And Urban Development, a US Government agency which does things like subsidize rent and help people purchase homes, so I doubt that the state of feline vitality is entirely unknown to them.
That's explicitly the problem with the definition.
You can "solve" the equation by reducing housing costs, but it is also possible that the "problem" isn't housing costs per se but wage depression, and that the "real" solution is to fix the gross monthly income.
"The" gross monthly income, as if there is one blob of income that we could turn a knob and increase, by say, 10%? Are we doing this across the board, from migrant farmworkers to the Fortune 500 C-levels? Does this dovetail with UBI so that people who earned $0 + entitlements, lose their entitlements and begin receiving cash instead?
If rental housing is the #1 monthly expense for the working class, or say, the socio-economic class who needs Affordable Housing, and you "fix" their income (which I think you mean raise it, rather than the financial term of art) if you raise their income by a given amount, and housing costs stay constant, then more people get housed?
Have families considered living with one another, rather than constantly splitting apart at first blush and divorcing at drop of hat? Who doesn't hate it these days when Uncle Billy has to move back into the garage? He's your uncle, think about it.
As you increase the difficulty of staying married, and make it trés gauche for women to fulfill destiny as mothers, you increase their difficulty of bearing and raising >0 children, DINKs emerge as the Ideal Consumer, but then you've decimated your future workforce, taxpayers, and caregivers.
I mean, the 50s/60s promoted the Nuclear Family for some reason, and it was probably intended to blow up extended family ties, which can make a populace harder to track and control, and because Nuclear Families tend to drive up demand for discrete housings, and also demand for any and all household goods and resources that can no longer be shared. Hmm.
> Affordable housing is defined by the U.S Department of Housing and Urban Development (HUD) as housing that does not require a household to spend more than 30 percent of its gross monthly income on housing costs.
This is fantastic, and I do think this definition is meaningful, but what legally binds this definition to what politicians and interest groups discuss? Without a legal binding the term "affordable housing" will continue to be a floating signifier indicating housing that is somehow generally affordable conveniently without defining the mechanism by which this will be delivered.
Every year, HUD establishes the ceilings for rental payments, plus utility allowances. Let's say that the ceiling in Houston is $1,800 for a 1BR apartment. That means that landlords who charge $1,800 or less to rent such a unit, are the only ones eligible to participate in the HCV (Section 8) program.
Therefore, people will colloquially refer to HCV-participant communities as "Affordable Housing" because if a landlord charges $1801.00, they're not eligible to receive HUD payments and HCV holders literally can't afford to live there.
Therefore, the landlords are presented with a bright-line; either they're in this public housing "project" or they're not.
Speaking of Projects, the "old way" was for HUD to build the buildings and HUD more-or-less directly managed the Project Housing, and the way it's gone with commercial landlords is a relatively new development, if you will.
>Most Metro areas do not have enough affordable housing.
Not only that, the definition of "affordable housing" is skewed. In the big metro area near me, "affordable housing" means 1500 to 2000 USD per month. That is not affordable to any normal person. To me, affordable rent should be below 1000 USD.
You think this homeless crises is bad, wait 30 years and then you will see Cities with large slums like many "third" world countries have.
And yes, it is the Gov. job to fix this, but the politicians wants to continue receiving their "bribes" from companies, some of which are buying up rental properties as fast as they become available. Ever see "cash for your house" ? Those properties are probably being bought up for use with AirBNB or being turned into rentals for around 3000 USD.
ProPublica did a whole series on one of the larger "Cash for your house" type businesses. It seems they're really trying to extract cheap homes from distressed sellers with pressure tactics[0][1][2][3]
The other side of this "scam" is that people are being sold how to "get rich quick" in real estate for $5k seminars (which boil down to "offer people 30% below market value and hope you get people who are dumb/desperate enough to sell").
Uh, in my upper middle class DC suburb you were socially looked down on if you didn't go to college, and no one taught us even basic finance. I have friends who's parents literally put the forms in front of them, told them to sign it so they could go to college. They didn't know what they were signing, now they're possibly on the hook for the rest of their lives
So "forced"? Not with a gun to their head, but when every authority figure, parent and friend you've ever trusted tells you to do the thing at 17...
If one could make a case for it, I wouldn't mind in these specific scenarios of parents coercing their children to sign contracts that the financial burdens be transferred to their parents (parents who often tend to help pay such bills anyway). But is that what people generally propose as a solution?
Sure, nobody forced them to take out loans, but for me, the propaganda all throughout high school was "If you want a high paying job, you need to go to college!" and then was told not to worry about the costs and student loan payments, the higher paying job will pay for itself.
Four years of every adult you trust. Your parents, teachers, counselors, and other school faculty. The same message. Go to college. Go to college. Go to college. Don't worry about the loans, the higher salary will pay for it. It's an investment. It doesn't even matter what you get a degree in, employers just like to see you had the discipline and sense of responsibility to complete it.
