We know what the problems are, so what about the solutions?
March 3, 2024 3:27 AM Subscribe
The Plan Is To Make You Permanently Poorer | Aaron Meets Gary Stevenson (Novara Media, YouTube/Piped, 1h31m27s, 10-Oct-2022)
Britain’s Economy Will Only Get Worse. Forever. | Aaron Bastani meets Gary Stevenson (Novara Media, YouTube/Piped, upcoming stream, will probably run about 90m)
posted by flabdablet at 4:43 AM on March 3 [2 favorites]
Britain’s Economy Will Only Get Worse. Forever. | Aaron Bastani meets Gary Stevenson (Novara Media, YouTube/Piped, upcoming stream, will probably run about 90m)
posted by flabdablet at 4:43 AM on March 3 [2 favorites]
The secret economics destroying Britain | Gary Stevenson interview (PoliticsJOE, YouTube/Piped, 51m58s)
posted by flabdablet at 4:50 AM on March 3 [1 favorite]
posted by flabdablet at 4:50 AM on March 3 [1 favorite]
Arragh, flabdablet, we can't leave you having a four-cornered debate with yourself. One of the points Stevenson makes about trad economic models is that it is all about mean man or modal man and ignores the distribution around those metrics - all mean and no variance. This is woeful / dangerous because it allows ppl to 'think' in stupid ways like maintaining that 'men' are {taller | heavier | richer | have bigger shoes} than 'women'.
Economic Iconoclasm requires a shout-out for Kate Raworth's Doughnut Economics [me MetaPrev]. Raworth refuses to allow economists to sweep inconvenient aspects of one economy under the carpet and then claim they understand how economies work. Not directly relevant, except bi££ions, in Feb'24 James O'Brien had Nick Wallis in his Full Disclosure chair to explain the Great UK Post Office Scandal. All good stuff, tyfs.
posted by BobTheScientist at 6:32 AM on March 3 [4 favorites]
Economic Iconoclasm requires a shout-out for Kate Raworth's Doughnut Economics [me MetaPrev]. Raworth refuses to allow economists to sweep inconvenient aspects of one economy under the carpet and then claim they understand how economies work. Not directly relevant, except bi££ions, in Feb'24 James O'Brien had Nick Wallis in his Full Disclosure chair to explain the Great UK Post Office Scandal. All good stuff, tyfs.
posted by BobTheScientist at 6:32 AM on March 3 [4 favorites]
Fixing wealth equality is just fixing a symptom. The root problem is human psychology and the stories we tell. We won't fix anything long term until we sort out the basic facts of what it is to be human and agree on fundamental aspects of our story.
posted by Awfki at 7:05 AM on March 3 [12 favorites]
posted by Awfki at 7:05 AM on March 3 [12 favorites]
I just feel like all the answers we have to fixing wealth inequality will always fail while those with the most wealth also have the most power and no qualms about using that power to keep themselves at the top of the pile where they believe they belong. (This may be defeatist and also wrong for reasons I do not understand, but this is always how I feel when I see articles about making the world a more fair or just or compassionate place.)
posted by Glinn at 7:26 AM on March 3 [5 favorites]
posted by Glinn at 7:26 AM on March 3 [5 favorites]
There’s this rhetorical style I call “The Liberal ‘We’”. It presupposes everyone is on the same team, and that societal problems are puzzles to be solved. You fix the problem by understanding the puzzle and explaining it, at which point everyone becomes enlightened and change their behavior.
You find the Liberal “We” on NPR, in TED talks, and in earnest college students. To whom I say: if you want to solve wealth inequality, you need to wrest control from the people in power, and that’s the hard part. Not only do they understand it (so explaining it won’t work), they like it, and they will kill you to defend it.
posted by qxntpqbbbqxl at 7:30 AM on March 3 [55 favorites]
You find the Liberal “We” on NPR, in TED talks, and in earnest college students. To whom I say: if you want to solve wealth inequality, you need to wrest control from the people in power, and that’s the hard part. Not only do they understand it (so explaining it won’t work), they like it, and they will kill you to defend it.
posted by qxntpqbbbqxl at 7:30 AM on March 3 [55 favorites]
The solution is paid in blood, but the 99.9% are not angry enough yet to make the purchase.
It's awkward, because the 0.1% have a whole lot of science about how angry and miserable they can make people before they start fomenting revolution. And then a whole lot of guns to put that revolution down.
It's really not a good situation at all.
posted by seanmpuckett at 7:35 AM on March 3 [10 favorites]
It's awkward, because the 0.1% have a whole lot of science about how angry and miserable they can make people before they start fomenting revolution. And then a whole lot of guns to put that revolution down.
It's really not a good situation at all.
posted by seanmpuckett at 7:35 AM on March 3 [10 favorites]
Stevenson repeatedly makes the point that the only power advantage that ordinary people have over the tiny minority of very rich families is that there are a lot more of us than of them; which implies that maybe it would be a good idea to stop fighting amongst ourselves, understand that rising inequality must inevitably yield a declining quality of life for very nearly everybody, and start demanding that our political representatives treat reducing structural wealth inequality as a high political priority.
Because as long as a substantial majority of people are not loudly and consistently demanding that of our political class, they're going to keep ignoring it in favour of whatever the confected culture war issue of the day might be, simply because of being correct in not seeing it as a vote winner.
The idea that democracy is powerless to counter the machinations of the extremely wealthy is one of those stories I think Awfki might have been alluding to above. It's a great story to get spread around if you're an oligarch. If you're not, not so much.
Another story is the one about the guy who owns $100M worth of assets, and as a consequence of that ownership, is raking in $5M per year - that's over $500 per hour, 24x7 - for doing nothing beyond continuing to breathe.
What's that guy going to do with his $13K per day? What would you do with it?
