Hacker News Reader

Comment by mbesto | Hacker News Reader

This is why the free market is so great.

1. Everything too expensive? Good, don't live here, eventually enough people will leave to drive all of the costs back to other market norms.

2. Dumb startups? Good, they will fail, people won't be able to afford to live here and they'll leave.

3. People are spoiled? Uber is cheaper and more convenient in some cases than taking the local transportation. When people stop taking public transportation because it's fundamentally broken (ps - it's awful in SF) then it will force government organizations to re-think their planning.

4. Bad engineers? Yup, I've met some of them. They'll eventually leave too when the system weeds them out.

I too think it's weird here, but since I do enjoy my life in the Bay area enough, I'm happy to wait for the market to correct to normalcy. The people who are here just to chase the "me too's" will soon be forgotten.

EDIT: I should probably clarify my overall sentiment. People who come to SF and complain that this situation is less than ideal have the freedom to simply choose not to play. The cost of living is driven by the simple laws of supply and demand. Speak with your wallets, not with your mouths.

View on HN

Ok, as a perennial voice for free markets I agree with your observations, but not your point. Having lived through it I see the damage it is doing to individuals who will take years to recover.

Too many engineers today, perhaps like sports players, take a big salary, project it across 30 years and then say "Wow I've got millions headed my way, do I really need to bag my lunch?"

I've watched as they became both broke and depressed as the wave that was supporting those salaries and the technology that was supporting their employment have broken (as they always do) and they are suddenly "too old and too out of date."

Like the guy who was making $200K/year as a SOAP architect for some package that managed really expensive enterprise server and storage gear. When the wave passed and people moved to cheap white box servers in abundance using things like Docker or Chef to run and manage them, this guy walked into a world at 45 years of age with zero applicable experience to your distributed server cluster based company. And he is slowly burning what savings he had because the only entry level programmer job he could get is paying him $85K and his take home pay doesn't completely cover his burn rate (he optimistically expects to be promoted to a high paying job as soon as they see what he can do.)

If you are living the high life as an in demand engineer please don't be that guy. Start planning to provide funds for your kids education, or if you're not having kids ever then a fund to pay someone else's kids to take care of you when you're too old to work. Cut out recurring expenses in your life where ever you can and put excess money into savings or investment vehicles so that it can start working for you by earning more money. Understand that life is change until you die. Anticipate change to avoid having change drive your decisions.

I agree with everything you said but I think you're underestimating the importance of fighting lifestyle inflation at all costs. It's incredibly hard to justify a six-figure burn rate under any circumstances, even in San Francisco. If you've got a job making multiples of the median household income in the US, it's incredibly irresponsible to live in a manner that wouldn't support a pretty major pay cut at any point.

I agree, but unfortunately what I've also seen is that cutting major costs frequently amounts to leaving areas altogether, which then torpedoes a lot of opportunities.

I was stoked to move to cheaper area and work remote for these reasons, but it put a serious brake on career/income growth. And all it takes is some old-school mgmt to come in and then you are treated like some pariah.

IMO, housing is a partial exception. You can easily opt out of 25$ for lunch and 6$ coffee seeming normal, but wasting hours a day driving is soul crushing. That said, making 150k and having roommates is completely reasonable.

A 6 figure burn rate is what's required to own property in or near sf. Take a modest $900k 3 bedroom condo: it costs nearly $5k/mo in mortgage (even with a sizable downpayment), insurance, taxes, and maintenance. And you haven't eaten yet, or owned even a single car.

At 3.92% interest rate for 30-years fixed with a 20% downpayment that's about $3,400/mo and at $900k property tax is another $6k/year, insurance is less than $100/mo so you net out at less than $4k/mo in PITI. And maintenance you'd hope to check what's wrong with the house before you buy but a new roof costs about $20k so unless you replace a roof a year I doubt you'll be spending over $1000/mo for maintenance, at least I'm not. And 20% is not a sizeable downpayment but the minimum to not have to pay mortgage insurance, a sizeable downpayment is 30%, which in a 30 years fixed means paying less than $3500/mo PITI. Of course if you go with ARMs you'd end up paying even less since interest rates are even lower there. If you can afford the downpayment you'd be paying less than rent in SF most of the time.

actually, property taxes in sf are a little over 1%, so you're looking at $10.4k/year on that $900k condo (note: on the cheap for sf). $3400 + $900 tax + $100 insurance = $4.4k, again, without any condo fees, maintenance, or utilities. So you'll net much closer to $5k than $4k. Which to my claim, means you're out $60k post tax (over $100k pre) without eating, health insurance, owning a car, or parking yet.

