4 ms·

I would just like to point out that a recession is a prime example of why most of our current "scarcity" is artificial. In a recession workers are still present

I would just like to point out that a recession is a prime example of why most of our current "scarcity" is artificial. In a recession workers are still present and physical capital is still present. The raw materials are still present and the mechanisms of government are still present. The problems lie with the financial system that facilitates exchange. A recession is not caused by "not enough resources" it's the aftermath of people taking too many risks with fake paper money. It's a non-sequitur to imply that a recession means that the government cant take care of its citizens.

lazide 4y ago
Since expansion (often into areas that don’t work) and corresponding contractions (when that which doesn’t work is found and then stops as it becomes unsustainable) happens in every system humans have ever tried that I’m aware of, what do you think is the alternative?
- softcactus 4y ago
  I don't think there is an alternative to free markets, but I do believe that we can use the power of government to set price floors. For example let's say the government provides free housing for all citizens regardless of means testing. It doesn't have to be great housing, but it establishes a price floor that all landlords have to compete with by offering better housing or lowering their rents. No fear of homelessness, starvation, or death by uninsured illness also establishes a labor floor. People can take more time for a job search, or quit jobs that are exploitative/pay poorly. The government doesn't have to mandate a minimum wage, since jobs now must offer something more than a day-to-day subsistence. With advances in productivity we are more than capable of doing this but we allocate capital to other things in pursuit of profit. Think of how much capital was poured into web3 speculation that could have been used to actually establish a price floor for housing or a wage floor for labor.
  - lazide 4y ago
    Why would a landlord participate, or instead move to a more profitable outlet for their effort and capital? If even after that there isn’t enough housing (say it’s a desirable area so people want to move in), who is going to build it? I’ve seen it work short term where there is existing stock built under a different scheme that can be ‘locked in’ to this. But then it quickly goes to a different kind of broken, where housing is ‘cheap’ but impossible to find unless you can get a friend to (usually illegally) sublet. The issue for a long time has been the fed printing money with pretty much no interrupting since ‘01. When they tried to take a break around ‘05 things got bad by ‘08 and they turned it on even higher. When money is cheap, people do steadily riskier and riskier things until it explodes. Then money has to get more expensive to help rein in the stupidity. So we’ll likely see housing get more affordable again for a bit. If we really wanted cheap housing, we need decently high interest rates. Here is the fed funds rate chart [https://fred.stlouisfed.org/series/FEDFUNDS https://fred.stlouisfed.org/series/FEDFUNDS] Here is the case Schiller housing price index [https://fred.stlouisfed.org/series/CSUSHPISA https://fred.stlouisfed.org/series/CSUSHPISA] When money is cheap, people try to make more money by buying and leveraging assets. Homeowners do the same thing, though they usually don’t realize it. That pushes demand and prices up. After all, people will buy more when it’s ‘cheap’, and that is based off the monthly loan servicing costs - aka interest rate, in large part.
    - softcactus 4y ago
      The free housing I am referring to is housing built and owned by the government. Landlords are participating in the market because they have to rent apartments to make money. Look at Vienna's housing model if you want to see a successful example of this. I am aware that cheap Fed money keeps our markets propped up with speculative investing. My point is that food, housing, and medicine are not constrained by financial bottlenecks, it's a matter of political will. If we wanted to provide food, shelter, and medicine for all of our citizens for free we easily could. However that would reduce profit margins as labor costs would rise in an already relatively (compared to the developing world) labor market. Free housing could be provided but it would be detrimental to REITs and banks who provide mortgages, so we don't actually want to solve the problem.

lazide 4y ago

Since expansion (often into areas that don’t work) and corresponding contractions (when that which doesn’t work is found and then stops as it becomes unsustainable) happens in every system humans have ever tried that I’m aware of, what do you think is the alternative?

softcactus 4y ago
I don't think there is an alternative to free markets, but I do believe that we can use the power of government to set price floors. For example let's say the government provides free housing for all citizens regardless of means testing. It doesn't have to be great housing, but it establishes a price floor that all landlords have to compete with by offering better housing or lowering their rents. No fear of homelessness, starvation, or death by uninsured illness also establishes a labor floor. People can take more time for a job search, or quit jobs that are exploitative/pay poorly. The government doesn't have to mandate a minimum wage, since jobs now must offer something more than a day-to-day subsistence. With advances in productivity we are more than capable of doing this but we allocate capital to other things in pursuit of profit. Think of how much capital was poured into web3 speculation that could have been used to actually establish a price floor for housing or a wage floor for labor.
- lazide 4y ago
  Why would a landlord participate, or instead move to a more profitable outlet for their effort and capital? If even after that there isn’t enough housing (say it’s a desirable area so people want to move in), who is going to build it? I’ve seen it work short term where there is existing stock built under a different scheme that can be ‘locked in’ to this. But then it quickly goes to a different kind of broken, where housing is ‘cheap’ but impossible to find unless you can get a friend to (usually illegally) sublet. The issue for a long time has been the fed printing money with pretty much no interrupting since ‘01. When they tried to take a break around ‘05 things got bad by ‘08 and they turned it on even higher. When money is cheap, people do steadily riskier and riskier things until it explodes. Then money has to get more expensive to help rein in the stupidity. So we’ll likely see housing get more affordable again for a bit. If we really wanted cheap housing, we need decently high interest rates. Here is the fed funds rate chart [https://fred.stlouisfed.org/series/FEDFUNDS https://fred.stlouisfed.org/series/FEDFUNDS] Here is the case Schiller housing price index [https://fred.stlouisfed.org/series/CSUSHPISA https://fred.stlouisfed.org/series/CSUSHPISA] When money is cheap, people try to make more money by buying and leveraging assets. Homeowners do the same thing, though they usually don’t realize it. That pushes demand and prices up. After all, people will buy more when it’s ‘cheap’, and that is based off the monthly loan servicing costs - aka interest rate, in large part.
  - softcactus 4y ago
    The free housing I am referring to is housing built and owned by the government. Landlords are participating in the market because they have to rent apartments to make money. Look at Vienna's housing model if you want to see a successful example of this. I am aware that cheap Fed money keeps our markets propped up with speculative investing. My point is that food, housing, and medicine are not constrained by financial bottlenecks, it's a matter of political will. If we wanted to provide food, shelter, and medicine for all of our citizens for free we easily could. However that would reduce profit margins as labor costs would rise in an already relatively (compared to the developing world) labor market. Free housing could be provided but it would be detrimental to REITs and banks who provide mortgages, so we don't actually want to solve the problem.