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Economics - The Thread

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Absolutely shocking that the same people, who think nobody helped them when they paid for a year's tuition and a year's entire apartment with a summer job that hired anybody who walked in the door, are the people who don't understand "why your generation is so depressed despite having so many more advantages than ours did."

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On 6/30/2017 at 12:35 PM, Salem said:

good stuff

 

Land therefore plays a very different role in market economies to capital: whereas Apple will produce more iPhone’s to meet demand, more land cannot be produced to meet housing demand.

...

Remarkably, the unique role of land in the economy is ignored in mainstream economics: it is treated the same way as any other form of capital. This, the authors argue, is one of the root causes of the discipline’s repeated failure to see crisis coming in the global economy.

...

When the banks create a new mortgage loan they create new money, and they create this credit often for existing property or land purchase, not new investment. This infinite supply of money in the form of mortgages interacts with a finite supply of land, inflating house prices.

...

An alliance of mortgage owners, property developers and bankers all end up having a strong vested interest in keeping the supply of new housing low. Why? Because scarcity is what allows these groups to reap the fruits of financialisation: if everyone could have a nice home to live in, the cost would drop like a stone, and so would the profits.

The result is a "low-supply equilibrium" where supply is kept artificially below demand.

:bey: 

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