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> Ultimately however the main problem is wealth inequality. If median income had increased with GDP since 1980, instead of all gains going to the 0.01%, you wou

> Ultimately however the main problem is wealth inequality. If median income had increased with GDP since 1980, instead of all gains going to the 0.01%, you would be able to afford to live in the suburbs of San Diego. The problem of income inequality is one and the same as the housing crisis - ie, the wealth gap is nearly entirely explained by real estate.

mhneu 10y ago
No, the wealth gap is not explained by real estate. The problem is that the 0.01% -- households worth more than ~$100M -- have received almost all the wealth gains since 1980. That's not just real estate -- it has to do with globalization as well as tax and policy decision. So the very rich have gotten much richer, while median incomes (I.e. middle class incomes) have not increased. See Fig 1 of this paper: https://gabriel-zucman.eu/files/SaezZucman2014.pdf https://gabriel-zucman.eu/files/SaezZucman2014.pdf
- sobani 10y ago
  According to [1] the return from 1980 to now is 57.5 fold. So anyone who started with 'just' 2M would have ended up with more than 100M. It's not surprising that those who started with the most, also got the most gains. [1] http://www.moneychimp.com/features/market_cagr.htm http://www.moneychimp.com/features/market_cagr.htm
hsitz 10y ago
Can you give a cite to any statistics or resources that suggest that real estate fully explains the wealth gap? The ultra-wealthy tend to have much higher percentage of their assets in securities than real estate. So that real estate explains the entire wealth gap sounds curious, although perhaps not impossible. I just have no idea how that could be.
crdoconnor 10y ago
>wealth gap is nearly entirely explained by real estate. 1) Reagan fired the air traffic controllers in 1981. 2) This set off a wave of anti-union action - http://www.alternet.org/story/154595/how_ronald_reagan_broke_the_air_traffic_controllers_union--and_why_that_fight_still_matters http://www.alternet.org/story/154595/how_ronald_reagan_broke... - causing the great decoupling of wages and productivity: https://upload.wikimedia.org/wikipedia/commons/4/45/Productivity_and_Real_Median_Family_Income_Growth_1947-2009.png https://upload.wikimedia.org/wikipedia/commons/4/45/Producti... 3) ...which caused staggering levels of wealth inequality: http://www.bankers-anonymous.com/wp-content/uploads/2015/04/wealth-inequality.jpg http://www.bankers-anonymous.com/wp-content/uploads/2015/04/... 4) And all that accumulated wealth ended up being lent back in the form of loans (e.g. student loans), mortgages as well as bidding up the price of real estate which your grandma - a 'boomer' profited a small amount from - which is why this is actually all her fault.

mhneu 10y ago

No, the wealth gap is not explained by real estate. The problem is that the 0.01% -- households worth more than ~$100M -- have received almost all the wealth gains since 1980. That's not just real estate -- it has to do with globalization as well as tax and policy decision. So the very rich have gotten much richer, while median incomes (I.e. middle class incomes) have not increased. See Fig 1 of this paper: https://gabriel-zucman.eu/files/SaezZucman2014.pdf https://gabriel-zucman.eu/files/SaezZucman2014.pdf

sobani 10y ago
According to [1] the return from 1980 to now is 57.5 fold. So anyone who started with 'just' 2M would have ended up with more than 100M. It's not surprising that those who started with the most, also got the most gains. [1] http://www.moneychimp.com/features/market_cagr.htm http://www.moneychimp.com/features/market_cagr.htm

hsitz 10y ago

Can you give a cite to any statistics or resources that suggest that real estate fully explains the wealth gap? The ultra-wealthy tend to have much higher percentage of their assets in securities than real estate. So that real estate explains the entire wealth gap sounds curious, although perhaps not impossible. I just have no idea how that could be.

crdoconnor 10y ago

>wealth gap is nearly entirely explained by real estate. 1) Reagan fired the air traffic controllers in 1981. 2) This set off a wave of anti-union action - http://www.alternet.org/story/154595/how_ronald_reagan_broke_the_air_traffic_controllers_union--and_why_that_fight_still_matters http://www.alternet.org/story/154595/how_ronald_reagan_broke... - causing the great decoupling of wages and productivity: https://upload.wikimedia.org/wikipedia/commons/4/45/Productivity_and_Real_Median_Family_Income_Growth_1947-2009.png https://upload.wikimedia.org/wikipedia/commons/4/45/Producti... 3) ...which caused staggering levels of wealth inequality: http://www.bankers-anonymous.com/wp-content/uploads/2015/04/wealth-inequality.jpg http://www.bankers-anonymous.com/wp-content/uploads/2015/04/... 4) And all that accumulated wealth ended up being lent back in the form of loans (e.g. student loans), mortgages as well as bidding up the price of real estate which your grandma - a 'boomer' profited a small amount from - which is why this is actually all her fault.