Yeah the economics of SF just don't work out unless you have a trust fund or your company IPOs, that's why everyone I know who wants to buy a house is moving to Austin and Portland.

How would you only be paying $6k/year property tax? I'd expect more than $10k/year or around 850/month.

The property tax rate is 1.1826% of assessed value in SF (1% state + a small % local). And your initial assessed value is based on your purchase price.

I think it's more realistic to say you'd be spending close to 4500/month net assuming you didn't live in a place with an HOA. If you live in a condo with an HOA, you could easily be spending 5000 to 5500/month.

On the plus side, at least you get to deduct all that mortgage interest and property tax on your federal taxes. When you are paying 3k/month+ in interest and taxes, that's a really nice tax advantage over renting a similar property.

Yep. The hedonic treadmill* is real. There are things worth paying for, and there are things whose net effect is only to make it more expensive for you to be happy. It's very much worth it to be deliberate in what luxuries you allow into your life, as once they've been there for a while you'll no longer derive any pleasure from them, but you'll miss them dearly if you were to give them up.

* https://en.wikipedia.org/wiki/Hedonic_treadmill

Young developer here.

The "lifestyle inflation is evil" mantra never made sense to me. The definition I usually find is "living better than a college student once you are a working professional," so apologies if you mean something different.

I was raised to save 15% for retirement, to never carry a credit card balance, to build a 6 month emergency fund, etc. All of these priorities come first. But, after they are funded:

I am in software in part because because I like it, but also because it enables the life I want: a decent apartment to myself, a decent car, some international travel, not having to agonize over small day-to-day purchases. I want these things much more than I want early retirement (which is not particularly useful if all I can do with it is sit in a low-cost-of-living-city home and eat Ramen). If you told me I'd be a broke college student forever, I'd probably go into theater.

Why should we compromise parts of our life for more money, and then carry that money in our savings accounts perpetually? It really seems like you should either use the money in a way that's important to you, or optimize for free time instead.

Silicon Valley as we imagine it might die, and I'm set to absorb a few months. I can't imagine the world will stop wanting code. And if it does, I can change careers like my parents both did in their 40s.

I don't think he's talking to you. If you are under 40 and are saving for retirement, have no debt, and have 6 months of expenses then you are lightyears ahead of most people in the US and you should call your parents and thank them for teaching you well.

I think he's referring to how most people do it - carrying debt, little or no savings, paycheck to paycheck no mater how they make. And when they do get a raise, instead of putting the extra money towards getting on track financially, they just bump up their lifestyle so that they're always living right on the edge of what they can manage.

bcg1 is right - I am largely referring to people very much like the example in the comment I replied to. Also when i think of "lifestyle inflation" it's more geared toward currently working professionals - folks who get a raise and their take-home increases by $800/mo so they go out and buy a car with a $700/mo payment attached to it - and less the transition from student to worker.

Yes, but you forget the protestant work ethic is strong in America. The more you suffer and the less money you make, the better of a person you are. Fucking-A hiring managers, no one is here to be "the salt of the earth", we're here for a paycheck and some mental stimulation.

hn has an outspoken minority actively competing in the cheapskate olympics. everyone's circumstances are different, do what makes sense to you.

there's always some penny pinching proselytizer trying to tell other people how to live.

i find it better to focus on making more money.

My personal favorite are those people who are living in a rent controlled apartment that they split with a partner and pay $700 on.

They say "$2k for an apartment? That's way too much! Why don't you move to [place]?"

Honestly if you haven't rented an apartment in the last few years, you have no idea. You also have no idea how lucky you are to get that rent control subsidy.

Sure. You just have to be careful with the "make more money" mentality because it eventually leads you out of being a full-time software developer.

