Countries could build new housing faster than the population grows, but as long as it can be scooped up by the wealthy for renting out, the scarcity would prevail.
(It would be different if the wealthy were buying these houses to live in them or to leave them empty, as that would increase demand and constrain supply. Happening in London, Vancouver and a bunch of other places, I think. Also sort of like what happened with the quinoa fad: https://en.wikipedia.org/wiki/Quinoa#Effects_of_rising_deman...)
Buying a house is not that easy. You need a bank to approve your mortgage, plus pay upfront money (plus pay for furniture and such) that people might not have because high rent prices stop them from saving money. More renters and less buyers might cause more wealthy people entering the market for speculation, compensating the decrease of people that want to buy to live. And on the other hand, given that housing is a necessity and not something that people can live without, landlords can still push prices up even with increased offer.
In general, I see a lot of takes on the housing market that focus too much on the theory and forgets the reality: people need houses, moving is not easy nor cheap, speculators and realtors can push prices up without that much pressure, and a lot of people don't have enough to face the expenses of buying a house.
This might be true if one could get as cheap and deep leverage on alternative investments as a house mortgage.
Side note: It's heartening that the HN community has evolved in the last 10 years -- the current top comments wouldn't have been at the top 10 years ago, or even 5 years ago. While I think there is still a long way to go, it has come far from almost unbridled worship of PG, libertarianism and "meritocracy".
Running an economy on feelings is a sure way to ruin an economy. People who buy multiple dwellings would be more than happy to rent them. Renting is good. It provides a liquid market to access housing. If the market is efficient, rent or buy should be a preference rather than a financial decision: The financial impact should be the same.
If people refuse to rent, or sell their property then you have something wrong with your economy (too much regulations, people are afraid of devaluation, etc...). You don't fix a structural problem of an economy by implementing a per-person limit to buy houses.
[House] renting is only "good" for the people making a profit off it. For the actual renters it's patently absurd.
"Rent-seeking" is a term with negative connotations for a reason.
"Rent" in an economic context refers to "any payment to an owner or factor of production in excess of the costs needed to bring that factor into production" (https://en.wikipedia.org/wiki/Economic_rent) as opposed to profits or wages: without a profit nobody would invest in anything and without wages nobody would work so these are both necessary costs. In a well-functioning market the monthly payment to your landlord is primarily a compensation for the cost of capital (profit) as well as administration and maintenance (wage), though of course if there's a bubble in the housing market, landlords will be happy to take advantage of that too (rent).
- the hotel model is a poor one for general, large-scale provision of shelter, and - the arrangement is heavily biased in favour of the hotel owner.
I always ask people who rent to take some time - whether now, or in the next ten or twenty years - to calculate how much they have spent on rent so far and how much they are still projected to spend for the rest of their lives. And then consider that they get no tangible asset for the often mind-boggling amounts the total comes to; that, in fact, they may have actually paid for other people's houses several times over with nothing to show for it. The situation is somewhat tenable when the landlords actually own their properties outright, but in the modern real estate world they are more often just middlemen that shuffle money between the renter and the bank.
I wish more people would question why the provision of shelter has become such a runaway profit-making machine, but I'm not holding my breath.
We recently bought the house we used to rent. If we would have continued to rent for 25 years, then, adjusting for inflation, that would cost us maybe 300K. That's a lot of money and you have nada at the end, you're absolutely right. But our loan plus interest plus insurance plus the leaky roof that is now up to us to fix plus 1% of your house's value for maintenance every year plus property taxes... napkin math puts it at 600K after 25 years. At that point it's ours, but meanwhile it will be harder for us to move if we have to, our monthly payment is twice what our rent was, and all of our savings are in the house so we have no money to invest in stock, less to save for retirement (tax-free) and less money if we decide we want to do something crazy like start a business. Psychologically it's a mixed bag as well: it's really nice to know something is yours, but you also start noticing a lot of things you don't like that previously you just didn't care about, and we're on the hook whenever something breaks down. We're happy with our choice, but surely you see that it's not a slam dunk in favor of one option or the other?
However when we settled down with kids priorities changed, living close to a train station with good connections for work was less important, school catchment areas were, and the main importance is stability. The longest rental contract you can take in the UK is 3 years, after that who knows what will happen - maybe the owner will sell up, maybe they'll double the rent. A 5 year or even 10 year fixed mortgage gives certainty.
But the key thing is we wouldn't be able to rent if nobody owned properties they didn't live in.
Ban renting of single family dwellings, but allow and encourage it where increased density is achieved (apartments, condos, multiplexes, etc). Owners of single family dwellings will scramble to convert their rentals to duplexes / multiplexes and create the additional inventory while companies acquire multiple properties to convert into apartment complexes.
In the UK the equivalent of 'zoning' regulations keeps M low. Government 'help to buy' here exacerbates the problem as it directly increases N without directly increasing M.
The fundamental model here is musical chairs.
The problem with the council house sell off was not replacing them on a 1:1 ratio -- for every house sold, a new one was built.
It also reduces the number of people renting, which lowers rental prices, which is also good.
It may increase the price of new houses for cash buyers. I have little sympathy for people that wealthy.
If you want to get more houses built, institute a land value tax. Taylor Wimpy owns 6,000 heactares of land. With just 25 houses per hectare, that's 150,000 unbuilt houses across the country. Assuming that a land value tax would replace council tax that would be about £1500 a year tax, or £225m a year in tax, maybe that would encourage them to speed up construction rather than building them at a rate that maximises profits.
At least you agree that there is a problem with supply.
> It also reduces the number of people renting, which lowers rental prices, which is also good.
Converting renters into buyers without building more housing reduces both the demand for and the supply of rental housing. This will not reduce rental prices.
> It may increase the price of new houses for cash buyers. I have little sympathy for people that wealthy.
Your sympathy is not required, but you should at least see how landlords paying higher prices for housing leads to higher rents for tenants.
HTB is only available on new homes so not removing any stock
> Your sympathy is not required, but you should at least see how landlords paying higher prices for housing leads to higher rents for tenants.
Why? Someone is either willing to pay £1k a month for renting a place or not, they care not for the cost of the house they are renting.
> you should at least see how landlords paying higher prices for housing leads to higher rents for tenants
I owned a flat, I rented it out for the maximum amount of money I could get for it (balanced against other things like reliablity of tennant etc). It doesn't matter how much the flat sells for.
https://www.rightmove.co.uk/properties/75180448#/ sold in November 2006 for £150k, it's now worth about £320k, it's being rented out for £1k a month because people will pay £1k a month, it has nothing to do with how much it was bought for, only what people will pay.
