Why Rent Is So High and Pay So Low • Hacker News Board

Re: Why Rent Is So High and Pay So Low

#51

Post by WalterBright » Fri, Aug 07, 2015, 10:21 PM UTC

nostromo wrote: post #6

This article doesn't answer the question and seems primary based on nostalgia. My theory: the Fed's zero interest rate policy is very good at inflating asset values: S&P500, housing, you name it. Rising income is a second-order effect: we hope that rising asset values will lead to increased wages. That used to be the case, but no longer is. Why? Because of automation and globalization probably. So, the Fed has the pe…

One thing nobody mentions is the increasing share of the GDP that the government consumes:

http://www.usgovernmentspending.com/total_spending_chart

That wealth has to come from somewhere.

Re: Why Rent Is So High and Pay So Low

#52

Post by danieltillett » Fri, Aug 07, 2015, 10:23 PM UTC

khuey wrote: post #41

danieltillett wrote: post #29

Earlier quoted context omitted.

In order to have an effective meritocracy you have to have universal education. You then pick the top 0.1% and invite them to join you and marry your son or daughter. The whole economic system is designed to identify the very clever no matter their background and bring them into the ruling class.

If you banish any of the smart/clever/etc to the underclass they might just start a revolution. Much easier to invite them to join the party.

Exactly right. The rich found this out early last century with the rise of communism. What they did was very clever; they basically introduced socialism in the 1930s by shifting the majority share of production to the masses to keep them quiet, introduced mass higher education with an emphasis on identifying the very smart (troublemakers if excluded) and brought them into the ruling class. Once this "decapitation of the masses” was in place (1970) they slowly took back their share of production. We are now back to the level the rich had in the 19th C. Impressive if somewhat depressing.

Re: Why Rent Is So High and Pay So Low

#53

Post by charonn0 » Fri, Aug 07, 2015, 10:26 PM UTC

runj__ wrote: post #37

ipsin wrote: post #13

I was disappointed that I could not actually scroll of down to read the article on mobile Android/chrome.

If the viewport is small enough it seems scrolling is disabled. I usually browse the web on the right side of my 15" screen and was confused when I wasn't able to scroll. I find it weird that most people don't plan for people with 900px or so wide browsers.

It's trying to display a lightbox advertisement that is too big for the viewport. So, scrolling gets disabled but the lightbox doesn't render until/unless you enlarge the window.

Re: Why Rent Is So High and Pay So Low

#54

Post by PythonicAlpha » Fri, Aug 07, 2015, 10:26 PM UTC

Reagan ended the Golden years and turned the US around from worker friendly to money-friendly. The result are low taxes for income generated from pure money, high speculation, bailouts for the big corporations and the decline of the US middle class.

Many of the other "western countries" just copy this trend and get the same, just with a few years between.

Re: Why Rent Is So High and Pay So Low

#55

Post by danieltillett » Fri, Aug 07, 2015, 10:27 PM UTC

enraged_camel wrote: post #47

danieltillett wrote: post #10

Earlier quoted context omitted.

This is not a bug it is a feature. The rich are a lot smarter today than when they were the descendants of feudal landlords - 100 years of meritocracy combined with assortative mating makes for a very clever ruling class. Edit. Spelling.

Counter-data: Paris Hilton.

Actually Paris is quite smart, she just plays an idiot for the masses. Even if she was an idiot, it proves nothing. There are plenty of dumb rich as even with assortative mating your children will be normally distributed, just from a higher mean.

Re: Why Rent Is So High and Pay So Low

#56

Post by [deleted] » Fri, Aug 07, 2015, 10:31 PM UTC

nostromo wrote: post #6

This article doesn't answer the question and seems primary based on nostalgia. My theory: the Fed's zero interest rate policy is very good at inflating asset values: S&P500, housing, you name it. Rising income is a second-order effect: we hope that rising asset values will lead to increased wages. That used to be the case, but no longer is. Why? Because of automation and globalization probably. So, the Fed has the pe…

[deleted]

Re: Why Rent Is So High and Pay So Low

#57

Post by patmcguire » Fri, Aug 07, 2015, 10:32 PM UTC

Worth noting the decline in how much is spent on food: in 1950 it was a third of household income, now it's 13%. So part of the cost of living has drastically decreased.

Re: Why Rent Is So High and Pay So Low

#58

Post by withdavidli » Fri, Aug 07, 2015, 10:38 PM UTC

daveloyall wrote: post #28

withdavidli wrote: post #15

Earlier quoted context omitted.

Not exactly true, back in feudal times just being able to read was quite a privilege. They also had a lock on information. We're much more on equal footing in terms of ability to gain information. Whether we act on the information is another issue.

Are you kidding? What does a family line which has had uninterrupted, exclusive access to a personal library know ? I mean think about it--what is that family like? That family which has held on to the same chunk of physical space, with books and notebooks, for several generations. "Equal footing in terms of ability to gain information", my ass! My own toddler gets confused when he tries to describe his home--probabl…

i don't understand the argument you are trying to make.

you cut off the the "more" to make it sound like my statement meant we are equal instead of relatively better than we once were in comparison to the upper class.

then proceeded to provide examples of your toddler being able to retain information and yourself retaining information. both are about memory and ability to recall those memories with accuracy.

Re: Why Rent Is So High and Pay So Low

#59

Post by ArkyBeagle » Fri, Aug 07, 2015, 10:39 PM UTC

nostromo wrote: post #6

This article doesn't answer the question and seems primary based on nostalgia. My theory: the Fed's zero interest rate policy is very good at inflating asset values: S&P500, housing, you name it. Rising income is a second-order effect: we hope that rising asset values will lead to increased wages. That used to be the case, but no longer is. Why? Because of automation and globalization probably. So, the Fed has the pe…

The Fed never touched the pedal. See also "Interest on reserves".

Land rents ( which are not the same as "rack rent", what you pay the landlord, but can be related by land prices going up speculatively ) drive out wage rises.

Scott Sumner says we should have Nominal GDP Targeting; if Real GDP is < say, 4%, the rest is made up with inflation.

Re: Why Rent Is So High and Pay So Low

#60

Post by kiba » Fri, Aug 07, 2015, 10:40 PM UTC

im3w1l wrote: post #42

So this article gives an explanation for why people would want to push up rents and property values. Anyone know the how of it? Rising rent compared to wage would normally lead to increased building, so this must be prevented somehow.

There is an incentive to restrict housing due to pre-existing owners not wanting their investments in properties to plummet in value.