Spending it all on hookers and blow is soon going to hurt his ability to keep on breathing, so that won't run for more than a year or two. What he can do - what most people would fairly quickly end up doing in his place - is buy your mum's house. And your mum's house. And yours. And yours. And yours. And then he can rent them back out to your kids. And he's not even a billionaire, though at that rate his kids most likely will be.
That guy could fund a basic income of $500 per week to at least 100 people, if that's what the law required him to do in order to retain ownership of those assets, and still have more money coming in than most of us would know what to do with. Just for breathing. An actual billionaire could fund a thousand.
That's a pretty good story to spread to friends, neighbours and acquaintances met down the pub.
posted by flabdablet at 8:15 AM on March 3 [28 favorites]
Because as long as a substantial majority of people are not loudly and consistently demanding that of our political class, they're going to keep ignoring it in favour of whatever the confected culture war issue of the day might be, simply because of being correct in not seeing it as a vote winner.
The idea that democracy is powerless to counter the machinations of the extremely wealthy is one of those stories I think Awfki might have been alluding to above. It's a great story to get spread around if you're an oligarch. If you're not, not so much.
Another story is the one about the guy who owns $100M worth of assets, and as a consequence of that ownership, is raking in $5M per year - that's over $500 per hour, 24x7 - for doing nothing beyond continuing to breathe.
What's that guy going to do with his $13K per day? What would you do with it?
Spending it all on hookers and blow is soon going to hurt his ability to keep on breathing, so that won't run for more than a year or two. What he can do - what most people would fairly quickly end up doing in his place - is buy your mum's house. And your mum's house. And yours. And yours. And yours. And then he can rent them back out to your kids. And he's not even a billionaire, though at that rate his kids most likely will be.
That guy could fund a basic income of $500 per week to at least 100 people, if that's what the law required him to do in order to retain ownership of those assets, and still have more money coming in than most of us would know what to do with. Just for breathing. An actual billionaire could fund a thousand.
That's a pretty good story to spread to friends, neighbours and acquaintances met down the pub.
posted by flabdablet at 8:15 AM on March 3 [28 favorites]
I've had a friend recommend I listen to Stevenson's videos a couple of times, and either because of this or because it popped up in my YouTube recs this morning, I got round to watching it. Or actually, putting it on my headphones while I hung out some washing.
And yes, it's great. Especially the bit where he does answer the question “How We Fix Wealth Inequality”: we keep on learning and keep on talking and keep on working out what we can do to move the needle and make sure that people aren't just acquiescing to it.
posted by ambrosen at 8:30 AM on March 3 [4 favorites]
And yes, it's great. Especially the bit where he does answer the question “How We Fix Wealth Inequality”: we keep on learning and keep on talking and keep on working out what we can do to move the needle and make sure that people aren't just acquiescing to it.
posted by ambrosen at 8:30 AM on March 3 [4 favorites]
All of the linked videos are conversations that don't rely at all on video props, so using any of them as a radio substitute would work just fine. For the long ones, probably better than watching.
posted by flabdablet at 8:51 AM on March 3 [3 favorites]
posted by flabdablet at 8:51 AM on March 3 [3 favorites]
the foremost (~80%) solution is fixing housing.
I've been lucky to bounce through life and avoided having to house a family in a high-rent area, so over the past nearly 40 years of adult life I've paid an average of ~$600/mo on housing (nominal $, inflation-adjusted it works out to $1000/mo).
More Renters Than Ever Before Are Burdened by the Rent They Pay
"A new Harvard report says 22.4 million households in the United States now spend more than 30 percent of their income in rent, with 12.1 million spending more than 50 percent."
"Renters are still paying the financial consequences of the pandemic, when rents in cities across the country rose by double-digit percent increases "
"rose" like the tides . . .
"Next month his rent, now $1,950 a month, is going up another $150."
"A single mother with two sons, Ms. Ross earns about $86,000 a year and pays $2,250 a month for a three-bedroom townhouse. "
"But for now, she said, 'We do without.'"
https://finance.yahoo.com/news/bezos-backed-company-surpasses-100m-175917368.html
It's one thing that professional sports team ownerships are monopolized by billionaires, that's the fat of the economy.
Housing is the meat and bones.
And it's not just renting in this picture, either. Australia and Canada ran themselves into massive housing bubbles this past decade, just like what Japan did to themselves in their late 80s "Bubble Economy".
I haven't seen a FPP on the Canada and Australian "Mortgage Cliff" thing (they don't have 30 year fixed mortgages so everyone who bought with stimulus interest rates will have to be re-financing at much higher rates later in the mid-decade).
posted by torokunai at 9:10 AM on March 3 [2 favorites]
I've been lucky to bounce through life and avoided having to house a family in a high-rent area, so over the past nearly 40 years of adult life I've paid an average of ~$600/mo on housing (nominal $, inflation-adjusted it works out to $1000/mo).
More Renters Than Ever Before Are Burdened by the Rent They Pay
"A new Harvard report says 22.4 million households in the United States now spend more than 30 percent of their income in rent, with 12.1 million spending more than 50 percent."
"Renters are still paying the financial consequences of the pandemic, when rents in cities across the country rose by double-digit percent increases "
"rose" like the tides . . .
"Next month his rent, now $1,950 a month, is going up another $150."
"A single mother with two sons, Ms. Ross earns about $86,000 a year and pays $2,250 a month for a three-bedroom townhouse. "
"But for now, she said, 'We do without.'"
https://finance.yahoo.com/news/bezos-backed-company-surpasses-100m-175917368.html
It's one thing that professional sports team ownerships are monopolized by billionaires, that's the fat of the economy.
Housing is the meat and bones.
And it's not just renting in this picture, either. Australia and Canada ran themselves into massive housing bubbles this past decade, just like what Japan did to themselves in their late 80s "Bubble Economy".