You can go manager or freelancer, of course.

In San Francisco, anyway, having "a decent apartment to myself" and "a decent car" already seems like a huge extravagance. Median 1BR rent is $3,620, add $300/mo for parking and let's say $300/mo for a car lease, you're at $4,200ish before any sort of food, travel, etc. Even if you're making nominally $120k/year, you need a lot of frugality to make that work.

I remember moving to SF and making ~$110k, and renting a ~$2500 studio in a mediocre part of town with no car (I got a motorcycle eventually) and it was difficult to save any money, even if I wasn't bankrupting myself.

There are Oakland studios with parking for closer to $2200.

Plan on getting out of software ASAP as age discrimination is rampant in the business.

I agree with everything you've pointed out, but that's not the topic to which the OP was directing his attention to and hence why I didn't address it.

Man, if there are any other young devs reading this, please take ChuckMcM seriously. I saw this happen to my dad in the dot com crash - luckily my family had saved enough money that my parents didn't have to make many compromises to take care of my brother and I, but it's still a damn scary experience. As a 25-year-old whose just getting started in the industry (through a bootcamp, no less), it's something I think about every day.

I totally agree with this. Tech waves can come and go so quickly that you could be obsolete before you even finish building something with the popular tech stack from last month (ok, a bit of hyperbole, but it sometimes feels like new things replace the last new thing before you even know why you would need the thing in the first place).

Not only do you need to try and save as much as possible (which is really hard if you are not single and able to live with roommates), you need to be constantly learning.

SFO is a region and city that lives in a boom/bust cycle. It's just the nature of the beast.

If you're attracted to the boom, but don't have the wherewithal to get rich, by definition you're not the type of person who plans well.

Part of the fallacy of this is the implication that you need "good" engineers for most startups. I think, frankly, that many startups need a website with a google form + some excel sheets to get started and if the thing takes off they can hire someone who can use google to bang on stackoverflow.

Very few things require genuinely novel pieces of code to work. Yes, lots of value can be captured using code, but you could totally start something like airbnb with a lot of manual labor clicking in a GUI.

Djikstra said "Beware premature optimization" and that's quite true. I think automation should be used when things hurt to bad to do manually anymore. For some people, that's any task which must be performed twice and then you write a script. For others it might be years manually updating excel for bookkeeping every night. One can go real far manually updating excel...

Excellent points. In most startups it doesn't take much technology to prove (or disprove) the business model idea.

For the few startups that do experience significant growth, it's much easier to find talent (engineering and otherwise).

>Djikstra said "Beware premature optimization" and that's quite true.

This is why a product I was working on almost got killed. The senior engineer working on it wanted perfection before delivery. The project was already one year overdue. He suddenly came in one day and rushed me to finish up something and he wrapped up a couple things and we launched at the end of the week.

Found out that the project was going to be axed if we didn't deliver very soon.

How does a guy like that become senior? As a senior one should know that there is a pragmatic balance lost in trying to aim for perfection.

He has his strengths. He produces exceptional quality code (albeit a bit on the spaghetti side) and is good at finding problems in code. He is also 63 and has decades of experience.

It's a challenge for me to imagine "exceptional quality code" with "albeit a bit on the spaghetti side". Can you elaborate?

It covers a lot of corner cases, it is fast, it is robust, and produces good quality data. Only thing is it is hard to navigate.

These developer descriptions sound like they are coming from the "Silicon Valley" tv show.

He can use goto :)

"exceptional quality code (albeit a bit on the spaghetti side)" is an oxymoron.

StitchFix started as an Excel sheet. https://www.reddit.com/r/startups/comments/2rjqt2/stitch_fix...

The Book-of-the-Month club operated for 75 years before they had even a website.

>I think, frankly, that many startups need a website with a google form + some excel sheets to get started and if the thing takes off they can hire someone who can use google to bang on stackoverflow.

I agree, but this is mostly true because there's so much low-hanging fruit out there. If you look at the current successful startups like Uber and Airbnb, they're really trivial applications. That doesn't mean they can't create huge amounts of value by "trivially" repackaging services and connecting people.

