3 ms·

Spot on. I'm not against money per se; I take issue with the fact it's used at every level rather than only where it makes sense. It doesn't make sense to use

Spot on. I'm not against money per se; I take issue with the fact it's used at every level rather than only where it makes sense. It doesn't make sense to use pure supply and demand for land at the very bottom level of human sized parcels. It makes sense to say that a studio should be cheaper than a 1BR should be cheaper than a 2BR and so on; but not that the studio should be allowed to tend towards its absolute maximum price (e.g. roughly minimum wage). Why? You don't even need a moral argument. It's simply inefficient, a huge drag on the economy. It means people spend 90% of their time scrambling just to exist and never do anything more. It is like if I had to spend 90% of my CPU power just to run the OS. Bonkers. It benefits no-one but landlords who in many cases are in a zero risk situation (you own a home and then you still own a home; the monetary value is really a game, it's not a real risk).

mindslight 11y ago
> It doesn't make sense to use pure supply and demand for land at the very bottom level of human sized parcels I don't think you even have to go this deep. The banks are the ones that create new money, multiplying deposits tenfold based on the valuation of the assets they're writing notes on. But that valuation is set entirely by the selling prices! So in this circular situation, the only downward pressure on housing is what the banks will loan (especially with further down-payment-erosion like PMI), which is set by the carrying cost of the capital (interest) times what people are willing to pay per month. There is no risk of default since on paper, the asset is worth slightly more than the loan. I think if you were to revoke financial primacy and eg disallow repossession of residences in bankruptcy, you'd see a pretty quick correction as there would then be an actual risk that someone would take a loan to buy a house and then decide servicing that debt was pointless. But there's no political capital, since everyone that has bought property (even and especially with a mortgage) wants to see the bubble keep going up forever.

mindslight 11y ago

> It doesn't make sense to use pure supply and demand for land at the very bottom level of human sized parcels I don't think you even have to go this deep. The banks are the ones that create new money, multiplying deposits tenfold based on the valuation of the assets they're writing notes on. But that valuation is set entirely by the selling prices! So in this circular situation, the only downward pressure on housing is what the banks will loan (especially with further down-payment-erosion like PMI), which is set by the carrying cost of the capital (interest) times what people are willing to pay per month. There is no risk of default since on paper, the asset is worth slightly more than the loan. I think if you were to revoke financial primacy and eg disallow repossession of residences in bankruptcy, you'd see a pretty quick correction as there would then be an actual risk that someone would take a loan to buy a house and then decide servicing that debt was pointless. But there's no political capital, since everyone that has bought property (even and especially with a mortgage) wants to see the bubble keep going up forever.