And then we get out of college, and then we find out we've been lied to. We were children and the adults that we were supposed to trust were lying to us. The degree didn't guarantee a job by any means. Worse yet, many jobs require the degree, but then pay $20/hr, while you're trying to pay $700+/month in student loan payments.
And then dickheads like you come in and pour salt on the wounds.
In short, people with an attitude like yours need to get fucked. Children are being lied to by the adults they trust, and then getting blamed for not being able to handle the responsibilities they took on based on the lies.
Why keep calling these people children past the age of twelve? There's a term for that period. Adolescence. It's supposed to imply some level of growth in independence and the ability to discern reality.
Yes, these adults gave these teenagers terrible advice. But the fact of the matter is, they can see exactly how much they would have to pay, with a job that they had no guarantee of. Teenagers of the current age have stopped listening to that advice. If you are stuck with the loans now, all you can do is call out mom, pop, and teachers for misleading you, but also yourself for believing them.
I won't convince you because you've got your anecdotes. Though I'd say if a public school counselor, parents and teachers all tell a 17 year old it's "college or bust", it's laughable to argue "ah, those teenagers should have been rational, informed consumers of professional training and eschewed the advice of every trusted adult in their life".
If you change "sell yourself into loan slavery for 30 years" with "create pornography" or "drink alcohol" or "enlist for war" or "buy guns" or "any number of age restricted things" suddenly everyone is all up in arms about how the 17 year old cannot be trusted to make an informed decision.
But when it's in the service of the finance industry - bam; all gone!
It does not take professional training to see the price tag of a student loan and to question if one can reasonably pay it off in the future. Certainly, someone equipped with the skills needed to be accepted into a college that costs so much should be able to do the math required on that calculation.
The point is that the majority did question it. It's a very uncertain proposition which is why they sought after the advice of people they trust with more life experiences and knowledge.
I think the fact that student loans can't be discharged in bankruptcy is a nod to the fact that everyone involved knows that the people taking them are largely uneducated about what they are.
Bro, when did you last look at the cost of college, the 70s?
I went to a community college and then transferred to a state college that was also in my town, so I didn't have to pay absurd dorm expenses. I worked 30-35 hours a week while going to college.
I still came out with ~$45K in loan debt.
And you're proposing even the possibility of a four-digit loan?
> when you have low or zero income.
Have you missed the part where adults are lying to children and telling them that the high salary their degree will earn them will pay for the loan?
I think a four digit loan is already on the high end when one also needs to get a car, find a place to live and to rent, with no savings. You arguing that it is consistently much higher makes my case against taking loans stronger, not weaker.
>Have you missed the part where adults are lying to children and telling them that the high salary their degree will earn them will pay for the loan?
Lying to teenagers who should, at some point, use their own judgment. You signed a paper for the loans, yes? Were you able to calculate that it would equal 45K or more of debt? How did you, yourself, think that you would manage to climb out of that debt with a job that you did not have, and would only have a chance of getting four years after graduating?
This is the bill of goods sold by the for-profit colleges themselves (all colleges are for-profit even if non-profit, the people profiting are the administration and staff, which balloons to consume all revenue).
We could reduce student usury by demanding that all loans be paid back at a maximum percentage of income for a set number of years. If the degree isn't worth 5% of expected job salary for 15 years, too bad. Obviously the numbers can be adjusted but the whole sale pitch is "spend $X, get a leg up on the pile and make twice $x yearly". Just codify that, and suddenly the loan companies are on the hook for $500k loans for basketweaving degrees that produce baristas.
They make 12-15 dollars an hour. That's 2400 dollars a month. That means at 30% of income (rental maximum in most areas), they can afford $720. (This assumes that they can work 40 hours. Their hours are often variable because they need two jobs - places mostly hire part time to avoid needing to give out health care.)
There are only a handful of apartments in the area that will rent a two bedroom for 1400. (I assume a roommate.) So, considering a moderate cost of living area, you are unlikely to ever make it out of sharing an apartment as nearly every job paying more than $30 an hour in this city requires a bachelor's degree.
Look around your job. How many people don't have a four year degree? It is near impossible to make it up the ladder without one.
The people I know making lower wages typically rent or live in places with not such a high expense. Their apartments are not as upscale as others are, but they are certainly livable.
I live in one of those places. This is a medium cost of living area. That's how much rent has gone up in the past decade in most places that they've raised the de facto minimum wage to 11 bucks, and I wasn't even counting those who live at the real edges. I'm talking about people who are doing reasonably but not excessively well for themselves with high school degrees.
Inflation where I live has driven entry level job wages much higher than 11 bucks. I haven't seen rent rise quickly to match it - where I've seen the most price gouging in response has generally been on car payments and electricity.
Anecdotally, plenty of people win the lottery. It does not make playing a sound strategy or something that works on average.
Sure, some will be alright. However, looking at statistics, the best way of not falling behind in terms of income is to get a good degree. Because that’s what we are talking about: average wages have been increasing more slowly than inflation for quite a few decades now. So we are talking about a generation falling behind, not a greedy generation.
