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Charles Mitchell and the 1929 stock crash

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Re: Charles Mitchell and the 1929 stock crash

#61

Post by yawnr »

silisili wrote: post #43
DSingularity wrote: post #40

Earlier quoted context omitted.

Why would they sell? They live there now. Why also would builders not keep prices high buy produce less? 2008 was bad loans coming to head. I don’t think it’s going to be the same.

> Why would they sell In many cases, they don't, they just walk away. Would you stay in a 500k 2000sqft house that you have no equity in, when a 300k 2000sqft house was for sale next door? In a non-recourse state? And even for principled people, when you lose your job or fall behind on something you overpaid for, it's really easy to just walk away.

Because you have a 2.5% mortgage and your monthly payment is still smaller than than 300k house at current rates. This is going to be the main issue to me. People are just going to sit in all these houses with bloated prices because the rates they pay are so low, and prices are going to have a very hard time returning to anything close to what they were with inventory so low.

Re: Charles Mitchell and the 1929 stock crash

#62

Post by quonn »

MrPatan wrote: post #56
imtringued wrote: post #49

Earlier quoted context omitted.

If you own land you own a piece of the planet. How much is permanent ownership over a given plot of land worth? Millions? Billions? Trillions? Infinite? Why would any sane person even run a business if the government pays massive subsidies (public services) to make your land more valuable? Just buy more land.

Because land is very easily taken away, so very easy to tax

It's not that easy to arbitrarily raising land taxes without doing a lot of economical damage. But you have a point: The land is inside a country and the country make all kinds of rules.

Re: Charles Mitchell and the 1929 stock crash

#63

Post by nopenopenopeno »

andromeduck wrote: post #60
axiolite wrote: post #54

Earlier quoted context omitted.

> How much is permanent ownership over a given plot of land worth? > the government pays massive subsidies (public services) to make your land more valuable Most of us have to pay taxes on property we own every year, pay for many of the public services (water, sewer, trash, etc.), and the benefits returned from taxes (like roads and police) are generally not worth the amount paid in a strict sense. If you think a plo…

It's not the land that's valuable but the lands proximity to goods and services - in that sense, it's not fair that the value created by those goods and services is accrued by a private property that did not pay a proportionate fraction of the revenue sustaining it as the bulk of revenue is raise from other means. This is where the Georgist idea of land value tax comes in.

Georgism now

Re: Charles Mitchell and the 1929 stock crash

#64

Post by stuxnet79 »

throwaway290 wrote: post #44
eftychis wrote: post #41

Earlier quoted context omitted.

That is the definition of an economy.

That's a weird definition of economy you have, but you do you.

It is hardly a "weird" definition. Economics and "the economy" as a whole fundamentally deal with scarcity.

Figuring out the most appropriate use of a good or service given that its scarce and has a multitude of "other" uses is the core problem that capitalism tries to solve.

Re: Charles Mitchell and the 1929 stock crash

#65

Post by powerapple »

stuxnet79 wrote: post #64
throwaway290 wrote: post #44

Earlier quoted context omitted.

That's a weird definition of economy you have, but you do you.

It is hardly a "weird" definition. Economics and "the economy" as a whole fundamentally deal with scarcity. Figuring out the most appropriate use of a good or service given that its scarce and has a multitude of "other" uses is the core problem that capitalism tries to solve.

That's the definition of value storage. The economy works on greeds, realization of greeds, and creation of new greeds. Scarcity would lead to the greed of owning it.

Re: Charles Mitchell and the 1929 stock crash

#66

Post by neilparikh »

axiolite wrote: post #54
imtringued wrote: post #49

Earlier quoted context omitted.

If you own land you own a piece of the planet. How much is permanent ownership over a given plot of land worth? Millions? Billions? Trillions? Infinite? Why would any sane person even run a business if the government pays massive subsidies (public services) to make your land more valuable? Just buy more land.

> How much is permanent ownership over a given plot of land worth? > the government pays massive subsidies (public services) to make your land more valuable Most of us have to pay taxes on property we own every year, pay for many of the public services (water, sewer, trash, etc.), and the benefits returned from taxes (like roads and police) are generally not worth the amount paid in a strict sense. If you think a plo…

> Most of us have to pay taxes on property we own every year, pay for many of the public services (water, sewer, trash, etc.), and the benefits returned from taxes (like roads and police) are generally not worth the amount paid in a strict sense.

