5 ms·

Yes, and what did those employees who would have otherwise been unemployed spend their money on? Likely rent was the #1 item, thus transferring wealth from tax

Yes, and what did those employees who would have otherwise been unemployed spend their money on? Likely rent was the #1 item, thus transferring wealth from tax dollars to asset holders.

birken 5y ago
I'm sure the employees would much rather have been laid off to stick it to the asset holders.
- manquer 5y ago
  With weaker demand rents would have actually fallen a lot more than now. That in turn would have an impact on asset prices in the long term. Will it be fairer to employees ? I don't know, there will be lot more pain for employees without government intervention. However with Quantitative Easing or bailouts and COVID loans means the rich are not paying the same price as well, that is why rich are becoming richer, poor suffer either way.
  - sangnoir 5y ago
    > With weaker demand rents would have actually fallen a lot more than now In this sentence, is "weaker demand" euphemism for mass homelessness?
    - diordiderot 5y ago
      It's amazing how sociopathic economics is without context
    - manquer 5y ago
      Not necessarily, demand in Bay Area for example is not really connected to homelessness all that much. While rents have dropped a bit here, it more likely to get 2 months rent free rather than actual drops. In a tough economy I would expect rents to drop and in turn asset prices as well. The 6 trillion pumped in has to go somewhere, if it’s not inflation of consumer goods, it is inflation of capital goods. This has made it incredibly harder for mobility and wealth inequality
- missedthecue 5y ago
  I have come to realize that many people are haunted by the constant fear that someone somewhere might be making a profit. I think it's a great thing and a credit to our institutions that millions of citizens of my country weren't evicted last March and April. Who cares if landlords got paid for rent or if a bank received a mortgage payment?
  - daddylongstroke 5y ago
    >...Who cares if landlords got paid for rent... Hmmm...unfortunately, most landlords are people who own a single rental, often the one they lived in previously that they cannot sell. By not bailing out landlords (not speaking of institutional investors here that buy up distressed mortgages in cash by the hundreds), you've hurt average-earning middle income citizens. So yes, with the moratoriums, you've transferred wealth from a chunk of the middle class to a different chunk of the middle and lower class.
    - GFischer 5y ago
      Most landlords own a single rental, but most rental properties are owned by large companies (notably REITs like MAA that has over 100.000 properties)... So what you're saying is both true (in that it saves average-earning citizens) and false (most of the money went to large corporations like https://en.wikipedia.org/wiki/Mid-America_Apartment_Communities https://en.wikipedia.org/wiki/Mid-America_Apartment_Communit... ).
      - daddylongstroke 5y ago
        >...most of the money went to large corporations... As far as I know, no landlord, large or small got any bailout. Are you saying investor-landlords received some type of direct stimulus? If so, can you elaborate?
tracer4201 5y ago
Are we saying a rent payment is a “transfer of wealth”? I’m not invested in real estate, but I imagine many people in real estate were just as impacted. Don’t you likely need to pay towards a mortgage and put some aside for capital and day to day maintenance? Your comment is written as if a rent payment is a transfer from one person to directly to someone else’s savings account. I’m not convinced this is true.
- deleted 5y ago
  [deleted]
- oblio 5y ago
  I think he's saying that at a certain level of wealth, you don't need mortgages anymore. And especially with super low interest rates - bonus points if the interest rate is fixed - mortgages are more of an investment than a liability. So people with a ton of money can just buy a lot of property which they then rent out. Renovation work can be delayed and property values have only went up in the past 30 years or so (minus the financial crisis, which in the greater scheme of things turned out to be just a blip). So they have an ever appreciating asset that's a constant stream of revenue. Double-win. Which makes this whole multiple-bankruptcy thing for the former US president even the more baffling :-))
- bredren 5y ago
  The great recession resulted in the creation of Blackstone's Invitation Homes, which is the largest owner of single-family rental homes in the US. Homes that used to be owned and rented locally by individuals or small businesses are now rented and managed from elsewhere. Profits resulting from higher rents and cheaper maintenance flow to stock holders, creating bad incentives. These homes are no longer rotating into the market for sale, reducing inventory. Even for rental homes rented by local owners, the increased rent due to the commercialization of rented residential housing created conditions for everyone's rent to go up. https://www.nytimes.com/2020/03/04/magazine/wall-street-landlords.html https://www.nytimes.com/2020/03/04/magazine/wall-street-land...
  - deathtraphomes 5y ago
Spivak 5y ago
This is not what anyone means when they talk about wealth transfers. Yes rent is a huge issue on its own eat the new feudal lords and all that but the problem of people using their wages and salaries funded by taxpayers to pay for things they we're paying for already is something totally different than inflation devaluing dollars, which is the primary asset held by low-middle income people, plus wholesale transfering it via bailouts to the already wealthy. If the gov't took money from taxpayers to give to companies to pay worker salaries to pay rent and you squint a bit that's just workers paying rent semi-collectively which on a macro scale is like... fine. Not good. But fine.
comboy 5y ago
It's a bit more complex, but even avoiding how much value pleople get from paying their rent, only as much was transferred as there would be empty vacancies from people relocating elsewhere (or losing their homes and having nowhere to go). If elsewhere, they also pay rent to somebody. Plus somebody else would pay the rent when they are gone, just slightly lower (probably). That difference in rent price would be amount being transferred then. Long story short it's more likely that they were able to buy other necessities and more food than they could without a job. Your argument would work though if these were high paying jobs - that would likely only result in fewer luxuries being bought. If money ends up in the hands of employees, then statistically by definition most of them are not the 1% and money equals higher level of living instead of more useless stuff.
- derefr 5y ago
  I think the idea isn’t that it was a net transfer from individual working-class people to the capital class, but rather a net transfer from city/state/country treasuries to the capital class. How much of that translates to the rich getting richer, depends on what proportion of those treasuries’ funds originally came from taxes on the rich, vs. taxes on everyone else.
  - comboy 5y ago
    The way I see it, they state money belongs to everyone (bear with me), the transfer between working and capital class happens when it is not distributed evenly, which is what happened at booking.com and is happening quite often because those who work don't have time to research new regulations, don't have experts to analyze them and some yet other people to fill out necessary documents to get money from the state. That's why I believe many laws like "let's help THOSE people in need" end up on a giant pile that's mostly getting abused by those who have time for it (of course there are exceptions).
ljm 5y ago
But they were paying rent or paying their mortgage before it happened too. All it says is that it's a good thing that the government backed you up when you were in trouble. And I'd rather see the government back up the poor folk instead of them bailing out the stupidly wealthy. It'd cost less money.

