5 ms·

In the 60s you could buy a median home with 2.1x the median income. In 2019, the ratio is 3.5x. https://themreport.com/news/data/02-02-2021/pressing-housing-ma

In the 60s you could buy a median home with 2.1x the median income. In 2019, the ratio is 3.5x. https://themreport.com/news/data/02-02-2021/pressing-housing-matters-in-the-1960s-and-today https://themreport.com/news/data/02-02-2021/pressing-housing...

ajmurmann 4y ago
I think this here is the key. Automation (not globalisation) has removed many entry level and low so jobs. At the same time we have artificial scarcity through regulations in the housing market to keep neighborhood character and see the cost of required services that cannot be automated easily like health care and education go up and up. Instead of increasing wealth redistribution to compensate for the wealth centralization from automation, we reduce mechanisms that transfer wealth to supposedly cut cost and because regulation is local but capital is global.
- danuker 4y ago
  > education I argue it can be automated. I have learned more from ML MOOCs than from my Romanian college.
  - ajmurmann 4y ago
    100% agree that we could, but social dynamics seem to prevent it from happening.
- kneebonian 4y ago
  I'd argue it's the other way all of the things you listed, healthcare, education, and housing are hugely subsidized by the governemnt. Healthcare through medica(r|d)e, education through pell grants and loans, and homes through the tax breaks associated. These things all together result in the massive increase in cost of these things, because the government is redistributing wealth from others to those industries.
  - ajmurmann 4y ago
    It's an interesting dynamic. Because of rising cost, consumption of the services gets subsidized in ways that distort the market. In addition lots of regulations and controls are put in place which further drive up cost. Interesting paper on this: https://www.niskanencenter.org/cost-disease-socialism-how-subsidizing-costs-while-restricting-supply-drives-americas-fiscal-imbalance/ https://www.niskanencenter.org/cost-disease-socialism-how-su...
  - jimbokun 4y ago
    I agree with you 100%, and its seems very difficult to explain this to people in terms of politics. The intuition is that grants and loans make education more affordable, but in the medium to long term they just inflate the cost of tuition for everyone. Similarly for healthcare and housing. Feel like we either need to socialize these sectors of the economy, or go full free market. But a system half way in between doesn't work. (My personal preference would be to largely socialize healthcare and education, while pushing for more free market reforms for housing, to encourage new development and increase the housing supply.)
badpun 4y ago
Median house in the 60s is not the same as median house in 2022. You could probably buy a median house from the 60s (i.e. 1000 sqft, no air condition, in a polluted area (this was pre-EPA time, so almost everywhere was polluted) etc.) right now for way below current median.
- arbitrary_name 4y ago
  I hear this every time. It doesn't effing matter if i don't have the option to buy a 1960s size house, let alone the newer larger home, die to price increases and high interest rates. Your analysis does not explain away decades of mediocre wage growth in the face of inflation in healthcare, education and housing costs.
  - gruez 4y ago
    > I hear this every time. It doesn't effing matter if i don't have the option to buy a 1960s size house, let alone the newer larger home, die to price increases and high interest rates. I mean, you could, either in the form of apartments (which are essentially smaller houses) or houses in less desirable areas (shittier houses).
  - badpun 4y ago
    But you do have an option to buy an 1960s house. They weren't all demolished - they're still here and naturally some are for sale. > Your analysis does not explain away decades of mediocre wage growth in the face of inflation in healthcare, education and housing costs. Wages are typically computed per household. In the late 1960, a tsunami of divorces and single-parent households started occuring (something that wasn't widely culturally accepted before then), which makes comparisons of household wages before and after an apples to oranges comparison. It's basically bad stats. Re: rising costs of (higher) education and healthcare. It's partially similar to the housing situation. The standard of service people get (and expect to get) today is dramatically higher than in 1960s. In 1960s, we didn't even have MRIs... Nowadays medicine is packed with expensive technology and drugs - that has to inflate the price. Similarly, today's university environment is a combination of an university of the past with a high-class resort (the student facilities are basically on the level of good hotels in many cases) - that's gotta inflate the price too. Add extractionary practices of the medicine insurance companies cartel and university administrators on top of that, and that pretty much explains current prices.

