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

Re: Why Rent Is So High and Pay So Low

#151

Post by adam419 » Sat, Aug 08, 2015, 7:19 AM UTC

tcbawo wrote: post #143

adam419 wrote: post #100

Earlier quoted context omitted.

Creating too bigger to fail out of already too big to fail industries does nothing except throw good money after bad, and increase systemic risk for an even worse repetition of a failure. Not to mention the fact that continuously proceeding with such bailouts is simply unsustainable. The problem lies in our modern inability to stomach losses and handle austerity. It's something no one rightfully wants, but when marke…

Morality aside, the US government acted in its own self-interest by protecting industries within its borders. It is likely had any major US automakers been liquidated, more wealth would have been destroyed than created. Extending the organism metaphor, forest fires can be a naturally occurring healthy event that promotes renewal. Sometimes, a fire will burn with enough intensity that the forest itself is destroyed. S…

The analogy only stretches so far but I think letting nature take it's course isn't as dangerous you think.

Re: Why Rent Is So High and Pay So Low

#152

Post by danieltillett » Sat, Aug 08, 2015, 7:27 AM UTC

api wrote: post #147

habitue wrote: post #33

Earlier quoted context omitted.

Holy shit. I hope this is sarcastic

You must be new here. There's a sizable cadre of IQ score worshipping neo-eugenicists around here. More people need to actually study evolutionary biology. Like I mean the real kind with math and combinatorics and stuff. Or maybe I'm just a stupid head.

I think you might mean population genetics, not evolutionary biology. If you study population genetics you might discover what results from assortative mating.

Re: Why Rent Is So High and Pay So Low

#153

Post by danieltillett » Sat, Aug 08, 2015, 7:41 AM UTC

enraged_camel wrote: post #142

danieltillett wrote: post #55

Earlier quoted context omitted.

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.

>>Actually Paris is quite smart, she just plays an idiot for the masses. People said the same thing about George W. Bush. We have yet to see any evidence for that assertion, both for him and Hilton. >>There are plenty of dumb rich as even with assortative mating your children will be normally distributed, just from a higher mean. Quite a bold claim. I'd like to see a citation.

>People said the same thing about George W. Bush. We have yet to see any evidence for that assertion, both for him and Hilton.

GWB got a SAT mark that implies a IQ over 130. While he certainly liked to play the fool for his audience, I saw no evidence that he was stupid, just totally corrupt.

>Quite a bold claim. I'd like to see a citation.

Any trait that has more than a few hundred genes influencing it will be normally distributed with the mean of the offspring the mean of the parents. The genetic component of intelligence is influenced by a few thousand genes so it is not surprising to find that intelligence is normally distributed with the offspring mean the mean of the parents. This is population genetics 101.

One of the more interesting observations about human intelligence is the variation in high intelligence is almost all genetics while low intelligence has a quite large environmental component [1].

1. https://en.wikipedia.org/wiki/Heritability_of_IQ

Re: Why Rent Is So High and Pay So Low

#154

Post by roghummal » Sat, Aug 08, 2015, 7:42 AM UTC

stretchwithme wrote: post #76

webosdude wrote: post #36

Earlier quoted context omitted.

I think that zero interest rate policy should have ended 2-3 years ago when economy got back in shape. The zero interest rates are benefiting housing market thereby increasing housing prices. I don't understand why Feds inflation gauge doesn't take into account the housing prices/rents that well? Every month Feds see unemployment rate and review the rates accordingly. I think they should also take into consideration…

Super low rates are bad all the time. They allow many things to exist that shouldn't, while the viable businesses have to pay higher prices for all their inputs. When you have cheap money, more people think marginal investments now make a lot of sense. But if you create too many online dog food companies, eventually most of them have to be shut down. It would have been better to allow an organic recovery. And remove…

>And remove the impediments to hiring.

What're those?

Re: Why Rent Is So High and Pay So Low

#155

Post by dmichulke » Sat, Aug 08, 2015, 7:44 AM UTC

juliangregorian wrote: post #114

adam419 wrote: post #48

Earlier quoted context omitted.

Here's another solution: Respect the wisdom of markets. Allow corrections to take place and don't bury malinvestment under the rug only for it rear it's ugly head worse later on by acting as if you have a better intuition on what the price of money should be. Most people accept the virtue of free markets. Yet many don't see that the actions the Fed has been taking destroys the concept of a market by artificially supp…

Markets are not wise by any stretch. No one agrees what a "free" market would look like, but in general they tend to favor incumbents and the powerful.

And they do so by influencing politics which in return need to abandon free markets to really favor the few.

So the problem is not necessarily one of free markets but alternatively, one of corruption.

Re: Why Rent Is So High and Pay So Low

#156

Post by 314 » Sat, Aug 08, 2015, 7:47 AM 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 answer was mentioned briefly in the beginning of the article, and then the implications discussed through the rest - it was not entirely obvious. Population rises and falls on long time scales. It acts like a commodity in that the supply and demand for people affects prices. When population is high wages are low and living space is expensive. The converse is also true. After WWII the population was very low (because the workforce slice of the demographic was more heavily affected than the other slices), now the population is relatively high (and the workforce slice of the demographic has expanded).