Once the low-hanging fruit is developed during the next 10 years or so we can finally start focusing on actual high-tech engineering startups.

If they were trivial then they'd have been eaten up by competitor now.

They're technically trivial. But execution ain't.

Just because they're not google search doesn't mean their technically trivial either. Have you worked on either product or do you just assume?

Tens of thousands of man hours have gone into making them seem trivial, and the fact that they seem so to you is a testament to their design.

Well the fact that they've hammered on them for years doesn't mean they're not trivial, it just means they've spent a lot of time on them. And I think we've got to differentiate between the app being [non-]trivial and the infrastructure behind it supporting the massive load being [non-]trivial.

Uber and Airbnb are most definitely not trivial. Anybody who has ever worked on a remotely complex two sided marketplace project can tell you that. The UI/UX alone is incredibly hard yo nail down. The fact that they made you think that they're trivial really shows that they are doing a lot of things right.

Trivial applications require tens of thousands of man hours. Actually, a lot more to make it scale. By trivial I don't mean "it doesn't require a lot of work". Any application requires a lot of work. By "trivial" I meant that they're not creating anything significantly new technology wise, and the value they create is mostly by making existing work/services easier to use and provide.

An excellent point. In fact, it is stated often that ZeroCater - a YC graduate - began as an Excel spreadsheet. (http://thehustle.co/stories/zerocater/)

"Soylent" is a good example. They regularly post about their elaborate IT infrastructure. Based on their sales volume, they do about two transactions a minute. One shared server could handle their transaction load. They could get a low-end hosting account from Hostgator, use one of the six shopping cart programs Hostgator supports, and lay off most of their computer staff.

(Soylent doesn't even make the stuff. That's outsourced to Jasper Products in Joplin, MO.[1])

[1] http://www.jasperproducts.com

> This is why the free market is so great.

I feel like I should just make this my email/social media signature since I say it so often:

A perfect requires these things:

- Perfect market information

- No participant with market power to set prices

- Non intervention by governments

- No barriers to entry or exit

- Equal access to factors of production

- Profit maximization

- No externalities

The less you have those, the less efficient your market is. "Free markets" aren't these magical things that arise on their own in nature. They are carefully crafted and maintained artificial environments and most are far from efficient.

Market forces are not a silver bullet that will solve all problems if we just sit around and wait long enough for the invisible hand to do everything.

The reason free markets are great isn't their speed (though they are often faster than your average politician); it's the self-regulating nature of it. You don't have to tell people to stop buying overly-expensive food, nor do you have to tell the food stores to cut their prices. Over time, they each realize that the higher price isn't working; the customer buys elsewhere (either across the street or aceoss the state), and the grocery store lowers its prices until people decide that it's worth it again.

Companies don't have to be told to improve, either, not when their competitors are improving and eating market space. At least, that's how it works in theory. A lot of industries have turned into demilitarized zones, both sides opposed but neither making a move. Telecom is the best example of how bad this gets.

> Companies don't have to be told to improve, either, not when their competitors are improving and eating market space. At least, that's how it works in theory. A lot of industries have turned into demilitarized zones, both sides opposed but neither making a move. Telecom is the best example of how bad this gets.

And yet even telecoms have invested huge swaths of capital to get us to 3G then LTE.

Yeah, okay. Until you hear stories like this.....

https://www.techdirt.com/articles/20131012/02124724852/decad...

The problem is that they basically habe a nonaggression pact. You'll find either AT&T or T-Mobile in any given area; not both. This means that, if you don't like their prices or their service...well, what are you gonna do? Build your own telco?

This lack of competition leads to a sort of mini-monopoly, meaning that they basically have no reason to not jack up prices.

That is, until Google comes along and kicks them out, as another comment points out.

Telcos are actually a great example of how the free market (eventually) routes around incumbents who fail to satisfy market demand.

The telcos have stalled residential broadband for decades, leaving most of the US stuck with early 2000s-level cable modems or DSL. None of them will make a move.

So what happened? https://fiber.google.com/about/

I wish you were right. I'm in Fremont, a half hour from Mountain View and Google. Google Fiber's still not available.

