It is probably worth tackling the elephant in the room when it comes to housing costs: every purchase of a house for a price that the buyer thinks is astronomical and indicative of the sheer lunacy of the housing market, is also a sale of a house that the seller thinks is a potentially life changing influx of cash in exchange for an asset that they invested in and feel entitled to profit from.
There is a generation of people who are counting on the sale of a house at a high price to partially fund their retirement. Any policy designed to provide relief to the buyer in that situation will, by definition, also provide pain to the seller. And those sellers are very typically older people (boomers, often), who vote.
So in truth, we will not deal with housing until we are ready to turn the page on the boomer generation. Because we have to piss off the old people to fix this, and to date our country has been categorically incapable of committing to any course of action that does that. So we won't fix the housing market until we are capable of crossing that bridge. And I wholeheartedly support racing towards that goal.
This would be a huge deal. Perhaps the most important thing that our country could do. Our governments at every level are currently struggling under the accumulated weight of having to deal with 50 years of boomer bullshit. Every stupid political battle they had, every compromise to please the special interests of their generational priorities, every convoluted plan to deal with (or avoid dealing with) all of the self-indulgent nonsense that they marinated in since the 70's.... All of it has crippled our institutions and enfeebled our government.
Now that the people themselves are clearly so infirm as a generation, can we finally take power from them and move on? If we can't, then we will allow our country to be driven over a cliff by what is essentially a ruling class of senile, barely lucid octogenarians.
Instead, we should make housing the first stand in this generational battle. Piss off the sellers (the elderly) for the greater benefit of the buyers - families, students, workers - you know, the future of the country! Any society whose decisions favor the past rather than the future is doomed to collapse. So let's prioritize prosperity for the future rather than for the past.
Do you plan on getting old? Perhaps, you'll do the honorable thing and shuffle off the stage at the first opportunity, so as not to become a burden to those younger than yourself. Someday, hopefully soon, you can experience the joys of Financial Repression for the remainder of your days after your human capital is expended and you have only your savings to live upon. Savings you never had to scrimp, save, and work long hours for because old people blocked you at every turn, yet for some inexplicable reason, all the while, they built and funded with their taxes and bond obligations the schools and universities and even apparently wasted at least a trillion or so of tuition that will likely never be repaid by the younger ones they foolishly brought forth and raised. You are right, they were and still are old fools. They must of been born old fools and never knew the joys of youthful wisdom. Losers. Why waste those savings on old people you have so convincingly argued are blocking you from taking what you feel they owe you! As for the barely lucid octogenarians you are right again. Perhaps your nimble minded cohort, presumably with more intellectual gifts than any generation that has ever preceded it, can do better if they'd only VOTE for the reams of qualified candidates your generation puts forward. Madison Cawthorn had such promise! Oh well. If you are the "future" then the "boomers" really were where failures at raising your parents.
It's not the "first opportunity". It's continuous death grip, religious adherence to expired ideas about work, about sense of place, about what to value and how, for which "boomers" have in comical, cartoon-like fashion so stubbornly, desperately and destructively strapped the fate of the entire country through sheer force of numbers, hubris, and a peakless mountain of navel gazing but barely coherent drivel such as this very word salad you just posted, gramps. But unlike your generation, when we are actually, thankfully, finally ready to push your old ass off towards the horizon on your little iceberg, you'll know, because unlike you folks, what we learned is that when we stick it in you upwards and sideways, at least have the heart to tell you to your face.
Also, as people age their perspectives and priorities shift. I am sure that a person’s 21 year old self would be quite different from their 71 year old self.
“Any policy designed to provide relief to the buyer in that situation will, by definition, also provide pain to the seller.”
I don’t think this is true. Or, rather, it’s only true if the house must remain exactly one house. If instead it’s upzoned, the land it’s on can be sold for more money and multiple buyers or renters can then enjoy cheaper housing in a larger building. Everyone wins!
That only works if the sellers can move out of states most interested in harming young people and restricting new construction through permits, enviro rules and zoning. The fact that there ARE cheap states to move to that encourage housing construction undermines your argument that “boomers” as a group are to blame. The mortgage and property tax deductions have been part of the tax code for a long, long time.
I am in favor of eliminating the deductions for mortgages and state taxes, but in the meantime companies should move jobs to cheaper states and or make jobs remote. This is already happening.
Walk around midtown Manhattan or SF’s Financial district and SOMA to see what their future looks like.
>>>So in truth, we will not deal with housing until we are ready to turn the page on the boomer generation<<<
I personally don't think society will deal with housing affordability meaningfully—as in abolish the local government NIMBY veto altogether—until some state's home ownership rate drops way below 50%. Incumbent home owners simply don't see much upside in allowing builders to increase the rate at which they're able to supply new housing. (Everything else is just nibbling at the edges). The majority of voters, in essence, are engaged in what they believe is rent-seeking. (I use the word "believe" because it's not at all clear to me they actually benefit financially in the long run from house supply constriction).
I'm not a pessimist on this score. I'm just realistic about the timeline (similar to my view on bringing meaningful gun regulations to America). Maybe the 2030s. Or 2040s. California will get there first, I reckon. Who'd have thought during Bill Clinton's presidency (seems like yesterday to me) we'd be where were are now with respect to cannabis legalization, say, or gay marriage*?
