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The economic pie is shrinking. Elites are spending more and more of their money sending their kids to the best prep schools and resume padding to ensure they do

The economic pie is shrinking. Elites are spending more and more of their money sending their kids to the best prep schools and resume padding to ensure they don't slip through the growing cracks in the developed world (i.e. inequality that is well accepted at this point). See the college admissions scandal. That was the canary in the coalmine for intra-elite competition. They spent hundreds of thousands to low digit millions to send their kids through the backdoor because they couldn't afford the backdoor. These were like low-level elites (not hyper wealthy). The point is that if these people are concerned about their status, the middle and lower classes have little hope. While the average outcomes may have been true in past decades, one must ask if this will be the case going forward. In a low-to-no-growth economy, where most of the gains are financialized in limited sectors (high finance and tech), how else will one penetrate these sectors if not through an elite institution? Answer: they probably will not and will resign themselves to working in a stagnating part of the economy. Respectfully, I think people who subscribe to your view are whistling in the dark about the future of the country.

imtringued 5y ago
The economic pie isn't shrinking, it's not being allowed to grow. Companies produce more things when the price goes up. This works amazingly well for consumer goods. However, companies have been banned from doing so in the housing market. What follows is a shortage, the driver of all inflations. However, this only reflects rents, not necessarily the prices of homes because they are primarily driven by the availability of cheap credit whose monthly payments may stay the same despite a more expensive house. From what I can tell rent inflation itself went up by 3%+ every year since 2000. One problem with rents is that the only way they can employ people is via construction and since that isn't happening it will not translate into increased wages, which will cause wages to lag behind as most people are employed in an industry whose maximum wage increases are effectively bounded by CPI+productivity growth, not rent inflation+productivity growth, rents outpacing wages is only natural. Education is one way to increase productivity growth, but another way would be to simply reduce the productivity growth needed to have a normal life, by building more housing. rent inflation - CPI = education shortfall or rent inflation - CPI = construction shortfall it's a choice and a lot of people are picking 1. because it's other people that have to get educated to pay for the shortfall, not the ones owning the land.

imtringued 5y ago

The economic pie isn't shrinking, it's not being allowed to grow. Companies produce more things when the price goes up. This works amazingly well for consumer goods. However, companies have been banned from doing so in the housing market. What follows is a shortage, the driver of all inflations. However, this only reflects rents, not necessarily the prices of homes because they are primarily driven by the availability of cheap credit whose monthly payments may stay the same despite a more expensive house. From what I can tell rent inflation itself went up by 3%+ every year since 2000. One problem with rents is that the only way they can employ people is via construction and since that isn't happening it will not translate into increased wages, which will cause wages to lag behind as most people are employed in an industry whose maximum wage increases are effectively bounded by CPI+productivity growth, not rent inflation+productivity growth, rents outpacing wages is only natural. Education is one way to increase productivity growth, but another way would be to simply reduce the productivity growth needed to have a normal life, by building more housing. rent inflation - CPI = education shortfall or rent inflation - CPI = construction shortfall it's a choice and a lot of people are picking 1. because it's other people that have to get educated to pay for the shortfall, not the ones owning the land.