5 ms·

i agree 100% , but what is the solution to that ? just raising wages en masse erodes the power of money and leads to inflation.

pstuart 3y ago
I thought it was the influx of new money printed, which we've done in the form of Quantitative Easing, multiple bail outs, etc.
- almost_usual 3y ago
  Which mostly trickles up.
  - mtsr 3y ago
    It didn’t even need to trickle up, it was exclusively handed out to the top on the assumption of “trickle down economy” being a real thing.
- syockit 3y ago
  You print more money because you have to give out more money, whether if it's in the form of handouts or in the form of extra wages.
  - pstuart 3y ago
    Employers aren't printing up more money. Yes, labor costs going up impact profits but what about labor costs of management? That has gone up significantly: "From 1978 to 2021, CEO pay based on realized compensation grew by 1,460%, far outstripping S&P stock market growth (1,063%) and top 0.1% earnings growth (which was 385% between 1978 and 2020, according to the latest data available). In contrast, compensation of the typical worker grew by just 18.1% from 1978 to 2021" Source: https://www.epi.org/publication/ceo-pay-in-2021/#:~:text=From%201978%20to%202021%2C%20CEO,18.1%25%20from%201978%20to%202021 https://www.epi.org/publication/ceo-pay-in-2021/#:~:text=Fro....
dclowd9901 3y ago
It seems like the primary consumer of our money is the artificial lack of housing inventory brought upon by the ability of folks to own more than one property. I suggest (and have suggested numerous times) that we disallow ownership of property for profit. Create a system that allows people to “buy” property short term through government loan structures that have very low interest rates and allows them to create an equity building mechanism early on. On paper it would have all the benefits of purchase with all of the benefits of leasing as well. The flood of new available property would absolutely crash our current economy, since it’s so extended on property ownership, but we did it wrong and we need to correct.
lifeisstillgood 3y ago
Inflation can be combatted by taxing it out of the economy - the issue is who do we tax. One should always tax the rich first - like robbing banks that's where the money is
- bluGill 3y ago
  The money is in the middle class though. Sure the rich have a bunch, but the middle class has far more. In real terms taxing the rich won't bring in enough money to count unless you redefine rich to cover most middle class.
  - lifeisstillgood 3y ago
    https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#range:2008.1,2023.1 https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr... So if i am reading the very first graph right, the top 10% wealthy in USA in 2023 held about 96Trn out of 140 Trn. The top 10 % is not usually middle class
  - momirlan 3y ago
    True, taxing and inflation hit the middle class the hardest. The upper classes don't have "income", they borrow funds based on their assets and have tax specialists that can launder any income. They don't have mortgages either.
usrbinbash 3y ago
The economic system seem to be more than capable of plunging itself into an inflation with stagnating wages already...and still rake in money left right and center.
vsareto 3y ago
The housing market is probably permanently ruined for individual family buyers as long as they are competing with businesses/individuals buying multiple residential properties as investments. Subsidies or government backed contributions won't be the answer. Universities have a societal function and could conceivable operate without profit in mind, but they still chose to be greedy and act like for-profit businesses once government backed loans became a thing. The government tried to fix access to education by directly injecting cash via students instead of fixing it through the universities. Taking the same approach with home buyers would be a mistake because real estate obviously is meant to be for-profit and acts that way, so they will obviously raise prices as well. So you'll probably need to fuck over a lot of banks, investors, construction and real estate companies to get housing prices accessible to the wider population and change economic interactions in that market. I wouldn't count on that though - the government will probably choose to fix it through backed loans or subsidies again, if they do anything.
- hollerith 3y ago
  It wouldn't be Hacker News without the constant stream economically-illiterate ideas for "improving" our lives in the comments!
  - vsareto 3y ago
    I'm not sure what you mean? Could you explain? Does it really bother you someone could be ignorant of something here?
    - hollerith 3y ago
      >Could you explain? Someone who understood basic economics wouldn't assert that investors are ruining the housing market for individual family buyers without explaining how the housing market or one particular housing market is different from all the other markets were investors are helpful for bringing products and services to individuals and families. I am sympathetic for example to the argument that the housing market in Vancouver and perhaps other parts of Canada is being distorted to the detriment of families by wealthy Chinese wishing to establish a safe trove of assets outside the reach of the Chinese government. But there are more barriers to Chinese investors (and Chinese visitors) in the US than in Canada, and the US is 9 times more populous than Canada, so that makes any particular severity of distortion cause by Chinese investors at least 9 times less likely in the US than in China. Non-Chinese investors who have an accurate understanding of the other investments available to them, on the other hand, will tend to invest in housing only when they seriously expect the demand for housing to increase--"expect" as in actually willing to put money on the outcome, not merely to opine on the outcome in internet forums--so their investment helps out families on net by helping to increase the supply of housing to meet the increase in demand. >Does it really bother you someone could be ignorant of something here? I'm not sure I understand the question. If you'd phrase your comment as a question about economics, I wouldn't've replied like I did (with a complaint in the form of sarcasm). Most humans are vulnerable to misinformation if it is repeated sufficiently often by a sufficiently diverse set of writers or speakers, and certain economically-impossible or -implausible arguments are repeated often enough on HN that I consider it worth my time to try to counter.
mostlylurks 3y ago
You could remove all the arcane laws, regulations, and zoning which make constructing new houses ludicrously expensive. Most people would be perfectly happy to live even in a shoddy log cabin built by them and their family if it meant they would could save those hundreds of thousands or even millions of dollars they would've spent otherwise to improve their lives in other ways. This alone could be enough to shave decades off the career of the average person. You could disallow corporate ownership of dwellings of any sort, and heavily tax ownership of more than two homes per family unit. You could provide significant tax benefits to lifestyles that approach self-sufficiency, such as people in rural areas that grow their own food. You could mandate a quota of completely remote workers for many industries, encouraging the diffusion of people and opportunities across the country, instead of everyone rushing to expensive cities in hopes of finding work.
- brookst 3y ago
  > You could disallow corporate ownership of dwellings of any sort Does that mean no high density residential? I can’t see how individuals build apartment buildings.
  - jddj 3y ago
    How do individuals end up owning apartments today?
    - brookst 3y ago
      They mostly don’t? I’m sure there are a few, but the vast majority are financed, built, and operated by corporations.
      - jddj 3y ago
        I don't know enough about the US market to speak too strongly here, but I'd have to imagine based on my experience elsewhere that if you wanted to buy a flat from a property developer right now you could. I would have thought that "build to let" would be the rarer case, but like I said I might be blind to the idiosyncrasies of the US here