Okay, increasing the supply of housing will lower prices regardless of whether they are rented out or bought.
> Someone is either willing to pay £1k a month for renting a place or not, they care not for the cost of the house they are renting.
Sure, but landlords do care and won't buy property to make it available for renting if they don't expect to be able to cover the cost. This decreases the supply of rental housing, which means fewer options and higher prices for tenants. If they already own the property and can't manage to get tenants paying rent which represents a competitive return on their capital (i.e. the current market value of the property) then they'll sell to someone looking to either own the property outright or demolish it and redevelop some other form of property. Either way it removes the housing from the rental market.
> … now worth about £320k, it's being rented out for £1k a month because people will pay £1k a month …
So the owner is only getting a 3.75% return on their £320k investment. That's not completely terrible, but it still essentially has negative value compared to the opportunity cost of selling the property and investing the proceeds. This is not a sustainable situation.
> … it has nothing to do with how much it was bought for, only what people will pay.
That much is true. The original purchase price doesn't matter in hindsight. (Obviously it does matter when deciding whether the property is worth purchasing to begin with.) Aside from calculating capital gains/loss for taxes, what counts after the purchase is only what the property would sell for now, not the amount that was originally paid.
They will charge what they can. If they aren't happy with the return, they can sell the house and invest the money in DOGE or whatever, that means more houses for people to buy, higher supply leads to lower prices, which is good (with very limited exceptions - mainly of those in negative equity looking to move or remortgage)
Or libertarians, because government subsidies distort the market and all that.
> Taylor Wimpy owns 6,000 heactares of land.
UK has 25 million hectares of land, ~2m in the south east. The problem isn't Taylor Wimpy owning all of the unbuilt ones. The London greenbelt is 500k hectares. That's a more plausible bottleneck. Considering 'London greenbelt' is just one dimension of regulation on housing construction and Taylor Wimpy presumably owns land outside south east.
Everywhere housing prices went way up, I doubt everywhere had the same issues with regulations since the 70s.
Now let's talk about cheap credit...
All the other factors certainly contribute, but cheap credit only affects how much the most desperate buyer is able to pay. This becomes the limiting factor almost everywhere, meaning that prices would be equally unaffordable if credit wasn’t cheap.
Building much more is the only fundamental solution, as this will reduce the proportion of desperate buyers. But of course local democracy prevents that - meaning, the problem persists indefinitely and we’re only wasting time discussing it.
I disagree with this statement, cheap credit allows banks to offer longer term mortgages and buyers able to afford a larger principal with the same per-month cost, pushing the prices upwards due to keeping payments low on a per-month basis, due to low interests and longer term plans.
This definitely pushes the price of all market upwards. It's a similar effect to tuition costs in the US, cheap credit, bankruptcy laws make them pretty safe for banks to take risk, flooding the market and allowing universities to hike prices.
Building is fundamental, but cheap credit has an upwards pressure in price, magnifying the effect.
All in all, I completely agree with your take on the solution. Build fucking more, population and specially cities have grown quite a lot on the past 3-4 decades, we still live with most dwellings built then than now.
The interest rate is the "price" of money. Central banks controlling the interest rate effectively practice price controls for debt. Much has been written about price controls, but fundamentally they create inefficiencies. Unfathomable amounts of debt have been completely misallocated in pursuit of whatever the goal of interest rate control has been.
The point is that cheap credit (mortgage regulation) significantly raises the upper bound on this limit.
Profit margin at the publicly listed UK house builders in around 30%
https://en.wikipedia.org/wiki/Housing_Act_1980
> By 2013, some tenants who had purchased their council flats, sold them later to speculators, investors or property companies. By 2013, a one-bedroom council flat that sold for £50,000 in the early 1990s, for example, had a market price of £250,000.[9] A tight housing market led to increased rent as construction of new homes decreased.[9]
It seems as if high housing prices are an explicit policy of most major powers at this time.
No, not really.
https://www.statista.com/statistics/240991/average-sales-pri...
> Didn't various governments put vast amounts of money into the economy in an effort to ensure house prices returned to their previous levels and continued to rise?
No.
They put lots of money into the economy as Keynesian economic expansion policy, to combat unemployment.
House prices simply weren’t as dramatically effected as you seem to think. Check the statistics on the previous link if you don’t believe me.
That's true in the US and UK.
I'd contend that preventing massive asset depreciation, including housing, was an explicit policy of every major economic power in North America, Europe and China. I don't know, but suspect other major economic powers also participated in that, but I'm not as well versed.
(I should point out that in the 1950s it was just as large a multiplier of household income, but in that time we went from one wagerearner to two.)
https://www.thelocal.es/20140225/spain-worst-in-europe-for-e...
It's not like our government will get EU's permission to let the banks fail or something...
The banks in question are essentially in agreement about prices and work together to keep them inflated. That's essentially cartel formation and needs to be prosecuted.
From a social standpoint, denying folks a roof over their head just because you want some numbers on a paper to look good should already mean that everyone ostracizes you. It's unquestionably evil.
Revolving doors... and all.
Maybe change could be enacted on the local government level which is the power more easily sizeable by real people and not political drones, in order to hijack current zoning laws which as far as I know are heavily concentrated down to local adminstrations like -ayuntamientos-, which in itself seems to be what's making things more complicated as corruption is harder to spot there, even if it's more obviously done than at higher levels... Anyways...
Maybe a return to the ghost villages once a job is not easily found in a city but online, but remote seems hard to implement here locally on a culture level at least until a couple generations of older folks retire from management, where one could get cheap land and construct with fairly advanced and economically minded new construction processes, like 3d printing homes or whatever, maybe...
But at the end of the day, we're still fucked, paying high rents for small jails in highly contaminated city centres... One can only dream to retire on the countryside for now.
I mean, I'll be honest and share that I didn't know the housing regulations are so f-ed up in the US, but they are pretty complicated everywhere.
What drives housing prices is a deflation of living goods coupled with an inflation of luxury goods which makes finding safe investments for large sums of money with relatively high yields hard to find. This is driven by an increasing inequality gap, which makes rich people desperately trying to find more things to invest their money into. And they have found housing in urban areas is the safest bet right now. So houses are bought and sold for the millions in hopes somebody else buys it for higher prices or the area justifies the rent.
Sure, but that part immediately follows - there was a good piece from a property developer working in Los Angeles (which has a lot of those kind of regulations) that was posted here a couple of months back. Because of all these regulations (parking minimums, max heights, setback requirements and so on), the only kind of housing that is profitable or even possible to build is luxury housing - the land costs x, the things that the regulations require cost y, you have to charge a lot more than the city's existing housing stock (most of which is grandfathered in) so you can only justify that by targeting the high end.