I haven't seen a FPP on the Canada and Australian "Mortgage Cliff" thing (they don't have 30 year fixed mortgages so everyone who bought with stimulus interest rates will have to be re-financing at much higher rates later in the mid-decade).
posted by torokunai at 9:10 AM on March 3 [2 favorites]
The idea that democracy is powerless to counter the machinations of the extremely wealthy is one of those stories I think Awfki might have been alluding to above. It's a great story to get spread around if you're an oligarch. If you're not, not so much.
I very much agree with this sentiment. I think people would be shocked at how fast things can change when the vast majority put aside their differences and assert themselves against the oligarchs or whatever powers that be. Of course it's hard to put aside our differences, but let's not forget that the powers that be are deeply invested in, and deeply invest into, making it seem much harder than it actually is.
I don't love this Gary fellow's presentation style (you're just... casually sitting under a blanket recording a video? Like, did your camera crawl out of the closet when you woke up this morning?) but basically I nodded in agreement with everything he said (at least in the first link), and I can't help but feel that some of the rebuttals here are kind of missing the point. So if he can help spread the word, as it were, then more power to him.
posted by Alex404 at 10:33 AM on March 3 [1 favorite]
I very much agree with this sentiment. I think people would be shocked at how fast things can change when the vast majority put aside their differences and assert themselves against the oligarchs or whatever powers that be. Of course it's hard to put aside our differences, but let's not forget that the powers that be are deeply invested in, and deeply invest into, making it seem much harder than it actually is.
I don't love this Gary fellow's presentation style (you're just... casually sitting under a blanket recording a video? Like, did your camera crawl out of the closet when you woke up this morning?) but basically I nodded in agreement with everything he said (at least in the first link), and I can't help but feel that some of the rebuttals here are kind of missing the point. So if he can help spread the word, as it were, then more power to him.
posted by Alex404 at 10:33 AM on March 3 [1 favorite]
Garys economics always seems rather doom-laden: the rich will always win, in this video he suggests the solution is for all of us to start YouTube channels and post about it, I really can't see social media with its algorithmic feeds making a dent in the way world economies are run.
An alternative and more positive channel is Moving Home with Charlie, he covers the UK housing market and the fact that in real-terms it has been falling for the last year, which is great news but almost nobody in the media is talking about it.
posted by Lanark at 12:09 PM on March 3
An alternative and more positive channel is Moving Home with Charlie, he covers the UK housing market and the fact that in real-terms it has been falling for the last year, which is great news but almost nobody in the media is talking about it.
posted by Lanark at 12:09 PM on March 3
That first video isn't very impressive. He never actually says how "How We Fix Wealth Inequality", and even if he did and I somehow missed it, it seems he'd probably be pretty UK centric. That's OK and all, but listening to some random guy snuggled up on his couch, who seems to be telling me things can be fixed if we change our minds for this long term battle and stay mentally healthy as everything collapses... As far as I can tell, because he's rambling the whole time.
So..., OK. Yeah?
Seriously, does he offer any serious ideas for thought? That first video is only 13 minutes of him saying virtually nothing of value, with the transcript not offering much clarification. The subsequent videos are much longer, and I'm not inspired that another 4 hours of viewing will offer significant insight on much of anything.
posted by 2N2222 at 1:09 PM on March 3 [2 favorites]
So..., OK. Yeah?
Seriously, does he offer any serious ideas for thought? That first video is only 13 minutes of him saying virtually nothing of value, with the transcript not offering much clarification. The subsequent videos are much longer, and I'm not inspired that another 4 hours of viewing will offer significant insight on much of anything.
posted by 2N2222 at 1:09 PM on March 3 [2 favorites]
the guillotine? (someone had to suggest it)
posted by nofundy at 3:29 PM on March 3 [1 favorite]
posted by nofundy at 3:29 PM on March 3 [1 favorite]
"Fixing wealth equality is just fixing a symptom. The root problem is human psychology"
But relieving symptoms is good if you're suffering!
Beyond that, with changes at "symptom" level, psychology can change. Of all people Margaret Thatcher articulated this clearly: "Economics are the method; the object is to change the heart and soul." If people experience the benefits of a more equal distribution and start believing that is a norm, they will change what they aspire to and what they tolerate in others.
posted by i_am_joe's_spleen at 3:56 PM on March 3 [3 favorites]
But relieving symptoms is good if you're suffering!
Beyond that, with changes at "symptom" level, psychology can change. Of all people Margaret Thatcher articulated this clearly: "Economics are the method; the object is to change the heart and soul." If people experience the benefits of a more equal distribution and start believing that is a norm, they will change what they aspire to and what they tolerate in others.
posted by i_am_joe's_spleen at 3:56 PM on March 3 [3 favorites]
Fixing wealth equality is just fixing a symptom. The root problem is human psychology and the stories we tell.
respectfully, this sounds a lot like the sort of story i would tell if i was an oligarch who didn't want my wealth getting equalised, or a non-oligarch carrying water for them
posted by busted_crayons at 4:23 PM on March 3 [4 favorites]
respectfully, this sounds a lot like the sort of story i would tell if i was an oligarch who didn't want my wealth getting equalised, or a non-oligarch carrying water for them
posted by busted_crayons at 4:23 PM on March 3 [4 favorites]
I'm really getting a Billy Ray Valentine vibe from this.
I have seen some traders at work, and they don't seem to be the smartest folks on the block. More like the jocks from school, so it's nice to see a smart guy do well in that environment.
Though he's hard to watch, all of those tics and touching his face. Might be better to listen to.
I want to believe him.
posted by MtDewd at 4:28 PM on March 3
I have seen some traders at work, and they don't seem to be the smartest folks on the block. More like the jocks from school, so it's nice to see a smart guy do well in that environment.