I'm not in the "plug my ears and yell FREE MARKETS" camp, but markets do tend to be a pretty robust solution to many problems even in the face of some imperfections. That's the key point: you never deal with a perfect world, with either markets, or some kind of government intervention.

> - Non intervention by governments

except to define property rights and enforce them, which is kind of significant 'intervention'.

"Don't let the perfect be the enemy of the good." All these problems also impact non-market solutions. If fact many ARE non-market solutions to other problems.

The non-market solutions would be something like these:

1 - Price controls

2 - Government approval of business ideas

3 - Rationing non-essentials

4 - Licensing engineers

Great points. Also a "free" market in practice will always tend to lead to extremes. For example, monopolies naturally form when economic power start becoming concentrated. That's why government regulations were put in place.

Sorry, but this is a totally heartless comment.

By saying things like "Good, they will fail, people won't be able to afford to live here and they'll leave" you're completely overlooking the human costs and implications.

Things don't just change overnight. It's an slow, painful, eventual decline. Things shouldn't need to be pushed to a breaking point for us to make necessary changes to alleviate these problems.

Wait, what are the problems?

"Everyone rides an Uber" is great for the Uber drivers. "People spend too much on organic produce" is great for the farmers. "Even bad engineers are in high demand" is great for the mediocre engineers.

Housing is a problem, but this post didn't mention it.

So before we start making changes, what are the problems in your opinion?

And, then, what changes are you proposing?

The changes I'm proposing are actually changes to our collective values. Namely, that we shouldn't worship economics and the power of the invisible hand to the point where we think about "market correction" before the well-being of the people around us.

Well the problem is the people who haven't been included in the tech boom and are living on salaries that can't afford those things and are being forced out of their neighborhoods. You can say it's just free markets again but there is a huge human cost.

"the people who haven't been included in the tech boom" ...are living on salaries that are supported by the people who have been included in the tech boom. It's exactly their expensive offerings to the tech people that is supporting their good income, BTW!

Being forced out of their neighborhoods is a housing issue. I think I agreed that housing is a problem. I totally agree we need much, much more housing in the Bay Area. Of course reasonable people can disagree about whether rent control and restrictive zoning helps or hurts the situation for the poorest neighbors. But no one was talking about housing.

Rose tinted glasses much? Have you ever been to a poor area in your life?

Even mentioning Uber, organics, bad engineers and mediocre engineers ignores places like the south side of Chicago and any gradient between. It's not as pretty outside as you think it is.

Wait I'm missing something. How does largesse in the Bay Area cause poverty elsewhere?

"We can solve all of the world's problems!" - Bay Area "What about us?" - The world

rant.

Maybe I'm a bit naively bitter on the subject, particularly after spending some time at Chicago's opengov hack nights. Something about it got very, very turned me completely away from modern civics and its problems solving. Much of it seems to stem from the same vain as high school grads building unmaintainable schools in "primitive" cultures many miles away.

My problem isn't that Uber, SF etc exist. Individually, "fuck yeah!". As a whole, though, they take the focus away from the nuance of actual problems and create comfort for those who can afford it. The poor, the mentally sick and the fringe simply aren't accounted for to the level that they can be. Especially after walking through SF streets earlier this year. It was infuriating to see so much homelessness and prosperity of achievement condensed in the same place. Chicago and NY have nothing on how sharp that difference was (although, I admit it might be selection bias).

Many techie-type folk my age tend to complain about the large economic/social problems. Very few of them ever take action - yet they complain about inaction! If that feeling is as pervasive as it seems, then maybe the problem just might be within some nuance that's not being addressed. When skill's diverted from that nuance towards Bay-like areas and their functions, then YES, they are part of the problem. Just maybe not directly or in an intuitive way.

I forgot to answer your question. Yes I've been to a poor area before.

I also forgot to apologize for mentioning Uber, organics, and engineering. You're right, but acknowledging the existence of those concepts I'm totally ignoring the South Side of Chicago.

But by bringing up Chicago, you're completely ignoring sub-Saharan Africa and Bangladesh. It's not so pretty there, either. Are you going to apologize for that?

Let's just remember that we should always mention regions of extreme poverty whenever we discuss something.