It’s less and less the case that a degree is the best path forward (depending on the field), but still.
Going for a college drop is analogous to the lottery, because losers will end up further behind those that skipped the expensive degree and lost money to inflation.
Education has traditionally been a primary method for upward economic mobility. Once student loans became a thing, colleges jacked up tuition to put it out of reach of anyone but the super wealthy unless student loans were used.
People basically did remain in the economic class though. The school doesn't have much to do with it. Has class mobility significantly increased since the adoption of mass tertiary education?
And those who do not want to deal with the risk of going through school and not getting a better job to pay for the onerous loans can just remain in their economic class.
100% agree. Also, to a young adult, student loans are a nigh-irresistible way to get away from your parents and gain independence, while worrying about the costs later.
Their parents and an entire propaganda machine coming from the school system, local, and federal governments.
Children were told "you can be anything you want to be" and also "in order to get a good job you have to go to college" which, in effect, forced children who otherwise didn't need to go to college, to go to college.
In the same way a child cannot consent to sex, a child cannot fight social pressure coming from every institution they have access to. Your insistence on the word force is manipulative, pointless, and in bad faith.
It's like birthing an animal in captivity and setting up a snare trap outside the only exit to their cage and then claiming you are hunting when they step on it. Truly disgusting.
I was told such things too. I also can process numbers. I knew that taking on an extra cost I could not pay would not be worth it without a guarantee of a high paying job, which is not something offered by going to school.
The younger generations certainly seem capable of that reasoning. They aren't taking on nearly as many student loans.
> I knew that taking on an extra cost I could not pay would not be worth it without a guarantee of a high paying job, which is not something offered by going to school.
Except this was exactly what was offered. Schools used to brag about placement rates. This message came from your parents, the staff at your school, etc.
Setting up, I repeat, a literal trap for children to fall into, and then getting on this stupid high horse about how you didn't fall for it. I cannot begin to express how depraved that concept is, and I know you can't begin to comprehend it. Maybe one day you will.
> The younger generations certainly seem capable of that reasoning. They aren't taking on nearly as many student loans.
That is because they have the mistakes of 2 previous generations as an example and the rhetoric has died down dramatically.
The trap the schools set is nasty. But it meets the nasty expectations people had that the economic boom of the 40s-50s, where everyone could just keep going to college and getting a high paying job and living it good forever. Some lessons you can only learn the hard way.
Let's take SF as an example. If a significant number of new units were built (somehow without detracting from the character of the city), would it really lower prices much? Likely not - instead prices would dip just enough to make it viable for large numbers of high income people from outside SF to come to the city (which by massing effect may make SF even more desirable, so actually higher prices!)
Wealth taxes are not a fairly tale, though of course they are a nightmare for the excessively wealthy! In the UK we used death duties to finish off the aristocracy.
This is a bizarre idea contrary to how many housing affordability crisis were actually solved in the past. Would SF's housing prices go down if you were to build 10,000 new units? You're right, probably not that much. Would SF's housing prices go down if you were to build 1M new units? No doubt.
Shenzhen grew from 100,000 people in the 1980s to 13M now with no housing affordability crisis...by building. The whole pearl river delta region is essentially an 80M people megacity with no housing problems...because they continuously built. Tokyo is also a classical example of continuously building infrastructure to support millions more people per decade.
Shenzhen and Guangzhou are some of the least affordable cities in the world when it comes to housing prices. Yes, rents are actually not that bad and many units are vacant being just used as investments, but the cost to buy is astronomical given the Chinese housing bubble.
Tokyo is an example where houses are torn down every 39 years so a new one can be built. Also, given the lack of population growth in Japan as a whole, the growth rate in Tokyo is anemic. Tokyo metro area has even been losing a small amount of population in the last three years: https://www.macrotrends.net/cities/21671/tokyo/population
Tokyo capped out and is now declining in population because there isn’t a backlog of millions of people who wanted to live there but couldn’t or had to move out because rent is 3x in Tokyo compared to Osaka.
Rent is maybe 30% higher in Tokyo, even less if you live on the end of a train line. Can you imagine how many people would move to Bay Area CA or New York City or Boston or Seattle if their rent was only 30% higher? Pre pandemic my 3 bedroom in Boston area was 3500/mo. Since the pandemic rents have gone even higher. We have bidding wars of people trying to win a rental unit. Bidding wars. It’s ridiculous.
Also I don’t see your point about houses being torn down. If anything that should make it more expensive (since buying used and not rebuilding is cheaper). Realistically rebuilding is vital (in conjunction with subdivision) because that’s how you increase density
> but couldn’t or had to move out because rent is 3x in Tokyo compared to Osaka.
Osaka and Nagoya are losing people also. The changes are for metro areas, not city cores.
> If anything that should make it more expensive (since buying used and not rebuilding is cheaper).