There is definitely speculation in the housing market, but most or all of the price rise can be explained by simple supply and demand. And since housing demand is fairly inelastic (everyone needs a house), a small amount of undersupply means a big increase in price.
Alas, no mortgage agency would loan for this property, there was no central heating system, and the roof was suboptimal. Only people that had $200k at hand could possibly consider it. And off course a cash offer came from a rich family who lived there for a week, did some renovations and sold it again for more then double the price, more then anything that a normal family could afford, even with a mortgage.
Things are bad indeed.
https://www.nytimes.com/interactive/2019/06/18/upshot/cities...
It's partially a cultural problem imho.
Lots of tiny Jerry built flats in tower blocks are not the answer - even more so when the rise of WFH is taken into account.
Also it is illegal to put extremely flammable cladding on the side of a building. The problem was that if someone sells you "non-flammable cladding" and they are lying, nobody properly checks.
Pretty much every landlord (also developers) is out there to stab the other landlords in the back if they have the option, which they don't have. The price increase is purely driven by the availability of people who are willing to pay for the price increase and the landlords are not allowed to solve the problem.
Don't forget if nobody is renting then nobody is "destroying" the property. That's other tactic. You reconstruct everything so its "too good" to be rented cheap. This way you lower the pool of "normal" flats so their prices go up to a point where the "too good" is the only option.
It's apparent from the increasingly huge differences between rent prices. Often times the longtime landlords who own maybe one building are renting so it makes them enough money to take care of the property + good profit on side and they are happy. They don't check market prices often and are 30%+ cheaper. The rent prices are completely fabricated with no relation to running costs or price of the property.
You can do it differently when you are on the other side of the table. However you'll soon find out that most of these things are done for a reason.
Much more important question is that who has the right to live in a city. Maybe most of the people living in there, people who give that city its purpose and take care of it, want older cheaper flats.
Maybe these companies misjudged their customers and are just forcefully trying to feed on peoples need to live somewhere.
People with money are not perfect or of inherently better character, the banker that does coke on Friday is just less likely to use the floorboards as kindling compared to a junkie with more congruent background.
Username fits i guess.
Some countries have wealth tax. Some countries don't.
It's sensible to park your money somewhere, where it's not taxed.
If you build more of it, yes, you will meet some of the housing demand (basically just for the richest), but housing is competing with rich people saving.
You need to tax unproductive behavior to rid of it.
Edit: or even if there is a prospect of this being the case.
They have also put heavy restrictions on bank lending.
Basically they are desperately trying to slow/reverse responsibly an out of control housing bubble.
That said they have unique cultural and geographical issues in terms of the sheer scale of their urbanisation
In addition, how do you account for the massive drop in new development that occurs as much fewer new houses are built as the housing prices are being deflated due to investment being banned? What about apartment buildings?
All genuine questions I would be interested in hearing a solution too?
You can still have that. All you need is a real estate tax. But nobody wants that. People don't want cheaper homes, they want to become part of the home-owner elite and get their own appreciating asset.
Real estate prices are going up everywhere - including places with negative demographic trends.
https://www.moneyadviceservice.org.uk/en/articles/help-to-bu...
For me housing is the least thing i want to worry about, so i gladly rent and simply can fix any problems by calling my landlord who is by law obliged to keep the house in a liveable condition.
Also flexibility, i can move whenever i want without worrying about the value of my house (which in reality likely only looses value)
How do you reconcile this impression of yours with the fact that housing prices are shooting up in all major cities, and have been so for decades? Why is this happening if fewer people are actually interested in owning their own housing?
As a sidenote: in my own personal experience housing is the single major issue of all my close friends and family, but it's only an option for a small minority of them. In fact, I have never met a single person who was in the financial position to buy a house/apartment and didn't do so.
I live in Switzerland and a lot of my social circle is in tech, so i know quite some people who have the financial means to own their housing but only few do. Most in the high income spectrum even use the flexibility of moving regularly.
I personally don't consider buying a house anytime soon either. I could prolly afford the house i rent, however i dont live near a city, i highly doubt the value would ever rise, more the opposite as the house is old and needs regular repairs. Buying the house would be like 350 times the rent, at least. Plus all the repairs are suddenly my problem.
And any costs to maintain a livable condition is going to just be added to the cost of the rent anyway, so it's not like you're actually saving money.
Buying as its own costs of course, and sometimes it's more cost effective to rent. The most unuseful answer, hence, is that it depends on the specifics.
However both points are kinda non issues due to our renting laws and the more or less standard contract around here. Getting kicked out only works with a reason, plus a prior notice from i think at least 3 months plus they are not allowed to increase the rent just for maintaining liveable conditions (i.e. repairs that have to be done).
But sure if you are willing to think and calculate in long terms (~30-50 years) buying often is the cheaper option. Yet comes with an additional workload (taxes, repairs, ...)
Depends on the country. In Poland, the landlord is only responsible for heavy/structural repairs (cracks in walls, broken windows etc.), while everything else, like clogged pipe, broken fridge etc., is actually tenant's responsibility by law, and they can be held responsible (witholding of deposit, lawsuit) if they neglect it.
The result is that for every house thats sold, there isn't just someone who wants it as a living space, but also 5 people who want it as an investment. So 5 people outbid each other, the highest bidder gets it, and then the sucker who wanted to live there but couldn't afford to buy it ends up renting it.
The problem (at least where I live) is absolutely not that there's too little housing. The problem is that a lot of people want to make money from the real estate market, which drives up prices.
Also, because these investors really really want to make a profit, they'll rather let an appartment sit empty than charge lower rent. The appartement I live in was empty for a year because nobody wanted to pay the high rent. (I was able to negotiate a bit, but it's still pretty high)
Pretending that the people who use the real estate market as investment don't profit off the working class who can barely afford housing is laughable.
Something like a 2x or 3x multiplier on property taxes or something, especially in densely populated areas, and especially in areas where there is rampant housing insecurity. The tax needs to be greater than the potential gamble of waiting for occupants. This should be both for residential and commercial use real estate.
*facetious
Maybe where you live. NYC and SF are special in that they have very powerful people working to reduce the construction of new housing. This is obviously what needs to get fixed first in those markets, but it isn't a relatable problem in most of the US.
> The reality is that the most expensive housing markets are also the ones with the least vacant.
This is a basic supply and demand observation, and does not preclude the existence of people who allow their properties to sit vacant for long periods of time.
Looks to me like in NYC the vacancy rate is up to 6% (from a previous steady 2-3%) while housing insecurity is increasing.
https://www.cnbc.com/2020/10/08/empty-rental-apartments-in-m...
https://cccnewyork.org/press-and-media/family-homelessness-i...