"So in truth, we will not deal with housing until we are ready to turn the page on the boomer generation. Because we have to piss off the old people to fix this, and to date our country has been categorically incapable of committing to any course of action that does that. So we won't fix the housing market until we are capable of crossing that bridge. And I wholeheartedly support racing towards that goal."
If you don't die young, you will be old some day. Karma can be a real bitch.
The problem is not so much boomers as it is developers. They are the ones that point the finger at boomers who "refuse" to move on. So they can't just swoop in and scarf up another home to put on the RENTAL market.
Meanwhile, what do these developers build? Luxury rentals where a 450 sf box is $2500/month. Then they sit in bewilderment when the boomers won't sell their homes to move into a $2500/month total rip-off.
I was listening to a podcast with a developer explaining how developers work. He was telling it in a "dark truths" form.
Why do developers build only luxury developments? Because they're the only thing financiers will let them build. Developers need to get money from lenders, institutional investors and insurers to produce a project that will protect their principal and generate cash flow. There's no such thing as "affordable" housing because the sell or lease price of a home reflects the baked-in cost of acquiring the land, building the property, interest, insurance, etc. To put up a unit that is below the market price, either government must pay the property owner out of tax revenues or whatever is reserved for affordable housing, like 20% of units, means that the remaining 80% must pay well above market rate to compensate for the below-market housing available.
Developers are neither more nor less guilty than any homeowner of any age who is counting on price appreciation as their primary source of wealth.
Housing as shelter vs. housing as an asset class -- affordability vs. wealth-building -- are fundamentally at odds. If you want affordable housing, you have to make the markets do to housing prices what the markets are doing to crypto and NFTs right now.
What the OP misses is that even if the Boomers were the “problem” they still are citizens with an equal right to vote as subsequent generations have.
They have spent a lifetime paying taxes and investing in America. They have earned the right to have a say in policy. You may not like how old people vote, fine. Persuade them to adopt your views. That is how democratic institutions function.
It is also a stretch for him to lump Boomers into a single block of people.
"can we finally take power from them and move on?" No. The boomers (liberal and conservative together) are going to end our republic before we can pry it from their cold, dead hands.
You'll like this then, _The Revolt of The Public and the Crisis of Authority in the New Millennium_, by Martin Gurri. Sadly, Martin Gurri is over thirty so u probably won't be able to *trust* any of his findings. Odd that is, as his work was devoured by the SillyCon Valley architects of the breakdown between 'authority' and 'the people' that once accepted their 'truths' with only rare rejections. Odd to since these self-appointed disrupters of the orderly flow of authority/information downward were only able to do what they did because they had the freedom, education, tools, capital, and so on, provided by their predecessors, you know, old people. I'd have to agree to a large extent with Gurri that watching the 2008 GFC (Great FlusterCuck) unfold in the nascent Internet age and seeing Authority bungle and flub the new Information reality in real-time had a much deeper impact on OECD society than most could foresee, much less accept the consequences of without time to access and adapt. As usual, simpletons in America, less so in Europe, fail to understand a person's age really is not the determining factor for your perceived woes. It is Class. But that is an immense subject which requires a mind uncluttered with preconceived misapprehensions.
"... to know things, one has to read a lot. Other forms of information consumption seldom have the same staying power as information gleaned from books. So read, people!" -- Marko Papic
I think a huge cause for Biden's unpopularity is inflation, and the average American falsely assuming that the President is the one primarily responsible for controlling it.
If this global inflation had not occured, and we were instead in a "regular" economy, the average voter could easily have gotten on board with focusing on climate change, cash benefits, voter rights reform, and the like.
I imagine the history books are going to include a quip about how inflation was very high under Biden's Presidency. But will they also mention how any economist would attest that the vast majority of power to control inflation is vested outside of the Oval Office? I doubt it.
And that's kind of bullshit, frankly: how someone can do the right things, but bad events happen outside their control, so people just assume it's their fault. Everytime I read an article that casually mentions Biden's approval and inflation, I feel like I'm taking crazy pills. How hard is it for the media to acknowledge that it's mostly outside of the president's control? And why do even the more enlightened writers, including yourself, simply take it as a given that people will blame the president for inflation or the economic cycle in general, without stopping to comment on how unfair that is? Why is this a thing that we are ok with, or don't bother trying to fix?
Yeah, those “I did that!” Biden stickers at gas pumps piss me off. Even if it weren’t for the Ukraine war, we’d still be coming out of our first pandemic as a modern global economy, so of course things are going to be somewhat messed up and wonky. It happened after world war 2 as well, and will happen anytime in the future where there is a worldwide shock to the system.
In this case it's a bit different though, as I think it's increasingly clear that the American Rescue Plan did contribute to inflation (not the only factor, for sure). As a Biden supporter myself, it's a bit depressing to realize that the big bill that was supposed to save the economy has actually ended up screwing over the whole rest of the Democrats' legislative agenda.
Ishaan would the U.S. be better off if hadn't passed ARPA? And would Manchin really have jumped on board with a climate plan, assualt weapon ban, protect woman's rights? No we would be in the exact same place except Republicans would be accusing the DEMS of not doing anything to provide relief to the American people. And of course it put upward pressure on prices while COVID forced increases in wages. But the majority of the inflation isn't because of the American Rescue Plan.