It simply means that you can't compute new housing very easily by new housing construction rates (you have to subtract old housing demolitions).
Density currently isn't increasing (you tear down one three story narrow house and replace it with another three story narrow house, you need to buy a bunch of SFHs to make a new apartment building).
> Shenzhen grew from 100,000 people in the 1980s to 13M now with no housing affordability crisis...by building.
I wouldn't use China as an example of solving the housing problem by simply building. There's currently a large oversupply problem [0] and, not entirely unlike the US (but more extreme), excess supply of housing has lead to people simply owning more than one property as an investment strategy.
yeah thats because the building was centrally planned, which is always a worse choice than just allowing the market to work itself out. It doesnt detract from the mind numbingly obvious statement that increasing supply decreases prices.
Increasing supply doesn't necessarily decrease prices. Increasing supply above demand is required for prices to decrease.
Unrelated to the above, but China's excessive building isn't actually from central planning, but because real estate is the one of the only viable investment methods in China, and because selling land to developers is one of the only ways local governments can raise revenue. Chinese cities are quite expensive to live in (especially if you have Western standards)
This idea among residents of San Francisco that all 8 billion of us humans want to live there and it’s impossible to build enough housing to satiate demand never ceases to crack me up.
So you are claiming that if SF becomes as dense as Manhattan, it will be as cheap as Manhattan? Or maybe Hong Kong’s density and housing affordability is the target here?
The ideal situation is Tokyo, where a lack of culture in speculating on housing coupled with population decreases leads (going down in the metro area for the last three years) to housing affordability.
The real underlying problem is that you have X million people who want to live in the quaint version of San Francisco. It's literally impossible; the quaint version dies at some point as more and more people are piled in, even if the resulting city is world-class and quite desirable.
Just like the entirety of Los Angeles couldn't move to Santa Barbara without Santa Barbara being changed forever.
The closest reasonable equivalent we can do is maintain the quaint "old town" and build a "real city" around it where people actually live and work, and the old town remains as a tourist destination, basically.
This is the case in much of Europe. The Paris you visit and the Paris people live in are often mixed, but they're noticeably different.
Rapid mass transit to city centers can hide the distinction.
Each state will calculate them differently, for example, New Jersey offers Excel spreadsheets to show exactly how they calculate it.
> The calculators below are for use by administrative agents and developers of affordable housing to determine the initial sales prices and rents for affordable units in compliance with the Uniform Housing Affordability Controls (UHAC).
Not at all, there a jobs that are good for students and other low skill/low experience workers... you can walk in and generate value, the phrase real job as I've heard it means career where with experience the amount of value increases.
What do you call a low experience worker, who only has access to jobs that pay insufficient to the cost of living? Underclass works fine for me. It seems like you do agree, you just either don't see that you do, or aren't honest enough to admit what the agreement means for the people who work these jobs. Their status as students or "other low skill" is irrelevant to their need to pay for food, housing, transport, healthcare etc.
It’s totally relevant because someone in their 20s might be able to live with their parents, or has multiple roommates etc. The amount of money that they need is much less than that of someone more established.
It is a really interesting contrast though, that in Amsterdam where I now live (and many other parts of Europe), this divide doesn’t exist as strongly.
We have a perfectly happy and healthy ~40 year old woman come to the office to tend to the plants, and she’s paid a totally fair livable wage. The guy who works at the cafeteria for the office complex supports his family in that job (and I’ve talked to him about it). Same with many other “low skill” workers that I talk to.
Baristas at a cafe seem to still be mostly 20 year olds, but maybe a bit less so than in the US
This used to be the case in the United States. As recently as the 70s blue collar laborers owned homes, had families and their wife stayed at home with the kids. The idea that you need two mid to high level incomes to afford a house is very new.
And then people wonder why none of us are having families. You’re too poor in your 20s, then you aren’t able to biologically by the time you’re in your 40s. But by then everyone in their 40s has the “I’ve got mine” mentality so nothing changes.
I believe a more accurate description is that people are choosing not to have children in the current environment; maybe something in the environment is detected as unsuitable for children, since human biology hasn’t changed but the birth rate has gone down.
If this kind of birthdate collapse happened in other organized animal societies we’d have lots of news pointing to specific environmental hazards, like that insecticide and bird eggs.
> something in the environment is detected as unsuitable for children
Yep: compelling alternatives and contraceptives have appeared, and the pressures to have children have diminished.
People in the past didn't have many of those, so they "chose" to have kids.
Having kids is hard. If you have other options, you're gonna take them. It's as simple as that. I genuinely think people complaining about the conditions haven't done enough introspection. In the abstract, they may feel that having kids is something they want or should do, despite their revealed preference being to not do so. They're just hoping that, somehow, someway, the prospect of raising families will finally seem ultra-compelling and they'll do it and live happily ever, having their cake and eating it too. But that won't happen. The sad reality is that the premise rested on more suffering than currently exists.