Though he's hard to watch, all of those tics and touching his face. Might be better to listen to.
I want to believe him.
posted by MtDewd at 4:28 PM on March 3
I'm reminded of all those talking heads on TV who are wrong year after year, but don't get called on it. No incentive to be right.
What if they could lose their jobs if they were wrong 90% of the time.
posted by MtDewd at 4:33 PM on March 3 [1 favorite]
What if they could lose their jobs if they were wrong 90% of the time.
posted by MtDewd at 4:33 PM on March 3 [1 favorite]
I haven't seen a FPP on the Canada and Australian "Mortgage Cliff" thing (they don't have 30 year fixed mortgages so everyone who bought with stimulus interest rates will have to be re-financing at much higher rates later in the mid-decade).
Just a small correction - fixed-rate mortgage of various durations (usually 20-30 years) are very common here in Australia. Borrowers can choose either a variable rate (goes up and down with the 'market') or a fixed rate for the duration of the mortgage (generally a higher rate than the prevailing market rate). They can often switch between them, depending on the conditions of the loan.
There are and have been for a long time offerings in Australia with a low fixed rate for a specified period, after which they revert to a variable rate. These are the ones that sit behind the 'mortgage cliff' consisting mostly of people who couldn't afford to buy a home flocking to them because the low rate just got them over the lending criteria threshold (if that doesn't sound familiar, I suggest you watch The Big Short). During mid-2020 and mid-2022, these comprised nearly 50% of new home loans. Generally, the lower rates (around 4% lower than variable rates today) were set for three years, so many of those have now switched over and most of the rest will do so this year. That interest increase means around a 60% increase in monthly payments for most of these borrowers.
The 'mortgage cliff' is more of a steep hill than a cliff, but its effects are already being felt and, in my inexpert opinion, have yet to peak despite reassuring news of likely interest rate cuts this year. I think many people are hanging on by their fingernails and that can't last forever, so I believe we'll see a spike in urgent house sales this year, so rich investors will be able to snap up bargains and rent them out to people forced out of their homes by banks for extortionate amounts.
"Fixing wealth equality is just fixing a symptom. The root problem is human psychology"
Well, I guess the root problem of wealth inequality is psychology, but the way to fix it is not to send all the billionaires to therapists, it's to take their excess money away from them and give it back to the people they stole it from. If they feel the need to examine their psyche in order to deal with their feelings about that, a well-funded public health system will be necessary, I guess.
posted by dg at 5:09 PM on March 3 [4 favorites]
Just a small correction - fixed-rate mortgage of various durations (usually 20-30 years) are very common here in Australia. Borrowers can choose either a variable rate (goes up and down with the 'market') or a fixed rate for the duration of the mortgage (generally a higher rate than the prevailing market rate). They can often switch between them, depending on the conditions of the loan.
There are and have been for a long time offerings in Australia with a low fixed rate for a specified period, after which they revert to a variable rate. These are the ones that sit behind the 'mortgage cliff' consisting mostly of people who couldn't afford to buy a home flocking to them because the low rate just got them over the lending criteria threshold (if that doesn't sound familiar, I suggest you watch The Big Short). During mid-2020 and mid-2022, these comprised nearly 50% of new home loans. Generally, the lower rates (around 4% lower than variable rates today) were set for three years, so many of those have now switched over and most of the rest will do so this year. That interest increase means around a 60% increase in monthly payments for most of these borrowers.
The 'mortgage cliff' is more of a steep hill than a cliff, but its effects are already being felt and, in my inexpert opinion, have yet to peak despite reassuring news of likely interest rate cuts this year. I think many people are hanging on by their fingernails and that can't last forever, so I believe we'll see a spike in urgent house sales this year, so rich investors will be able to snap up bargains and rent them out to people forced out of their homes by banks for extortionate amounts.
"Fixing wealth equality is just fixing a symptom. The root problem is human psychology"
Well, I guess the root problem of wealth inequality is psychology, but the way to fix it is not to send all the billionaires to therapists, it's to take their excess money away from them and give it back to the people they stole it from. If they feel the need to examine their psyche in order to deal with their feelings about that, a well-funded public health system will be necessary, I guess.
posted by dg at 5:09 PM on March 3 [4 favorites]
Wealth inequality is a symptom of faulty monetary policy. Fix the money!
Inflation favours the asset rich while picking the pockets of the poor.
Save your economic energy with a money that isn't being continually devalued by design.
posted by neonamber at 6:57 PM on March 3
Inflation favours the asset rich while picking the pockets of the poor.
Save your economic energy with a money that isn't being continually devalued by design.
posted by neonamber at 6:57 PM on March 3
The problem with the money is not how it was issued, it's who ends up holding most of it. Whether the particular tokens involved came out of a central bank or an ASIC makes no difference to the destructive effects of maldistribution.
If you're one of the overwhelming majority who doesn't inhabit the bottom of the economic sump that money naturally drains into, it makes no difference whether the sump dwellers extract their rents from you as USD or Internet Points; they still win, you still lose.
That sump is well overdue for a good flushing out, and will remain so until the poisonous economic legacy of Thatcher and Reagan stops being widely understood as an inevitable or even credible foundation for fiscal policy.
posted by flabdablet at 9:00 PM on March 3 [2 favorites]
If you're one of the overwhelming majority who doesn't inhabit the bottom of the economic sump that money naturally drains into, it makes no difference whether the sump dwellers extract their rents from you as USD or Internet Points; they still win, you still lose.
That sump is well overdue for a good flushing out, and will remain so until the poisonous economic legacy of Thatcher and Reagan stops being widely understood as an inevitable or even credible foundation for fiscal policy.
posted by flabdablet at 9:00 PM on March 3 [2 favorites]
I just got a nice email from travelingthyme about three Piped links that have been reported as not working, asking if I have alternative sources for that material. Yes I do: every Piped video link posted above is already accompanied by a YouTube link to the same video and vice versa. Look for (Piped/YouTube) and (YouTube/Piped) annotations.
