4 ms·

Alternative title by me: Remote work frees up $800b to be spent more effectively.

mastax 3y ago
When the paper value of an asset disappears you don't get the money back to spend elsewhere. Nobody does. Just like lending creates money, destruction of assets destroys money. Which happens to be what we want right now, as long as it can be done in an orderly fashion.
- stjohnswarts 3y ago
  That capital that would have been spent by real estate owners can now be spent by the company for pay raises, putting it into other investments, etc. Capitalism is a rough business and lots of winners and losers. Why am I supposed to feel sorry for these real estate guys? They never came to my aid when I got laid off in the past.
- SeanLuke 3y ago
  > Just like lending creates money, destruction of assets destroys money. Lending creates money? Banks can just, poof, will it into existence? Correpondingly, asset destruction destroys money? Like someone literally is setting fire to it? This is nonsense.
  - zeroonetwothree 3y ago
    Fractional reserve lending does create money.
    - xw4002 3y ago
      I suppose when we say these things we should say, fractional reserve lending creates some money. Otherwise one can get the impression that banks can create as much money as they want, which they can’t.
  - jgilias 3y ago
    Nope, that’s exactly how it works. Here’s something to read on money creation: https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...
  - jacknews 3y ago
    yes, basically, they just poof it into existence, and then it poofs out again when the loan is repaid. of course there are details ...
- CBarkleyU 3y ago
  How is something worth anything? How is something worth $800b? Is it because someone else would pay $800b for it? Why would they pay $800b for that somethin? Is it because they need to in order to make more money? If that all is true, then by destroying the need to pay $800b, we freed up $800b, right?
  - zeroonetwothree 3y ago
    This is not exactly correct. For example consider a single office building and say it’s worth $2 billion. But now demand has fallen and the most anyway will pay is $1 billion. The other $1 billion is not “lost”, but it’s not freed up either. It just means that the buyer no longer transfers it to the seller. So the buyer has an extra $1 billion to spend on other things and the seller has $1 billion less. The net effect on the economy should be approximately neutral (of course sometimes if asset prices fall too much then companies can go out of business which can hurt the economy etc)
    - CBarkleyU 3y ago
      >The net effect on the economy should be approximately neutral It wouldnt, and that's exactly my point. Company A is producing something of value (presumably) while Landlord B isnt (as evidenced by COVID-19 forcing us to WFH). So the $1 billion has now and always has had a wasted opportunity cost attached to it (who's making better use of it). In other words, if Apple wired me personally half of their yearly profit, do you think that the net effect on the economy would be neutral?
- zeroonetwothree 3y ago
  Lowered asset values does not destroy money in the sense that the money supply is unchanged (ignoring secondary effects, but those are hard ti predict anyway).
- navane 3y ago
  The value decreases because the anticipated rent decreases. This windfall is literally money that can be spend elsewhere by the entities that rent.
charles_f 3y ago
On the owner side "Remote work will transfer $800b from someone to anticipated it to someone who didn't as much. Neither will do anything valuable with it anyways." On the renter side "Remote work will allow all the rents to be redistributed to shareholders, who will stack it neatly in piles of virtual $100 bills"
- therealdrag0 3y ago
  Remote work adds 800b to suburb and small city real estate value. (Suburb because people not going into office will move further away on avg but also on average want a bigger house to have an office. Small cities from people moving from coastal cities to places like Boise and Austin.)

When the paper value of an asset disappears you don't get the money back to spend elsewhere. Nobody does. Just like lending creates money, destruction of assets destroys money. Which happens to be what we want right now, as long as it can be done in an orderly fashion.

stjohnswarts 3y ago
That capital that would have been spent by real estate owners can now be spent by the company for pay raises, putting it into other investments, etc. Capitalism is a rough business and lots of winners and losers. Why am I supposed to feel sorry for these real estate guys? They never came to my aid when I got laid off in the past.
SeanLuke 3y ago
> Just like lending creates money, destruction of assets destroys money. Lending creates money? Banks can just, poof, will it into existence? Correpondingly, asset destruction destroys money? Like someone literally is setting fire to it? This is nonsense.
- zeroonetwothree 3y ago
  Fractional reserve lending does create money.
  - xw4002 3y ago
    I suppose when we say these things we should say, fractional reserve lending creates some money. Otherwise one can get the impression that banks can create as much money as they want, which they can’t.
- jgilias 3y ago
  Nope, that’s exactly how it works. Here’s something to read on money creation: https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...
- jacknews 3y ago
  yes, basically, they just poof it into existence, and then it poofs out again when the loan is repaid. of course there are details ...
CBarkleyU 3y ago
How is something worth anything? How is something worth $800b? Is it because someone else would pay $800b for it? Why would they pay $800b for that somethin? Is it because they need to in order to make more money? If that all is true, then by destroying the need to pay $800b, we freed up $800b, right?
- zeroonetwothree 3y ago
  This is not exactly correct. For example consider a single office building and say it’s worth $2 billion. But now demand has fallen and the most anyway will pay is $1 billion. The other $1 billion is not “lost”, but it’s not freed up either. It just means that the buyer no longer transfers it to the seller. So the buyer has an extra $1 billion to spend on other things and the seller has $1 billion less. The net effect on the economy should be approximately neutral (of course sometimes if asset prices fall too much then companies can go out of business which can hurt the economy etc)
  - CBarkleyU 3y ago
    >The net effect on the economy should be approximately neutral It wouldnt, and that's exactly my point. Company A is producing something of value (presumably) while Landlord B isnt (as evidenced by COVID-19 forcing us to WFH). So the $1 billion has now and always has had a wasted opportunity cost attached to it (who's making better use of it). In other words, if Apple wired me personally half of their yearly profit, do you think that the net effect on the economy would be neutral?
zeroonetwothree 3y ago
Lowered asset values does not destroy money in the sense that the money supply is unchanged (ignoring secondary effects, but those are hard ti predict anyway).
navane 3y ago
The value decreases because the anticipated rent decreases. This windfall is literally money that can be spend elsewhere by the entities that rent.

charles_f 3y ago

On the owner side "Remote work will transfer $800b from someone to anticipated it to someone who didn't as much. Neither will do anything valuable with it anyways." On the renter side "Remote work will allow all the rents to be redistributed to shareholders, who will stack it neatly in piles of virtual $100 bills"

therealdrag0 3y ago
Remote work adds 800b to suburb and small city real estate value. (Suburb because people not going into office will move further away on avg but also on average want a bigger house to have an office. Small cities from people moving from coastal cities to places like Boise and Austin.)