If you don't think the benefits aren't worth it, why do you keep owning the property? Choosing to continue to own the property implies a revealed preference that the benefits outweigh the costs.

The biggest benefit from owning property is the right to exclusive use of a certain location for infinite time [0]. And the value of this right is proportional to how desirable living there is, which is made up of factors like economic liveness, proximity to nature, government services etc. The thing to note here is that while not all of these are due to government subsidy, all of these are the result of "other people's work"; you can just sit there and if other people do good work, the gains go to you.

Also, as a sidenote, most local services are not funded exclusively by property taxes: there's usually funding from things like sales and income taxes (either from that area, or transferred from higher levels of govt).

[0] - Minus property tax of course, but property tax is rarely equal to the benefit you get; if it was, the purchase price of the property would be 0.

Re: Charles Mitchell and the 1929 stock crash

#67

Post by ianai »

bruce511 wrote: post #10

The crash didn't happen because of 1 banker, but it did happen because of things he, and his contemporaries dreamed up. Basically bankers make money when money flows. It flows only when "there is something better". So to keep making money there always has to be "something better" and ultimately that becomes unsustainable. 1929 was a re-adjustment, where all the bullshit is cleaned away. It was perhaps the first time…

1929 refuted the notion that “what goes down will come back up.” Society in the US pushed hard for decades to investigate and protect against similar market conditions through banking regulations and oversight. Galbraiths work is worth reviewing on this. (The sad truth is much of those safeguards were dismantled by the 50s.)

Definitely history worth studying.

Re: Charles Mitchell and the 1929 stock crash

#68

Post by neilparikh »

MrPatan wrote: post #56
imtringued wrote: post #49

Earlier quoted context omitted.

If you own land you own a piece of the planet. How much is permanent ownership over a given plot of land worth? Millions? Billions? Trillions? Infinite? Why would any sane person even run a business if the government pays massive subsidies (public services) to make your land more valuable? Just buy more land.

Because land is very easily taken away, so very easy to tax

In theory, yes, but the last few decades show the opposite is happening: property tax rates are limited in many states (CA prop 13 being the prime example), and income taxes and sales tax fund more and more.

For example, the federal govt's total revenue is 6 times the total property tax collected in the US (and this ignores state income/sales taxes).

In California specifically, just the personal income tax alone is more than the property tax collected. Once you add in the other sources, property tax revenue is half of non-property tax revenue.

Re: Charles Mitchell and the 1929 stock crash

#69

Post by francisofascii »

silisili wrote: post #32
tjr225 wrote: post #26

Earlier quoted context omitted.

Property is intrinsically limited. Property in desirably places is especially intrinsically limited. You’re basically lucky if you own any property at all at this point. Just take a gander and how much property in Hong Kong or Amsterdam costs and you’ll start to think it is cheap in the US. It’s only going to get worse. Do you think that people are going to desire living in Santa Monica or Queen Anne less over the ne…

> Property in desirably places is especially intrinsically limited. Yes...but property values are way up all over. Boise, Phoenix, Nashville...even middle of nowhere Kansas. El Paso is having it rough. They've always had super cheap houses to the point of unbelievable...what most would consider a decked out mansion for 300k or so, and a 3+ percent property tax. Guess what's happening now that everyone's regular ol 15…

Boise, Phoenix, and Nashville are all very desirable, actually. Just not top tier desirable like the Bay Area, NYC, Austin, DC, and Seattle.

Re: Charles Mitchell and the 1929 stock crash

#70

Post by throwaway290 »

stuxnet79 wrote: post #64
throwaway290 wrote: post #44

Earlier quoted context omitted.

That's a weird definition of economy you have, but you do you.

It is hardly a "weird" definition. Economics and "the economy" as a whole fundamentally deal with scarcity. Figuring out the most appropriate use of a good or service given that its scarce and has a multitude of "other" uses is the core problem that capitalism tries to solve.

Do you assume scarcity of resources is required for there to be a scarcity of products and especially services? You may still want to have someone cook you dinner without there being a scarcity of food. There is still art and stuff, live performances you may want to see. But no scarcity of resources, no need to fight for survival, the motivation to always optimize for profit at the expense of everything else
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