>>>A big pillar of Biden’s agenda was the “care economy” — the idea that as manufacturing jobs get automated away, people will move en masse into health care, eldercare, education and child care. In fact, this has already been the trend for many decades now. So Biden wanted to speed the transition along, to ensure mass employment with good wages.<<<
I've read Noah's commentary on this previously. If this really is one thing the Biden people were up to—and I have no particular reason to doubt his analysis—the stymying of Bidenomics—at least for the time being—might not be, erm, an entirely negative development. There are a few reasons for this:
1) As Noah points out, it's far from clear this sector needs "strengthening"—care jobs are growing on their own.
2) Some of the subsidization methods in question appear likely to make certain kinds of care in America less, not more, affordable.
3) It's hard to imagine the care sphere isn't a pretty low productivity sector. It seems questionable helping a low productivity sector get even bigger is likely to boost general economic performance or living standards.
First recession where the root cause is *too many jobs*.
We’d have more abundance, but the tech sector, which is where productivity improvements come from, has been too busy chasing ad-tech and stupid crypto schemes versus deploying industrial automation.
Most of that is reversing, and my hope is we get back to building real stuff over technology to manage NFT collections.
>>>First recession where the root cause is *too many jobs*.<<<
I don't think the recession we're likely sliding into is all *that* much different in terms of causation than what we experienced in 1970, 1974, or 1980-1982. What it's definitely NOT like is 1990, 2001 or 2008, all of which were classic investment bubble bursts (with significant debt overhang).
This one is of the "Fed taking away the punch bowl" variety (admittedly the circumstances leading up to it are different than anything in memory). I do believe, though, that the circumstances under which we're sliding into recession (if indeed, as seems likely, a recession is descending) make it possible we'll see an old-school, V-shaped recovery, and not one of those tortuously slow, jobless, tepid recoveries we've experienced in recent cycles.
Buttigieg, IIRC, was going with "Medicare for all who want it" (Which I thought worked reasonably well both in terms of labelling and policy). I'd like to see the US adopt something like "Medicare for all who want it *plus* automatic enrollment." (Although the underlying bones would be more along the lines of the more frugal Medicaid system than spend-thrifty Medicare. But pretty sure the latter label polls better!).
The "common progressive belief that inequality trends upward without a big corrective push by the government" has never been about wages. It has always been about investment income, inheritance, and the like.
Wealth levels, not wage levels, do trend upwards without a big corrective push by the government.
Noah, interested to understand why you recommend the Japanese and Korean model for a national health insurance structure to address our health care crisis in the U.S.? Is it political expediancy or do you think that it has the most merit from an economic, societal and HC quality perspective?
Healthcare is like energy. It drives the cost of every other piece of the economy. There is no other segment of our economy where change could bring about greater economic prosperity or healthy societal impact. Where could we save $2T a year (~the size of the 8th largest economy) in the world and re-deploy those resources to address climate change, education, infrastructure and housing? Political compromise isn't the answer here. It is making U.S. Citizens aware of the biggest government subsidy ever in the history of the world and how it is keeping their wages low, reducing their ability to change jobs or start their own business and how it is making the U.S. increasingly uncompetitive in the global economy. This is a winnable fight if it is conducted properly. But very interested in hearing yours and others perspective.
Why does it feel like Noah’s approach is just parasitic on Ezra Klein’s supply side progressivism (itself inspired by the left’s GND) with a lot of ‘centrist’ rhetoric to appeal to his readers, who it must be said, are not very smart…
>>>But the other two pillars — a big push for care jobs and a big increase in cash benefits — look more suited to 2009 than to 2022.<<<
Hindsight, unfortunately, tends to be a lot more accurate than foresight. Democratic policy people got some things pretty badly wrong in 2021, but it's easy to see why. Essentially, the lessons of 2009 were over-learned. And then some. For years we heard about insufficient demand. We also heard about how inadequate stimulus in the wake of the Great Recession reverberated for years, politically, to the detriment of Democrats. And so in 2021 the party of FDR was determined not to repeat those mistakes. The future is hard to predict!
For the record, I'm not overly disappointed with the way things have played out for a couple of reasons. First, I was personally pretty nervous in November/December of 2020 that Biden might not even be able to secure an Electoral College victory (due to GOP shenanigans), much less get a bunch of far-reaching policies enacted. So my expectations were modest from the get go. Relatedly, I thought Democrats if lucky would probably win only one of those Georgia Senate races in January, 2021. I figured if the country (and Democrats) were lucky, Biden would secure the White House and might be able to get some judged confirmed, and sanity might return to foreign policy and executive branch operations. And that was about it.
And yet both those races were won by Democrats, and a covid relief bill, and an infrastructure bill and a gun control (!) bill have all become law. We also got out of the disastrous Afghanistan quagmire, job creation has been great, and our tattered alliances have been stitched back together. And daily average covid deaths are down by over 90% since Trump's last week in office.
I think there's a pretty strong chance that, say, 24 months from now, not only will inflation have been substantially tamed, but the US economy will be on the far side of a period of weakness (that is, in recovery from recession), and so Joe's chances for a second term will be looking good. I know a lot of people don't agree with that. But in my experience must humans are prisoners of recency bias.
It is interesting to see that Governors, senators and other politicians think that growth in healthcare is good for the economy. The majority of care jobs is detrimental to the U.S. economy.