To my eyes this seems like a tragically dumb problem with several really obvious solutions.
You don’t get taxed on improvements to the land, you get taxed on the value of the land (ie based on the value of the surrounding land... a vacant lot—or a lot being “renovated”—pays the ~same tax per acre as a 3 story apartment building next door instead of an order of magnitude less).
https://ballotpedia.org/California_Proposition_15,_Tax_on_Co...
We have too much retail space in America and too little housing, but zoning has often made it impossible to repurpose the land.
Construction companies that build residences are clearly creating value for society, so they should be allowed to make some kind of profit. Real estate agencies that buy property from construction companies are doing a very bad thing by renting them as "luxury" housing to people who otherwise have no choice since their livelihood is tied to an urban area.
Why not put a cap on the profit that can be made from a residence? Something like 5x construction costs, plus ongoing costs of maintenance. Suddenly, the "luxury" housing market is no longer suffocating all the affordable housing out of town since the property owner can't expect to rake in the piles of money every month.
Many buildings are "luxury" in that they cost 15% more to build but then ask for 50% higher rent. It's not hard to find buildings that were once "luxury" but are now kinda gross since the veneer has peeled off. But there's not enough competition in housing to force the rent lower.
What gets people fed up is the seemingly universal constant of rents raising 10% every year despite no additional investment.
So if you have house A that you live in, whose tax bill is $10K, and house B that's empty, whose tax bill is $7K, then your total tax should be $17K.
If you additionally have house C that is also empty, whose tax bill is $8K, then your total tax should be $10K + ($7K + $8K) x 2 = $40K.
If you additionally have house D that is also empty, whose tax bill is $5K, then your total tax should be $10K + ($7K + $8K + $5K) x 3 = $70K.
This would strongly incentivize against this activity of having one person or entity simply hoovering up homes and treating them like bars of gold.
You won't solve sh*t. Just like the other gazillion times new taxes were introduced to solve something.
Well, I mean, unless your goal is to make the poor even poorer.
Monthly council tax will double for properties that do not have occupants. This is due to my area having over 10% of houses being bought as holiday homes or investments that stay empty for most of the year.
Once you moved in, increases in rent used to be regulated. Now a landlord can charge whatever they want after the initial period and if you can't afford it you have to leave.
Landlords used to have to maintain and fix the property. While they still do in theory, in practise they often just threaten one of the two options above to anyone who wants a repair done.
That's not very smart. So the current tenant leaves, and then what? Good luck finding someone else to rent the property at the original price without fixing the issue…
I would argue that it is low interest rates AND low supply. If supply was sufficient then renters would just rent the houses which were purchased, possibly at a discount.
This is not necessarily true. In Los Angeles, for example, the price-to-rent ratio is about 38, i.e. if you pay $1000 / month in rent for a place, buying a comparable place would cost you about $450,000 (38 * 12 * 1000). There are a lot of people who could afford to pay $12,000 / year for housing, but could not afford the down payment on a $450,000 mortgage.
For that matter, the interest payments alone mean that renting is cheaper than buying -- 3% interest on a $450,000 loan alone is already $13,500 / year, and that's before taking into account that you also have to pay property taxes (another $3,500 / year), maintenance (probably another couple thousand a year), and principle on the mortgage (about another $9,000 / year).
In less inflated housing markets, it is generally true that the cost of rent is similar to the cost of a mortgage, but that is definitely not true in all markets.
Not true. The people (or companies) winning the bidding war for these properties are paying cash. Normals don't have $900K cash laying around to buy a property originally listed at 550K.
This means that someone buying it to rent out can get a loan for significantly more than someone looking to purchase, making it much easier to outbid them.
If you want the profit, then hold the risk.
If you want the freedom of mobility, then rent.
Feel free to expand upon the argument of real estate as a "little risk" investment.
>Renters are stuck by leases
Leases are on average, an order of magnitude shorter than mortgage loans. Less exposure, less risk. Your leverage is to walk away after a year.
offset by property taxes? Maintenance? Inflation eroding the value of the equity. Time/cost of managing the property. Potentially depreciating property values, depending on area?
I've been a landlord. It's a money sink. Tenants brought in cats (against the lease) that peed all over, making the residence smell unbearable. Had to completely rip out carpet, reseal the floors to get the smell out. Ripped out stair case railings.
It's far from "little risk". It was a time and money sink.
The area itself did not appreciate in value. So after all said and done, definitely lost money.
I'm glad to be done.
I didn't "walk away" like the renters could. I fixed the house, the damage that the renters caused, I assumed the very liabilities that the renters get to punt on. Their leverage in the deal worked in their favor that time. They get to just move on.
How is any of that different then a renter where the landlord sells the home, raises the rent (they can do that every year or so), refuses to fix something (or takes forever to find the "best" price), or just starts doing some other crazy stuff? The risk seems pretty similar to me.
No different and probably more easily explained then an eviction. Try renting anywhere with an eviction. The risk is largely the same.
The idea that you think someone could lose large amounts of money and not have it impact them personally or that there isn't personal fallout perplexes me. This feels like that episode of Seinfeld..
Kramer: It's a write off for them.
Jerry: How is it a write off?
Kramer: They just write it off.
Jerry: Write it off of what?
Kramer: They just write it off!
Jerry: You don't even know what a write off is, do you?
Kramer: No. Do you?
Jerry: No I don't
All my experience is in the midwest, where there are essentially no renter protections.
Landlords hold all the risk. There's risk of devaluation, risk of renters destroying property, risk of unexpectedly high maintenance costs, risk of insurance/taxes going up more than planned. If anything bad happens to the property, the renter can just walk away, the owner is stuck with it.
I'm not a landlord, sometimes look into it but every time conclude that the risks are far too high for what minimal profit it might bring. So I stick to index funds.
Yes, landlords have risk. My original point was that renters shoulder the same and more risk.
Less time and monetary exposure.
Renters incur less risk.
The renter is more likely to carry the financial fallout longer, because they have no assets backing their risk.
It's a pity if a flat is empty for a year, but that in itself also does not cause a shortage. After all, it was rented out after a year.
The market is supposed to deliver the flat to the person who needs it most. In that case, apparently it was you. Without the speculator, somebody would have rented it for a very low price long ago, and you would not have been able to live there at all. So maybe the market worked.
