Indeed, and the article is right in saying there isn't really a way out. Humanity paints itself into these kinds of corners fairly frequently over the course of history: entrenched systems where many suffer, but where too many powerful people benefit for it to be able to change.
Traditionally, the solution has been violent revolution. That's really the only way to (for example) tell 66% of Americans that their biggest asset that they've spent a lifetime saving for and investing in is now worthless because trust us, everyone is better off when housing isn't an investment.
But America is in a strange place in human development. There are enough bread and circuses in the form of cheap Netflix, cell phones, and food supply where even the totally destitute just don't have the desire to grab a pitchfork and physically march to their capital building. (And I would argue that January 6 was more of a social-media-fueled livestream event than any kind of attempt at coherent political change.)
Plus, suburban sprawl and the isolated, car-based lifestyle we've cultivated in the past century means that even if you wanted to get a group of like-minded revolutionaries together and march, how would you even physically do that? How does a poor person in suburban Tulsa even meet 20 like-minded people, and where would they go to express their displeasure physically? Once they got there, where would they all park?
Suggesting that the conclusion is telling homeowners that their asset is now "worthless" is extreme hyperbole. Homeowners live in their house. You need only apply the same metaphor from the article. Nobody might be willing to pay money for my couch, but I still keep it in my living room and use it.
Yep. Even if I bought a house at the peak and the market tanks I can still sell it (at a loss) and buy a comparable house because those are cheaper too. The people who get screwed are the multiple-home-owning rent seekers and I'm ok with that.
Treating your primary residence as an investment has been bad financial philosophy for all of time.
> The people who get screwed are the multiple-home-owning rent seekers and I'm ok with that.
And people who suddenly find themselves underwater on their mortgage. Assuming they face no economic shocks they might be able to ride it out, but that sounds like a very stressful situation to be in.
Going in to a mortgage without a plan for the market tanking and being upside down means you shouldn't have gone into the mortgage. They can stay in the house and continue making the payments they can afford. They can afford the payments, right? Right??
If they can't then they fall back on some social safety net that prevents bad decisions from being ruinous. Our lack of these mechanisms is why we have to keep propping housing up. The problem is we can't keep doing that.
> The people who get screwed are the multiple-home-owning rent seekers and I'm ok with that.
Well, also people who were planning on retiring to a lower cost of living area (i.e., NY to Florida) and using the difference difference in housing costs as part of their retirement income.
I don't think it is a good long term plan to subsidize poor retirement savings strategies at the cost of affordable housing. This is why we need to provide safety nets, in case people paint themselves into these corners. But we don't need to bend over backwards to make those bad ideas passable ideas, the cost to society is too great.
I think we're going to see a lot more Trump and Bernie-style candidates taking on more aggressive positions as time goes on, unless something changes. The powers-that-be have done a pretty amazing job of defusing "Occupy Wall Street" and similar movements, but they'll keep springing up.
People aren't taking kindly to the status quo.
Maybe not, though, I don't have a lot of hard data.. MOST of my extended network of friends and family have honestly been able to get by well enough with our current system. A few people ended up completely screwed over through no fault of their own, unable to get a decent career going or get an opportunity to save any money. A lot of people made a few bad choices that snowballed and left them destitute. Pretty much all of them would have been fine in the 50s-70s when you could just roll up your sleeves and work hard to make a decent living.
Modern society feels like a huge scam to me. If you do what conventional wisdom says (go to college, get a job, buy a car, buy a house, buy a big wedding, buy vacations, etc) you're probably going to end up with crushing lifelong debt, spending 2+ hours a day angrily driving your car to and from work
I mean there is a way out, it would just require a large swath of people to quit feeding into the machine for a few weeks to a few months. It does not have to be violent at all.
99% of people do not allocate capital, do not write laws, and do not drive policy decisions (yes, we vote, but at least in the US your vote has little impact on these things).
We need to agree on what we think the absolute minimum a person should get for working a full-time job. I personally think a person should be able to afford a home if they work full-time with their own salary. Yes, even someone working full-time at starbucks in the Bay Area should be able to pay the mortgage on 1 very small, crappy condo likely with a long-ish commute. Anything less is unacceptable. Working more hours, attaining more degrees/credentials/experience should allow you to afford slightly nicer standards of living.
Anyone that currently can't afford a mortgage on 1 crappy condo in their city should get a new job that pays at that end or move or quit working all together. Let the "smart/capable" people who "deserve" a decent standard of living do the work.
If and when they decide they want to provide others the same standard of living to others for 40hours/week of work, then everyone can go back to work. If everyone did this tomorrow, we would have new policies and laws in weeks-to-months to overhaul housing. Yes, some people would die in the meantime, but it would make the world a better place. We celebrate people going overseas to get blown up as heroes, maybe some poor and middle class people can die domestically as heroes instead to make this happen as well.
Since we can't even start the conversation about the minimum acceptable compensation for working a full-time job, there's probably no way the rest could happen. It is frustrating how a couple weeks-to-months of widespread action (or inaction) by the working-class and poor could change life for so, so many and generations to come, but knowing there is less than 1% chance it will ever happen.
Maybe the working class does deserve their exploitation.
Traditionally, the solution has been violent revolution. That's really the only way to (for example) tell 66% of Americans that their biggest asset that they've spent a lifetime saving for and investing in is now worthless because trust us, everyone is better off when housing isn't an investment.
But America is in a strange place in human development. There are enough bread and circuses in the form of cheap Netflix, cell phones, and food supply where even the totally destitute just don't have the desire to grab a pitchfork and physically march to their capital building. (And I would argue that January 6 was more of a social-media-fueled livestream event than any kind of attempt at coherent political change.)
Plus, suburban sprawl and the isolated, car-based lifestyle we've cultivated in the past century means that even if you wanted to get a group of like-minded revolutionaries together and march, how would you even physically do that? How does a poor person in suburban Tulsa even meet 20 like-minded people, and where would they go to express their displeasure physically? Once they got there, where would they all park?