Yes, and what did those employees who would have otherwise been unemployed spend their money on? Likely rent was the #1 item, thus transferring wealth from tax dollars to asset holders.

birken 5y ago

I'm sure the employees would much rather have been laid off to stick it to the asset holders.

manquer 5y ago
With weaker demand rents would have actually fallen a lot more than now. That in turn would have an impact on asset prices in the long term. Will it be fairer to employees ? I don't know, there will be lot more pain for employees without government intervention. However with Quantitative Easing or bailouts and COVID loans means the rich are not paying the same price as well, that is why rich are becoming richer, poor suffer either way.
- sangnoir 5y ago
  > With weaker demand rents would have actually fallen a lot more than now In this sentence, is "weaker demand" euphemism for mass homelessness?
  - diordiderot 5y ago
    It's amazing how sociopathic economics is without context
  - manquer 5y ago
    Not necessarily, demand in Bay Area for example is not really connected to homelessness all that much. While rents have dropped a bit here, it more likely to get 2 months rent free rather than actual drops. In a tough economy I would expect rents to drop and in turn asset prices as well. The 6 trillion pumped in has to go somewhere, if it’s not inflation of consumer goods, it is inflation of capital goods. This has made it incredibly harder for mobility and wealth inequality
missedthecue 5y ago
I have come to realize that many people are haunted by the constant fear that someone somewhere might be making a profit. I think it's a great thing and a credit to our institutions that millions of citizens of my country weren't evicted last March and April. Who cares if landlords got paid for rent or if a bank received a mortgage payment?
- daddylongstroke 5y ago
  >...Who cares if landlords got paid for rent... Hmmm...unfortunately, most landlords are people who own a single rental, often the one they lived in previously that they cannot sell. By not bailing out landlords (not speaking of institutional investors here that buy up distressed mortgages in cash by the hundreds), you've hurt average-earning middle income citizens. So yes, with the moratoriums, you've transferred wealth from a chunk of the middle class to a different chunk of the middle and lower class.
  - GFischer 5y ago
    Most landlords own a single rental, but most rental properties are owned by large companies (notably REITs like MAA that has over 100.000 properties)... So what you're saying is both true (in that it saves average-earning citizens) and false (most of the money went to large corporations like https://en.wikipedia.org/wiki/Mid-America_Apartment_Communities https://en.wikipedia.org/wiki/Mid-America_Apartment_Communit... ).
    - daddylongstroke 5y ago
      >...most of the money went to large corporations... As far as I know, no landlord, large or small got any bailout. Are you saying investor-landlords received some type of direct stimulus? If so, can you elaborate?

