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NIMBYs in the twenty-first century

• hucker 12y ago
  Paywalled... Does anyone have a mirror? edit: They removed it, thanks The Economist!
  • seany 12y ago
    https://archive.today/iU9Z3 https://archive.today/iU9Z3
  • throwaway_xl5 12y ago
    Economist lets you read a limited number of articles free of charge each month. The link gave me the full article so perhaps you used up your quota, or their rules are different in your territory?
    • hucker 12y ago
      It says I've used up my number of articles for the month, but I can't remember reading any in a long time, which my browser history confirms. Weird.
    • rrss1122 12y ago
      You're right. I hit a paywall at first, but with private browsing got through to the full article, so I guess I used up my quota.
  • ananyob 12y ago
    Not paywalled anymore-(Economist journo)
• pcarolan 12y ago
  Conventional wisdom says that homes are bad investments compared to equities, conventional wisdom looks to be wrong. Maybe loading up your 401k instead of buying a home isn't such a good idea. The right answer is probably to rebalance a bit towards property.
  • nissimk 12y ago
    Real estate has two primary advantages over equities: Large amounts of leverage are both legal and easily acquired for real estate transactions. Most of the remaining tax shelters in the US are related to real estate see "Full time real estate professional," 1031 exchange, etc.
  • psaintla 12y ago
    Yes, which is always why I always cringe when I see how many people in their 20s and 30s believe that home ownership is a bad idea. The willingness to rent for life in order to live a high density, urban lifestyle is going to come back to haunt them when they get older. It's good for me as a landlord but I hope people my age start rethinking their position on home ownership.
    • billmalarky 12y ago
      Cringe? Really? By living in a high density urban area many people are able to invest more per year than they bring home after taxes living in the midwest.
    • leviathant 12y ago
      I was resistant to buying a house here in Pennsylvania, but my wife's from Sydney, Australia, and was gobsmacked by how inexpensive real estate is here. By 26, we had bought a small house in the Philadelphia suburbs about three blocks from a train station and renovated it over the course of a few years. We were able to purchase a larger house in Philadelphia proper, and rented out the house in the suburbs - which covered the price of that house's mortgage and subsidized the newer house's mortgage. Aggressively paying down the first house, it's now paid off, and is just straight income, and we're more than halfway done paying off the mortgage on this house. This year, we actually dumped our investment account for a sizeable property in an amazing spot (on the waterfront, where the historic district meets the trendy hipster district), with commercial space on the first floor, an apartment on the second floor, and we'll be financing the expansion to a third floor by selling off the other two houses we have. I'll be living in a new-construction home above a performing arts space that I own outright, paid for by a second floor apartment I'll be renting out, in a high density, urban environment - because my wife and I bought a house when we were 26.
• ForHackernews 12y ago
  > Modern forms of capital, such as software, depreciate faster in value than equipment did in the past: a giant metal press might have a working life of decades while a new piece of database-management software will be obsolete in a few years at most. Is software even capital? Isn't this part of why we've been arguing against software patents for years now? Obviously software and other forms of intellectual property have value, but to me capital is something used to produce valuable products, not the products themselves. Maybe the firmware for some CNC machine is capital? Are books capital because you can make movies out of them?
  • eldavido 12y ago
    The economist is taking the position of the buyer (not maker) of software -- the prototypical business that buys a CRM tool to manage its customer relationships. Seen as a good that increases the productive capacity of a company or the economy more generally, it seems software very much is capital.
    • ForHackernews 12y ago
      Do they buy a CRM tool, or do they just license the use of one? My understanding is that it's almost impossible to really "buy" and "own" commercial software, you can only acquire a license to use it.
      • Symmetry 12y ago
        If the license lasts any period of time then it's still capital, albeit capital that depreciates quickly.
  • a_c_s 12y ago
    Broadly speaking, economics talks about three categories of things: Land (natural resources), Labor & Capital. Looking at things from this perspective, capital includes everything from carpet, books and desk chairs to massive heavy industry factory machinery. A source: http://www.henrygeorge.org/def2.htm http://www.henrygeorge.org/def2.htm
  • 12y ago
• sun_machine 12y ago
  I am confused by the way the Economist phrased Mr. Rognlie's argument. The crux of Piketty's argument is that when global returns on wealth (r) is more than global economy growth (g), capital will start snowballing into the hands of the few very quickly. The mechanism of r getting bigger than g is not an increase in r, but a decrease in g. The increase of the global economy is dominated not by increasing technological efficiency, but by population growth. There is an upper limit of the number of people we can fit on this rock (whether 9 billion or 100 billion, we will hit a limit at some point). Once we bump into that ceiling, growth will slow dramatically, and those who have already managed to create a sizable stash, or who have the talent to regularly beat the market, can accumulate wealth to no end. In short, as I understood Piketty's book, the fact that r might not increase if we put the right limits on housing development, doesn't change the overall hypothesis made by Piketty.
  • Spooky23 12y ago
    Wealth is different than growth. I think the point is that if you move towards rent-seeking vs. value creation, people with a critical mass just hoover up capital and get richer. Even if the economy contracts, you can still take more chips off the table. We have historical examples of this as populations start bumping against local ceilings that illustrate that this scenario is very possible. The Roman aristocracy was living it up, while the plebeians in many cases were subsisting on bread and circuses.