If the market worked, you'd see people building multi-family units everywhere until supply caught up with demand, and then you'd see a huge crater in prices as people who took a bath on real estate speculation were overrun with the resulting supply glut. This doesn't happen, for a host of various reasons. Governments want housing to be simultaneously affordable and an investment, which is impossible. Hence most cities wind up building a sort of shadow immigration system, through rent control, selective property tax moratoriums, and so on. People who have lived in a city all their life enjoy lower rents, subsidized by people who just moved in and have to buy at market rate.
There are other factors, of course. Just speculation does not really seem to be a major one.
$70k-150k up-front isn't easy to save up for even above-average earners (remember, these are average home prices, not luxury homes), so anyone earning average or below is forced into either renting forever, or moving to another town.
Maybe if I put down one million and borrow another 300k, I can get a low mortgage. But I also lost one million.
Do you really think that’s a factor? That the wealthy say “My family has all bedrooms they need, so I’m done investing in real estate?” PE firms buy up entire communities and repackage their mortgages into investment products. Foreign investors will buy property regardless of location and never step foot in it if it’s in a more stable country than theirs. Real estate investing is not about finding a place to live for the wealthy.
“We find that housing speculation, anchored, in part, on extrapolation of past housing price changes, led not only to greater price increases and more housing construction during the boom in 2004 to 2006, but also to more severe economic downturns during the subsequent bust in 2007 to 2009.”
Something like 60% of US people own a home. 30% even own their home completely outright, with no mortgage.
Obviously 30%, let alone 60%, of the population cannot be considered 'upper class', and 'middle class' is probably even a stretch.
The home ownership rate seems broadly stable since the 60s to me, with gentle ups and downs with the economy, so as well as saying home ownership is an upper-class or middle-class thing not being true it's also not the case that 'it wasn't always like this'.
https://en.wikipedia.org/wiki/Home-ownership_in_the_United_S...
Which tells me that they likely bought their house over 30 years ago. Which tells me that they have been largely unaffected by the complaint you are responding to.
Who do you think owns the homes all around you, and in all the suburban streets around the city? Normal people like you. There aren't hundreds of elites living on every US street, clearly. They're just normal people who saved up over a few years or got a little helper money from their parents.
Real estate is worse than crypto when it comes to speculation.I realized this myself when my property doubled in value in less than 2 years.
Once you're in the market, it's easier to STAY in the market. If house prices go up, you'll have to pay more to move to a new house but this is an easier pill to swallow because your current house has increased in value.
Regardless, at current (historically quite low) interest rates, a typical software engineer's salary will qualify you for a very large mortgage.
You'd be surprised. At 30, I saw many of my friends go from thinking they'll never afford a home to each buying one over just a few years.
Low interest rates aren't helping most people, they're hurting by pushing up house prices. Only those with significant capital for a deposit benefit.
Most people buy as a couple, so this is achievable.
Huh? Why can't 30% (or 60%, for that matter) of the population be middle class?
Wikipedia [1]:
> The American middle class is a social class in the United States.[1][2] While the concept is typically ambiguous in popular opinion and common language use,[3] contemporary social scientists have put forward several ostensibly congruent theories on the American middle class. Depending on the class model used, the middle class constitutes anywhere from 25% to 66% of households.
But anyway even if you don't agree with that, the original claim was that they were 'upper class'! Which is obviously ludicrous. You do not need to be an elite to own a house - drive down almost any suburban street in American you'll see people who own houses.
This goes back to the above post regarding the ambiguity around defining class. The traditional definition that I’m aware of uses quintiles, so “upper middle class” is defined as being within the top 20% (minus the top 1%-5% reserved for upper class). With this definition, the upper middle class will always be 15-19% of the population, on a sliding scale of income. This threshold comes out to about $87k/yr. at the individual level currently, I think.
But then people redefine that meaning. There was an article recently on HN saying the middle class is shrinking because more people are moving into upper middle class. They defined it based on absolute (as opposed to relative) income. But if you dig deeper into the research methodologies they normalized income so that a person making $58k/yr is equivalent to $100k if they are single. Magically, the threshold for upper middle class on an individual basis is reduced by 33%. (To be fair, they had reasons for this like the way poverty is defined by the government to factor in the number of people in a household).
I have a couple problems with this. 1) research indicates people are single, longer without kids because they feel less financially secure. It’s hard to square being single as a reason to be vaulted into upper middle class in that context 2) out of curiosity I took the average expenses for a mortgage, utilities, taxes etc. and tried to balance that against the $58k definition of upper middle class. In that case, if you have the average student loan debt you can’t afford the “average” American lifestyle even on an upper middle class income.
The point of all this being, we need to be careful about how we define economic class.
“If you torture numbers enough, they’ll confess to anything. “
No it hasn’t.
In fact it’s up since 1990! And about where it was as far back as 1970. It seems relatively stable to me?
If owning a place to live is too expensive, it follows by logic that renting is cheaper than buying. Otherwise for the price of the rent, people could get a loan to buy.
So it really doesn't seem obvious that this is an issue of rich vs poor.
Invitation homes owns over 10k homes https://www.google.com/amp/s/www.newsweek.com/us-largest-pro...
In 2015, about 1/3 of vancouver homes bought were to Chinese nationals as investments https://www.fortunebuilders.com/one-third-of-vancouvers-real...
In the UK there was a trend for Baby Boomers to buy up one or two (or more) properties and rent them out as a "nice little side income" etc in addition to their pensions at a time when savings interest rates were low, so there was no point saving (since returns were awful) and property loans were cheap. You even got a tax break on the loan interest!
These people are not mega-rich - just middle-class anybodies. I don't blame them - why leave large sums of money from your pension in the bank where you'll earn 0.05-0.5% interest a year, when you can spend it to buy a property that you can rent out for 5% yeild and benefit from property value increases if/when you need to sell.
The laws have changed a bit now to make it less attractive (no more tax breaks on loan interest, and more tax on "additional" properties you buy beyond your own personal home), and there is anecdotal evidence that "amateur" landlords are exiting the market in droves. Even so it has stoked the market considerably over a good decade or more, and so prices for even very modest "starter" properties (think 1 bed flats, small houses etc) are relatively unobtainable for the average person on the street or first-time buyer.
There's literal mansion districts in my major city, where not only is building an apartment illegal, but even building a small detached house is illegal. How on earth did that happen??
US cities like LA, SF, NYC have been very expensive for a long time.
Corruption is an incredible poverty multiplier, combined with debauched and half-useless is just insane. Living in a society led by such people isn't fair by any means.
Arrogant new wealth is 100x better then old corrupt wealth that only seeks to entrench itself and friends.
New wealth in proper democracies at least has a proven track record of competency and general societal good, it can also do a lot of good when spent (see Bill Gates)
If you are all worried about wealth, just put 99% estate tax, will cover both old and new wealth.