More people with money chase a fixed(-ish) number of homes through rent and purchase. Debt is cheap. The result is high prices. Most people in a job can be replaced with a large available pool of others, the result is low wages though lack of negotiating power.

The unanswered question in the article is whether Reagan/Thatcher caused these changes through their policies or simply rode into power on their effects. History is nothing but a long-term record of the effect of demographic change on political will.

Re: Why Rent Is So High and Pay So Low

#157

Post by xyzzyz » Sat, Aug 08, 2015, 7:49 AM UTC

spiralpolitik wrote: post #108

tcbawo wrote: post #74

Earlier quoted context omitted.

This is a gray area. If we allowed a large automaker to go bankrupt, we probably would have lost the supply chain and many supporting industries which would be gone (from the US) forever. Same with banks. As much as we detest bailing out bankers, allowing the US to economy to be cut off from credit would create lasting collateral damage.

The counter example is Iceland who told the banks to get lost and is the only European country who's economy is now ahead of where it was in 2008. http://www.independent.co.uk/news/business/news/three-charts...

Not the only one -- Poland didn't even have a red year. It exhibited GDP growth throughout the crisis.

Re: Why Rent Is So High and Pay So Low

#158

Post by ectoplasm » Sat, Aug 08, 2015, 8:00 AM UTC

danieltillett wrote: post #153

enraged_camel wrote: post #142

Earlier quoted context omitted.

>>Actually Paris is quite smart, she just plays an idiot for the masses. People said the same thing about George W. Bush. We have yet to see any evidence for that assertion, both for him and Hilton. >>There are plenty of dumb rich as even with assortative mating your children will be normally distributed, just from a higher mean. Quite a bold claim. I'd like to see a citation.

>People said the same thing about George W. Bush. We have yet to see any evidence for that assertion, both for him and Hilton. GWB got a SAT mark that implies a IQ over 130. While he certainly liked to play the fool for his audience, I saw no evidence that he was stupid, just totally corrupt. >Quite a bold claim. I'd like to see a citation. Any trait that has more than a few hundred genes influencing it will be norma…

Per the intro to that article, presumably high intelligence also has a large environmental component, in that you need a good environment not to squash the heritability.

btw, I think you didn't finish editing:

> normally distributed with the mean of the offspring the mean of the parents

> normally distributed with the offspring mean the mean of the parents

Re: Why Rent Is So High and Pay So Low

#159

Post by jms » Sat, Aug 08, 2015, 8:02 AM UTC

meric wrote: post #120

jrbancel wrote: post #105

What is the ideal ratio of rent/net income? Personally, I don't want to spend more than 20% of my net income on rent + utilities. That way, I can save 50% and use the remaining 30% for food and entertainment. I am currently at 16% in Seattle and I leave in a very good apartment, but I got lucky.

I rented a 3 room apartment. Sublet out 2.5 rooms. (I'm sharing one room.) Reduced my rental expense to 0%. Paying bills only. Only 15 minutes train to the second most expensive city by property prices relative to income in the world. (Sydney)

May I ask where you are roughly? I'm planning to buy a house in a cheap rural location (in NZ), but will still need to spend time in the city for work. I'd love to pick your brains - my email is in my profile, and I'm happy to buy dinner in return.

Re: Why Rent Is So High and Pay So Low

#160

Post by enraged_camel » Sat, Aug 08, 2015, 8:03 AM UTC

danieltillett wrote: post #153

enraged_camel wrote: post #142

Earlier quoted context omitted.

>>Actually Paris is quite smart, she just plays an idiot for the masses. People said the same thing about George W. Bush. We have yet to see any evidence for that assertion, both for him and Hilton. >>There are plenty of dumb rich as even with assortative mating your children will be normally distributed, just from a higher mean. Quite a bold claim. I'd like to see a citation.

>People said the same thing about George W. Bush. We have yet to see any evidence for that assertion, both for him and Hilton. GWB got a SAT mark that implies a IQ over 130. While he certainly liked to play the fool for his audience, I saw no evidence that he was stupid, just totally corrupt. >Quite a bold claim. I'd like to see a citation. Any trait that has more than a few hundred genes influencing it will be norma…

>>GWB got a SAT mark that implies a IQ over 130.

Huh? He scored 566 on verbal and 640 on math for a total of 1206 points -- around 140 points below his Yale classmates. I'm not sure how this implies an IQ of over 130, unless you believe that Yale is attended by pure geniuses (hint: it isn't).

Furthermore, both SAT and IQ scores are highly correlated with the quality of education one receives. They don't measure innate intelligence.

But if we still care about IQ, then a 2006 study of presidential IQs estimated Bush's IQ to be around 125, the lowest in any president over the past 50 years, and higher than only three other presidents (Grant, Monroe and Harding). You can read about it if you want [1].

[1] https://en.wikipedia.org/wiki/U.S._Presidential_IQ_hoax