If a Piped link actually does take you to the Piped site but the video will not then play for you there, you might try using Piped's preferences to change your default Piped instance to one of the ones listed as currently operating. Or you can rely on uBlock Origin to render YouTube minimally tolerable. Up to you.
In general, Piped and YouTube links are interchangeable just by swapping piped.video for www.youtube.com (or vice versa) within the URL.
I've just re-checked all the Piped links I've posted above and all of them still work for me, both on a different computer and via a different ISP, so they have in fact been posted correctly and there's nothing that I nor any Mefi moderator can fix if they get further flagged as broken.
posted by flabdablet at 11:47 PM on March 3
If a Piped link actually does take you to the Piped site but the video will not then play for you there, you might try using Piped's preferences to change your default Piped instance to one of the ones listed as currently operating. Or you can rely on uBlock Origin to render YouTube minimally tolerable. Up to you.
In general, Piped and YouTube links are interchangeable just by swapping piped.video for www.youtube.com (or vice versa) within the URL.
I've just re-checked all the Piped links I've posted above and all of them still work for me, both on a different computer and via a different ISP, so they have in fact been posted correctly and there's nothing that I nor any Mefi moderator can fix if they get further flagged as broken.
posted by flabdablet at 11:47 PM on March 3
But wait, there's more! Here are Invidious versions of the same links just for good measure. If these work better for you than Piped or YouTube, please let me know via memail and I'll include them routinely in future video postings. In case I forget, you can also convert any YouTube or Piped link to its Invidious equivalent just by replacing the existing hostname inside the URL with invidio.us.
How We Fix Wealth Inequality (Gary's Economics, Invidious/Piped/YouTube, 13m37s)
James O'Brien meets Gary Stevenson | LBC (LBC, Invidious/Piped/YouTube, 1h3m23s)
The Plan Is To Make You Permanently Poorer | Aaron Meets Gary Stevenson (Novara Media, Invidious/YouTube/Piped, 1h31m27s, 10-Oct-2022)
Britain’s Economy Will Only Get Worse. Forever. | Aaron Bastani meets Gary Stevenson (Novara Media, Invidious/YouTube/Piped, 1h58m16s)
The secret economics destroying Britain | Gary Stevenson interview (PoliticsJOE, Invidious/YouTube/Piped, 51m58s)
posted by flabdablet at 11:49 PM on March 3
How We Fix Wealth Inequality (Gary's Economics, Invidious/Piped/YouTube, 13m37s)
James O'Brien meets Gary Stevenson | LBC (LBC, Invidious/Piped/YouTube, 1h3m23s)
The Plan Is To Make You Permanently Poorer | Aaron Meets Gary Stevenson (Novara Media, Invidious/YouTube/Piped, 1h31m27s, 10-Oct-2022)
Britain’s Economy Will Only Get Worse. Forever. | Aaron Bastani meets Gary Stevenson (Novara Media, Invidious/YouTube/Piped, 1h58m16s)
The secret economics destroying Britain | Gary Stevenson interview (PoliticsJOE, Invidious/YouTube/Piped, 51m58s)
posted by flabdablet at 11:49 PM on March 3
The root problem is human psychology and the stories we tell.
...and who tells those stories, and who believes them.
I'm a little disheartened at the comments here suggesting that facts have a dress code. Perhaps I should start posting Ben Shapiro's content. He's always immaculately turned out.
posted by flabdablet at 12:14 AM on March 4 [1 favorite]
...and who tells those stories, and who believes them.
I'm a little disheartened at the comments here suggesting that facts have a dress code. Perhaps I should start posting Ben Shapiro's content. He's always immaculately turned out.
posted by flabdablet at 12:14 AM on March 4 [1 favorite]
Just a small correction - fixed-rate mortgage of various durations (usually 20-30 years) are very common here in Australia.
That's... not true. CBA, the largest lender (26% of the total market), has only recently extended fixed-rate mortgages from 3 years to 5 years. You can check for yourself on their website. For most of recent history it was a maximum of 3 years fixed - we took on three mortgages, one in 2007, 2010, and 2017, and we took on a total renovation on one where we gutted and rebuilt a bathroom, added a brand new bathroom, changed the entire flooring to engineered wood and repainted.
The Reserve Bank of Australia says that
- Most borrowers in Australia who fix their mortgage interest rate do so for three years or less.
- By mid-2022, new fixed-rate lending had declined to around 5 per cent of total new lending.
The cost for building new homes has gone up about 50% between 2019 and today, while the cost for building home extensions has gone up about 100%. This is due to large increases in building materials and labor costs.
In comparison, renters are getting a steal, with national rent price index going up about 9% between Jan 2019 and Dec 2023 according to the Australian Bureau of Statistics. Rents were depressed during Covid which made the return to normal a much larger jump year to year.
We've cancelled plans to build a new house and expand an existing one and will just be renting an additional property instead (no doubt adding to the lack of supply).
posted by xdvesper at 2:06 AM on March 4
That's... not true. CBA, the largest lender (26% of the total market), has only recently extended fixed-rate mortgages from 3 years to 5 years. You can check for yourself on their website. For most of recent history it was a maximum of 3 years fixed - we took on three mortgages, one in 2007, 2010, and 2017, and we took on a total renovation on one where we gutted and rebuilt a bathroom, added a brand new bathroom, changed the entire flooring to engineered wood and repainted.
The Reserve Bank of Australia says that
- Most borrowers in Australia who fix their mortgage interest rate do so for three years or less.
- By mid-2022, new fixed-rate lending had declined to around 5 per cent of total new lending.