Personally, I think these good ole nonprofit boys; Billy, Zuck, Warren, etc. are tax dodgers.
Obama wanted to reform nonprofit regulations, but chickened out.
1.) Proprietary UNIX vendors. Cheap workstations? Fuck you. OS without a support contract? Fuck you. First party compiler? Fuck you. These started to improve after 2000 with ports of open source tools, but most people would realistically be in way over their head price-wise unless they were accessing these systems through a university or workplace.
2.) Open source UNIX and UNIX-like systems. Linux was still pretty rough around the edges, and BSD derivatives were still pretty widespread. All said and done, you had to know these existed, know how to be involved in the community, and deal with the reality that the money just wasn't there yet. These options were not without compromise -- it would be years before Linux began making inroads in the "serious" deployment market.
3.) Microsoft. They did shitty things, but it was possible to get affordable development tools on affordable (and actually quite performant, all things considered) hardware, instead of needing tens of thousands of dollars for option 1 or being in the right place and time for option 2. Windows, VB, etc. causes lots of moaning and groaning today, but it had to have been magical at the time.
Give them all a try on period accurate hardware, one after another. You will become acutely aware why people put up with Microsoft.
In the 2000s, getting linux to work with wifi was a mess of command line commands and other PITAs that no normal users would put up with.
If you want to focus on just his business, initially, Gates was a tech hero, upsetting the incumbents as much as any modern disruptor. His company came to be known as a villian, was itself upset, and is going through a reinvention period during which I think they are doing really good things. But none of that should be about his character. He played the game and won, then got out and focused on more important things.
Corrected that for you.
In all seriousness: I think Bill Gates is probably sincere in his philanthropy, but that the reason is emotional maturity and reflection... that and he's sitting on a fuck ton of money that one man can only squander if not put to better use.
What gets me is people who so vehemently hate that they talk about killing the person, not the business.
Are we going to applaud Zuckerberg in 20 years when he's going to use his money for good? He could already be doing good right now, instead of being a net-negative to the world, but he chooses to make billions instead.
You forget that outside of tech everything that MS did that we rail on about will be remembered as good business. Nobody except people on the inside have these idealistic views about software and freedom and all that.
He spends a minor portion of his extreme wealth on good causes and charitywashes his bad reputation into being a "good guy."
We then don't talk about the fact that we could go remarkably further on the same course if we took a much larger bulk of his wealth and put it toward similar objectives of reducing poverty, disease etc.
This is of course nothing new. Robber barons did the same thing, which is why there's a Carnegie Library in my town etc.
Who could? You and I could? The government could? Honestly asking, I don't really know what you're saying. If that money went to the government a very small percentage of it would be used to reduce poverty and disease. A much higher percentage of it would be used to fund the military.
I wouldn't count on it though.
Bill and Melinda Gates have pledged 95% of their wealth to charity. So far, they have given away about $45B, and have a remaining wealth of about $110B -- even if they didn't give away any more than that, that's still over 30%, which I don't know if I'd consider a "minor portion".
How do you envision going significantly farther towards the objective of reducing poverty, disease etc than the Gates Foundation?
I hope that was given as stock to the foundation...
I cant even fathom those sums let alone giving them to charity and putting it to good use...
Maybe he doesn't even tell himself that, but works like that subconsciously.
It's doubtful he has ulterior motives as you say.
Also, Bill Gates revolutionized the computer industry and brought a lot of wealth and power to the US and control of a good industry.
The fact that he right now goes for diseases world wide is great, I would not want to die from Polio or Malaria, those disease can always make a comeback and spread like Covid... it would be better to have them eradicated entirely.
Not really disagreeing with you for anyone else, though.
But if they donate to a charity that spends the money outside of the US, should they get the full benefit of that tax break? It’s an interesting question that I never thought about.
Yes, I’ve met a lot of people from former Soviet states that say the same things. But I also know even more people who lived in the USA when we had very high top marginal tax rates... you know, back when “America was great”.
e.g. LGBTQ rights, gender equality, abolition, that whites are not inherently superior to blacks, etc.
Meanwhile most countries are happily democratic. Nothing is perfect but democracy is about as close as you can get.
Only way communism was socialist was that everybody was starving except party elite. Everybody was equal under the watchful eye of big brother... praised dear leader or camps... or both...
This is just a thinly veiled way of saying "america first".
That’s the story of the Titanic, sunk in 1913.
You clearly haven't studied WWI or its causes or you'd realize that the entrenched interests were responsible for the spread of the war in the first place. It's the opposite of what you're saying happened.
Also we're talking 2 out of maybe 6-10 people (and their families/heirs traveling with them)? Not like 2 out of thousands.
It stabilizes the world into a corrupt distopia where those people rule only to entrench themselves and their friends (incompetent and malign as they are)
What you are describing is the old feudalism approach where aristocracy controlled everything. How well did that turn out for the serfs?, then how did it work out historically for everyone?, how many are still around?
How do we make this happen?
getting murdered vs getting aggressive cancer
Michael Young wrote this two decades ago now:
The business meritocracy is in vogue. If meritocrats believe, as more and more of them are encouraged to, that their advancement comes from their own merits, they can feel they deserve whatever they can get.
They can be insufferably smug, much more so than the people who knew they had achieved advancement not on their own merit but because they were, as somebody's son or daughter, the beneficiaries of nepotism. The newcomers can actually believe they have morality on their side.
We're still near the beginning of the internet revolution. We're in the era where the inventors of things can get rich through their own talents. In every other industry that has undergone a technological leap forwards the same thing has happened until other people have bought up their talent and ideas and the inventors no longer make the big money. Just look at agriculture, manufacturing, publishing, news, automotive, aerospace, computing... They all saw the same cycle. The internet won't be different.
The Google founders, Sergey Brin and Larry Page, had Jewish backgrounds but consider themselves non-religious. Facebook founder Zuckerberg had Jewish background and considered himself atheist at some point. Microsoft founder Bill Gates is Catholic. Paul Allen had Jewish parents. Amazon founder Jeff Bezos was raised Catholic. Apple founder Steve Job's closest religious interest seems to have been Buddhism. Steve Wozniak describes himself as atheist.
So we don't find a single Protestant, certainly not a Protestant fundamentalist, among any of the founders of the 5 largest tech companies.
Many cultures, in the far east as well as Europe have similar "always be doing something productive" undertones.
I agree that the moralizing zealots that set the tone for early American culture were insufferable (and being so insufferable likely helped accelerate the settlement of the east coast states) but "muh protestant work ethic" isn't really unique to the US.
