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The problem isn’t that people are wanting too much. It’s that getting on the property ladder at all, even a small condo in a metro where there are jobs, is bec

The problem isn’t that people are wanting too much. It’s that getting on the property ladder at all, even a small condo in a metro where there are jobs, is becoming far, far more difficult than for previous generations. And of course, if people need to work longer and harder to achieve what would've been considered fairly modest goals by (recent) previous generations in terms of housing, then they have less time and energy to devote to friendship and community.

ethbr0 5y ago
My personal read is that a huge amount of that in the last decade or so has been a consequence of basement central bank rates. When vast sums of institutional money are freed and chasing yield, eventually some of it leaks into residential property. And when a market that was precariously balanced with only retail buyers (due to density opposition and building economics) now has equal or more investors pile in? Well, prices do what they've done.
- Ericson2314 5y ago
  If we lower them we have no homes, if we raise them we have no jobs. The fact of the matter is conventional central banking is a failure, as is widespread private homeownership in metropolitan areas.
  - ethbr0 5y ago
    Well, conventional central banking usually has the goals of "prevent another Great Depression" and "keep inflation under control." In that respect, they've been fairly successful. The side effects are... less good. But worse than a national depression? Eh.
    - Ericson2314 5y ago
      https://jwmason.org/slackwire/at-jacobin-the-fed-doesnt-work-for-you/ https://jwmason.org/slackwire/at-jacobin-the-fed-doesnt-work... well start with those side effects: inflation is kept in check by beating back workers whenever they get to powerful. Then take into account how lousy growth has been since the 1970s when they started doing that. If we could have had depressions but more amortized growth, and not "jobless recoveries" and anemic amortized growth, would that have been worse or better?
      - imtringued 5y ago
        That's why they changed the inflation target. If your goal is 2% then you have to raise rates before you even hit 2% nipping full employment in the bud. If you target an average rate of 2% then having a year with 5% and four with less than 2% lets you balance things out. Edit: I read the article and it basically boils down to rich people benefiting from low inflation because it doesn't erode their deposits and makes stocks/housing go up without increasing wages. It's pretty much true but it is also so obvious to be boring. Money from the past is power from the past. Maintaining the value of money earned 60 years ago is the same as maintaining power obtained 60 years ago. Holding onto money doesn't help workers be more productive so if they spent their 60 year old money it would get eroded by inflation. You therefore need to add some slack in the labor supply that is not used up by anyone, meaning nobody is going to miss that labor if it is paid by 60 year old dollars that would otherwise result in inflation if there were full employment.
        Ericson2314 5y ago
        http://jwmason.org/slackwire/alternative-visions-of-inflation/ http://jwmason.org/slackwire/alternative-visions-of-inflatio... this one is fresh off the presses and gets deeper into the issues.
  - imtringued 5y ago
    I don't see how it is a failure. Our money is a failure because of the asymmetry between deposits and loans. You must pay your loan on time but you don't have to spend your deposits on time. The obvious answer is always extend the deadline or take away the deposit.
- imtringued 5y ago
  > My personal read is that a huge amount of that in the last decade or so has been a consequence of basement central bank rates. The central bank doesn't decide the interest rate, rather it is closer to an autonomous organization whose goal is to let interest rates follow the economy. Low interest rates are the result of the preference to hold deposits and the preference to not take on debt. If you want higher interest rates you'll have to raise the government debt ceiling or kill deposits with inflation/negative interest rates on deposits. Considering the demand for perpetual savings it only makes sense that governments would issue perpetual bonds. The reason why perpetual bonds are interesting is that they only have to be paid back when they have to be paid back.

ethbr0 5y ago

My personal read is that a huge amount of that in the last decade or so has been a consequence of basement central bank rates. When vast sums of institutional money are freed and chasing yield, eventually some of it leaks into residential property. And when a market that was precariously balanced with only retail buyers (due to density opposition and building economics) now has equal or more investors pile in? Well, prices do what they've done.

Ericson2314 5y ago
If we lower them we have no homes, if we raise them we have no jobs. The fact of the matter is conventional central banking is a failure, as is widespread private homeownership in metropolitan areas.
- ethbr0 5y ago
  Well, conventional central banking usually has the goals of "prevent another Great Depression" and "keep inflation under control." In that respect, they've been fairly successful. The side effects are... less good. But worse than a national depression? Eh.
  - Ericson2314 5y ago
    https://jwmason.org/slackwire/at-jacobin-the-fed-doesnt-work-for-you/ https://jwmason.org/slackwire/at-jacobin-the-fed-doesnt-work... well start with those side effects: inflation is kept in check by beating back workers whenever they get to powerful. Then take into account how lousy growth has been since the 1970s when they started doing that. If we could have had depressions but more amortized growth, and not "jobless recoveries" and anemic amortized growth, would that have been worse or better?
    - imtringued 5y ago
      That's why they changed the inflation target. If your goal is 2% then you have to raise rates before you even hit 2% nipping full employment in the bud. If you target an average rate of 2% then having a year with 5% and four with less than 2% lets you balance things out. Edit: I read the article and it basically boils down to rich people benefiting from low inflation because it doesn't erode their deposits and makes stocks/housing go up without increasing wages. It's pretty much true but it is also so obvious to be boring. Money from the past is power from the past. Maintaining the value of money earned 60 years ago is the same as maintaining power obtained 60 years ago. Holding onto money doesn't help workers be more productive so if they spent their 60 year old money it would get eroded by inflation. You therefore need to add some slack in the labor supply that is not used up by anyone, meaning nobody is going to miss that labor if it is paid by 60 year old dollars that would otherwise result in inflation if there were full employment.
      - Ericson2314 5y ago
        http://jwmason.org/slackwire/alternative-visions-of-inflation/ http://jwmason.org/slackwire/alternative-visions-of-inflatio... this one is fresh off the presses and gets deeper into the issues.
- imtringued 5y ago
  I don't see how it is a failure. Our money is a failure because of the asymmetry between deposits and loans. You must pay your loan on time but you don't have to spend your deposits on time. The obvious answer is always extend the deadline or take away the deposit.
imtringued 5y ago
> My personal read is that a huge amount of that in the last decade or so has been a consequence of basement central bank rates. The central bank doesn't decide the interest rate, rather it is closer to an autonomous organization whose goal is to let interest rates follow the economy. Low interest rates are the result of the preference to hold deposits and the preference to not take on debt. If you want higher interest rates you'll have to raise the government debt ceiling or kill deposits with inflation/negative interest rates on deposits. Considering the demand for perpetual savings it only makes sense that governments would issue perpetual bonds. The reason why perpetual bonds are interesting is that they only have to be paid back when they have to be paid back.