When we design weapons we want them to maim, injure and terrorize our opponents but not kill them. Why, because it requires two or three soldiers to care for them. It takes two or three guns out of the fight. It distracts and breaks focus. The U.S. HC system is the same. We can't have 2 or 3 people to support 1 person who is contributing to producing needed goods and economic output. The U.S. HC industry along with our construction industry are the most lagging segments in terms of productivey in our economy.
I think the "light at the end of the tunnel that's a train barreling toward us" awaiting the mid-to-late 2020s, other than more partisans in the second civil war, is the health care bomb from all of the COVID care of 2020 to now.
How is our expensive healthcare sector ever going to collect on all of the COVID treatment rendered in the past two years?
Bobson, I wouldn't be concerned about the HC providers collecting on COVID treatment. They made out very well as they always do. They will cry poverty while they increased their profits. No industy does it better than HC. Even fossil fuels and defense contractors can't compete.
Funny not one mention of deficit in article or comment fields. That says something! Certainly low interest rates and ballooning debt set the stage for inflation. But the sparks that ignited it began with chip (electronics) shortages and then energy consumption at the margin by crypto and the inane tariffs implemented by the previous administration. Then the pandemic hit and PPP added fuel to the fire. Ukraine just kept it burning. Early in 2021 Biden should have removed tariffs and put an enormous climate tax on crypto; regardless of the source. Energy and commodity costs would have tanked and Russia would never have attacked. Biden should then have focused on improving the tax system and shutting down loopholes. Along the way there should have been a concerted, early effort to address both low interest rates and high deficits. The economy would have progressed nicely, people would be more trusting in the outlook and the government and inflation would be subdued.
I find it strange you are blaming President Biden for a legislative programme that has not managed to pass through Congress. Why aren't you blaming Congress?
Or, for that matter, the gerrymandered Electoral System that gives voters in poor, agrarian states disproportionate power compared to other states?
Moreover, as you can see arguments by Manchin against key areas of the proposed packages -- how in the world do you think we will pass a National Healthcare system?
Your analysis is extremely cogent but you undermine it by blaming what is arguably a figurehead in the process. At this stage, Biden is more a symptom of the problem rather than the root cause of it.
I wonder how the effect of the subsidies we are not getting compares to the effect of the high energy prices we are getting now compared to the previous decade. Hoping these prices spur on more clean energy and transportation growth, but maybe the market is predicting the prices not to last long enough for real ROI.
I have to take exception to the characterization of child care and elder care as overpriced. It's like calling a good surgeon overpriced- they're expensive, but hopefully worth it. The difference being that those employed in the child care and elder care fields make far less and have far fewer benefits than a surgeon or almost any other job, while carrying a fairly heavy load of responsibility.
It is definitely overpriced - it is expensive for the users and yet somehow barely has paid a living wage to its employees - it seems like there's a necessary inefficient middle administrative or sunk cost layer.
The building costs & licensing requirements are probably part of the inefficient middle administrative layer that is close to a pure loss.
If you're maintaining a 4 toddlers to 1 adult ratio, you can run a 3 adult 12 toddler business from literally any single-family-home in America, and the person running the business can live there. Also at that ratio, that's "be a capable adult who raised their own kids". I don't know the exact cost structure of it, but when I was a toddler in Canada I did spend some time at "Auntie's", which was a tiny from-someone's-house business like this.
Or maybe it's just expensive to staff a daycare center or nursing home adequately and pay for equipment, rent and upkeep, as well as insurance. If a parent of two finds it more rewarding (financially / emotionally / intellectually / whatever) to work than to stay home with their kids, how much less should the people doing the job of caring for those kids make? If our society wants more people in the workforce, they need to find a way to support working parents.
All-payer systems (of the kind we see in countries such as Germany or in states like Maryland) could be a way forward in Healthcare reform, although it will still entail taking on the very powerful Pharma and insurance lobbies, which has usually frustrated rational reform of the kind proposed here.
We also need substantial upgrades to our electricity grids, as the problems in states such as California and Texas illustrate. There will probably be a need for some baseline energy component in gas (or nuclear) to deal with the intermittency and power density issued in renewables, although the latter are certainly becoming more cost effective
It is probably worth tackling the elephant in the room when it comes to housing costs: every purchase of a house for a price that the buyer thinks is astronomical and indicative of the sheer lunacy of the housing market, is also a sale of a house that the seller thinks is a potentially life changing influx of cash in exchange for an asset that they invested in and feel entitled to profit from.
There is a generation of people who are counting on the sale of a house at a high price to partially fund their retirement. Any policy designed to provide relief to the buyer in that situation will, by definition, also provide pain to the seller. And those sellers are very typically older people (boomers, often), who vote.
So in truth, we will not deal with housing until we are ready to turn the page on the boomer generation. Because we have to piss off the old people to fix this, and to date our country has been categorically incapable of committing to any course of action that does that. So we won't fix the housing market until we are capable of crossing that bridge. And I wholeheartedly support racing towards that goal.
This would be a huge deal. Perhaps the most important thing that our country could do. Our governments at every level are currently struggling under the accumulated weight of having to deal with 50 years of boomer bullshit. Every stupid political battle they had, every compromise to please the special interests of their generational priorities, every convoluted plan to deal with (or avoid dealing with) all of the self-indulgent nonsense that they marinated in since the 70's.... All of it has crippled our institutions and enfeebled our government.