pstuart 3y ago

I thought it was the influx of new money printed, which we've done in the form of Quantitative Easing, multiple bail outs, etc.

almost_usual 3y ago
Which mostly trickles up.
- mtsr 3y ago
  It didn’t even need to trickle up, it was exclusively handed out to the top on the assumption of “trickle down economy” being a real thing.
syockit 3y ago
You print more money because you have to give out more money, whether if it's in the form of handouts or in the form of extra wages.
- pstuart 3y ago
  Employers aren't printing up more money. Yes, labor costs going up impact profits but what about labor costs of management? That has gone up significantly: "From 1978 to 2021, CEO pay based on realized compensation grew by 1,460%, far outstripping S&P stock market growth (1,063%) and top 0.1% earnings growth (which was 385% between 1978 and 2020, according to the latest data available). In contrast, compensation of the typical worker grew by just 18.1% from 1978 to 2021" Source: https://www.epi.org/publication/ceo-pay-in-2021/#:~:text=From%201978%20to%202021%2C%20CEO,18.1%25%20from%201978%20to%202021 https://www.epi.org/publication/ceo-pay-in-2021/#:~:text=Fro....

dclowd9901 3y ago

It seems like the primary consumer of our money is the artificial lack of housing inventory brought upon by the ability of folks to own more than one property. I suggest (and have suggested numerous times) that we disallow ownership of property for profit. Create a system that allows people to “buy” property short term through government loan structures that have very low interest rates and allows them to create an equity building mechanism early on. On paper it would have all the benefits of purchase with all of the benefits of leasing as well. The flood of new available property would absolutely crash our current economy, since it’s so extended on property ownership, but we did it wrong and we need to correct.

lifeisstillgood 3y ago

Inflation can be combatted by taxing it out of the economy - the issue is who do we tax. One should always tax the rich first - like robbing banks that's where the money is

bluGill 3y ago
The money is in the middle class though. Sure the rich have a bunch, but the middle class has far more. In real terms taxing the rich won't bring in enough money to count unless you redefine rich to cover most middle class.
- lifeisstillgood 3y ago
  https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#range:2008.1,2023.1 https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr... So if i am reading the very first graph right, the top 10% wealthy in USA in 2023 held about 96Trn out of 140 Trn. The top 10 % is not usually middle class
- momirlan 3y ago
  True, taxing and inflation hit the middle class the hardest. The upper classes don't have "income", they borrow funds based on their assets and have tax specialists that can launder any income. They don't have mortgages either.

