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America’s Covid job-saving programme gave most of its cash to the rich

economist.com

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Re: America’s Covid job-saving programme gave most of its cash to the rich

#71

Post by vgeek »

rory wrote: post #60

I know a few upper-middle class small business owners (all non-retail sectors) whose businesses weren't substantially affected by the pandemic, but who basically got a free handout as part of the program. Two mentioned how they were initially hesitant to apply for money, but then worried that if they didn't, their business could take a downturn after it was too late. Then as long as they spent the money on payroll (w…

I was doing some work for a $30MM/yr ecommerce retailer whose business was up 30% YoY pre-pandemic and began a trend of doubling in April 2020. They were still hiring and got ~$600k for free. Another $50MM/yr company had flat/slightly up revenue and got $1.2MM. Both companies are notoriously stingy with W2 worker pay and bonuses, and remained so even after getting bailouts.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#72

Post by spywaregorilla »

Aeolun wrote: post #41
spywaregorilla wrote: post #37

Earlier quoted context omitted.

War (taking place somewhere else, that you're winning)

That seems like a zero sum game. For you to be winning there has to be an similar working class somewhere that is losing.

Outside the problem definition

Re: America’s Covid job-saving programme gave most of its cash to the rich

#73

Post by rthomas6 »

anonporridge wrote: post #24
ericmcer wrote: post #13

Earlier quoted context omitted.

Direct cash still has this effect. $1500 to subsidize rent that is $1500 to property owners.

Land lords still exist in a competitive market and can't arbitrarily raise rents without collusion. One way to alleviate this problem is to have a harsher tax on vacant properties to punish using housing as a store of value and creating artificial scarcity in the market, e.g. like how the DeBeers corporation made diamonds artificially scarce and scammed the world for the past century selling a shiny rock.

The thought-out version of this is called Georgism. It proposes a (close to) 100% tax on the unimproved value of land. Economists agree the tax can't be passed on to renters, for reasons I can't articulate.

https://astralcodexten.substack.com/p/your-book-review-progr...

Re: America’s Covid job-saving programme gave most of its cash to the rich

#74

Post by dgb23 »

e4e78a06 wrote: post #44
piva00 wrote: post #18

Earlier quoted context omitted.

> The way to help the working class is to ensure economic growth happens, because a rising tide lifts all boats. This is just trickle down economics. The same catchphrase as "grow the pie to share it". It simply fuels money to the rich as well, in a larger proportion than to workers. We are actually experiencing the results of 40 years of that ideology and it doesn't look pretty. Growth is also looking like a very un…

We haven't had real economic growth in the US since the 70's when deindustrialization first began. If you discount by the real estate market's return instead of CPI you have negative or flat real growth. CPI includes a lot of goods that are long run deflationary like TVs, food, and cars. I'd point you to China for an example of what "rising tide lifts all boats" actually looks like. And to add to that - it matters a…

> Wealth redistribution has never worked in history. In every case where it has occurred there has been a flight of capital leading to underinvestment and poverty, or war.

What do you classify as wealth redistribution?

Re: America’s Covid job-saving programme gave most of its cash to the rich

#75

Post by [deleted] »

anonporridge wrote: post #31
davidw wrote: post #26

Earlier quoted context omitted.

> Land lords still exist in a competitive market and can't arbitrarily raise rents without collusion. Well...kind of. It's pretty bad in a lot of places. There aren't enough homes in the places people want to live.

There's a delicate balance of property owners using their power to prevent new construction and densification in an attempt to keep their property values high by preventing competition and going too far where you destroy your local economy because the people who actually do the work can't afford to live there.

[deleted]

Re: America’s Covid job-saving programme gave most of its cash to the rich

#76

Post by germandiago »

rvense wrote: post #69
nsxwolf wrote: post #54

Earlier quoted context omitted.

When I was a landlord I found it very difficult to even cover the mortgage, let alone cover association dues and maintenance. I would try to raise the rent a little in between tenants, and it would greatly reduce interest in the listing.

Why should the rent cover your mortgage?

Because people who buy a place would like to reasonably be able to pay something that takes 30 years or similar to pay with the rent itself.

That is a reason why you invest in the first place.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#77

Post by ethangarofolo »

rvense wrote: post #69
nsxwolf wrote: post #54

Earlier quoted context omitted.

When I was a landlord I found it very difficult to even cover the mortgage, let alone cover association dues and maintenance. I would try to raise the rent a little in between tenants, and it would greatly reduce interest in the listing.

Why should the rent cover your mortgage?

Why wouldn't it?

We're talking about a mortgage on the rental property itself not on the landlord's personal residence.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#78

Post by dylan604 »

rvense wrote: post #69
nsxwolf wrote: post #54

Earlier quoted context omitted.

When I was a landlord I found it very difficult to even cover the mortgage, let alone cover association dues and maintenance. I would try to raise the rent a little in between tenants, and it would greatly reduce interest in the listing.

Why should the rent cover your mortgage?

Likely NOT the landlord's personal domicile's mortgage, but the mortgage on the rental property itself. Landlords with mortgages on their rental property can go upside down on their notes too.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#79

Post by munk-a »

shinryuu wrote: post #30
ericmcer wrote: post #13

Earlier quoted context omitted.

Direct cash still has this effect. $1500 to subsidize rent that is $1500 to property owners.

That's the trickle-up economics in action! I'd prefer that.

I've always been a fan of picturing it as "rising tide economics".

Re: America’s Covid job-saving programme gave most of its cash to the rich

#80

Post by qqqwerty »

anonporridge wrote: post #28
pharmakom wrote: post #21

Earlier quoted context omitted.

UBI would likely cool the housing market since people would have the resources to try cheaper places.

This is an important point too. Traditionally, humans have to live where they can find a flow of capital via the jobs available. If every human has a baseline flow of capital attached to them specifically, regardless of where they live, it potentially opens up a ton of possibility in where people can live, because they can do less well paying jobs but still live a good life.

It is also worth comparing this to the current status quo. About ~17% of working age adults in West Virginia are receiving disability benefits[1] vs about 8% for California and New York.

The reasons for this are complex, but in short it is likely due to a mixture of cost of living (disability benefits go farther in LOC areas), economic opportunity (disability is "more attractive" when job opportunities are scare), and demographics (older, more blue collar, etc...). But regardless of how or why these discrepancies exist, we have essentially created a system which incentives our population to self-sort geographically based on their ability to contribute economically. That is of course problematic in and of itself, but this also means we have a real life pseudo "UBI experiment" that we can evaluate. And if you look at the data, nearly all of the states with high disability percentages are low cost of living states, particularly when it comes to housing prices.

So anyone who complains about how UBI would increase housing costs needs to first account for the fact that large swaths of the working age population are already receiving benefits similar in level to a UBI (disability is about $1600/mo). And despite the higher concentration of beneficiaries in areas like WV, we haven't seen much of any impact in real estate or local inflation. If anything we have seen the opposite.

[1] https://www.mathematica.org/dataviz/state-disability-maps

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