An interesting thesis on inequality....the yard sale model.

[Blansky]

Originally Posted by Krash

All I know is that I was born piss poor. When I was growing up, we had nothing, and I mean NOTHING!

I never subscribe to any theory that suggests the deck is stacked against you. Perhaps other countries, but not in the USA.

I’m retiring at 59. Very HAPPY and very HEALTHY!

When I look back at my life, it’s quite shocking where I’m at versus where I came from.


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I really don't think that's what the exercise was about.

It was merely an illustration of the zero sum game will always end up with one or a small group of people owning everything, as is now happening.

In just the US...from 1989 -2019 (30 years)

The share of total wealth held by families in the top 10 percent of the distribution increased from 63 percent in 1989 to 72 percent in 2019, and the share of total wealth held by families in the top 1 percent of the distribution increased from 27 percent to 34 percent over the same period, CBO estimates. By contrast, the share of total wealth held by families in the bottom half of the distribution declined over that period, from 4 percent to 2 percent.

[Krash]

Originally Posted by Blansky

I really don't think that's what the exercise was about.

It was merely an illustration of the zero sum game will always end up with one or a small group of people owning everything, as is now happening.

In just the US...from 1989 -2019 (30 years)

The share of total wealth held by families in the top 10 percent of the distribution increased from 63 percent in 1989 to 72 percent in 2019, and the share of total wealth held by families in the top 1 percent of the distribution increased from 27 percent to 34 percent over the same period, CBO estimates. By contrast, the share of total wealth held by families in the bottom half of the distribution declined over that period, from 4 percent to 2 percent.

Well, simple math. If you have $10 million in the bank, then that’s good for $200,000 a year at just 2% interest. Compounded annually, then the money really starts to pile up.

However, there isn’t a finite amount of wealth in this country. It’s virtually unlimited. That’s one of the fundamental flaws with this exercise.

Bezos, Musk, Buffet and Gates accumulating more money doesn’t prevent me or anyone else from accumulating more money too. Actually, quite the contrary, many people have become wealthy simply by investing in Tesla and Amazon.


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[Star Ferry]

Originally Posted by Krash

Well, simple math. If you have $10 million in the bank, then that’s good for $200,000 a year at just 2% interest. Compounded annually, then the money really starts to pile up.

However, there isn’t a finite amount of wealth in this country. It’s virtually unlimited. That’s one of the fundamental flaws with this exercise.

Bezos, Musk, Buffet and Gates accumulating more money doesn’t prevent me or anyone else from accumulating more money too. Actually, quite the contrary, many people have become wealthy simply by investing in Tesla and Amazon.


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I agree and I disagree. Since economies can grow, it’s not literally a zero sum game. But the number of people getting rich on paper over the past 30 years has skyrocketed, growing far faster than the supply of goods and services people normally consume (housing along with home appliances and home maintenance services, transport, energy, food, clothing, education, healthcare, and non-essentials like travel and live entertainment).

The result is inflation, which does hurt the average Joe. Average Joe who wants a 1500 square foot 3/2 house in the Cleveland suburbs is now competing with Richie Rich who may be buying for his child or buying as a rental property, or against an institutional investor pooling funds from many rich people. Most likely he will struggle to compete. Maybe he can move to a far outer ring suburb, which means he’ll be nowhere near the lake, likely have lesser schools and public services available, and will be far from whatever the city offers in terms of jobs, hospitals, education, cultural amenities, and more.

[MrGoat]

Originally Posted by Star Ferry

I agree and I disagree. Since economies can grow, it’s not literally a zero sum game. But the number of people getting rich on paper over the past 30 years has skyrocketed, growing far faster than the supply of goods and services people normally consume (housing along with home appliances and home maintenance services, transport, energy, food, clothing, education, healthcare, and non-essentials like travel and live entertainment).

The result is inflation, which does hurt the average Joe. Average Joe who wants a 1500 square foot 3/2 house in the Cleveland suburbs is now competing with Richie Rich who may be buying for his child or buying as a rental property, or against an institutional investor pooling funds from many rich people. Most likely he will struggle to compete. Maybe he can move to a far outer ring suburb, which means he’ll be nowhere near the lake, likely have lesser schools and public services available, and will be far from whatever the city offers in terms of jobs, hospitals, education, cultural amenities, and more.

For the most part in my area it’s not “Richey Rich” buying up the houses. It’s private equity firms and commercial entities buying them, inflating prices without any actual reasoning and then renting them out for exorbitant amounts.


