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> In the other camp are those who are quite concerned about the financial, economic, and political consequences if paper wealth reverts to historical norms in r
by elihu 5y ago
> In the other camp are those who are quite concerned about the financial, economic, and political consequences if paper wealth reverts to historical norms in relation to global income.
What about the camp that is worried that paper wealth doesn't revert to norms? I mean, if a person doesn't already own a house, then inflated prices work against them.
- xwdv 5y agoThat’s more of a personal problem. Paper wealth reverting to norms would be more of a societal problem, and thus is more important to prevent.
- TrainedMonkey 5y agoA class of people unable to afford a home sounds like a societal problem.
- sokoloff 5y agoA class of people unable to afford housing is a societal problem. Unable to purchase a home in a specific city is not nearly so obviously a problem. (Much of Europe seems happy to rent for life.)
- deleted 5y ago[deleted]
- diffeomorphism 5y agoSame difference. Rent prices and house prices are tied. If houses are unaffordable, so is rent.
- clippablematt 5y agoMuch of Europe has to rent for life, but isn’t happy about it. (at least in my experience of like everyone I know).
- sokoloff 5y agoI’ve got a couple close friends who relocated to Europe and many colleagues. All are in high-tech and all seem perfectly content to rent (which I don’t understand but my close friends assure me it’s the case [and when something breaks or leaks in my house, I do understand some of the appeal]).
- csomar 5y agoMaybe they are happy to rent because they are temporarily in Europe?
- zajio1am 5y agoNot really. In EU, 70 % of population owns, while 30 % rents: https://ec.europa.eu/eurostat/cache/digpub/housing/bloc-1a.html https://ec.europa.eu/eurostat/cache/digpub/housing/bloc-1a.h...
- linguae 5y agoBut if economic opportunity is concentrated in cities that are too expensive for average working people to live in (even when renting instead of buying), then this is a societal problem. Even if the shift to working from home for some occupations becomes permanent, not all jobs can be performed from home. While some metropolises such as Tokyo seem to be set up well for providing housing at a wide range of price points, others such as the San Francisco Bay Area and Los Angeles do a much worse job; there are some people who regularly commute 2-3 hours each way from these metro areas because this is all they can afford, yet the job markets in the Central Valley (near the Bay Area) or the Inland Empire and Antelope Valley (both near Los Angeles) areas are rather anemic at best. For many of these people, the choice isn't between a condo in Fremont versus a single-family house in Tracy. Instead, it's an apartment in a place like Stockton or Modesto versus moving outside of the orbit of the Bay Area; that's how bad the housing crisis has gotten for many people. The chief cause of this is zoning regulations and other policies in the Bay Area and Los Angeles that discourage denser development, thus encouraging sprawl further and further out; hence, the "drive until you qualify" phenomenon. The normalization of mega-commuting has social and environmental consequences. Yes, there are cheaper metro areas, but these cheaper metro areas tend to offer fewer job opportunities compared to the more popular metro areas. Part of what fueled the social divide between "blue state" and "red state" America is economic opportunity being increasingly concentrated in a handful of coastal metro areas, while these opportunities have largely failed to trickle down to much of rural America and the Rust Belt. What's needed are two solutions: 1. Change the zoning policies of certain metro areas in order to accommodate the demand through densification instead of sprawl. 2. Find ways to encourage the economic development of areas outside of the coasts.
- seanmcdirmid 5y agoWhat about a Singapore style solution? As a city state, they don't have the benefit of having anywhere else to go, so public housing schemes (government provides affordable apartments to rent, no short term speculations allowed) are the main way to go. Or we could make housing depreciate like in Tokyo (and allow for low end small rooms without central heating).
- 5y ago
- JacobThreeThree 5y agoTranslation: too bad, you'll never own anything.
- twiddling 5y agoJust eat lentils and be frugal
- 01100011 5y agoI don't think that's so bad unless you need that ownership to build wealth. In this country, it seems a lot of our wealth was built up via land ownership. Contrast the US, which encouraged wider land ownership, with Mexico which granted land to a wealthy few and excluded the lower classes. If we can come up with a consistent policy scheme(taxation and incentives) which can undo land ownership as being a sure-fire way to build wealth(maybe a land value tax?) then it's perhaps not so bad to have a nation of renters.
- literallyWTF 5y agoAh yes, let’s lock out entire swaths of people from being able to purchase any sort of permanent dwelling. All hail our glorious landlords.
- geysersam 5y agoIt's exactly the other way around. "Paper wealth" is nothing, everyone can get enormous wealth by adding five zeros to the dollar bills. It has no relation to the real world means of production, to the GDP. If house prices lose 80% tomorrow all factories will be intact, all people will still have the same skills to perform their work. The impact would be artificial. On the other hand, not being able to find ample living space is a real problem and a drag on the economy.
- shmel 5y ago> Paper wealth reverting to norms would be more of a societal problem What is the problem again? Rich people getting less rich? Imaginary number of net wealth getting lower?
- mullingitover 5y ago2008 showed us where this road goes. The wealthy are the tiniest sliver of the group of people whose lives will be ruined. If anything, when the dust settles the truly wealthy (those whose wealth isn't riding on leverage) will end up even wealthier because they'll be sitting on capital that they can use to buy up even more assets at fire sale rates.
- chii 5y ago> truly wealthy (those whose wealth isn't riding on leverage) incredibly convenient to just dismiss those people who lost wealth this way, and claim that the "truly wealthy" is to be blamed.
- mullingitover 5y agoI...did neither of those things?
- flipbrad 5y agoA fair few pension funds and charitable endowments have wealth locked up in property. Not saying that alone justifies protecting asset values, but it does have societal significance worth bearing in mind.
- strken 5y agoHere are a few obvious problems: - retirement plans often rely on equity from real estate, and so do some nursing home admissions - as per 2008, when people have more money remaining on a mortgage than the underlying asset (home) is worth, some of them will declare bankruptcy - when rich people suddenly have a lot less nominal cash, they can't fund their businesses by liquidating assets, so they cut costs, and then those costs have to find new jobs, which can take years and is hugely disruptive for everyone[0] Overall there's an argument to be made for doing it anyway, but there are pretty clear downsides to causing an economic crisis, even if the economy eventually reaches a better equilibrium state. [0] note that I'm not supporting trickle-down economics, just warning about the disruption that suddenly changing the distribution of wealth will cause
- spaetzleesser 5y agoI guess you loved 2008 bailouts then and will be happy to bail out wealthy people again next crash.
- edgyquant 5y agoYes this is a big problem in the west because the government has incentive to ensure the price of houses continue to go up. This is, apparently, especially an American problem where there’s a social stigma about renting (though it’s going away)