Compare sorting by median vs average to get a sense of the issue; https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...
This is a recent development where the median wealth of citizens in progressively taxes nations has quickly overtaken the median wealth of USA citizens.
All it takes is tax on the extremely wealthy and lessening taxes on the middle class… seems obvious right? Yet things gave consistently been going the other way for along time in the USA.
If all that fails, they have their underground bunkers on faraway islands and/or backup citizenships.
Agreed and I think this is a result of a naive belief that we humans tend to have that controlling thoughts can control reality. Politicians still live by this belief but eventually reality and lived experience does catch up. By that time all trust is long gone.
People usually change their behavior after some pretty horrific events. So I would predict something like that in future. For both Europe and US too.
The richest of the rich have purchased islands where they can hole up.
The bunkers are in case of nuclear war or serious pandemics. Absolutely worst case last resort scenario, not just "oh I don't care if I end up there"
You could tax 100% of all of the top 1%'s income (not progressively, just a flat 100% tax) and it'd cover less than double the federal government's budget deficit in the US. There would be just enough left over to pay for making the covid 19 ACA subsidies permanent and a few other pet projects.
Of course, you can't actually tax 100% of their income. In fact, you'd need higher taxes on the top 10% than anywhere else in the West to cover the deficit, significantly expand social programs to have an impact, and lower taxes on the middle class.
It should be pointed out that Australia has higher taxes on their middle class than the US does. It tops out at 45% (plus 2% for medicare) for anyone at $190k or above.
If you live in New York City, and you're in the top 1% of income earners (taking cash salary rather than equity options) you're looking at a federal tax rate of 37%, a state tax rate of 10.9%, and a city income tax rate of 3.876% for a total of 51.77%. Some other states have similarly high tax brackets, others are less, and others yet use other schemes like no income tax but higher sales and property taxes.
Not quite so obvious when you look closer at it.
How much of the current burden is shouldered by the middle class? How much by the 1%? How does that compare to other Western nations? What measurable effect would raising this on the 1% be? What about the middle class?
Tech and AI have taken off in the US partially because they’re in the domain of software, which hasnt bee regulated to the point of deliberate inefficiency like other industries in the US.
(I pick this example because our regulation of insurance companies has (unintuitively) incentivized them to pay more for care. So it’s an example of poor regulation imo)
Stuff like this isn't Wall Street or Billionaires or whatever bogeyman - it's our neighbors: https://bendyimby.com/2024/04/16/the-hearing-and-the-housing...
However regulation is helpful for those already sick or with pre-existing conditions. Developed countries with well-regulated systems also have better health outcomes than the US does.
We've blundered into a system that has the worst parts of socialized health care and private health insurance without any of the benefits.
What do you mean? Several Asian cities have housing crises far worse than the US in local purchasing power, and I'd even argue that a "cheap" home in many Asian countries is going to be of a far lower quality than a "cheap" home in the US.
As it is now anyone with assets is only barely affected by inflation while those who earn a living from wages have their livelihood eroded over time covertly.
Think of it another way. It's not that these things are more expensive. It's that the average US worker simply doesn't provide anything of value. China provides the things of value now. How the government corrected for this was to flood the economy with cash. So it looks like things got more expensive, when really it's that wages reduced to match reality. US citizens selling each other lattes back and forth, producing nothing of actual value. US companies bleeding people dry with fees. The final straw was an old man uniting the world against the USA instead of against China.
If you want to know where this is going, look at Britain: the previous world super power. Britain governed far more of the earth than the USA ever did, and now look at it. Now the only thing it produces is ASBOs. I suppose it also sells weapons to dictators and provides banking to them. That is the USA's future.
If you were to buy that same house today, your mortgage would be about $5100/m-- about 6 weeks of pay.
And the reason is exactly what you're saying: the average US worker doesn't provide as much value anymore. Just as her factory job got optimized/automated, AI is going to do the same for many. Tech workers were expensive for a while and now they're not. The problem is that there seems to be less and less opportunity where one can bring value. The only true winners are the factory owners and AI providers in this scenario. The only chance anybody has right now is to cut the middleman out, start their own business, and pray it takes off.
That's just an example, but the pattern will easily repeat. One thing that came out of the post-pandemic era is that the lowest deciles saw the biggest rises in income. Consequently, things like Doordash became more expensive, and stuff like McDonald's stopped staffing as much.
This isn't some grand secret, but most Americans who post on Twitter, HN, or Reddit consider the results some kind of tragedy, though it is the natural thing that happens when people become much higher income: you can't hire many of them to do low-productivity jobs like bus a McD's table.
That's what life looks like when others get richer relative to you. You can't consume the fruits of their labor for cheap. And they will compete for you with the things that you decided to place supply controls on. The highly-educated downwardly-mobile see this most acutely, which is why you see it commonly among the educated children of the past elite.
So the young want cheap affordable housing, right in the middle of Manhattan, never going to happen.
The key issue upstream is that too many good jobs are concentrated in too few places, and that leads to consumerism stimulating those places and making them further more attractive. Technology, through Covid, actually gave governments a get out of jail free card by allowing remote work to become more mainstream. Only to just not grasp the golden egg they were given. Pivot economies more to remote working more actively helps distribute people to other places with more affordable home. Over time, and again slowly, those places become more attractive because people now actually live there.
Existing homeowners can still wrap themselves in the warm glow of their high house prices which only loses "real" value through inflation which people tend not to notice as much.
But we decided to try to go back to the status quo so oh well
- House prices increasing while wages are stagnant
- Home loans and increasing prices mean the people going for huge leverages on their home purchases
- Supply is essentially government controlled, and dependent, and building more housing is heavily politicized
- A lot of dubious money is being created, which gets converted to good money by investing it in the housing market
- Housing is genuinely difficult to build and labor and capital intensive
> The key issue upstream is that too many good jobs are concentrated in too few places
This no longer is the case with remote work on the rise, If that were the case, housing prices would increase faster in trendy overpriced places, but the increase as of late was more uniform, with places like London growing slower (or even depreciating, relatively speaking) to less in-demand places.
What is happening with house prices in london is a combination of the simple effects of high-ish interest rates v high house prices (limiting affordability) and also flats in general taking a beating from post-grenfell building regs changes and leasehold issues. When you look at granular data there is still a surprising amount growth in Zone 3-4 onwards in London because actual houses in those locations are still sort of achievable for decently paid couples.
Also regionally, a bit glib, but the price increases are happening in Manchester not Bolton or Sheffield not Scunthorpe. If remote working was truly acceptable then those latter locations would be seeing far more inward movement of people but they're not really
physical products & energy are the two things that are relevant to people's wellbeing.
right now A.I is sucking up the energy & the RAM - so is it gonna translate into a net positive ?
Pretty much everything gets more expensive, with the outliers being tech which has gotten much cheaper, mostly because the rate at which it progresses is faster than the rate at which governments can print money. But everything we need to survive, like food, housing, etc, keeps getting more expensive. And the asset class get richer as a result.
plenty of charts you can look at - net productivity by virtually any metric vs real adjusted income. the example I like are kiosks and self checkout. who has encountered one at a place where it is cheaper than its main rival and is directly attributable to (by the company or otherwise) to lower prices?? in my view all it did was remove some jobs. that's the preview. that's it. you will lose jobs and you will pay more. congrats.
even with year 2020 tech you could automate most work that needs to be done, if our industry wouldn't endlessly keep disrupting itself and have a little bit of discipline.
so once ai destroys desk jobs and the creative jobs, then what? chill out? too bad anyone who has a house won't let more be built.