https://apnews.com/article/real-estate-housing-market-home-p...
https://www.in2013dollars.com/us/stocks/s-p-500/1997?amount=...
1. $83k is not the total cost of ownership; it's just the loan balance. Just looking at a home mortgage calculator, the out-of-pocket costs of buying an $83k home at the historical interest rate of 1997, which was about 7.6%, is about $363k[0].
2. Homelessness is a crime in most states, so housing becomes a natural short position that everyone has to cover, just like taxes.
Outside of estate sales, it is very rare for a home seller to not also be a home buyer. The monetary value of the home is, for them, a way to accelerate and account for what would otherwise be a barter transaction. So if you're expecting to have to buy a home for a million dollars, and you've already spent $350k on the loan, then $1.2 million means you'd be about $150k in the negative, not counting closing costs and moving costs, compared to doing nothing. The $1.3m asking price is close to break even for people who aren't planning on dying anytime soon.
[0] I used this calculator: https://www.calculator.net/mortgage-calculator.html?chousepr...
I often think about why this is happening now without invoking the default "evil rich people" hypothesis. I think it's because world population increased so fast in the last decades that there is simply not enough resources, land, high paying jobs for everyone to achieve a comfortable life. And because the population is so high and the world so connected, it's easier for a single person to accumulate wealth because talent or sheer luck. IE. build the right app at the right time and get rich almost instantly. Society seems to be self correction mode by not having nearly as many babies recent years.
On the contrary, (in the US) I think there is at least enough land and resources (including food) that a modest haircut on the ultra-rich would go a long way for the lower-middle classes.
On the contrary, (in the US) I think there is at least enough land and resources (including food) that a modest haircut on the ultra-rich would go a long way for the lower-middle classes.
An interesting factoid from the Roman Empire is that in their later years there was a major fertility collapse to the point that various laws were passed in order to try to motivate fertility in various ways, and they ultimately failed.
I don't know what to take from that yet, if anything, but I think it's obvious that we've similarly entered well into an 'end of empire' type era, and fertility rates have also again collapsed. So again, I think it's simply interesting to ponder.
The same thing happened (declining fertility rates) between WW1 and WW2, which I found interesting. Also a time of great wealth inequality and economic dislocation.
Another thing I got from the same book (Dark Continent) was that pre-Nazi Germany was basically being run by the equivalent of executive orders due to political polarisation and deadlock in the Parliament. Definite vibes of modern US in that statement.
https://en.wikipedia.org/wiki/Dark_Continent:_Europe%27s_Twe...
I don't know if the same was true in Rome, but indirect evidence would suggest it may well have been. Here [1] is a selection of some of the laws that were created to motivate fertility. They definitely target what were probably higher class citizens - concubinage was legally recognized, inheritance was one of the main targets of penalties, ranking of politicians was determined by their number of children, and so on. There was even apparently some angle shoot where people tried to marry very underage girls to avoid the penalties against unmarried men while also having a legal justification for having no children 'yet'.
What do you mean? In the French protests, the "evil rich people" hypothesis is very present. Every other protester was brandishing "tax the rich" placards.
So I really don't get your original point in this context.
You got it exactly backwards. Population growth meant lots of children that consume but don't produce anything. This generates demand for workers who produce but don't consume (e.g. parents). Now that population growth has stopped, there are no more new consumers and the existing consumers are saturating, because they already have everything they could possibly want, with the exception of high priced things like housing.
Rising house prices increase the obligation to work for money, but they don't generate demand for more work. This leads to demand saturation.
Rich people do not generate demand, because they invest their surplus only when they expect to obtain an even greater surplus, which means they increase supply, which leads to even faster market saturation. You can't invest your way out of saturation unless you are okay with negative returns.
Communism is wrong, because its appeal lies in the fact that people hate their bosses. It literally tells you employment is the problem even though there have been historical periods after wars where markets were not saturated and the demand for labor was high. Employment was objectively good for workers during those times.
To this day communists do not have a theory that explains why there is a structural demand deficit for labor. The obvious answer is the one I laid out above. There are people who provide more labor hours to the market than they consume labor hours from the market, leading to an accumulation of labor hour credits (some people call it money) and the corresponding labor hour debit (some people call it debt). The communists would object to this by invoking their reserve army of labor theory, but that doesn't actually explain anything, it just shuffles around who gets hired. The argument is that competition between workers leads to employers only hiring the most productive employees that are necessary to supply the total demand for labor, but if the total demand for labor is equivalent to the supply of labor, there wouldn't be a reserve army in the first place. A critique based on competition leading to exploitation decides who wins the game of musical chairs, but it doesn't tell us why there is a shortage of musical chairs to begin with.
Obviously, the problem is the duration difference between the labor hour credit and the debit. You can hold labor hour credits at no cost, which is a free lunch. Holding labor hour debit means paying a fee and having a deadline each month, but the true duration of the debit is equal to the credit that created it. The demand for free lunches is infinite, which artificially inflates the holding period towards infinity and since one persons credit holdings are another persons debit holdings, debit is increasing towards infinity as well. This is what allows the labor demand deficit to grow over time.
The solution to this problem is to reject neoclassical economics with its automatic assumption of equilibrium and to build institutions that encourage equilibrium formation. The truth is that it's not only communists that hate equilibrium. Capitalists hate it as well.