The cost for building new homes has gone up about 50% between 2019 and today, while the cost for building home extensions has gone up about 100%. This is due to large increases in building materials and labor costs.
In comparison, renters are getting a steal, with national rent price index going up about 9% between Jan 2019 and Dec 2023 according to the Australian Bureau of Statistics. Rents were depressed during Covid which made the return to normal a much larger jump year to year.
We've cancelled plans to build a new house and expand an existing one and will just be renting an additional property instead (no doubt adding to the lack of supply).
posted by xdvesper at 2:06 AM on March 4
(Regarding Canadian mortgages: 20- to 30-year fixed mortgages are available, but you have to ask about them (my bank didn’t offer the info at all) and the interest rate was significantly higher to hedge against the bank’s risk. So the standard mortgage here is you get a fixed 4- or 5-year term, then the interest rate gets adjusted to whatever the bank’s prime rate is at that new time, for the next 4- or 5-year term. You can re-finance (which is technically taking out a new mortgage and using it to pay off the old mortgage), which is handy if you can see interest rates starting to go up and your term is going to end soon, so you want to get out ahead of that and get a slightly better rate for your next term - though that requires either an unusual degree of paying attention to the market and/or luck. Canada has tighter financial regulations in general than the US, so when I initially got my mortgage, the likelihood of it ballooning quite as much as many of the sort of mortgages in the US (where that was built-in and designed to be extortionate; my mortgage rate adjustment is indexed to the prime rate so can’t go up arbitrarily, barring overall arbitrary economic problems) seemed quite low. Though if the Conservatives and their current leader who is more into culture war crap than the traditional class war focus of Conservatives of days past, which gives a distraction that enables them to do class war on steroids, get into power federally in next fall’s election, that’s looking a lot more worrisome.)
posted by eviemath at 5:45 AM on March 4 [1 favorite]
posted by eviemath at 5:45 AM on March 4 [1 favorite]
Canada has tighter financial regulations in general than the US, so when I initially got my mortgage, the likelihood of it ballooning quite as much as many of the sort of mortgages in the US (where that was built-in and designed to be extortionate; my mortgage rate adjustment is indexed to the prime rate so can’t go up arbitrarily, barring overall arbitrary economic problems) seemed quite low.
Not really true. US mortgages are usually fixed rate at a tiny increase over the current rate for 15-30 years; Most US mortgages, even adjustable ones like in Canada, are the exact same terms - 5 years before a rate adjustment, indexed to the LIBOR rate. Maybe a tiny percentage had different terms, but that's extremely rare.
posted by The_Vegetables at 7:30 AM on March 4
Not really true. US mortgages are usually fixed rate at a tiny increase over the current rate for 15-30 years; Most US mortgages, even adjustable ones like in Canada, are the exact same terms - 5 years before a rate adjustment, indexed to the LIBOR rate. Maybe a tiny percentage had different terms, but that's extremely rare.
posted by The_Vegetables at 7:30 AM on March 4
<rant>
If only someone had written out this "solution" so that I could read about it instead of watching videos, I too would be able to critique it.
I know that long-form text composition has fallen out of style for any kind of popular advocacy, and that's a shame. Actually writing out your thinking clarifies it in ways that talking never can, and it's essential for steering clear of easily-avoidable (if you write it out!) pitfalls of cognitive error.
</rant>
I did scan the thread, and this comment from @qxntpqbbbqxl leads me to feel ok about not investing the time to watch the videos.
posted by Aardvark Cheeselog at 8:17 AM on March 4
If only someone had written out this "solution" so that I could read about it instead of watching videos, I too would be able to critique it.
I know that long-form text composition has fallen out of style for any kind of popular advocacy, and that's a shame. Actually writing out your thinking clarifies it in ways that talking never can, and it's essential for steering clear of easily-avoidable (if you write it out!) pitfalls of cognitive error.
</rant>
I did scan the thread, and this comment from @qxntpqbbbqxl leads me to feel ok about not investing the time to watch the videos.
posted by Aardvark Cheeselog at 8:17 AM on March 4
> I haven't seen a FPP on the Canada and Australian "Mortgage Cliff" thing (they don't have 30 year fixed mortgages so everyone who bought with stimulus interest rates will have to be re-financing at much higher rates later in the mid-decade)
So in Canada, most mortgages are on ~30 year amortization schedules with 5 year terms. So you sign up for a fixed or variable rate for 5 years, and at the end of the 5 year period you renew your mortgage. You can often reset your amortization at that point if you want.
If you locked in your mortgage at a fixed rate during a low interest period, you'll often get a bad deal compared to (then current) floating rates as the banks expect rates to go up.
So when the reset happens, you'll be offered a better rate (relative to now-current floating), you can switch to floating, and you can reset your amortization. All of which can keep your payments from going up as far as feared (at the cost of higher risk or longer repayment).
On the other hand, if you have the cash, the higher rates will make you want to pay down your mortgage faster. Mortgage interest is not usually tax-deductible in Canada (unless you borrow against your real estate to pay for investments), but most housing capital gains are tax-free. So throwing money at your mortgage is effectively a tax-free investment using post-tax money: the higher the rate, the better it competes with other savings.
posted by NotAYakk at 8:32 AM on March 4
So in Canada, most mortgages are on ~30 year amortization schedules with 5 year terms. So you sign up for a fixed or variable rate for 5 years, and at the end of the 5 year period you renew your mortgage. You can often reset your amortization at that point if you want.
If you locked in your mortgage at a fixed rate during a low interest period, you'll often get a bad deal compared to (then current) floating rates as the banks expect rates to go up.
So when the reset happens, you'll be offered a better rate (relative to now-current floating), you can switch to floating, and you can reset your amortization. All of which can keep your payments from going up as far as feared (at the cost of higher risk or longer repayment).