usrbinbash 3y ago

The economic system seem to be more than capable of plunging itself into an inflation with stagnating wages already...and still rake in money left right and center.

vsareto 3y ago

The housing market is probably permanently ruined for individual family buyers as long as they are competing with businesses/individuals buying multiple residential properties as investments. Subsidies or government backed contributions won't be the answer. Universities have a societal function and could conceivable operate without profit in mind, but they still chose to be greedy and act like for-profit businesses once government backed loans became a thing. The government tried to fix access to education by directly injecting cash via students instead of fixing it through the universities. Taking the same approach with home buyers would be a mistake because real estate obviously is meant to be for-profit and acts that way, so they will obviously raise prices as well. So you'll probably need to fuck over a lot of banks, investors, construction and real estate companies to get housing prices accessible to the wider population and change economic interactions in that market. I wouldn't count on that though - the government will probably choose to fix it through backed loans or subsidies again, if they do anything.

hollerith 3y ago
It wouldn't be Hacker News without the constant stream economically-illiterate ideas for "improving" our lives in the comments!
- vsareto 3y ago
  I'm not sure what you mean? Could you explain? Does it really bother you someone could be ignorant of something here?
  - hollerith 3y ago
    >Could you explain? Someone who understood basic economics wouldn't assert that investors are ruining the housing market for individual family buyers without explaining how the housing market or one particular housing market is different from all the other markets were investors are helpful for bringing products and services to individuals and families. I am sympathetic for example to the argument that the housing market in Vancouver and perhaps other parts of Canada is being distorted to the detriment of families by wealthy Chinese wishing to establish a safe trove of assets outside the reach of the Chinese government. But there are more barriers to Chinese investors (and Chinese visitors) in the US than in Canada, and the US is 9 times more populous than Canada, so that makes any particular severity of distortion cause by Chinese investors at least 9 times less likely in the US than in China. Non-Chinese investors who have an accurate understanding of the other investments available to them, on the other hand, will tend to invest in housing only when they seriously expect the demand for housing to increase--"expect" as in actually willing to put money on the outcome, not merely to opine on the outcome in internet forums--so their investment helps out families on net by helping to increase the supply of housing to meet the increase in demand. >Does it really bother you someone could be ignorant of something here? I'm not sure I understand the question. If you'd phrase your comment as a question about economics, I wouldn't've replied like I did (with a complaint in the form of sarcasm). Most humans are vulnerable to misinformation if it is repeated sufficiently often by a sufficiently diverse set of writers or speakers, and certain economically-impossible or -implausible arguments are repeated often enough on HN that I consider it worth my time to try to counter.

mostlylurks 3y ago

You could remove all the arcane laws, regulations, and zoning which make constructing new houses ludicrously expensive. Most people would be perfectly happy to live even in a shoddy log cabin built by them and their family if it meant they would could save those hundreds of thousands or even millions of dollars they would've spent otherwise to improve their lives in other ways. This alone could be enough to shave decades off the career of the average person. You could disallow corporate ownership of dwellings of any sort, and heavily tax ownership of more than two homes per family unit. You could provide significant tax benefits to lifestyles that approach self-sufficiency, such as people in rural areas that grow their own food. You could mandate a quota of completely remote workers for many industries, encouraging the diffusion of people and opportunities across the country, instead of everyone rushing to expensive cities in hopes of finding work.

brookst 3y ago
> You could disallow corporate ownership of dwellings of any sort Does that mean no high density residential? I can’t see how individuals build apartment buildings.
- jddj 3y ago
  How do individuals end up owning apartments today?
  - brookst 3y ago
    They mostly don’t? I’m sure there are a few, but the vast majority are financed, built, and operated by corporations.
    - jddj 3y ago
      I don't know enough about the US market to speak too strongly here, but I'd have to imagine based on my experience elsewhere that if you wanted to buy a flat from a property developer right now you could. I would have thought that "build to let" would be the rarer case, but like I said I might be blind to the idiosyncrasies of the US here