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It seems like the author is willfully miss-understanding Trudeau's statement. Value and affordability can be considered independently. Increasing median incom

It seems like the author is willfully miss-understanding Trudeau's statement. Value and affordability can be considered independently. Increasing median income and economic growth both increase affordability, even if housing costs track inflation.

hammock 2y ago
Can you explain how?
- s1artibartfast 2y ago
  I thought I did, but can give an example. If the median income increases from 50K to 100K (adjusting for inflation), and houses stay at 500k (adjusting for inflation), they have become more affordable without losing value.
  - eddd-ddde 2y ago
    But isn't money losing value then? Implicitly making the houses worth 500K also lose theirs?
    - s1artibartfast 2y ago
      I dont understand your question.
  - hammock 2y ago
    Well that begs the question, how are you going to double income beyond the rate of inflation?
    - s1artibartfast 2y ago
      If it happens, it will be the same way it has been done for hundreds of years. Increase in productivity. More widgets and stuff produced per worker is the only way to beat inflation. This is the fundamental economic goal of nations which seek prosperity.
      - hammock 2y ago
        How does the correlation of productivity vs income look for the last 50 years?
    - dopylitty 2y ago
      Rather than doubling all income one option would be to make the existing income more evenly spread out. For instance McDonalds' CEO makes ~$20 million a year[0] and they paid out $6.6/share with 726M shares[1] to parasite shareholders[2] while the average non-CEO employee makes $25k a year[3]. Since there are 150000 employees working for McDonalds that means lowering the CEO salary to $200k and eliminating shareholder payouts would free up close to $5 billion/year. If that $5 billion were distributed evenly to all employees they would take in an additional $33k/year, more than doubling their salaries. Of course all these numbers are estimates and there are caveats but the overall point is there's a lot of money out there that's going to a very few people. 0: https://www.restaurantbusinessonline.com/financing/mcdonalds-ceo-chris-kempczinski-got-big-raise-last-year https://www.restaurantbusinessonline.com/financing/mcdonalds... 1: https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/shares-outstanding https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/shar... 2: https://finance.yahoo.com/news/income-investors-know-mcdonalds-corporation-121341390.html https://finance.yahoo.com/news/income-investors-know-mcdonal... 3: https://www.zippia.com/mcdonald-s-careers-7238/salary/ https://www.zippia.com/mcdonald-s-careers-7238/salary/
      - s1artibartfast 2y ago
        Do you realize the CEO salary is literally a rounding error in your calculation? Your answer doesnt have enough digits to express the worker impact of that $20m salary.
Jensson 2y ago
> Increasing median income and economic growth both increase affordability, even if housing costs track inflation. Given 1% growth a year that would take close to a lifetime to just halve current home prices per income. It isn't a solution for the people living today.
- s1artibartfast 2y ago
  "just halving" is a radical change that will never happen on a short timeline. With a more realistic number of 2% (for the US), you are talking about a 35% reduction in Price/income in 20 years. I think that is a very optimistic case to shoot for socially and politically.
  - leereeves 2y ago
    If home prices can rise 5% or more per year, why can't they also fall 5% per year?
    - s1artibartfast 2y ago
      I dont know what point you are trying to make, but housing prices fluctuate all the time. I am talking about long term averages.
      - leereeves 2y ago
        So am I. The median home price rose from 221k in Q4 2011 to 442k in Q4 2022. That's doubling in 11 years, thus rising 6.5% per year on average over the long term. https://fred.stlouisfed.org/series/MSPUS https://fred.stlouisfed.org/series/MSPUS Over the same time period, the value of existing homes, as measured by the Case-Shiller U.S. National Home Price Index (which measures the price of repeat same home sales) more than doubled. https://fred.stlouisfed.org/series/csushpinsa https://fred.stlouisfed.org/series/csushpinsa
        s1artibartfast 2y ago

hammock 2y ago

Can you explain how?

s1artibartfast 2y ago
I thought I did, but can give an example. If the median income increases from 50K to 100K (adjusting for inflation), and houses stay at 500k (adjusting for inflation), they have become more affordable without losing value.
- eddd-ddde 2y ago
  But isn't money losing value then? Implicitly making the houses worth 500K also lose theirs?
  - s1artibartfast 2y ago
    I dont understand your question.
- hammock 2y ago
  Well that begs the question, how are you going to double income beyond the rate of inflation?
  - s1artibartfast 2y ago
    If it happens, it will be the same way it has been done for hundreds of years. Increase in productivity. More widgets and stuff produced per worker is the only way to beat inflation. This is the fundamental economic goal of nations which seek prosperity.
    - hammock 2y ago
      How does the correlation of productivity vs income look for the last 50 years?
  - dopylitty 2y ago
    Rather than doubling all income one option would be to make the existing income more evenly spread out. For instance McDonalds' CEO makes ~$20 million a year[0] and they paid out $6.6/share with 726M shares[1] to parasite shareholders[2] while the average non-CEO employee makes $25k a year[3]. Since there are 150000 employees working for McDonalds that means lowering the CEO salary to $200k and eliminating shareholder payouts would free up close to $5 billion/year. If that $5 billion were distributed evenly to all employees they would take in an additional $33k/year, more than doubling their salaries. Of course all these numbers are estimates and there are caveats but the overall point is there's a lot of money out there that's going to a very few people. 0: https://www.restaurantbusinessonline.com/financing/mcdonalds-ceo-chris-kempczinski-got-big-raise-last-year https://www.restaurantbusinessonline.com/financing/mcdonalds... 1: https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/shares-outstanding https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/shar... 2: https://finance.yahoo.com/news/income-investors-know-mcdonalds-corporation-121341390.html https://finance.yahoo.com/news/income-investors-know-mcdonal... 3: https://www.zippia.com/mcdonald-s-careers-7238/salary/ https://www.zippia.com/mcdonald-s-careers-7238/salary/
    - s1artibartfast 2y ago
      Do you realize the CEO salary is literally a rounding error in your calculation? Your answer doesnt have enough digits to express the worker impact of that $20m salary.

Jensson 2y ago

> Increasing median income and economic growth both increase affordability, even if housing costs track inflation. Given 1% growth a year that would take close to a lifetime to just halve current home prices per income. It isn't a solution for the people living today.

s1artibartfast 2y ago
"just halving" is a radical change that will never happen on a short timeline. With a more realistic number of 2% (for the US), you are talking about a 35% reduction in Price/income in 20 years. I think that is a very optimistic case to shoot for socially and politically.
- leereeves 2y ago
  If home prices can rise 5% or more per year, why can't they also fall 5% per year?
  - s1artibartfast 2y ago
    I dont know what point you are trying to make, but housing prices fluctuate all the time. I am talking about long term averages.
    - leereeves 2y ago
      So am I. The median home price rose from 221k in Q4 2011 to 442k in Q4 2022. That's doubling in 11 years, thus rising 6.5% per year on average over the long term. https://fred.stlouisfed.org/series/MSPUS https://fred.stlouisfed.org/series/MSPUS Over the same time period, the value of existing homes, as measured by the Case-Shiller U.S. National Home Price Index (which measures the price of repeat same home sales) more than doubled. https://fred.stlouisfed.org/series/csushpinsa https://fred.stlouisfed.org/series/csushpinsa
      - s1artibartfast 2y ago