On the other hand, if you have the cash, the higher rates will make you want to pay down your mortgage faster. Mortgage interest is not usually tax-deductible in Canada (unless you borrow against your real estate to pay for investments), but most housing capital gains are tax-free. So throwing money at your mortgage is effectively a tax-free investment using post-tax money: the higher the rate, the better it competes with other savings.
posted by NotAYakk at 8:32 AM on March 4
I know that long-form text composition has fallen out of style for any kind of popular advocacy, and that's a shame.
You'll doubtless be pleased to learn, then, that The Trading Game is now shipping.
posted by flabdablet at 8:59 AM on March 4
You'll doubtless be pleased to learn, then, that The Trading Game is now shipping.
posted by flabdablet at 8:59 AM on March 4
I agree with @qxntpqbbbqxl's comment - social change comes from power, which is missing from Stevenson's analysis. The thing is, Stevenson's not an activist (in the sense of being someone who has spent time working with large numbers of other people to make change), and he's also not a social change theorist, who has studied how to make change. So when he proposes solutions for social change, they're not really based in his expertise.
But he does have expertise - it's in economics. And there he's valuable for a few reasons: one, he's very very smart; two, he's got a working class analysis of these systems; and three, unlike most of these fuckers, he's telling the truth. He's the first economist I've found who provides anything close to an analysis of what's actually happened in the housing market and why. When I first found his videos, I had a real 'personal is the political' moment, where the last 15 years of my life finally fell into place. I think I've said this here before, but I've become, comparatively, much, much worse off financially than my friend group simply because they (couples) bought property (houses) in the city where we grew up when we were 27-32 and a decade later I (single) had to spend the same amount of money to buy smaller property (an apartment) in a smaller city. To be clear, I'm doing fine. But I will likely never live in the city I grew up in again, and if I stay single in either of these two cities, I may never live in a house again - it's simply not possible financially anymore. Boo hoo, in some sense, but also, it's worth noticing, because that is a very different situation to how things were when I was born. It's so clear to me how many ladders for working class kids have been pulled up in my lifetime, because I used many of them to get where I am. I lived this, I've marinated in lefty press for years, but I had no analysis of the specific political-economic decisions and dynamics behind this process - just a vague sense of confusion and unfairness and "capitalism". Maybe it was obvious to everyone else why rich people buying ordinary suburban houses meant inequality was getting worse, but I haven't come across anyone else unpacking the reasons why as clearly as Stevenson.
MtDewd, the talking heads on TV who are wrong year after year is a bugbear of Stevenson's too - he has a huge rant about it in the Novara Media interview (which is available as a podcast, for those who hate watching videos as much as I do), particularly about one of his economics professors at Oxford who was not only wrong on interest rates for a decade but hadn't even noticed he was wrong.
posted by happyfrog at 12:57 PM on March 4 [6 favorites]
But he does have expertise - it's in economics. And there he's valuable for a few reasons: one, he's very very smart; two, he's got a working class analysis of these systems; and three, unlike most of these fuckers, he's telling the truth. He's the first economist I've found who provides anything close to an analysis of what's actually happened in the housing market and why. When I first found his videos, I had a real 'personal is the political' moment, where the last 15 years of my life finally fell into place. I think I've said this here before, but I've become, comparatively, much, much worse off financially than my friend group simply because they (couples) bought property (houses) in the city where we grew up when we were 27-32 and a decade later I (single) had to spend the same amount of money to buy smaller property (an apartment) in a smaller city. To be clear, I'm doing fine. But I will likely never live in the city I grew up in again, and if I stay single in either of these two cities, I may never live in a house again - it's simply not possible financially anymore. Boo hoo, in some sense, but also, it's worth noticing, because that is a very different situation to how things were when I was born. It's so clear to me how many ladders for working class kids have been pulled up in my lifetime, because I used many of them to get where I am. I lived this, I've marinated in lefty press for years, but I had no analysis of the specific political-economic decisions and dynamics behind this process - just a vague sense of confusion and unfairness and "capitalism". Maybe it was obvious to everyone else why rich people buying ordinary suburban houses meant inequality was getting worse, but I haven't come across anyone else unpacking the reasons why as clearly as Stevenson.
MtDewd, the talking heads on TV who are wrong year after year is a bugbear of Stevenson's too - he has a huge rant about it in the Novara Media interview (which is available as a podcast, for those who hate watching videos as much as I do), particularly about one of his economics professors at Oxford who was not only wrong on interest rates for a decade but hadn't even noticed he was wrong.
posted by happyfrog at 12:57 PM on March 4 [6 favorites]
e's the first economist I've found who provides anything close to an analysis of what's actually happened in the housing market and why. When I first found his videos, I had a real 'personal is the political' moment, where the last 15 years of my life finally fell into place. I think I've said this here before, but I've become, comparatively, much, much worse off financially than my friend group simply because they (couples) bought property (houses) in the city where we grew up when we were 27-32 and a decade later I (single) had to spend the same amount of money to buy smaller property (an apartment) in a smaller city.
Well, the truth of the 'housing market' has nothing to do with oligarchs or capitalism, but rather people who own and city planners heavily putting their thumbs on the market, and (at least in the US) 'liberal' presidents getting bad advice (because horseshoe theory effects housing markets in coastal US cities the most) and cutting out policies for public ownership (Bill Clinton) and lower income private ownership (Obama). And Stevenson's from the UK, which is even worse than the US's worst when it comes to new construction rules, so it's even worse there.
So 'capitalism' would actually be better for most, in that capitalists would build enough housing for the market clearing rate to be afforded, but it can't because of regulations. Regulations are great if they are for health and construction safety, but housing rules have nothing to do with health and construction safety. They are mostly about vague upper middle class consumer preferences.
It would also be fine if owning a home wasn't literally the only way that middle income earners could increase their net worth (via forced savings, no actual appreciation required) via safe leverage. But it is, so we are screwed unless city regulations dramatically change.
