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Comment by dietr1ch | Hacker News Reader

Why does the standard economic answer have any credibility yet?

Standard economics are a simplistic model that fails hard to account for the effects of their own simplifications. No one sees physicists saying that a bouncy ball will bounce forever because it loses a negligible amount of energy in each bounce, but we see economists talk about a magical system where they get pretty much every assumption wrong and don't account for how it makes the model deviate from reality. (I had a list of aspects where the assumptions go wrong, but it's a bit too long to fit in the margin of this post)

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It sounds like those mythical economists you mention are men of straw?

Today economists use things like GDP to understand the economy and you still hear about it and still guides decisions with big impact.

Things like the Gini coefficient is over 100 years old and it showed that the economy could be doing great based on averages, despite it only being true for a few, yet there's still no push away from metrics that misrepresent how most people are doing.

Well, maybe they are also ignored scientists that we all know have ideas on how to improve things, but are powerless too.

Things obviously going downhill for 40+ years, but maybe working as intended, - https://en.wikipedia.org/wiki/Economic_inequality

GDP correlates really well with just about anything we value.

> Things obviously going downhill for 40+ years, [...]

Global economy inequality has decreased markedly over the last few decades. More and more people have it better than ever before.

Not it doesn't - capitalism has been off the rails for at least a decade or two. Not going to go into a rant here, but just observing the basic fact that capitalism cannot create certain resources we value - such as living space - which comprise a certain percentage (lets say a third) of things we value. This leads to these goods with inflexible supplies inflating in dollar value (see housing crisis).

If housing price increase outpaces wage growth (which it does), with GDP growth being concentrated in very few pockets, this leads to decreasing living standards for most of the population, at least in this aspect.

Capitalism has no problems creating more living space - when it’s not being strangled by building codes which specifically prohibit building more living space.

Yes but the problem isn't just more living space, but more affordable living space.

Sure we have developers in Texas, Oklahoma, Florida, etc plopping down houses >$300-500k, but can the average person afford them? Yes I agree building codes in places like California make houses expensive, but the current market in the United States does not incentivize building affordable housing.

Uh, new housing has always been more expensive than older housing. That’s normal.

When more supply goes on the market, existing stock goes lower in price - when there is enough supply.

That is how it always has been.

Even old ‘shotgun shacks’ are too expensive because zoning restrictions (and too much easy money) has caused everyone to inflate everything.

> Uh, new housing has always been more expensive than older housing. That’s normal.

> When more supply goes on the market, existing stock goes lower in price - when there is enough supply.

Yes, that's part of why the housing stock today is nicer than the housing stock 200 years ago: over time the average newly built home was always better than existing houses.

Other than water and veggies, pretty much everything I buy has always been better than what I had 2,5,10 years before, but only housing has been becoming increasingly prohibitive.

It isn’t just housing actually - costs of education and healthcare have similarly skyrocketed out of control.

These are all areas with similar levels of ‘desirable is constrained’. Or perhaps worded better as ‘people want the top x percent, not just the same thing in bulk’.

Most of the other things you’re talking about, it’s easier to scale up production without hurting desirability.

For instance, if commute/neighborhoods/climate literally didn’t matter, everyone complaining about housing costs would just move to Rural Kansas or North Dakota and problem solved for dirt cheap.

Instead everyone is complaining about how nice new housing in city-of-choice-close-to-work is unaffordable.

Well of course it is - people are restricting building to keep it nice (by their standards), which is why folks want to move there, which is restricting supply - and with easier money (historically) that is causing increased bidding and increased costs.

The knowledge acquiring part of education has become cheaper than ever: most of the resources are available for free on the internet. And the cost of eg getting access to lab equipment has probably fallen (thanks to Alibaba etc). The cost of hiring a coach / teacher to help you has probably risen in line with general wages.

What has become more and more expensive is the get-a-piece-of-paper-at-the-end part of education.

That being also the most regulated part of education, I wouldn't necessarily blame in on 'markets' or 'capitalism'.

I agree - and i’d even say the issue here is literally not markets or capitalism. If anything, without markets or capitalism the issue would be a lot worse. At least there is still an option to get those things (in most cases) rather than ‘wait in a line for 20 years’ like in other systems. (cough USSR)

> I agree building codes in places like California make houses expensive, but the current market in the United States does not incentivize building affordable housing

Because the building codes drive up the costs!

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