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Comment by CBarkleyU | Hacker News Reader

Alternative title by me: Remote work frees up $800b to be spent more effectively.

On the owner side "Remote work will transfer $800b from someone to anticipated it to someone who didn't as much. Neither will do anything valuable with it anyways."

On the renter side "Remote work will allow all the rents to be redistributed to shareholders, who will stack it neatly in piles of virtual $100 bills"

Remote work adds 800b to suburb and small city real estate value.

(Suburb because people not going into office will move further away on avg but also on average want a bigger house to have an office. Small cities from people moving from coastal cities to places like Boise and Austin.)

When the paper value of an asset disappears you don't get the money back to spend elsewhere. Nobody does.

Just like lending creates money, destruction of assets destroys money. Which happens to be what we want right now, as long as it can be done in an orderly fashion.

The value decreases because the anticipated rent decreases. This windfall is literally money that can be spend elsewhere by the entities that rent.

> Just like lending creates money, destruction of assets destroys money.

Lending creates money? Banks can just, poof, will it into existence?

Correpondingly, asset destruction destroys money? Like someone literally is setting fire to it? This is nonsense.

Nope, that’s exactly how it works.

Here’s something to read on money creation:

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...

Fractional reserve lending does create money.

I suppose when we say these things we should say, fractional reserve lending creates some money. Otherwise one can get the impression that banks can create as much money as they want, which they can’t.

yes, basically, they just poof it into existence, and then it poofs out again when the loan is repaid.

of course there are details ...

How is something worth anything? How is something worth $800b? Is it because someone else would pay $800b for it? Why would they pay $800b for that somethin? Is it because they need to in order to make more money?

If that all is true, then by destroying the need to pay $800b, we freed up $800b, right?

This is not exactly correct. For example consider a single office building and say it’s worth $2 billion. But now demand has fallen and the most anyway will pay is $1 billion. The other $1 billion is not “lost”, but it’s not freed up either. It just means that the buyer no longer transfers it to the seller. So the buyer has an extra $1 billion to spend on other things and the seller has $1 billion less. The net effect on the economy should be approximately neutral (of course sometimes if asset prices fall too much then companies can go out of business which can hurt the economy etc)

>The net effect on the economy should be approximately neutral

It wouldnt, and that's exactly my point. Company A is producing something of value (presumably) while Landlord B isnt (as evidenced by COVID-19 forcing us to WFH). So the $1 billion has now and always has had a wasted opportunity cost attached to it (who's making better use of it).

In other words, if Apple wired me personally half of their yearly profit, do you think that the net effect on the economy would be neutral?

Lowered asset values does not destroy money in the sense that the money supply is unchanged (ignoring secondary effects, but those are hard ti predict anyway).

That capital that would have been spent by real estate owners can now be spent by the company for pay raises, putting it into other investments, etc. Capitalism is a rough business and lots of winners and losers. Why am I supposed to feel sorry for these real estate guys? They never came to my aid when I got laid off in the past.

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