Because these areas are part of the nuance that allows SF-like mentalities to exist. Ignoring that nuance ignores the larger problem on how these bubbles can happen.

I really can't make any sense of this. Is it supposed to make sense? How can something be part of a nuance? What is the nuance you're talking about? And if ignoring the nuance means ignoring the "larger problem," how is it that it is a nuance at all? Is nuance just supposed to be a word for something you don't care to explain?

To me, 'nuance' is just a word to describe "the sub-surface stuff that has no immediate and apparent effect within a local system." So, when I say "ignoring the nuance ignores the larger problem", I'm suggesting that there's a large set of problems occurs when you ignore the lon-local effects - ideologically and physically.

It's a complicated problem with many, many components. Nuance is more relevant than you think it is. Think of fractals and weather patterns.

An effect of SF: http://www.chicagotribune.com/news/globalcity/ct-global-city... Why it happens: https://en.wikipedia.org/wiki/Human_capital_flight

Empirically, all historic efforts to alleviate the heartlessness of market forces with centralized planning ("us" making necessary changes) have resulted in even worse and more heartless outcomes for even more people. Talk to some Cubans, Russians, North Koreans, or East Germans about how that whole process turns out.

It's not that the free market solution is great. It's that all other possible solutions are even worse.

1) Sure, eventually. 2) Sure, eventually. 3) Sure because you are so averse to being taxed that you will deliberately destroy your own potential to get to work rather than acknowledge the idea that this could be a shared problem solveable by shared funds. 4) Sure, eventually.

So your argument is that this is really bad at the moment, but over an unspecified amount of time, 'the market' will sort it out. No worries. No need to think about things. No need to consider things. Just the market. Isn't the market great.

I think he was putting it more as a natural state of things. It's not "really bad", it's how things are ought to be. Yes, think about things, consider things for your life, plan out, et cetera. He does that and he is content (although I'm not sure how much he's actually considering in his daily thought sessions, as I've encountered more ignorant content people than thoughtful content ones).

> This is why the free market is so great.

I don't disagree with the points you made. But there is nothing free market about the housing market in San Francisco.

"But there is nothing free market about the housing market in San Francisco."

How so? There is a supply (although limited), and there is a demand. The landlords are interested to maximize their profits, but can not ask more than the market can bear.

There would be high demand for buying land to build new homes on. Or buying land with old low-rise buildings, and replacing the buildings with higher and/or more efficient design, to provide more homes on the same piece of land.

But even if the owner would like to sell the land, and buyer would like to pay a lot of money, this is usually not allowed, for political reasons.

If let to operate more freely, free market economy would be efficient in increasing the density of homes in high-demand areas. This is very much not happening in San Francisco.

If people are willing to pay Manhattan-prices (and even more), the free market response would be to build at Manhattan-density.

> Everything too expensive? Good, don't live here, eventually enough people will leave to drive all of the costs back to other market norms.

That's a rather nonchalant way of saying something that will likely be a very sharp, painful transition. And when a boom-town the size of San Francisco implodes it can have a huge impact on the entire country.

I don't see any reason to assume the free market will solve those problems- the local markets are doing just fine with the rich (spoiled?) part of the population, and have little to no incentive to change; dumb startups are doing just fine as VC fodder; bad engineers are doing fantastic at making CRUD apps for startups that don't need anything fancier.

If only that were the case. Especially in the internet age, one would expect that you could work in some far off place where you can get a mansion on a huge piece of land and have a drive jusr for the amount you pay in rent in SF, yet for some reason (it's free money bubble, stupid) people, i.e., kids that drank the Tech Crunch Kool-Aid, all cram into tiny little apartments to do useless shit. Ultimately the missing element from the market is rational actors.

> Ultimately the missing element from the market is rational actors.

Love the quote :)

What about the people who have already lived there, who aren't on engineering salaries and work service positions?

I think it's fun to be flippant, but there still certain demographics that are being displaced and negatively impacted by the bubble.

Of course, but their skin tone is a few shades darker, so nobody talks or cares about them.

People would rather argue in ivory towers about abstract problems that don't exist in the real world (sexism in video games, Internet feminism, etc), rather than work on unpleasant and unsexy problems that can easily be solved.