tracer4201 5y ago

Are we saying a rent payment is a “transfer of wealth”? I’m not invested in real estate, but I imagine many people in real estate were just as impacted. Don’t you likely need to pay towards a mortgage and put some aside for capital and day to day maintenance? Your comment is written as if a rent payment is a transfer from one person to directly to someone else’s savings account. I’m not convinced this is true.

deleted 5y ago
[deleted]
oblio 5y ago
I think he's saying that at a certain level of wealth, you don't need mortgages anymore. And especially with super low interest rates - bonus points if the interest rate is fixed - mortgages are more of an investment than a liability. So people with a ton of money can just buy a lot of property which they then rent out. Renovation work can be delayed and property values have only went up in the past 30 years or so (minus the financial crisis, which in the greater scheme of things turned out to be just a blip). So they have an ever appreciating asset that's a constant stream of revenue. Double-win. Which makes this whole multiple-bankruptcy thing for the former US president even the more baffling :-))
bredren 5y ago
The great recession resulted in the creation of Blackstone's Invitation Homes, which is the largest owner of single-family rental homes in the US. Homes that used to be owned and rented locally by individuals or small businesses are now rented and managed from elsewhere. Profits resulting from higher rents and cheaper maintenance flow to stock holders, creating bad incentives. These homes are no longer rotating into the market for sale, reducing inventory. Even for rental homes rented by local owners, the increased rent due to the commercialization of rented residential housing created conditions for everyone's rent to go up. https://www.nytimes.com/2020/03/04/magazine/wall-street-landlords.html https://www.nytimes.com/2020/03/04/magazine/wall-street-land...
- deathtraphomes 5y ago

Spivak 5y ago

This is not what anyone means when they talk about wealth transfers. Yes rent is a huge issue on its own eat the new feudal lords and all that but the problem of people using their wages and salaries funded by taxpayers to pay for things they we're paying for already is something totally different than inflation devaluing dollars, which is the primary asset held by low-middle income people, plus wholesale transfering it via bailouts to the already wealthy. If the gov't took money from taxpayers to give to companies to pay worker salaries to pay rent and you squint a bit that's just workers paying rent semi-collectively which on a macro scale is like... fine. Not good. But fine.

comboy 5y ago

It's a bit more complex, but even avoiding how much value pleople get from paying their rent, only as much was transferred as there would be empty vacancies from people relocating elsewhere (or losing their homes and having nowhere to go). If elsewhere, they also pay rent to somebody. Plus somebody else would pay the rent when they are gone, just slightly lower (probably). That difference in rent price would be amount being transferred then. Long story short it's more likely that they were able to buy other necessities and more food than they could without a job. Your argument would work though if these were high paying jobs - that would likely only result in fewer luxuries being bought. If money ends up in the hands of employees, then statistically by definition most of them are not the 1% and money equals higher level of living instead of more useless stuff.

derefr 5y ago
I think the idea isn’t that it was a net transfer from individual working-class people to the capital class, but rather a net transfer from city/state/country treasuries to the capital class. How much of that translates to the rich getting richer, depends on what proportion of those treasuries’ funds originally came from taxes on the rich, vs. taxes on everyone else.
- comboy 5y ago
  The way I see it, they state money belongs to everyone (bear with me), the transfer between working and capital class happens when it is not distributed evenly, which is what happened at booking.com and is happening quite often because those who work don't have time to research new regulations, don't have experts to analyze them and some yet other people to fill out necessary documents to get money from the state. That's why I believe many laws like "let's help THOSE people in need" end up on a giant pile that's mostly getting abused by those who have time for it (of course there are exceptions).

ljm 5y ago

But they were paying rent or paying their mortgage before it happened too. All it says is that it's a good thing that the government backed you up when you were in trouble. And I'd rather see the government back up the poor folk instead of them bailing out the stupidly wealthy. It'd cost less money.