When wages go up, mortgage lending goes up (and by a multiple). The banks hoover up all productivity gains.
NYTimes might want house prices to go down but they have to take on the banks if they mean it.
Incredible that anyone could disagree with this, really, but downvote away.
Anyone denying the effect of banks is missing an important point. I suggest looking at positivemoney's articles or videos on youtube for an explanation of this process, it's pretty clear.
Credit sets the price. Banks issue as much credit as they can, leaving workers with enough to eat / heat / clothe themselves and no more.
I cannot understand how anyone can think otherwise. This is how we create money.
Where is all the money going in SF with all the highly paid devs? A big wedge to the landlords. Because all productivity gains flow into land because that is what the banks use to create new debt.
But you don't have to live in SF. You live there because that's where employers who will pay high wages are. Therefore, you decide to live there instead of working remotely or living somewhere with a lower cost of living.
Landlords are not the problem (although, they are a symptom). Tech employers who demand you live in SF are the problem. And as long as employees continue to flock there despite the real estate cost, employers will continue to push the externality of housing costs onto them.
When non-tech workers complain its too expensive to live in SF, everyone says "market forces". When tech workers complain its too expensive, its a housing crisis.
People choose to live in specific cities for reasons other than their current job.
>you decide to live there instead of working remotely
Not everyone gets to work remotely.
>or living somewhere with a lower cost of living
Not everyone can do a shitty commute for years on end without becoming depressed.
Living near lucrative jobs where the employer doesn't care about your housing costs is not a right.
I think you're close, but take a look at "Progress and Poverty" by Henry George. The problem is the failure to capture rents through taxation.
However banks do not provide a service as banks are not intermediaries. The create new money as credit.
https://bankunderground.co.uk/2015/06/30/banks-are-not-inter...
I'll have to chew on that a bit. Thanks.
Our culture is such that we cannot make basic distinctions between rents in general and productive work. I suspect we'd have to fix that, then let the existing accounting mechanisms sort it out.
It blew my mind that this is how money is created.
What would be the downside of banks having to buy this money from the government instead of creating it for free?
Funny how money creation isn't on the curriculum, isn't it?
What about the power the government derives from taxing your real estate? Don't forget that either.