3 ms·

Great point and I agree with most of your sentiment, but I'm not sure you got all of my point. What I'm saying, and a big component of what I'm thinking about

Great point and I agree with most of your sentiment, but I'm not sure you got all of my point. What I'm saying, and a big component of what I'm thinking about is housing costs, is that we're chasing the same things with more dollars. If household incomes double, expect the price of houses to follow suit. Assuming supply doesn't change, it doesn't help to earn 2x the money when all the bidders in the marketplace also have 2x the money.

yakult 9y ago
>we're chasing the same things with more dollars. you're missing the part where more demand creates more supply. Sure, sometimes the market is distorted due to zoning, like in SF, and also land is finite, but generally speaking the market responds to the added demand by creating more housing, possibly denser housing. Same with other goods. Those are not empty dollars that got added into the system by fiat - they represent additional productive work done, and the goods / services they create is added to the economy.
- throwaway9980 9y ago
  Agreed. And that's why I said "assuming supply stays the same" when talking about the housing market. I don't think I was clear with what I meant by 2x and 1.5x. I'm assuming those dollars represent productive labor and that means that there's more supply. My point is that I think the supply side isn't keeping up. The economy itself isn't bringing home 2x the bacon, but rather 1.5x the bacon when you're feeding all this extra labor into it. And yes, this is due to market distortions and diminishing returns.
  - yakult 9y ago
    This is the crux: my point is that 1.5x the bacon is often still worth 2x the labour. Seriously, despite all the moaning about materialism and consumerism, the economy as a whole has suffered from a severe lack of bacon ever since the first monkey exchanged some bacon for a back rub, and this is definitely part of the solution.
    - zero_intp 9y ago
      This is a very astute insight on a micro-economic scale. From a macro-economic scale, this is the difference between USA and, for example, French labor laws creating 40 vs 35/32 hour work weeks.
      - yakult 9y ago
        That works sort-of when the majority of the population is relatively well-off, though still inefficient. Not so well now with the immigration crisis and change in demographics. The choice to sacrifice wages for more time with your kids is a luxury good, even if people choose to spend some of that time doing housework.

yakult 9y ago

>we're chasing the same things with more dollars. you're missing the part where more demand creates more supply. Sure, sometimes the market is distorted due to zoning, like in SF, and also land is finite, but generally speaking the market responds to the added demand by creating more housing, possibly denser housing. Same with other goods. Those are not empty dollars that got added into the system by fiat - they represent additional productive work done, and the goods / services they create is added to the economy.

throwaway9980 9y ago
Agreed. And that's why I said "assuming supply stays the same" when talking about the housing market. I don't think I was clear with what I meant by 2x and 1.5x. I'm assuming those dollars represent productive labor and that means that there's more supply. My point is that I think the supply side isn't keeping up. The economy itself isn't bringing home 2x the bacon, but rather 1.5x the bacon when you're feeding all this extra labor into it. And yes, this is due to market distortions and diminishing returns.
- yakult 9y ago
  This is the crux: my point is that 1.5x the bacon is often still worth 2x the labour. Seriously, despite all the moaning about materialism and consumerism, the economy as a whole has suffered from a severe lack of bacon ever since the first monkey exchanged some bacon for a back rub, and this is definitely part of the solution.
  - zero_intp 9y ago
    This is a very astute insight on a micro-economic scale. From a macro-economic scale, this is the difference between USA and, for example, French labor laws creating 40 vs 35/32 hour work weeks.
    - yakult 9y ago
      That works sort-of when the majority of the population is relatively well-off, though still inefficient. Not so well now with the immigration crisis and change in demographics. The choice to sacrifice wages for more time with your kids is a luxury good, even if people choose to spend some of that time doing housework.