> sexism in video games, Internet feminism, etc

What's abstract or unreal about them? What's "Internet" feminism, for that matter? I'd say sexism in videogames is real... and the level of aggression in online discussions about that topic is almost asphyxiating, enough that I consider it a serious problem. Would you similarly argue that it's "unreal" to argue about sexism (or racism, or whatever -ism) in movies?

It's a shame you said this, because I'm in agreement with the rest of your post.

Coming from a family of immigrants that had to move around to find work, it's interesting to hear about people's sense of entitlement to a certain lifestyle. Especially the expensive beachside living lifestyle. Am I wrong for not feeling sorry for them?

Disclosure. I tried living in SF. The cost of living was too high. I left. Problem solved. Ta da, no bitching required

I guess I don't get your argument. Not being displaced by an economic bubble is a now a sense of entitlement?

Based on your experience you described, you weren't displaced.

If you feel entitled to not be displaced - then yes, that's a sense of entitlement.

I was amazed by the people who felt entitled to a lower cost of living - all while blaming IT workers for gentrifying their beautiful oasis. I would have thought they lived in SF their whole life to feel that level of angst. More like a couple years. Intermittently. While their parents pay for their art degree.

That's very tautological of you, but I'm guessing English isn't your first language.

A sense of entitlement is an English idiom for "having too high of expectations", and typically associated with narcissism. Expecting to not be displaced from your home after 20 years is not a sense of entitlement or narcissistic.

"What about the people who have already lived there, who aren't on engineering salaries and work service positions?"

I'm trying to look at it in more brighter light, so I'll say that they can sell high their place (which is wonderful thing from a market player's prospective), then offer themselves as a gift to enrich some other lucky place (which is good for many under multiple reasons). It's a win-win!

"they can sell high their place" It must be nice to live in a world where even the service workers own property.

"When people stop taking public transportation because it's fundamentally broken (ps - it's awful in SF) then it will force government organizations to re-think their planning."

The opposite, I think. I recently started taking public transportation MORE often, because traffic on the freeways has gotten so bad.

Your comment is valid if we lived in a totally free market. We do not.

1) Want to build a skyscrapper? Having the same housing density as Tokyo or Manhattan? No .. sorry .. think of the traffic or view or ... whatever.

2) The place you live in has become very valuable. Pay the appropriate property tax. Umm .. no .. sorry. We don't want to make live unaffordable for seniors or umm whatever.

The reality is just wealth distribution. Away from people who are young and new to the area and towards those who were here before.

Exactly! Although, it isn't just that assessments need to rise in tandem with values, which Prop 13 prevents, but the rates on land ought to rise dramatically which Prop 13 also prevents. And taxes ought to be eliminated for improvements.

Considering people seem to have planned their lives around the implicit expectation of the current tax structure, it isn't ridiculous for seniors on "fixed incomes" to be nervous.

But let's remember that seniors are the wealthiest age demographic, and those among them who are actually financially needy can be easily cared for while still not stifling all the hopes of young entrepreneurs.

Your points are great and all, but what about the local folks that the engineers displaced? The people who has lived in SF for decades, contributed to its wonderful culture but failed to catch on to the tech boom. After being pushed out by the high living cost you cannot just expect they will seamlessly move right back when the prices/market calibrates to normal.

Disclaimer: I don't live in SF and never would

> When people stop taking public transportation because it's fundamentally broken (ps - it's awful in SF) then it will force government organizations to re-think their planning.

I think what is much more likely is that the government will simply raise taxes to cover the shortfall and let the public transit die.

"I think what is much more likely is that the government will simply [...] let the public transit die."

That kind of happened in other parts of the world (in the former socialist block). You know what happened afterwards? The significant demand for mass transportation encouraged private parties to step in. They weren't as good or as convenient compared to the former government-subsidized public one, but they solved the problem for a while.

This is the archetype of magical thinking. You could just as well have said god will do those things with the amount of support you offered.

But it seems there is such an unquestioning faith in "the invisible hand" that the mere suggestion that misrembered high school economics may be an oversimplification, let alone in error, is viewed as unspeakable blasphemy.

