Home Ownership is Collapsing. What, if anything, should we do?

[phattonez]

The employees also benefit (profit?) because their job is made easier when given the use of better tools/equipment by their employer. Rest assured that most employees would rather ride a mower than to push/pull it.

Again, not a justification for capital reaping all the benefits. The worker also has to learn how to use the new equipment.

Sent from my HTC phone. Instaurare omnia in Christo.

 

[Grokmaster]

Since 2008, home ownership rates have been collapsing to historic lows. Among all age groups younger than 65, rates have plummeted.

This causes a few problems:
1. The groups who do not own are effectively transferring their wealth to landlords since they're not building equity.
2. This increased instability causes social capital to decay.
3. People who do not own anything in their country aren't going to have a stake in its long term future.

So what do we do about this? I have argued for cutting back tax breaks to landlords and increasing interest rates, but can we go even further, and should we? For instance, our labor force participation is still at a historic low, so we have millions of people not working. Would it be better to organize something similar to the WPA to get these people building homes?

Or are you fine with the status quo?

Millennials are more interested in DOING STUFF, than in OWNING STUFF, at least so far.

That may change as they age.

Boomers were ALL ABOUT home ownership...and we are dying off.

interest rates are VERY LOW= all that should be done to promote home ownership.


The less involved the government is in the mortgage/home ownership industry, the better off we all are.

The mismanagement of Fannie/Freddie, + the CRA, was a major contributing factor to the economelt….(plus allowing investment houses I=to invest in mortgage-backed securities...allowed by a Bill Clinton executive order).

 

[ttwtt78640]

Again, not a justification for capital reaping all the benefits. The worker also has to learn how to use the new equipment.

Sent from my HTC phone. Instaurare omnia in Christo.

Rest assured that learning how to use a riding lawn mower is done on company time and is thus a company expense (cost to the employee is zero). Your notion that employees somehow become business partners ignores that their only contribution (investment?) is their labor/time for which they receive a guaranteed return.

The capital supply, and the thus capital risk, is born entirely by the owner(s) of the business. Employees may be quite happy if they got paid more (per hour/week) when their employer's profits are up but wold surely object to getting paid less (per hour/week) during periods when those profits are down.

Few employees would be likely to accept a job if their pay was based on a percentage of weekly net profits or losses. Imagine the shock if, on payday, you were told that you owed the boss $100 for working that week because the business's HVAC system needed an expensive repair.

 

[phattonez]

Rest assured that learning how to use a riding lawn mower is done on company time and is thus a company expense (cost to the employee is zero). Your notion that employees somehow become business partners ignores that their only contribution (investment?) is their labor/time for which they receive a guaranteed return.

The capital supply, and the thus capital risk, is born entirely by the owner(s) of the business. Employees may be quite happy if they got paid more (per hour/week) when their employer's profits are up but wold surely object to getting paid less (per hour/week) during periods when those profits are down.

Few employees would be likely to accept a job if their pay was based on a percentage of weekly net profits or losses. Imagine the shock if, on payday, you were told that you owed the boss $100 for working that week because the business's HVAC system needed an expensive repair.

I understand all that, which is why I'm not making the point that the owners shouldn't be paid more. I'm saying that the principle of paying as little as possible isn't good, especially in light of this:

This market is broken, and the economic thinking that has dominated for the past decades is responsible. It has resulted in a soaring cost of living, stagnant wages, and delayed family formation. We need to try something else.

Sent from my HTC phone. Instaurare omnia in Christo.

 

[ttwtt78640]

I understand all that, which is why I'm not making the point that the owners shouldn't be paid more. I'm saying that the principle of paying as little as possible isn't good, especially in light of this:

This market is broken, and the economic thinking that has dominated for the past decades is responsible. It has resulted in a soaring cost of living, stagnant wages, and delayed family formation. We need to try something else.

Sent from my HTC phone. Instaurare omnia in Christo.

That is a fair point yet automation is more of a factor than any reduction in pay for skilled labor. Almost any moron can pass goods over a barcode scanner and look at the total due when all items are scanned. Cashiers do not even have to know how to make change any more - the machine asks for the total tendered and then tells them what change (if any) is due.

Folks are now expected to pump their own gas, ring up their own purchases and even bag them (welcome to Walmart!) - many places now even expect the customer to supply the bags. Now I can (and do) buy things online using a computer (or smart phone), authorizing direct payment from my bank and have them delivered right to my door - that eliminates very little (if any) skilled labor.

 

[phattonez]

That is a fair point yet automation is more of a factor than any reduction in pay for skilled labor. Almost any moron can pass goods over a barcode scanner and look at the total due when all items are scanned. Cashiers do not even have to know how to make change any more - the machine asks for the total tendered and then tells them what change (if any) is due.

Folks are now expected to pump their own gas, ring up their own purchases and even bag them (welcome to Walmart!) - many places now even expect the customer to supply the bags. Now I can (and do) buy things online using a computer (or smart phone), authorizing direct payment from my bank and have them delivered right to my door - that eliminates very little (if any) skilled labor.

This is the same complaint that Luddites made more than a hundred years ago. No, something else changed in the past 20 years: globalization.

Sent from my HTC phone. Instaurare omnia in Christo.