But it's okay:
> If this kind of birthdate collapse happened in other organized animal societies we’d have lots of news pointing to specific environmental hazards, like that insecticide and bird eggs.
Other animals won't be able to defy biology and grow transcended versions of themselves in pods, like we're surely gonna do eventually. That's the future, and it's unironically the solution to all the shitty Ponzi schemes our biological legacy left us with. :p Until then, all you can do is hang tight. (The only other solution is to go back to the Dark Ages, which is even worse.)
People always do things "because they want to" - even if forced to do it at gunpoint (they could choose to die, of course).
Things on many metrics are likely better now than any point in human history, but people's perceptions of that are way off.
But it doesn't change that there are people who would like to start a family and feel they can't. Obviously they can, as the mechanics of it all hasn't changed in the last million years, but they choose not to.
Absolutely not! Just that it’s more likely for someone to be able to take a job like that without becoming homeless or hungry, since there are a decent amount of young people who don’t need a lot.
I was mostly just trying to give a steel-man for the previous person’s thoughts before sharing my bit of info. Because it’s a complex issue and I don’t want to dismiss anyone acting in good faith.
The other part of my comment was, I thought, the more interesting part. About how this weird “able to support a family” vs “not” dichotomy seems to be a US problem that hasn’t hit Europe.
The Netherlands does have a more complex minimum wage law though, which starts low for a 15-year-old, and gets progressively higher until you’re a young adult (at 21) [0]. And it also has a clause that if you’re supporting yourself, then the highest level minimum wage applies regardless of age. I think that helps resolve the issue I mentioned above.
Maybe, but someone once told me that I don't have a "real job" because I sit at a desk all day. And their perception didn't change when I told them I have a standing desk.
This is the entirety of the problem. Economic opportunity is here, affordable housing is there. If you want access to the economic opportunity you have to pay the wealthy landowning class. It’s a drain on the economy that brings us all down.
The issue is absolutely supply and demand for houses, otherwise housing would be affordable for more people.
Housing markets are local. Their supply and demand dynamics are local. Affordable housing in Kentucky does not help people in San Francisco or Seattle unless everyone can telework.
Unaffordable housing is a major contributor to inability to build wealth. In most cases it’s no high paying jobs or unaffordable housing, pick one.
It’s not needed for everyone to be able to work remotely. A large subset of people being able to do so should make affordable housing in one location be helpful in other areas.
It takes time and confidence that the remote work is widespread and durable, but it doesn’t have to be across every field.
The main reason people move into the expensive cities chasing the high paying jobs is because they cannot afford to live in the rural communities or small town they grew up in, since wages there have stayed low while cost of real estate has exploded.
> In most cases it’s no high paying jobs or unaffordable housing, pick one
isn't this another effect of inequality of wealth distribution?
Suppose you live where high paying jobs are, but people getting high pays contribute proportionally and schools, medical bills, etc. are affordable, there would be a lot more families that could funnel the money saved to housing, instead of having to chose.
If those people become homeless is not just because they can't afford a higher over a lower rent, that "more houses" will fix.
It's because they can't get a job, or don't have savings to retire on or to handle a health or other emergency, and can't afford neither rent nor mortgage repayments.
A house in Omaha doesn't help someone living in NY, so saying there are plenty of houses but they're just in the wrong place is so wildly wrong I have to think it's intentionally done just to score cheap political points.
I'm going to positively interpret your comment and respond anyway.
Instead of moving away people move further into the suburbs and commute so they can arbitrage the higher pay of the urban area with the lower cost of living.
We have a term for this, its called suburban sprawl.
The number of jobs in low cost of living areas can't support the cities, and lack of housing leads to folks moving just far enough away to make the math work.
I won’t argue with you on the developing underclass, but the numbers have shown for a while now that there is a very real housing shortage. Part of the problem here is that we’re not building to keep pace with the population.
> This means taking wealth away from those who have amassed too much, and returning it to those who had it stolen from them.
Letting the government (especially the current system of governance) do such a task is an extremely dangerous move. This will most likely result in pulling more wealth from the middle-class to the upper-class.
There is no reason to believe that the government that enabled this will suddenly turned around 180 degrees. Almost always why a communist/socialist revolution results in more misery to the common man.
Every time I hear "smart guns", all I can imagine is some redneck yelling at their gun, "Alexa, turn off the safety!" and a little Alexa voice coming out of their smart gun, "Now playing Turn Off The Safety by Some Gen Z Artist Nobody Has Heard Of".
The second amendment is not a credible deterrent to government violence. Those gun nuts can bring every weapon they like, all 400 million of them, to a battlefield and they will be wiped out in a couple weeks by the US military. They are not Afghanis who have spent generations surviving in war, they are fat fucks on blood pressure medication with gun fetishes.
So true. I grew up in Trump country. Most of these people have one foot in the grave--proudly declaring their love of pork shoulder and beer.
A caravan of excessively loud Harleys recently commanded my attention. Driven by aging pork lords ferrying humongous wives on the back, I could only take solace in that they would all be dead in a few years. However, our schools are still producing these people. You should check out the YouTube videos where these people show up at town council. All hope fades.