"Silicon Valley money wants to remake people in their images, they have a Protestant zealotry associated with their money that makes any oligarch look straight up sympathetic in comparison"
The comment literally suggests that Silicon Valley billionaires (which it juxtaposes with old money) have a Protestant fanaticism associated with their money.
It has everything to do with a moral perspective - that righteousness and wealth go hand in hand, and it does indeed come from the culture of the European Reform. It's not a matter of Christianity, it's mostly absent from Catholicism, and I suppose other strains.
Think of the meaning, the moral implications, of the phrase "the deserving poor". Try translating it into other languages, and see what happens.
I also think it's actually not that confusing, assuming you're experienced in reading English. It might be more subtle if you spend most of your time in other languages.
There is the root of your misunderstanding.
If you prefer the literal, think "Ayn Randian / Objectivist zealotry".
Source please.
> it's that this mentality of earned wealth completely rids the owner of any sort of responsibility.
Allow me to offer a different view. If you're one of the lucky few who went from nothing to millions (or even billions) you'd be pissed if society came and started talking about responsibility and equality _now_. Where was society _before_?
And that, I think, is the crux of the issue - society feels responsible for your successes but not for your failures. If you went from nothing to riches - society feels like you owe it some. But if you went from squarely middle class to being a drug addict on the streets then the fault is yours alone. Society will of course try to help you, but it will never consider the idea that maybe, just maybe, it is responsible for what happened to you.
The political left has been pretty clear that the aim isn’t solely a focus on essential (and shared) resources, but on increasing the social safety net (either through UBI, single payer, or other mechanisms).
Separate conversation if those are good policies or not, but the argument isn’t that the rich don’t want to pay for police. That’s an incredible straw man.
Silicon Valley has one of the highest tax rates on long-term capital gains in the world, even more than almost all "social democracies". When Europe starts to look like a tax haven, the taxes on capital are not too low.
Last time I checked, incomes are far higher in US, than in more socialized countries like in Western Europe.
The ultra-rich nowadays physically isolate themselves from the working class and generally have security forces and bodyguards to further ensure their separation.
Old money wants subjects, new money wants worshippers.
- Quoting your comment: "The real sinister psychological thing going on behind the Graham argument is that..."
- Quoting a line from the article: "His seemingly impartial and logical writing attempts to hide his true intentions."
- Denounce critics of happiness industry.
- Play-down the idea of minimum support framework. In general, play down community and governmental support infrastructure in favour of individual's agency.
- The current crop of rich people, by and large, earned it and their way of earning wealth is objectively better than earlier ones. So they not only deserve that wealth but also deserve the way it's been accumulated.
- In today's world anyone can be rich and so if you aren't rich then it's your problem.
- Tech will eat the world. Journalists who couldn't foresee Amazon and its ilk's rise are idiots who don't understand exponential curve.
I have dramatised the theme but it's not far off.
I won't judge if any of these are right or not because at the end of the day they are all opinions and he's entitled to have them based on his world view. Someone with a different world view and experience (such as me, for instance) will not agree with them and that's OK.
That said, based on the pattern above it's easy to see how can one assign intent to PG's posts.
Could you please elaborate on what kind of worldview he's attempting to "prosthelytize" that is inherently nefarious, without making a straw man?
Interesting observation. I recently learned from a Fresh Air interview with Heather McGhee about Hinton Rowan Helper, a white racist Southerner abolitionist. He wrote a book analyzing the way chattel slavery harmed working-class whites and white society, the essential dynamic being:
the wealth of the plantation class did not depend on the labor of the white working class, nor their ability to buy product from the plantation class (cotton and tobacco were shipped north and globally); as a result the plantation (ruling) class had no incentive to invest in society; Helper quantified this by looking at number of libraries, schools, etc. in the North vs the deep South.
Obviously I don't want to claim the horrors of slavery are comparable to the effects of tech companies on the economy... but I wonder if the same _essential dynamic_ is there:
- wealth equating to political power
- an industry driven to remove any reliance on an educated populous or satisfied workforce (through automation, and the secondary effects of automation as in the way Uber etc. offloads risk onto drivers/society)
- an industry for whom the populous are not customers but "the product"
[1] https://www.worldcat.org/title/executive-imperialism-the-myt...
(And the paper) https://calisphere.org/item/ark:/28722/bk0003v1h0r/
This is in stark contrast to the Organs operating the prisons during the Soviet era who would never submit themselves to torture to understand the plight of the prisoners they sentenced.
Anyway, just a fun anecdote, clearly noblesse oblige wasn't enough to stop the people from revolting in several cases.
I think they understand noblesse oblige. But it's a 2-way street. Don't expect them to feel a sense of obligation if you're going to assume the worst about them just because they are rich.
The rich donate because they are protecting their reputation and for the sake of their own self image (everybody needs to be the hero of their own story).
The only ones who can manage that and not be charitable are the utterly self deluded (e.g. Trump).
Don't expect them to donate a damn thing if they are lauded as heroes. Bill Gates likely wouldn't be giving his money away at all if it he didn't feel the need to repair his image in the 2000s.
Same reason all of the robber Barrons were philanthropists - do you think they would have been more charitable if they had been cheered on instead of villainized? Like hell they would.
Bill is way too invested in this stuff for it to be a cynical PR effort. And he himself states it was his mother who inspired him to give: https://www.businessinsider.com/bill-gates-mother-inspired-p... If Bill's giving was a cynical PR play, why would he be pushing other HNWs to give through the giving pledge? Wouldn't it be better to discourage them from giving so he looks better by comparison?
Note also that a few years ago when Zuck pledged to donate 99% of his money, the internet erupted in incoherent anger. Similarly whenever the news covers tech philanthropy, the angle is always "well really this is something that the government should be doing, the fact that it is being handled by private philanthropy is kinda problematic". The giver's generosity is inevitably taken for granted. For the supposed PR benefits of philanthropy there is a shocking lack of good PR. Far more scorn is heaped upon wealthy philanthropists than rich people who just quietly buy yachts and stuff. Your reaction of "giving is just a cynical ploy" seems to be way more common they "hey, they are giving, that's pretty cool" in all the online discussions I have seen of billionaire giving.
BTW, did demonization of wall street in the wake of the 2008 crash trigger a wave of philanthropic giving from them?
For what it's worth, though, saying "my mother inspired me to do this" is precisely what a PR flack would advise him over "I was guilt tripped into this by my critics".
He does routinely use PR firms for image management.
Positivity sells and human interest sells and giving his critics more airtime would not be advantageous to him.
Mark Zuckerberg did the same thing here - note the title:
https://news.ycombinator.com/item?id=10658787
>Note also that a few years ago when Zuck pledged to donate 99% of his money, the internet erupted in incoherent anger.