Now that the people themselves are clearly so infirm as a generation, can we finally take power from them and move on? If we can't, then we will allow our country to be driven over a cliff by what is essentially a ruling class of senile, barely lucid octogenarians.
Instead, we should make housing the first stand in this generational battle. Piss off the sellers (the elderly) for the greater benefit of the buyers - families, students, workers - you know, the future of the country! Any society whose decisions favor the past rather than the future is doomed to collapse. So let's prioritize prosperity for the future rather than for the past.
Do you plan on getting old? Perhaps, you'll do the honorable thing and shuffle off the stage at the first opportunity, so as not to become a burden to those younger than yourself. Someday, hopefully soon, you can experience the joys of Financial Repression for the remainder of your days after your human capital is expended and you have only your savings to live upon. Savings you never had to scrimp, save, and work long hours for because old people blocked you at every turn, yet for some inexplicable reason, all the while, they built and funded with their taxes and bond obligations the schools and universities and even apparently wasted at least a trillion or so of tuition that will likely never be repaid by the younger ones they foolishly brought forth and raised. You are right, they were and still are old fools. They must of been born old fools and never knew the joys of youthful wisdom. Losers. Why waste those savings on old people you have so convincingly argued are blocking you from taking what you feel they owe you! As for the barely lucid octogenarians you are right again. Perhaps your nimble minded cohort, presumably with more intellectual gifts than any generation that has ever preceded it, can do better if they'd only VOTE for the reams of qualified candidates your generation puts forward. Madison Cawthorn had such promise! Oh well. If you are the "future" then the "boomers" really were where failures at raising your parents.
It's not the "first opportunity". It's continuous death grip, religious adherence to expired ideas about work, about sense of place, about what to value and how, for which "boomers" have in comical, cartoon-like fashion so stubbornly, desperately and destructively strapped the fate of the entire country through sheer force of numbers, hubris, and a peakless mountain of navel gazing but barely coherent drivel such as this very word salad you just posted, gramps. But unlike your generation, when we are actually, thankfully, finally ready to push your old ass off towards the horizon on your little iceberg, you'll know, because unlike you folks, what we learned is that when we stick it in you upwards and sideways, at least have the heart to tell you to your face.
Imagine being this old and this insecure. Sad.
The generational hate is kind of off-putting.
Instead of being vindictive about old people voting regularly (oh the horror...) focus on getting the non-olds to vote regularly too.
Also, as people age their perspectives and priorities shift. I am sure that a person’s 21 year old self would be quite different from their 71 year old self.
Absolutely.
It's been interesting to see this happening with myself as I went from my 20s to late-30s.
And especially after I had kids.
I shifted in notable ways from a:
'dont restrain my options I need to grow/excel as much as possible'
...to more of a:
'dont rock the boat and disrupt or ruin the good stuff I've established' mindset.
"barely lucid octogenarians"
The oldest boomers are in their mid 70's.
“Any policy designed to provide relief to the buyer in that situation will, by definition, also provide pain to the seller.”
I don’t think this is true. Or, rather, it’s only true if the house must remain exactly one house. If instead it’s upzoned, the land it’s on can be sold for more money and multiple buyers or renters can then enjoy cheaper housing in a larger building. Everyone wins!
This smacks of bitterness.
What institutions have the Boomers specifically crippled? Some of the institutions our nation prospers from originated under the Boomer aegis.
Like the Silent/Greatest Generation before them, the Boomers had their shares of virtue and vice. Such is the way of human history.
I am certain that Gen X and the Millennials will have a similar reckoning with history about 50-70 years from now.
Gen Xers were/are the slackers that were told by their elders they will never amount to anything in the world. And they were right!
That only works if the sellers can move out of states most interested in harming young people and restricting new construction through permits, enviro rules and zoning. The fact that there ARE cheap states to move to that encourage housing construction undermines your argument that “boomers” as a group are to blame. The mortgage and property tax deductions have been part of the tax code for a long, long time.
I am in favor of eliminating the deductions for mortgages and state taxes, but in the meantime companies should move jobs to cheaper states and or make jobs remote. This is already happening.
Walk around midtown Manhattan or SF’s Financial district and SOMA to see what their future looks like.
>>>So in truth, we will not deal with housing until we are ready to turn the page on the boomer generation<<<
I personally don't think society will deal with housing affordability meaningfully—as in abolish the local government NIMBY veto altogether—until some state's home ownership rate drops way below 50%. Incumbent home owners simply don't see much upside in allowing builders to increase the rate at which they're able to supply new housing. (Everything else is just nibbling at the edges). The majority of voters, in essence, are engaged in what they believe is rent-seeking. (I use the word "believe" because it's not at all clear to me they actually benefit financially in the long run from house supply constriction).
I'm not a pessimist on this score. I'm just realistic about the timeline (similar to my view on bringing meaningful gun regulations to America). Maybe the 2030s. Or 2040s. California will get there first, I reckon. Who'd have thought during Bill Clinton's presidency (seems like yesterday to me) we'd be where were are now with respect to cannabis legalization, say, or gay marriage*?
*I know, I know, this right is looking shaky.
"So in truth, we will not deal with housing until we are ready to turn the page on the boomer generation. Because we have to piss off the old people to fix this, and to date our country has been categorically incapable of committing to any course of action that does that. So we won't fix the housing market until we are capable of crossing that bridge. And I wholeheartedly support racing towards that goal."