ajmurmann 4y ago

I think this here is the key. Automation (not globalisation) has removed many entry level and low so jobs. At the same time we have artificial scarcity through regulations in the housing market to keep neighborhood character and see the cost of required services that cannot be automated easily like health care and education go up and up. Instead of increasing wealth redistribution to compensate for the wealth centralization from automation, we reduce mechanisms that transfer wealth to supposedly cut cost and because regulation is local but capital is global.

danuker 4y ago
> education I argue it can be automated. I have learned more from ML MOOCs than from my Romanian college.
- ajmurmann 4y ago
  100% agree that we could, but social dynamics seem to prevent it from happening.
kneebonian 4y ago
I'd argue it's the other way all of the things you listed, healthcare, education, and housing are hugely subsidized by the governemnt. Healthcare through medica(r|d)e, education through pell grants and loans, and homes through the tax breaks associated. These things all together result in the massive increase in cost of these things, because the government is redistributing wealth from others to those industries.
- ajmurmann 4y ago
  It's an interesting dynamic. Because of rising cost, consumption of the services gets subsidized in ways that distort the market. In addition lots of regulations and controls are put in place which further drive up cost. Interesting paper on this: https://www.niskanencenter.org/cost-disease-socialism-how-subsidizing-costs-while-restricting-supply-drives-americas-fiscal-imbalance/ https://www.niskanencenter.org/cost-disease-socialism-how-su...
- jimbokun 4y ago
  I agree with you 100%, and its seems very difficult to explain this to people in terms of politics. The intuition is that grants and loans make education more affordable, but in the medium to long term they just inflate the cost of tuition for everyone. Similarly for healthcare and housing. Feel like we either need to socialize these sectors of the economy, or go full free market. But a system half way in between doesn't work. (My personal preference would be to largely socialize healthcare and education, while pushing for more free market reforms for housing, to encourage new development and increase the housing supply.)

badpun 4y ago

Median house in the 60s is not the same as median house in 2022. You could probably buy a median house from the 60s (i.e. 1000 sqft, no air condition, in a polluted area (this was pre-EPA time, so almost everywhere was polluted) etc.) right now for way below current median.

arbitrary_name 4y ago
I hear this every time. It doesn't effing matter if i don't have the option to buy a 1960s size house, let alone the newer larger home, die to price increases and high interest rates. Your analysis does not explain away decades of mediocre wage growth in the face of inflation in healthcare, education and housing costs.
- gruez 4y ago
  > I hear this every time. It doesn't effing matter if i don't have the option to buy a 1960s size house, let alone the newer larger home, die to price increases and high interest rates. I mean, you could, either in the form of apartments (which are essentially smaller houses) or houses in less desirable areas (shittier houses).
- badpun 4y ago
  But you do have an option to buy an 1960s house. They weren't all demolished - they're still here and naturally some are for sale. > Your analysis does not explain away decades of mediocre wage growth in the face of inflation in healthcare, education and housing costs. Wages are typically computed per household. In the late 1960, a tsunami of divorces and single-parent households started occuring (something that wasn't widely culturally accepted before then), which makes comparisons of household wages before and after an apples to oranges comparison. It's basically bad stats. Re: rising costs of (higher) education and healthcare. It's partially similar to the housing situation. The standard of service people get (and expect to get) today is dramatically higher than in 1960s. In 1960s, we didn't even have MRIs... Nowadays medicine is packed with expensive technology and drugs - that has to inflate the price. Similarly, today's university environment is a combination of an university of the past with a high-class resort (the student facilities are basically on the level of good hotels in many cases) - that's gotta inflate the price too. Add extractionary practices of the medicine insurance companies cartel and university administrators on top of that, and that pretty much explains current prices.