> The issue is not supply and demand for houses - there are plenty enough to go around (though often in the wrong place).
This drives prices up, though. Not just price of homes, but, similarly to fuel, prices of almost everything. Not many people are in the correct stage of life to evenly distribute themselves across the US's geography.
> For example, medical bills. For example student loans.
I doubt the baby boomers have student loan debt. They existed in a time long before the current university bureaucratic infrastructure was put in place and drove up costs (and thus prices), and they were far less likely to get a degree with no job prospects. Medical bills, sure, but they have always been around.
> The solution is to address wealth inequality. This means taking wealth away from those who have amassed too much, and returning it to those who had it stolen from them.
You have to be aware of all the massive, country-breaking problems this approach all but guarantees. We need a system that works, not a system that doesn't work with a heavy-handed thumb on the scale.
The actual obvious candidate is not punishing people who create so much value they have a load of money, because that value is worth that money, and without it we might be stuffed. The big reasons are: fuel prices, which are actually driving inflation, the post-Covid economic impact, and investing giant sums in defending Ukraine's border. You could say land and medical legislation give the worst of both worlds in those sectors, probably less efficient than public running or private markets.
You might say all of those things are worth it. But it's silly to just assume we can raid piggy banks on an ongoing basis, even if you had no moral issue with it.
You're making quite a number of faulty assumptions.
> Medical bills, sure, but they have always been around.
Prices for medical care have increased disproportionately in the last few decades[0].
> Investing giant sums in defending Ukraine's border.
It's barely 1% of your budget. It's 3% or so of your military budget. That doesn't move the needle. I mean sure; you're spending too much on the military, no doubt about that. But that doesn't have anything to do with Ukraine.
> We need a system that works, not a system that doesn't work with a heavy-handed thumb on the scale.
You already have that. Currently it is heavily biased in favor or the upper 10% of the population.
> The actual obvious candidate is not punishing people who create so much value they have a load of money,
That's assuming that people that "have a load of money" necessarily created that value. Given the current socio-economic conditions, I doubt that is usually the case. [1]
> That's assuming that people that "have a load of money" necessarily created that value
Other than generationally wealthy families (very few) or thieves or people making laws that then make them rich in the stock market, there are plenty of wealthy people who got wealthy because people chose to give them money in exchange for something worth that money to them.
Ah, I think I got your question now; you mean to ask; "What makes you think that all that wealth is not rightly earned by the rich people. They are producing value, that's why they are rich."
At least that my interpretation, let me know if I got that wrong.
We can assume that industrious, ingenious people with the will to to greatness come from all parts of society equally. If productivity and ingenuity were the driver of wealth, we would conclude that throughout all economic layers of society, we have a constant percentage of people that are getting richer, i.e. that they get to earn more value than their parents.
If we look at the date we see that this was roughly the case for the 1940ies cohort. With each next cohort, people from lower-income households not only have a lower chance of moving up the socioeconomic ladder, but also a reduced share of total wealth.
At the same time you see agglutination of wealth in the upper levels of society.
That still doesn't mean that people who are rich didn't get there by providing value to others. E.g. Bill Gates made software that almost every business in the world chose to pay him for. Social mobility stats aren't relevant to that question.
Yeah, from shoestring to millionaire, right? Not so much.
Bill Gates was born into an already very wealthy family. He enjoyed an top notch education, had access to promising early technology and - maybe most important, had connections through his friends and family that he could leverage.
His most important deal he didn't make because he creating a unique value, but because of - some might argue - somewhat shady business practices, where he ripped off the value created by someone else.
He made money by arbitration of value. That is not the same as creating that value.
I doubt that there was anything uniquely special of value created by Bill Gates that justifies him having access to a million times the resources that an everyday citizen has.
I don't doubt that he's a hard and dedicated worker. But I've already made the argument that this is not the factor deciding whether you get rich or not.
Luck, preparation, luck, endurance, luck, risk-taking and luck are. By being rich, you can make sure you have the preparation, the endurance and the capacity for risk-taking. You still need luck.
You seem to have got stranded down the wrong path. I'm not talking about "Yeah, from shoestring to millionaire, right?"
It doesn't matter if someone was a millionaire and took a risk and made loads of money, or whether Bill Gates worked hard or not. When they made that new money, they did so by creating value, because people paid them for their product or service.
When it comes to Bill Gates, Microsoft made and supplied the software that has computerised almost all businesses worldwide and home computers for decades. That is obvious, and enormous, value.
It makes sense in the conclusion. I don't think I agree with the premises.
None of the products that Bill Gates made himself were uniquely brilliant. He did not make money by himself writing software that provided unique value. He made a very good Basic compiler, but that's not where his wealth comes from.
His breakthrough deal with was with IBM, where he arbitrated between IBM and Tim Patterson - without either party knowing of the other. That's not value he created, that's value he arbitrated.
