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Comment by b34r | Hacker News Reader

Out of curiosity, why wouldn’t we want the government managing mortgages for the whole country? (Assuming the acquisition process isn’t slow AF because government.)

Real estate seems like a pretty important part of the economy and, more importantly, the government artificially making housing more accessible for potential first time buyers creates a virtuous cycle where people can finally save money and the eventually spend that money to stimulate their micro economies.

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> Out of curiosity, why wouldn’t we want the government managing mortgages for the whole country?

> Real estate seems like a pretty important part of the economy...

You just answered your own question. Governments do not have a history of distributing scarce resources effectively. You need various market forces.

> the government artificially making housing more accessible for potential first time buyers creates a virtuous cycle where people can finally save money and the eventually spend that money to stimulate their micro economies

This is not what happens. As you said - it's artificial. Markets, like the internet, route around this sort of censorship. Any attempt to make housing artificially more affordable will have the effect of increasing demand (by design). When you increase demand, prices rise. And thus becomes unaffordable again. You can then increase the subsidies further to try to offset your original manipulation, which will only worsen the problem. This is precisely what happened in the 90s/early 00s and the result was the 2008 housing bubble.

Markets are basically anarchy... there are countless examples of markets inefficiently allocating resources (homes, for one). Not sure I buy this.

This thread is literally about how the housing market isn't a true market...it's a government run welfare program backed by the Fed. You're proving my point.

> Governments do not have a history of distributing scarce resources effectively.

To be fair, "various market forces" also don't have the best track record of distributing resources, especially scarce ones. Somehow those always end up being "distributed" into the same few hands...

To be fair, how is that even remotely true? Look at the wealth, convenience, leisure and abundance all around you. Even people with lower income experience high standards of living. The system we have now is not without fault, but it has done better than any other before in meeting our needs and desires.

I don't understand why people make wild claims that everything is distributed to only a few hands, thats preposterous. If you really believe that, you are poisoned by ideology.

> Look at the wealth, convenience, leisure and abundance all around you. Even people with lower income experience high standards of living. The system we have now is not without fault, but it has done better than any other before in meeting our needs and desires.

You should spend some time in Appalachia if you think that's true.

You are making a logical fallacy and I don't think it's worth my time to actually attempt to discuss this with you.

There's nothing to discuss because you don't really have much of an argument. "Look around. Things are better than what they were" doesn't negate the fact that market forces are bad at distributing resources. You can look at the COVID-19 crisis as well. "Market forces" led to distribution channels with no redundancy, leaving the United States with a shortage of something super basic: PPE.

You continue to state that market forces are bad, while not paying any attention to the counterargument that they are pretty good compared to the alternatives. Making an honest comparison would be a much tedious discussion.

I'm not saying market forces are categorically bad. I'm saying they're bad at some things. Market forces are terrible at distributing housing, healthcare, and primary education. As with most things, there's a happy medium between unfettered market forces and central planning.

This is patently and simply false; if you view home ownership data worldwide, you'll see distinct patters of more home ownership in countries and localities in which the building, sale, and ownership of homes is encouraged by the government, oftentimes protecting it from the exploitative practices of capital accumulation. US home ownership is low relative to its wealth, lower than former communist blocks. Best system my ass.

This is literally the opposite of what is true. Every _single_ thing that you own tells a different story than the sentence you wrote above.

That's called communism, not various market forces.

During communism, people with the only currency left - power - manage to get all the best things (which can be food, if everyone is starving, or luxury item, if people are not starving yet). In a free market luxury items eventually become common goods.

That's why most common people have a phone, a vacuum cleaner, a microwave, a tv.

You're focusing on wealth inequality/relative living standards, which while important, is secondary to absolute living standards.

And while it may just seem that the rich get richer, the poor have gotten far richer under capitalist systems than any other form of economy.

It's not like the market is doing a good job distributing scarce resources either, particularly in the case of housing.

Capitalism is like democracy: it's the worst form of economics, except for all the others. The fact that it has flaws does not make other systems superior.

Also, this thread is literally about how the housing market isn't a true market...it's a government run welfare program backed by the Fed. You're proving my point.

I'm not anti-capitalism, but markets aren't a naturally regulating thing. They need to be managed.[0] And the government plays a role in shaping to what ends those markets are managed for. E.g. if your market is allowing wealthy foreigners to buy property that then goes unused it's not a well-functioning market, regardless of how much it is aligned with "capitalism".[1]

[0]: And they are always managed. Even "free"-markets are managed, since free-markets are not a natural state, at least not for long.

[1]: Capitalism itself is a vague word that can be used to describe any number of only superficially related systems. E.g., 1800s Britain was capitalist, and had working conditions so appalling that they made Marx's ideas attractive. Modern Nordic capitalism is quite different from that, but would also still be described as capitalism (except by Democratic Socialists who know nothing about Scandinavia and are trying to convince people that those countries are actually socialist).

Fortunately, we don't actually need to make housing more affordable to the whole market, just the ones for whom it matters: the poor.

Government messing with the housing market is what caused the 2008 recession. I think that's a very good reason not to want that.

It didn’t go so well with college loans.

Any market government gets into gets distorted.

Most of the rest of the developed world doesn't really consider college a market in the American fashion, though.

Half-hearted government is a problem; education and healthcare both suffer in the US from trying to split the baby Solomon-style.

Maybe higher education shouldn't be a market.

You know the Federal Reserve is not a government agency, right?

Because the government is a terrible market participant. It has infinite money, they suffer no consequences, and ideologues come up every so often and let their agendas take over any economic objective the program had in mind.

This is happening now more than ever with the Democrats seemingly deciding that the US Fed has the additional mandate of fighting systemic racism.

The Fed board is appointed by the President and approved by the Senate. The current chairman was appointed by Trump. The article doesn't even mention racism so I guess this is probably a throwaway culture war post but I have a hard time seeing how this of all things could be pinned on the Democrats. If anything it's the anti-public-health Republicans who let the pandemic get out of control and lead to a Fed buying spree.

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