Particularly ludicrous is:

>4. Bad engineers? Yup, I've met some of them. They'll eventually leave too when the system weeds them out.

But I'd ask the prophet of the invisible hand these questions:

Isn't the current state necessarily exactly correct given the panglossian invisble hand?

How is it other's using the same hand waving also claim the bay area economy is a permanent feature? Heretics I presume?

If the invisible hand is going to correct the situation, when will it happen? Next week? A hundred years? Or "soon, my son, soon"

There is absolutely no reason for this post to be down voted. I am not sure why people are okay with "it will fix itself" -- it is an absurd position.

Considering how very non-free-market principles led to the regulation and law that made startup speculation such a hot, bubbly market, I am led to strongly question your underlying premise.

You are speaking of a free market that is highly theoretical, because there is no such "free market" in today's economy, no matter where you live. However, free market theory suggests that a situation such as SF is not possible under a free market.

San Francisco has a great deal of political might, which explains a lot of the founding contexts allowing it to survive in the way it does. Add the fact that employees cannot be held to an non-compete agreement, and you have a bunch of engineers stepping over one another to chase the next six month gig as the number of ridiculous startup options balloons to a totally unsustainable size.

This is why the free market is so great.

Intractability issues of Nash equilibria aside, if that's your take on an article ostensibly about sustained market disequilibria, then I don't think you fully understand what a 'free market' is supposed to entail.

Such a simple answer for a problem that is vastly more complex. Here's 2 simple ideas for you:

1. Some people can have more freedom than other people.

2. In a free market, rich people have more freedom than everyone else.

A free market is not truly free. Although this concept is frighteningly obvious it is incredibly hard to articulate. You are essentially telling people to get the fuck out of San Francisco because they're not rich enough.

>> Speak with your wallets, not with your mouths.

Careful. Money=speech is a touchy subject. It implies that those with less money are somehow less important. That may be true from a libertarian absolute free market standpoint, but cities are not liberated markets. They are nests of overlapping interests and entrenched power brokers. Not everyone is free to move at the drop of a hat, nor should we expect them to bounce around chasing their market niche. We should respect that people want to live in community year after year without being forced out, or in, due to market fluctuations. There is value in establishing roots in a community beyond the financial.

Your examples are why the market is seriously flawed here.

Why does it take so long for the market to correct and why does the market allow such huge variance from normal?

I think the answer is obvious, people get acclimated to their environment very quickly and lose the ability to see systemic problems.

Therefore it seems the market will tend towards local minimum. Similar to how evolution works. It doesn't handle gross changes without a lot of pain.

I agree with everything you said but this:

> then it will force government organizations to re-think their planning.

Made me lol. As if any Government has ever changed it's offerings based on the market. They'll just keep paying public workers absurd wages to continue to suck because status quo is way more important than customer satisfaction when it comes to public entities.

Ever? Your bias is showing.

http://www.twincities.com/2015/12/31/mark-dayton-wants-100-m...

How does a politician wanting money to start a service defeat my point in any way? He's not fighting a status quo, he's adding a new service which is extremely sexy for a politician to do, especially in the leadup to an election. Not to mention he isn't actually doing anything yet, he's demanding funding to do something, which is also way easier to do then actually doing it.

A Government entity has no competition, or if they do (like the USPS for example) they can rely on subsidies from the Government and run at a total loss if they need to. I'm not saying this is a good or bad thing, but if you have a worker who knows their performance is tied to their ability to deliver a product and another worker who knows they're pay is coming whether the customers are happy or not, one of those is going to be motivated to make sure customers are happy and the other one is not, and they will act accordingly.

>1. Everything too expensive? Good, don't live here, eventually enough people will leave to drive all of the costs back to other market norms.

What do free markets and San Francisco NIMBYism have to do with each-other?

What an extreme simplification and absurd push-under-the-rug statements.

I'm glad we could stand by free-market narratives while we waste untold amounts of capital on nothing.

I don't know if SF public transportation is awful . . . try living in Detroit.

Don't get offended. People are free to speak with their mouths.

The free market is great if you're wealthy... yes

Free market? Last I heard the money supply was decided by a few people in New York.

Reply on news.ycombinator.com