Now, you might say, but that is the value he provided, the arbitration. But that is not value created by any means and it's not necessarily a function of ingenuity or hard work or perseverance, but it's a function of well-connectedness, of knowing-the-right-people, of moving-in-the-right circles.
And that again are areas where being wealthy and connected, going to the right schools, speaking the right lingo and knowing the right people will give you an invaluable advantage.
The value created is in what his customers paid for: computers that worked for them in business and in their homes.
Things don't have to be unique to create value. They just have to be worth their price. And if you charge people a price and they pay it, you can be pretty sure you created value for them. And so if someone like that is super rich, you can be sure they likely created a lot of value.
You still seem stuck on "it's easier for some people than others to create value", which is still not relevant to this point.
In this particular example, the value was not created by Bill Gates or Microsoft, he only leveraged his connected position to sell IBM somebody else's product. The value was created by someone else.
So no, I'm not stuck on the position "it's easier for some people than others to create value", I'm stuck on the "arbitrage is not creating value" position.
I'm not saying that Bill Gates wrote, maintained, upgraded, marketed, sold, etc Microsoft software all by himself. I'm saying that he created value for his customers, and so they paid him.
He did that via a series of voluntary (again, this is the private sector, where you have to make a voluntary agreement with someone - you can't just throw them in jail if they don't pay you the taxes you decided you want) agreements with other businesses, and with employees, and with customers.
As I wrote before; I don't think that arbitrage and gatekeeping are the same as creating value. It's capturing the differences in the perceptions of value of two parties. But it's not creating said value.
Let's once again go back to the Microsoft/IBM deal; what value exactly would have Bill Gates able to "create" for IBM, if not for the exiting work of 86-DOS?
Nothing. Because in this case there was no value created by him. He would have had to write he required software to actually deliver the value instead.
And that's the case in many of such dealings. You could get rid of all the gatekeepers and arbitrage-takers and there would still be value to be sold. But get rid of the value-creators and the gatekeepers and arbitrage-takers don't have anything to work with.
Gatekeeping and leveraging of existing value is just another form of market failure.
Free markets operate under the assumption that all the market participants have total knowledge about the various offers at hand. If they don't know the various offers, then they cannot make an informed decision; the market fails. Gatekeepers and arbitrage benefit from this market failure.
> The issue is that a sizeable underclass is being created that have no wealth, not least because what wealth they did have has been funneled to the very wealthy.
This has happened in all of the industrialized world, and it's happening very quickly right now. The reasons you mention are very US-specific, but the funneling happens everywhere, usually by more traditional means such as rents and taxes.
Yes, taxes are greatly beneficial for the rich, just scrutinize any European government budget and you'll see it is in large part a scheme to pay out money to wealthy people that are in favour with the political class.
The reason for this massive wealth distribution is the inflationary monetary system, that's the common denominator in all countries experiencing it, and it's not hard to see how.
In the past, serfdom was at least more honest. You knew your tax payments went to the lord for his own benefit.
> The reason for this massive wealth distribution is the inflationary monetary system
Inflation serves to reduce wealth (if just stuffed under the mattress), and encourages investment (to beat inflation). The real problem is that wealth begets wealth - if left to it's own devices the capitalist system will ensure wealth becomes concentrated in fewer and fewer hands. The only way this can be counter-balanced is with government regulation (e.g. anti-monopolistic laws, wealth redistribution).
>Inflation serves to reduce wealth (if just stuffed under the mattress), and encourages investment (to beat inflation).
Inflation, in the current form, transfers wealth to the first people to receive/spend the newly printed money (the financial system) from the last people to receive the newly printed money (this is termed the Cantillon effect). Since the end of Bretton Woods in the 1970s there's been a massive increase in USD inflation coinciding with a massive increase in wealth inequality, as would be expected from a system based around systematic transfer of wealth from the real economy to the financial industry. Technically inflation doesn't have to act like this; if it occurred via helicopter money airdropped equally into everybody's bank account, there wouldn't be a wealth transfer. But with the current system it's a systematic source of inequality.
In the absence of government intervention, wealth is more likely to tend toward the center. The issue is that any democratic form of government featuring any kind of legislature reliant on voting will be bought. First, large companies will want small little advantages like a new road to their factory. Overtime, it becomes massive like immunity from prosecution from drugs that kill people like opioids. Over time, these companies receiving benefits become indistinguishable from the government itself and drive nearly all policy like Boeing, Raytheon, Lockheed, JP Morgan, Goldman, etc. Generally, all attempts to stop this are subverted and used to the benefit of these megacorporations via riders on any such bill introduced by politicians who’re on the take. Further, the agencies tasked with enforcement of any regulation usually have people who previously worked at these companies or who hope to work at them in the future on their staff.
Humans respond to incentives, and all incentives line up toward the merger of corporation and state in a democracy. I’d like to see a free market democracy that lacks corporate personhood to see if that changes the structure, but a human life isn’t long enough to really witness such a thing.
