4 ms·

I don't know about the other countries you have mentioned but German residential real estate has very high levels of institutional investment and the legacy of

I don't know about the other countries you have mentioned but German residential real estate has very high levels of institutional investment and the legacy of rent control (famously, Berlin...although that changed a few years ago). So you have very high wealth inequality, average German net financial wealth is equal to Greece and Germany has a significant number of billionaires, but you also have a system that fundamentally cannot be compared with the US. It just optimises for different things. That being said, whilst recognising those differences, lower wealth inequality is not the result of most of these systems. Income inequality is generally lower but the cost of this is usually: low competition, high structural unemployment, weak unions, low levels of business creation...it isn't free. It is readly apparent from the EU that whilst the US has high inequality, it also has a far more dynamic economy that results in more people actually becoming wealthy (to take Germany as an example, most billionaires come from families that got rich in the 30s and inherited...the level of downward mobility is very high in the US) and higher levels of innovation.

coliveira 6y ago
> more dynamic economy that results in more people actually becoming wealthy This is exactly the other side of inequality: if there is a big gap, someone must be taking advantage of this gap. The problem is that most people are losers in this competition.
oblio 6y ago
Most statistics contradict you, despite the popular impression. The US has lower social mobility than most European countries. https://en.m.wikipedia.org/wiki/Global_Social_Mobility_Index https://en.m.wikipedia.org/wiki/Global_Social_Mobility_Index
collyw 6y ago
What happened with rent control in Berlin? Rent control sounds like a good idea in theory but in practice it seems the opposite, creating two tiers of renters.
- llampx 6y ago
  They introduced the Mietendeckel law last year, which solidified the two tier system for renters. If you had a good rent contract in a central location, you were sitting pretty and could probably count on a decrease in rent. If you had done the responsible thing and rented in a further away location, no such luck. If you are looking for an apartment now, supply has been dramatically reduced. Great for the haves, not so much for the have nots.
- imtringued 6y ago
  Rent control is a bad idea in theory as well. A theoretical solution to the problem that can deliver the promises of rent control is if the government guarantees housing for the desired price. The reason why it works is because the government is forced to change laws that prevent the construction it just promised. It's about accountability rather than the promise itself. The reason why rent control doesn't work is because the government can enact or keep laws that restrict the supply of housing. There is no accountability. It's actually equivalent to censorship. If you want the housing market to look good, just ban bad news (high prices).

coliveira 6y ago

> more dynamic economy that results in more people actually becoming wealthy This is exactly the other side of inequality: if there is a big gap, someone must be taking advantage of this gap. The problem is that most people are losers in this competition.

oblio 6y ago

Most statistics contradict you, despite the popular impression. The US has lower social mobility than most European countries. https://en.m.wikipedia.org/wiki/Global_Social_Mobility_Index https://en.m.wikipedia.org/wiki/Global_Social_Mobility_Index

collyw 6y ago

What happened with rent control in Berlin? Rent control sounds like a good idea in theory but in practice it seems the opposite, creating two tiers of renters.

llampx 6y ago
They introduced the Mietendeckel law last year, which solidified the two tier system for renters. If you had a good rent contract in a central location, you were sitting pretty and could probably count on a decrease in rent. If you had done the responsible thing and rented in a further away location, no such luck. If you are looking for an apartment now, supply has been dramatically reduced. Great for the haves, not so much for the have nots.
imtringued 6y ago
Rent control is a bad idea in theory as well. A theoretical solution to the problem that can deliver the promises of rent control is if the government guarantees housing for the desired price. The reason why it works is because the government is forced to change laws that prevent the construction it just promised. It's about accountability rather than the promise itself. The reason why rent control doesn't work is because the government can enact or keep laws that restrict the supply of housing. There is no accountability. It's actually equivalent to censorship. If you want the housing market to look good, just ban bad news (high prices).