That doesn't mean that a solid percentage of people who are on the lowest end of the economic totem pole would be able to buy even if 'capitalism' provided housing at the market clearing rate - some percentage of government owned, heavily subsidized housing is also required. But that can't be built in the US due to limits put in place by Clinton, at least not with Federal money. So you require state or local funds to build it, and those are extremely limited and variable based on the city and state.
posted by The_Vegetables at 2:07 PM on March 4
Well, the truth of the 'housing market' has nothing to do with oligarchs or capitalism, but rather people who own and city planners heavily putting their thumbs on the market, and (at least in the US) 'liberal' presidents getting bad advice (because horseshoe theory effects housing markets in coastal US cities the most) and cutting out policies for public ownership (Bill Clinton) and lower income private ownership (Obama). And Stevenson's from the UK, which is even worse than the US's worst when it comes to new construction rules, so it's even worse there.
So 'capitalism' would actually be better for most, in that capitalists would build enough housing for the market clearing rate to be afforded, but it can't because of regulations. Regulations are great if they are for health and construction safety, but housing rules have nothing to do with health and construction safety. They are mostly about vague upper middle class consumer preferences.
It would also be fine if owning a home wasn't literally the only way that middle income earners could increase their net worth (via forced savings, no actual appreciation required) via safe leverage. But it is, so we are screwed unless city regulations dramatically change.
That doesn't mean that a solid percentage of people who are on the lowest end of the economic totem pole would be able to buy even if 'capitalism' provided housing at the market clearing rate - some percentage of government owned, heavily subsidized housing is also required. But that can't be built in the US due to limits put in place by Clinton, at least not with Federal money. So you require state or local funds to build it, and those are extremely limited and variable based on the city and state.
posted by The_Vegetables at 2:07 PM on March 4
unlike most of these fuckers, he's telling the truth.
Three other economists whose opinions I also respect for the same reason are Richard Denniss, Ross Gittins and Yanis Varoufakis. All of them are worth seeking out if you're not already familiar with their work.
posted by flabdablet at 9:47 PM on March 4
Three other economists whose opinions I also respect for the same reason are Richard Denniss, Ross Gittins and Yanis Varoufakis. All of them are worth seeking out if you're not already familiar with their work.
posted by flabdablet at 9:47 PM on March 4
available as a podcast, for those who hate watching videos as much as I do
One of the nice features of Piped is that the UI includes a headphone button (on the right, below the main play window) for audio-only playback.
posted by flabdablet at 10:45 PM on March 4 [1 favorite]
One of the nice features of Piped is that the UI includes a headphone button (on the right, below the main play window) for audio-only playback.
posted by flabdablet at 10:45 PM on March 4 [1 favorite]
Regarding Canadian mortgages: 20- to 30-year fixed mortgages are available, but you have to ask about them (my bank didn’t offer the info at all) and the interest rate was significantly higher to hedge against the bank’s risk
Let's be clear here, it's not to hedge against the bank's risk, it's to hedge against the bank not making as much money as it possibly could over the life of your mortgage. The only risk to a bank when it issues a mortgage is the risk that the loan will not be repaid. Locking in a low-interest rate is an opportunity cost for the bank, but they dont lose money as long as the loan continues to be repaid. (There are interactions with inflation, but again, that is not losing money, that is just decreasing the rate at which the bank is making money.)
Banks in the US issue long-term fixed-rate mortgages all the time, even in low interest rate environments (my rate for my first home was 2.75% for 30 years), and they don't go bust when interest rates go up, as long as people keep paying their mortgages.
posted by LizBoBiz at 12:10 AM on March 5
Let's be clear here, it's not to hedge against the bank's risk, it's to hedge against the bank not making as much money as it possibly could over the life of your mortgage. The only risk to a bank when it issues a mortgage is the risk that the loan will not be repaid. Locking in a low-interest rate is an opportunity cost for the bank, but they dont lose money as long as the loan continues to be repaid. (There are interactions with inflation, but again, that is not losing money, that is just decreasing the rate at which the bank is making money.)
Banks in the US issue long-term fixed-rate mortgages all the time, even in low interest rate environments (my rate for my first home was 2.75% for 30 years), and they don't go bust when interest rates go up, as long as people keep paying their mortgages.
posted by LizBoBiz at 12:10 AM on March 5
Financial education is it? Here's Martin Lewis given 12 mins at a UK parliament Education subcommittee asking why he had to write, publish, and pay upfront for, the only text-book on FinEd available to UK schools. Your Money Matters is available as a free download.
posted by BobTheScientist at 6:10 AM on March 5 [2 favorites]
posted by BobTheScientist at 6:10 AM on March 5 [2 favorites]
Let's be clear here, it's not to hedge against the bank's risk, it's to hedge against the bank not making as much money as it possibly could over the life of your mortgage.
Longer to type but more accurate, yes. The bank would consider it a “risk” in the sense of a lost opportunity cost, even though it’s not actually losing money. But it is worth keeping in mind that those are two very different things.
posted by eviemath at 8:32 AM on March 5 [1 favorite]
Longer to type but more accurate, yes. The bank would consider it a “risk” in the sense of a lost opportunity cost, even though it’s not actually losing money. But it is worth keeping in mind that those are two very different things.
posted by eviemath at 8:32 AM on March 5 [1 favorite]
Oh wait, did people start recommending economists to read? Can I throw Ha-Joon Chang into the ring?
posted by mittens at 8:39 AM on March 5 [2 favorites]
posted by mittens at 8:39 AM on March 5 [2 favorites]
« Older Fat profits are one of the telltale signs of an... | The Dahlia Wars Newer »
This thread has been archived and is closed to new comments
posted by flabdablet at 3:32 AM on March 3 [1 favorite]