  • tomjen3 12y ago
    You seem to be under the assumption that the population is going to grow towards infinity. The UN projects that we will stay under 10 billion (http://en.wikipedia.org/wiki/Projections_of_population_growth http://en.wikipedia.org/wiki/Projections_of_population_growt...) and even the highest only have us at 16 billion at the end of this century (compare that to the growth in the 20th century). So unless there is a relatively low limit for total humans on this planet, we won't reach it before we become a spacefaring race, at which point the limit will be the carrying capacity of the Universe.
    • onnoonno 12y ago
• venomsnake 12y ago
  > Modern forms of capital, such as software, depreciate faster in value than equipment did in the past: a giant metal press might have a working life of decades while a new piece of database-management software will be obsolete in a few years at most. Those rotting bits ... outside of consumer software, the life of software is easily measured in decades.
  • mikeash 12y ago
    I think it's tremendous confusion on their part about what "obsolete" means. If people upgrade software every few years it's because the new software is much better (or at the very least perceived as such). Even most consumer software keeps on working almost forever (although this is starting to change now that so many things depend on external services). Imagine if the giant metal press had a new version come out a few years later than was twice as efficient. You could keep operating the old one as long as you wanted, but paying for a new one would be well worth it. The old one is "obsolete." But the value of the old one, in terms of what it does for your business, is unchanged! If you wanted to sell it, the price on the secondary market will take a big hit, but that's less important. Rather than demonstrating that return from capital is declining, the rapid obsolescence of software demonstrates that return from capital is increasing! If businesses were buying new giant metal presses every few years even though the old ones worked fine, would you say "oh, the return must be decreasing," or would you say, "wow, those new presses must be a huge improvement to be worth such a quick turnaround"?
• nwah1 12y ago
  Housing is a euphemism for land. The value of locations is determined by the quality of the surrounding community and the environment. This value winds up in land because it is claimed for exclusive use by individuals, enforced by government. Yet, claiming ownership over any part of the surface of this ball of space rock is arbitrary, and no principle of justice can truly legitimize it. Instead of Piketty's blunt "wealth tax" we should be taxing land value, which as the cited MIT/Brookings report shows, is responsible for nearly all the new growth in inequality.
  • matwood 12y ago
    Who isn't paying taxes on their land value? Maybe there are some states that do not, but every year I pay a pretty large tax bill based on the value of my land/house.
    • ForHackernews 12y ago
      Arguably, we should be taxing based on the value of only the land itself, and not considering improvements (buildings, etc.) made to the land, in order to not (mildly) disincentivize making improvements to land one owns.
      • nwah1 12y ago
        Yes, and since raw land can have a hefty unearned price tag, we already know that most of the value is left to the titleholders. It is very much like the patent debates, except even worse. At least a patentholder, in theory, might have had something to do with thinking up the idea. And at least the patent doesn't last forever Land titles are permanent, yet the titleholder had nothing whatsoever to do with the manifestation of the space and matter contained at the location.
      • Symmetry 12y ago
        The problem is that a large fraction of our land value is in cities and most of them have zoning restrictions that don't match classic notions of owning land. It's easy for otherwise identical pieces of land in the same neighborhood to differ in price by a factor of ten depending on whether it comes with the right to build a house on it. Well, I suppose that means that the land tax just has to incorporate different gradients of "owning" land but that's probably still simpler than trying to determine the value of improvements.
• michaelochurch 12y ago
  The weak point of democracy is the phenomenon of cheap votes. On any high stakes issue, there are still a large number of people who don't give a damn and will sell their vote for $25 if they legally can. This undermines the democratic process, as power accrues to those who bundle cheap votes together and deploy or sell the packages. This leads to a "democracy" (or, in Silicon Valley corporate-speak, a meritocracy) that can readily be used to validate the will of the existing elite, while posing no threat to it or check against its greed. In elections, we prohibit explicit vote selling. But marketing is also about cheap-vote buying. Pepsi advertises because a large number of people just don't care which cola they get. Wal-Marts destroy small towns, but they're profitable because a large number of people will (with no ill intent, or cognizance of this being what they're doing) "vote" against their own communities to save $25 on Christmas shopping. In culture, the term for very loud or passionate cheap votes is "useful idiots". Startup cheerleaders and the tech press (regulatory arbitrage! so visionary!) are useful idiots for the venture capitalists. The 22-year-olds who work 12 hours per day because they believe their 0.03% slices are just "teasers" and that they'll be introduced to VCs inside of 6 months are cheap votes. NIMBY is two problems come together, because it's a cheap-vote dynamic on both sides. Among the renters on the losing side, most people don't get involved in local issues, and not voting is a vote. They're selling their vote for the benefit of not having to put time in, and perhaps because they consider the NIMBY problem helpless. On the other hand, the NIMBYs are also cheap votes. They know what's good for society and the rising generation, yet they push for the opposite because they'd rather jerk up their housing prices and get artificial money they don't need (and can't use unless they sell their houses and move to a cheaper place) than do the right thing. They're easily bought. The story of the "first world" 21st century, in terms of the breakdown of democracy, capitalism, and meritocracy at the hands of a corporate elite, is the story of cheap vote aggregation. Nowhere is this more evident than in venture capital, where passive capital (cheap votes) from teachers' and firefighters' pension funds from Ohio and Nebraska and Montana is siphoned off to the career benefit of well-connected rich kids in California. The people who should care, don't, because it doesn't affect them enough.
  • icebraining 12y ago
    Why bring new terminology to replace "concentrated benefits and dispersed costs", which is well established?