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[Krash]

Originally Posted by Star Ferry

I agree and I disagree. Since economies can grow, it’s not literally a zero sum game. But the number of people getting rich on paper over the past 30 years has skyrocketed, growing far faster than the supply of goods and services people normally consume (housing along with home appliances and home maintenance services, transport, energy, food, clothing, education, healthcare, and non-essentials like travel and live entertainment).

The result is inflation, which does hurt the average Joe. Average Joe who wants a 1500 square foot 3/2 house in the Cleveland suburbs is now competing with Richie Rich who may be buying for his child or buying as a rental property, or against an institutional investor pooling funds from many rich people. Most likely he will struggle to compete. Maybe he can move to a far outer ring suburb, which means he’ll be nowhere near the lake, likely have lesser schools and public services available, and will be far from whatever the city offers in terms of jobs, hospitals, education, cultural amenities, and more.

No doubt inflation hurts the working class folks more than people living high on the hog.

[mountainjogger]

Originally Posted by brandrea

I’m offended that you don’t cheer for my Maple Leafs

Brian, I like trees the same as the next person. And fall is one of my favorite times of the year. But I am still at a loss as to why would one cheer for leaves. Is this Canadian humor?

[brandrea]

Originally Posted by mountainjogger

Brian, I like trees the same as the next person. And fall is one of my favorite times of the year. But I am still at a loss as to why would one cheer for leaves. Is this Canadian humor?

I guess the name doesn't exactly strike fear into the face of any opponent.

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[mountainjogger]

Originally Posted by brandrea

I guess the name doesn't exactly strike fear into the face of any opponent.

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[jgrae]

Originally Posted by Star Ferry

Keeping all that ice cold in the summer, the Zambonis to groom it, the helmets and sticks, insurance costs… hockey is literally systematic oppression, prolongs intergenerational trauma, and should probably be banned. That’s my takeaway.

[brandrea]

Originally Posted by MrGoat

For the most part in my area it’s not “Richey Rich” buying up the houses. It’s private equity firms and commercial entities buying them, inflating prices without any actual reasoning and then renting them out for exorbitant amounts.


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Interesting. I’m not sure if that’s happening everywhere, perhaps it is. It may explain in part, the run up we’ve seen in real estate prices.

Regardless, there’s no denying that affordable housing is an issue in many areas.

What can be done to improve affordability for renters or Joe average “wanna be” home owners? (Besides moving to the outer reaches).

[GB-man]

Originally Posted by brandrea

Interesting. I’m not sure if that’s happening everywhere, perhaps it is. It may explain in part, the run up we’ve seen in real estate prices.

Regardless, there’s no denying that affordable housing is an issue in many areas.

What can be done to improve affordability for renters or Joe average “wanna be” home owners? (Besides moving to the outer reaches).

I recall when I bought my first home around 2012 there was a narrative here in America that the millennials were going to buck the American dream and forgo a 30 year mortgage to buy a house in favor of a low maintenance lifestyle of renting. You could pile all your money into investments and not have to worry about a new roof or the lawn. That narrative seems to have changed now that homes have increased 10-20% yoy consecutively and rents have gone hockey stick in many areas.

[brandrea]

Originally Posted by GB-man

I recall when I bought my first home around 2012 there was a narrative here in America that the millennials were going to buck the American dream and forgo a 30 year mortgage to buy a house in favor of a low maintenance lifestyle of renting. You could pile all your money into investments and not have to worry about a new roof or the lawn. That narrative seems to have changed now that homes have increased 10-20% yoy consecutively and rents have gone hockey stick in many areas.

I recall hearing that back in my day too Tom.

I suppose it can work if you're disciplined and you know how to invest

Wait ... why does everyone have to bring hockey analogies into these discussions ...


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[Maleg]

Originally Posted by brandrea

Interesting. I’m not sure if that’s happening everywhere, perhaps it is. It may explain in part, the run up we’ve seen in real estate prices.

Regardless, there’s no denying that affordable housing is an issue in many areas.

What can be done to improve affordability for renters or Joe average “wanna be” home owners? (Besides moving to the outer reaches).

In my area (greater Chicagoland) the very low mortgage interest rates brought a lot of new buyers into the market, but the available property inventory was static. The ensuing sellers market drove up property sales prices (no news there).

Rental property owners repriced their rents based on the new elevated property prices (new market values). The average Joe quickly found themselves at the wrong end of the real estate boom.

Now, with rents much higher people want to buy, but the Fed raised interest rates pushing Joe average out of the market. The government already has home buying programs to help Joe Average, but the Fed and this economy are conspiring against him.

Joe’s best option is a more affordable home in the hinterlands and a long commute to work. As it turns out, this is the American way. It’s how the suburbs came to be in the first place. And it’s one of the reasons America is addicted to automobiles. It’s also how I could afford my first home.