If you don't die young, you will be old some day. Karma can be a real bitch.
The problem is not so much boomers as it is developers. They are the ones that point the finger at boomers who "refuse" to move on. So they can't just swoop in and scarf up another home to put on the RENTAL market.
Meanwhile, what do these developers build? Luxury rentals where a 450 sf box is $2500/month. Then they sit in bewilderment when the boomers won't sell their homes to move into a $2500/month total rip-off.
I was listening to a podcast with a developer explaining how developers work. He was telling it in a "dark truths" form.
Why do developers build only luxury developments? Because they're the only thing financiers will let them build. Developers need to get money from lenders, institutional investors and insurers to produce a project that will protect their principal and generate cash flow. There's no such thing as "affordable" housing because the sell or lease price of a home reflects the baked-in cost of acquiring the land, building the property, interest, insurance, etc. To put up a unit that is below the market price, either government must pay the property owner out of tax revenues or whatever is reserved for affordable housing, like 20% of units, means that the remaining 80% must pay well above market rate to compensate for the below-market housing available.
Developers are neither more nor less guilty than any homeowner of any age who is counting on price appreciation as their primary source of wealth.
Housing as shelter vs. housing as an asset class -- affordability vs. wealth-building -- are fundamentally at odds. If you want affordable housing, you have to make the markets do to housing prices what the markets are doing to crypto and NFTs right now.
What the OP misses is that even if the Boomers were the “problem” they still are citizens with an equal right to vote as subsequent generations have.
They have spent a lifetime paying taxes and investing in America. They have earned the right to have a say in policy. You may not like how old people vote, fine. Persuade them to adopt your views. That is how democratic institutions function.
It is also a stretch for him to lump Boomers into a single block of people.
"can we finally take power from them and move on?" No. The boomers (liberal and conservative together) are going to end our republic before we can pry it from their cold, dead hands.
You'll like this then, _The Revolt of The Public and the Crisis of Authority in the New Millennium_, by Martin Gurri. Sadly, Martin Gurri is over thirty so u probably won't be able to *trust* any of his findings. Odd that is, as his work was devoured by the SillyCon Valley architects of the breakdown between 'authority' and 'the people' that once accepted their 'truths' with only rare rejections. Odd to since these self-appointed disrupters of the orderly flow of authority/information downward were only able to do what they did because they had the freedom, education, tools, capital, and so on, provided by their predecessors, you know, old people. I'd have to agree to a large extent with Gurri that watching the 2008 GFC (Great FlusterCuck) unfold in the nascent Internet age and seeing Authority bungle and flub the new Information reality in real-time had a much deeper impact on OECD society than most could foresee, much less accept the consequences of without time to access and adapt. As usual, simpletons in America, less so in Europe, fail to understand a person's age really is not the determining factor for your perceived woes. It is Class. But that is an immense subject which requires a mind uncluttered with preconceived misapprehensions.
"... to know things, one has to read a lot. Other forms of information consumption seldom have the same staying power as information gleaned from books. So read, people!" -- Marko Papic
This is true. You can sell your house. But where do you go? There are no bargains in the housing market - anywhere.
I think a huge cause for Biden's unpopularity is inflation, and the average American falsely assuming that the President is the one primarily responsible for controlling it.
If this global inflation had not occured, and we were instead in a "regular" economy, the average voter could easily have gotten on board with focusing on climate change, cash benefits, voter rights reform, and the like.
I imagine the history books are going to include a quip about how inflation was very high under Biden's Presidency. But will they also mention how any economist would attest that the vast majority of power to control inflation is vested outside of the Oval Office? I doubt it.
And that's kind of bullshit, frankly: how someone can do the right things, but bad events happen outside their control, so people just assume it's their fault. Everytime I read an article that casually mentions Biden's approval and inflation, I feel like I'm taking crazy pills. How hard is it for the media to acknowledge that it's mostly outside of the president's control? And why do even the more enlightened writers, including yourself, simply take it as a given that people will blame the president for inflation or the economic cycle in general, without stopping to comment on how unfair that is? Why is this a thing that we are ok with, or don't bother trying to fix?
Yeah, those “I did that!” Biden stickers at gas pumps piss me off. Even if it weren’t for the Ukraine war, we’d still be coming out of our first pandemic as a modern global economy, so of course things are going to be somewhat messed up and wonky. It happened after world war 2 as well, and will happen anytime in the future where there is a worldwide shock to the system.
In this case it's a bit different though, as I think it's increasingly clear that the American Rescue Plan did contribute to inflation (not the only factor, for sure). As a Biden supporter myself, it's a bit depressing to realize that the big bill that was supposed to save the economy has actually ended up screwing over the whole rest of the Democrats' legislative agenda.
One of the Federal Reserve branches attributes almost 100% of inflation to the American Rescue Plan. Noah wrote up about it.
Ishaan would the U.S. be better off if hadn't passed ARPA? And would Manchin really have jumped on board with a climate plan, assualt weapon ban, protect woman's rights? No we would be in the exact same place except Republicans would be accusing the DEMS of not doing anything to provide relief to the American people. And of course it put upward pressure on prices while COVID forced increases in wages. But the majority of the inflation isn't because of the American Rescue Plan.
although i mean if covid hadn't happened the donald may well have gotten reelected, so these bad events outside of their control cut both ways...