The comments above read more like coherent suspicion rather than incoherent anger.
>For the supposed PR benefits of philanthropy there is a shocking lack of good PR.
Bill Gates has successfully repaired his image since the early 2ks. The fact that Mark Zuckerberg didn't repairs his overnight after acting the way he did previously is hardly proof that it doesn't work.
And you are pulling that theory completely out of your ass.
I highly doubt you have met Bill Gates or spent time with him or have the slightest idea about what his private thoughts are on anything.
You say that "Every single one has exploited people left and right", what evidentiary basis could you possibly have for making that statement? There are thousands of billionaires worldwide, could you name even 100 of them off the top of your head, much less explain how each and every one "exploited people left and right"?
Haters gonna hate.
And if they didn't, billionaires wouldn't donate.
You steal a loaf of bread - you go to jail. You commit fraud on a scale that destabilizes the global economy - you get to say that people pointing out your misdeeds are "demonizing" you.
Proceeds to link a literal PR propaganda piece by Gates and Co.
recent fake news about Bill Gates connections to covid/vaccines probably caused more PR damage to him than all of you combined
This is nothing new either: https://en.wikipedia.org/wiki/Rockefeller_Foundation
Is there actual data to back this up? That 'old money' behaves in a more positive society-impacting way than 'new money'?
> Because at least old money understands the concept of noblesse oblige.
Someone getting rich in 1982 isn't old money(!).
There is nothing except some kind of rose-tinted glasses to indicate that the rich in any era were particularly responsible in their use of wealth.
To be clear, you are comparing the mindset of new money to the pious protestants who held overwhelming sway over US society for almost two centuries? Just who do you think the old money is?
Who are you talking about when you say "this mentality of earned wealth completely rids the owner of any sense of responsibility"?
If you believe that your wealth is entirely, or almost entirely, through sheer force of your own will, skills, and abilities, you have no responsibility to anyone with regard to that wealth. You earned it all without anyone's help. It's all yours. They can pound sand.
If you believe that your wealth is in part due to factors outside of your control - having connected family, having family money, attending good schools, lucky breaks early in your career, etc. - you're much more likely to feel a sense of responsibility toward the next generation. To give other people lucky breaks, maybe even ones less deserving than you were. To set up scholarship funds so other kids can attend good schools they otherwise wouldn't be able to.
Edit to add: People in group 2 don't feel they "deserve" it any less. They still earned it. It's still theirs. They just understand the difference between being born on third base and hitting a triple. The run still counts at the end of the day.
You out of your mind? What could possibly make you say "they knew it"? The amount of people rich-by-inheritance who are selling their bootstraps stories is stupidly high, and a lot of them believe it. One famous example got banned from twitter a couple months ago.
You can just count in your city how many buildings, libraries, concert halls and similar have been built by the rich of old, and how many by the rich of new.
Maybe the new rich give to ONGs instead, but ONGs can be seen as just another institution to exert power, influence markets, and buy people by giving them a position in ONGs where you invest heavily. On the other side infrastructure is infrastructure, yes, it makes you look good, but you have to build something real and solid that is easy to evaluate.
Sounds like it was written by someone who didn't grow up around "old money".
There's plenty of statistical literature on this myth.
> This new, self-made entrepreneur class does not only think they have earned their money themselves, which as a sidenote is also kind of a fiction
It's not a fiction that entrepreneurs earned their money themselves. It's more complicated than that but it's not fiction. Most entrepreneurs fail, the ones who get rich usually do something innovative.
It is a fiction that entrepreneurs are "intellectually superior, morally superior and virtuous" but, again, who really thinks of themselves that way, Paul Graham-style entrepreneurs or the lefties who insist that they are motivated purely by "justice" but are clearly at least partly motivated by resentment?
There are good arguments for left-wing policies. But the left today is culturally ascendant and many of its most popular arguments are petty vindictiveness (like, for example, that rich people didn't innovate in order to get rich -- most of them did!).
My god, so many people misunderstood you, and took this thing in the literal sense. HN is worse that I imagined.
>Silicon Valley money wants to remake people in their images, they have a Protestant zealotry associated with their money that makes any oligarch look straight up sympathetic in comparison
Tech became a global catalyst for many people to get out of poverty. A lot of people in countries like India, Nigeria or Ukraine would never had a chance to get out of poverty otherwise. I do not observe any increase in the sentiment in them remaking people in their own images. Half a century ago Ayn Rand was getting enough followers well before tech was even a thing.
The quote that you have provided reminds me of the zealotry of communist regime that my country went through. As well as the arguments of the woke marxists that are sadly getting more frequent today.
Anyway, thank you for an interesting take on the problem.
But never mind, it is hating on rich people, so it is always OK, right?
Okay, I'm attacking the C.S. Lewis quote and not your main point, which is interesting, although I'm not exactly sure who is trying to remake me in their image and what that would even mean.
Not to mention that "curing the ills of society" in the worst way imaginable (eugenics) was pretty in-vogue with early 20th century "old money".
Also, didn't I just say that eugenics was a horrible thing that was in-vogue in the early 20th century? Isn't that exactly what you're saying?
>"People who don't look any deeper than the Gini coefficient look back on the world of 1982 as the good old days, because those who got rich then didn't get as rich. But if you dig into how they got rich, the old days don't look so good. In 1982, 84% of the richest 100 people got rich by inheritance, extracting natural resources, or doing real estate deals. Is that really better than a world in which the richest people get rich by starting tech companies?"
And my answer to that question would be, arguably yes. Why? Because at least old money understands the concept of noblesse oblige. The real sinister psychological thing going on behind the Graham argument is that it's not at all about meritocracy, it's that this mentality of earned wealth completely rids the owner of any sort of responsibility.
The aristocrats and oligarchs of the olden days might have been corrupt, debauched and half-useless, but at least they knew it. This new, self-made entrepreneur class does not only think they have earned their money themselves, which as a sidenote is also kind of a fiction, but that they're intellectually superior, morally superior and virtuous in ways that anyone else just can't understand.
Old money might have ignored you and thrown a party, but Silicon Valley money wants to remake people in their images, they have a Protestant zealotry associated with their money that makes any oligarch look straight up sympathetic in comparison.
C.S Lewis:
"“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. They may be more likely to go to Heaven yet at the same time likelier to make a Hell of earth. This very kindness stings with intolerable insult. To be "cured" against one's will and cured of states which we may not regard as disease is to be put on a level of those who have not yet reached the age of reason or those who never will; to be classed with infants, imbeciles, and domestic animals.”