>In the absence of government intervention, wealth is more likely to tend toward the center. The issue is that any democratic form of government featuring any kind of legislature reliant on voting will be bought.
Every non-democratic form will be bought even faster, if it's not operated directly by the "buyers" in the first place.
Though I doubt that "in the absence of government intervention, wealth is more likely to tend toward the center". There are dozens of ways for the rich to get richer and fuck the poor/center over without government intervention. In a more anarchic, no-government-at-all situation, for an extreme example, they are the ones to afford the best mercernaries and dictate terms...
My argument is not that any government or no government is better than another, but rather that this form of corruption is unavoidable in democracies.
As for anarchy, yes, you could have more or worse violent action, but the type you cite is directly how the current system works. In the USA, the US and its states have the greatest military strength and therefore set the terms. They also engage in military action on behalf of corporations like United Fruit, Coca-Cola, Exon, etc. The argument that "in the absence of a government the warlords would take over" ignores that the warlords are already in power. Further, I at no point advocated for anarchy. I merely stated that in the absence of government intervention, wealthy is more likely to tend toward the center. In the USA, the wealth gap has widened as government intervention in the market has increased and that is the basis of evidence for my argument. Today, the richest and poorest are further apart that any prior time in US history, and law/regulation is and has been in continuous expansion not retraction.
Corruption happens under any form of government, it doesn't require democracy. The risk for corruption is always there when power is centralized, the more you centralize the more incentive there is.
If anything democracy has only shown that it isn't a magic bullet for corruption. Part of the goal is that oversight by the voting public will eventually weed out the corrupt, that works somewhat and should certainly be better than no oversight from other forms of government.
I do not disagree with your first part. The second part, I would argue has been proven false. Voting changes nothing, and I dare say that were voting capable of changing anything, it'd be illegal. Obama and Trump both said they were antiwar and would end war, neither did. All of the Presidents of my life time have spoken against large deficit spending except for Clinton and Biden, and hilariously, only Clinton ever made any real progress on that front. The people are generally against the drug war, no change. The people are generally against mass incarceration, no change. The people are generally against corporate/government collusion, no change. The people have generally been against bailouts, no change.
Oh we're 100% on the same page. I whole heartedly believe the ideals behind democracy are meant to keep power in check, but we lost that before I was born.
I'd argue that I've never truly lived in a democracy, but I hope to one day. It's a system I would fight for if there were actually a semblance of a movement willing to stand up and say enough is enough. So far though I've been a bit sad, or maybe just disappointed, to see that the vast majority of our people don't seem interested in democracy, liberty, or individual freedoms.
Most people only “believe” in democracy when they’re on the winning side of an election. Later, when the elected individual doesn’t live up to his/her campaign promises everyone seems to have amnesia and they go right back to the polls.
Corporate personhood is used to shield people from persecution for things they'd be persecuted for doing as private individuals. If there was no corporate liability shield, every single drug company employee involved in knowingly marketing and distributing harmful opiates could potentially be sued; no longer could people use "I was just following orders" as an excuse.
Sue the owners of corporations when they break laws. That’s my alternative vision. Why did no board members of major tobacco companies have to face the consequences of their actions when they knowingly falsely advertised their product? Take away corporate personhood and make the owners face the music.
Inflation serves to redistribute wealth, since the first people to receive the new money created are those who benefit most from it. The reduced value of money some rich man has under his mattress is of very little importance here, what's important is the reduced value of the money received as wages by labourers.
When Roman emperors inflated their currency, the first people to receive the new money created were their soldiers. Wealth of the rest of Roman citizens was in this way redistributed to the soldiers.
Today we have a fractional reserve system in banking, meaning that banks actually create money and inflate the money supply when they give a "loan". While a lot of this money goes to governments and some goes to companies, the wast majority of new money enters circulation by being lent to real estate purchasers. That's why real estate is so unaffordable. It's not more complicated than that.
> The only way this can be counter-balanced is with government regulation
Then start regulating the banks and take away their privilege of creating money from nothing.
> capitalist system will ensure wealth becomes concentrated in fewer and fewer hands. The only way this can be counter-balanced is with government regulation
I'd argue government is just the same. If you look at who holds office right now, it's predominantly the older generation [0]. They achieved that by becoming career politicians. Deng Xiaoping introduced capitalism which lifted generations of people out of poverty [1]. It has a good track record of doing that. The rich companies lobby the government to make competition for the little guy impossible and solidifying their concentration of power -- crony capitalism. I do think there should be a push and pull, but both sides are human and power hungry.
The issue is that a sizeable underclass is being created that have no wealth, not least because what wealth they did have has been funnelled to the very wealthy. For example, medical bills. For example student loans. For example zero interest rates with zero wage inflation meaning accommodation costs don't fall as a proportion of income.
The solution is to address wealth inequality. This means taking wealth away from those who have amassed too much, and returning it to those who had it stolen from them.