>>>A big pillar of Biden’s agenda was the “care economy” — the idea that as manufacturing jobs get automated away, people will move en masse into health care, eldercare, education and child care. In fact, this has already been the trend for many decades now. So Biden wanted to speed the transition along, to ensure mass employment with good wages.<<<
I've read Noah's commentary on this previously. If this really is one thing the Biden people were up to—and I have no particular reason to doubt his analysis—the stymying of Bidenomics—at least for the time being—might not be, erm, an entirely negative development. There are a few reasons for this:
1) As Noah points out, it's far from clear this sector needs "strengthening"—care jobs are growing on their own.
2) Some of the subsidization methods in question appear likely to make certain kinds of care in America less, not more, affordable.
3) It's hard to imagine the care sphere isn't a pretty low productivity sector. It seems questionable helping a low productivity sector get even bigger is likely to boost general economic performance or living standards.
First recession where the root cause is *too many jobs*.
We’d have more abundance, but the tech sector, which is where productivity improvements come from, has been too busy chasing ad-tech and stupid crypto schemes versus deploying industrial automation.
Most of that is reversing, and my hope is we get back to building real stuff over technology to manage NFT collections.
>>>First recession where the root cause is *too many jobs*.<<<
I don't think the recession we're likely sliding into is all *that* much different in terms of causation than what we experienced in 1970, 1974, or 1980-1982. What it's definitely NOT like is 1990, 2001 or 2008, all of which were classic investment bubble bursts (with significant debt overhang).
This one is of the "Fed taking away the punch bowl" variety (admittedly the circumstances leading up to it are different than anything in memory). I do believe, though, that the circumstances under which we're sliding into recession (if indeed, as seems likely, a recession is descending) make it possible we'll see an old-school, V-shaped recovery, and not one of those tortuously slow, jobless, tepid recoveries we've experienced in recent cycles.
You need a name for this insurance system if you want it to catch on. Maybe partial-medicare-for-all
Buttigieg, IIRC, was going with "Medicare for all who want it" (Which I thought worked reasonably well both in terms of labelling and policy). I'd like to see the US adopt something like "Medicare for all who want it *plus* automatic enrollment." (Although the underlying bones would be more along the lines of the more frugal Medicaid system than spend-thrifty Medicare. But pretty sure the latter label polls better!).
The "common progressive belief that inequality trends upward without a big corrective push by the government" has never been about wages. It has always been about investment income, inheritance, and the like.
Wealth levels, not wage levels, do trend upwards without a big corrective push by the government.
EDIT: Here is some data to back it up:
https://realtimeinequality.org/
You see in the top half of the page, income inequality is decreasing. But overall wealth inequality is increasing.
Wealth is the important unit here. Income can't be spent directly. It gets converted to wealth, however briefly, before being spent.
Noah, interested to understand why you recommend the Japanese and Korean model for a national health insurance structure to address our health care crisis in the U.S.? Is it political expediancy or do you think that it has the most merit from an economic, societal and HC quality perspective?
Healthcare is like energy. It drives the cost of every other piece of the economy. There is no other segment of our economy where change could bring about greater economic prosperity or healthy societal impact. Where could we save $2T a year (~the size of the 8th largest economy) in the world and re-deploy those resources to address climate change, education, infrastructure and housing? Political compromise isn't the answer here. It is making U.S. Citizens aware of the biggest government subsidy ever in the history of the world and how it is keeping their wages low, reducing their ability to change jobs or start their own business and how it is making the U.S. increasingly uncompetitive in the global economy. This is a winnable fight if it is conducted properly. But very interested in hearing yours and others perspective.
People in the US with insurance think they have wonderful health care until they start to need it. Or they get to Medicare.
Why does it feel like Noah’s approach is just parasitic on Ezra Klein’s supply side progressivism (itself inspired by the left’s GND) with a lot of ‘centrist’ rhetoric to appeal to his readers, who it must be said, are not very smart…
>>>But the other two pillars — a big push for care jobs and a big increase in cash benefits — look more suited to 2009 than to 2022.<<<
Hindsight, unfortunately, tends to be a lot more accurate than foresight. Democratic policy people got some things pretty badly wrong in 2021, but it's easy to see why. Essentially, the lessons of 2009 were over-learned. And then some. For years we heard about insufficient demand. We also heard about how inadequate stimulus in the wake of the Great Recession reverberated for years, politically, to the detriment of Democrats. And so in 2021 the party of FDR was determined not to repeat those mistakes. The future is hard to predict!
For the record, I'm not overly disappointed with the way things have played out for a couple of reasons. First, I was personally pretty nervous in November/December of 2020 that Biden might not even be able to secure an Electoral College victory (due to GOP shenanigans), much less get a bunch of far-reaching policies enacted. So my expectations were modest from the get go. Relatedly, I thought Democrats if lucky would probably win only one of those Georgia Senate races in January, 2021. I figured if the country (and Democrats) were lucky, Biden would secure the White House and might be able to get some judged confirmed, and sanity might return to foreign policy and executive branch operations. And that was about it.
And yet both those races were won by Democrats, and a covid relief bill, and an infrastructure bill and a gun control (!) bill have all become law. We also got out of the disastrous Afghanistan quagmire, job creation has been great, and our tattered alliances have been stitched back together. And daily average covid deaths are down by over 90% since Trump's last week in office.
I think there's a pretty strong chance that, say, 24 months from now, not only will inflation have been substantially tamed, but the US economy will be on the far side of a period of weakness (that is, in recovery from recession), and so Joe's chances for a second term will be looking good. I know a lot of people don't agree with that. But in my experience must humans are prisoners of recency bias.
It is interesting to see that Governors, senators and other politicians think that growth in healthcare is good for the economy. The majority of care jobs is detrimental to the U.S. economy.
When we design weapons we want them to maim, injure and terrorize our opponents but not kill them. Why, because it requires two or three soldiers to care for them. It takes two or three guns out of the fight. It distracts and breaks focus. The U.S. HC system is the same. We can't have 2 or 3 people to support 1 person who is contributing to producing needed goods and economic output. The U.S. HC industry along with our construction industry are the most lagging segments in terms of productivey in our economy.
I think the "light at the end of the tunnel that's a train barreling toward us" awaiting the mid-to-late 2020s, other than more partisans in the second civil war, is the health care bomb from all of the COVID care of 2020 to now.
How is our expensive healthcare sector ever going to collect on all of the COVID treatment rendered in the past two years?
Bobson, I wouldn't be concerned about the HC providers collecting on COVID treatment. They made out very well as they always do. They will cry poverty while they increased their profits. No industy does it better than HC. Even fossil fuels and defense contractors can't compete.
Funny not one mention of deficit in article or comment fields. That says something! Certainly low interest rates and ballooning debt set the stage for inflation. But the sparks that ignited it began with chip (electronics) shortages and then energy consumption at the margin by crypto and the inane tariffs implemented by the previous administration. Then the pandemic hit and PPP added fuel to the fire. Ukraine just kept it burning. Early in 2021 Biden should have removed tariffs and put an enormous climate tax on crypto; regardless of the source. Energy and commodity costs would have tanked and Russia would never have attacked. Biden should then have focused on improving the tax system and shutting down loopholes. Along the way there should have been a concerted, early effort to address both low interest rates and high deficits. The economy would have progressed nicely, people would be more trusting in the outlook and the government and inflation would be subdued.
I wouldn't be opposed to a 100% capital gains tax on cryptocurrency. ;)
I find it strange you are blaming President Biden for a legislative programme that has not managed to pass through Congress. Why aren't you blaming Congress?
Or, for that matter, the gerrymandered Electoral System that gives voters in poor, agrarian states disproportionate power compared to other states?
Moreover, as you can see arguments by Manchin against key areas of the proposed packages -- how in the world do you think we will pass a National Healthcare system?
Your analysis is extremely cogent but you undermine it by blaming what is arguably a figurehead in the process. At this stage, Biden is more a symptom of the problem rather than the root cause of it.
I wonder how the effect of the subsidies we are not getting compares to the effect of the high energy prices we are getting now compared to the previous decade. Hoping these prices spur on more clean energy and transportation growth, but maybe the market is predicting the prices not to last long enough for real ROI.
Has anyone done any guesstimates on this?
I have to take exception to the characterization of child care and elder care as overpriced. It's like calling a good surgeon overpriced- they're expensive, but hopefully worth it. The difference being that those employed in the child care and elder care fields make far less and have far fewer benefits than a surgeon or almost any other job, while carrying a fairly heavy load of responsibility.
It is definitely overpriced - it is expensive for the users and yet somehow barely has paid a living wage to its employees - it seems like there's a necessary inefficient middle administrative or sunk cost layer.
I think this is just the reality of cost disease.
Consider someone making $20/hr, and watching 4 toddlers. No other benefits.
If they work for 8 hours per day (which isn't enough to most working parents), that's $40/day for each kid. Or $200 per week.
Then factor in that 10 hours is pretty common, and building costs and insurance cost and licensing requirements...
The building costs & licensing requirements are probably part of the inefficient middle administrative layer that is close to a pure loss.
If you're maintaining a 4 toddlers to 1 adult ratio, you can run a 3 adult 12 toddler business from literally any single-family-home in America, and the person running the business can live there. Also at that ratio, that's "be a capable adult who raised their own kids". I don't know the exact cost structure of it, but when I was a toddler in Canada I did spend some time at "Auntie's", which was a tiny from-someone's-house business like this.
Or maybe it's just expensive to staff a daycare center or nursing home adequately and pay for equipment, rent and upkeep, as well as insurance. If a parent of two finds it more rewarding (financially / emotionally / intellectually / whatever) to work than to stay home with their kids, how much less should the people doing the job of caring for those kids make? If our society wants more people in the workforce, they need to find a way to support working parents.
All-payer systems (of the kind we see in countries such as Germany or in states like Maryland) could be a way forward in Healthcare reform, although it will still entail taking on the very powerful Pharma and insurance lobbies, which has usually frustrated rational reform of the kind proposed here.
We also need substantial upgrades to our electricity grids, as the problems in states such as California and Texas illustrate. There will probably be a need for some baseline energy component in gas (or nuclear) to deal with the intermittency and power density issued in renewables, although the latter are certainly becoming more cost effective
“ instead, it should be a system where the government pays some portion of every medical bill and leaves the rest to private insurance.”
If that sort of thing actually works, it should be applied to college tuition costs.
Government spending as “investment…”. JFC.
and for heaven’s sake, “employment” figures don’t include the millions who are not actively looking for work. Such “data” is skewed and misleading.