Greece Is Richer. So Why Do So Many Greeks Still Feel Poor?
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> Rents have surged in recent years, driven by tourism, foreign investment and a shortage of affordable housing. The cost of housing now consumes one of the largest shares of disposable income in the European Union
My impression is that where housing is expensive, there will be complaints of unaffordability (obviously), but also vice versa, that where there is unaffordability, housing always seems to be a large component (at least in "the west").
in most places basic food (rice and beans or an equivalent) is cheap. Services can usually be skimped on. Transportation can usually be flexible (new car / cheap used car / transit / bike). Housing costs seem to be relatively non-flexible though.
I wouldn't be surprised if Greece has strong NIMBY factors.
No doubt. You see it in tourism economies the world over.
Cheap services + cultural/historical novelty + nice climate make tourism highly viable -> tourism becomes outsized part of economy -> those enriched by peddling tourism write the rules to their benefit -> it becomes all but illegal to develop any other industry, build housing, etc, etc because all this activity winds up punitively regulated lest someone do something that scared away the tourists.
It is the same in the east - it is either housing, or housing related tax.
Isn't a tax the obvious solution here?
> Between 2009 and the trough of the bailout years in 2016, average household wealth fell by roughly 35%
35% of the land didn't disappear and I'm guessing 35% of the buildings didn't disappear... So what changed was the measurements... GDP values seem even shadier.
It's interesting that housing is the one that all the HN commenters pick out to comment on. It's probably the most universal complaint, the one that's easiest to sympathize with from halfway around the world.
I wouldn't be surprised if Greece has strong NIMBY factors.
Granted it's not all zoning, new houses won't be super cheap, but it's a start.
Incidentally these people are the best economic citizens because if you give them money they'll spend every cent of it because they need to buy food and energy, use health care and pay rent.
In other words if a rich person gets a million they (if they're sane) spend a fraction of it and put the rest in assets, stock market, property, etc. If you give 1000 poor people each 1000e every cent will go into local economy immediately.
The "bottom 50%" is a measure of how well you make it possible for everybody to succeed without extraordinary help.
The "bottom 10%" is a measure of extraordinary help.
I'm not sure I buy it but it's an effect to consider.
But yeah. Ugh, capitalism.
I’m not familiar with Dalio outside some weird pseudo-academic paper he wrote where he attempts to provide a new grand theory of economics based on “transactions”, but I would be interested to hear this perspective supported.
Edit: samiv above answered my question
Take a country like Sweden for example everyone is reasonably well off (if not exactly thriving) since income inequality is quite low. At the same time wealth inequality is extremely high since the rich pulled the ladder after them and there are hardly any options for the middle class to accumulate much wealth. In turn that probably doesn’t help productivity and innovation that much. Why work harder if you won’t get anything in return? Which is a general vibe vibe in Scandinavian work culture.
Then again they (well Denmark at least since a petrostate like Norway doesn’t count and Sweden hasn’t been stellar and the Danish government is hellbent on turning the EU into a fascist dystopia so maybe its not a price worth paying..) are doing quite well economically compared to most other European countries.
If you look at the top 51% things are going extremely well, but as this article shows it can hide a lot. I loved his explanation of how the economic machine works: https://www.youtube.com/watch?v=PHe0bXAIuk0 his book Principles is pretty good too.
Problem is, this creates systemic effects. If you look longer term, a society that does this will end up a lot poorer than one that doesn't. Even for the bottom 51% you were optimizing. Because there are two variables to control: the redistribution, and the actual productivity. If you just focus on splitting wealth, you stop growing wealth.
Growing wealth on the other hand will make everybody richer, including the botton 51%. Simply participating in a richer economy has advantages. Plus the smaller redistribution percentage will actually end up bigger in absolute terms.
Got data to back that up?
(On the serious level, I'm really curious; But on the polemic level I'll call BS - I highly doubt there ever was such a period in any capitalist country ever)
"The Rentier Black Hole"
A theory of land, housing, and open-economy failure: how a non-reproducible asset absorbs global savings, breaks wage-price adjustment, and hollows out the productive economy.
Officially, it's a 6-day working week - 48 hours (!)
The tourism economy requires only cheap labour, ideally buying all the properties and bringing in seasonal workers. That's sad.
The prices of everyday goods rose (sometimes more than double) and the profits from VAT(24%) with them.
High duties on fuel + fuel price went up, combined with rent prices (living far away from your workplace) => longer work commute, bad infrastructure and older vehicles ( no money to buy a fuel efficient one when you are poor)
Liberalization of the energy market forced by EU which lead to extreme prices. (new companies that don't produce anything got in the middleman position with only goal higher profits)
In summary, everything has been and continues to be done at the expense of the majority (low-wage earners), while making them even poorer.
- Per capital GDP still awful
- Quality of life continues to get worse thanks to rising global temperature.
- Everything else worth doing is still fairly terrible compared to better-off EU neighbors since tourism remains the economic staple. That strangles any other economic programs from working.
- Average is one of the worst ways to measure wealth (use Median)
- Wealth is typically tied up in illiquid assets (e.g. housing), making people feel trapped or anchored to a place that may not be economically mobile (e.g. rural)
We need to eat the fucking rich. Bnch of parasitic fuckwads.
This seems to be the plan basically everywhere though. Yes, some countries still have a ladder for average people to own property and find success, but the global trend seems to be that this possibility is shrinking for the vast majority of people
That's what happens when average people have to compete with real estate conglomerates for housing though
[emphasis mine]
I somewhat disagree: at least during the COVID-19 times the government did have a plan to partially fix it: At that time there were a lot of discussions whether work from home will be there to stay or not.
If it would have stayed, that would have partially solved the problem (not for everybody, but for a substantial subset of people):
Since people can live at places where rent or the price of houses is much lower, companies can pay smaller salaries, but employees (after subtracting the cost of living) still have more money. In other words: both sides get their slice of the pie: employers can decrease salaries while employees still have more money.
Unluckily, when COVID-19 was over, companies decided they basically want people to come back to to office (working from home should be an exception).
This was the central reason why this plan failed.
Even if rents were capped at half what a mortgage for the same property is, you still are in a position that once the asset of the house is paid off the landlord now has an asset that earns income without labour.
And the inverse.
Regardless of what you earn (to a point, even into higher income brackets), if you do not put it into an asset that can house you, and you stop earning, you cannot live without reducing your overall capital.
So rental means a lack of opportunity to reduce your labour dependent income over time (important as you age), and a reduced ability to weather negative life events.
A separate concern is who should receive the money and how we morally justify that, since they didn't produce anything or work to earn it.
I've seen many parents and grandparents of friends having to live on scraps and decide between healthcare and rent because they just can't make ends meet anymore.
For the young folks that can't buy because they can't save its even worse, they'll be indentured servants for as long as they're useful for the labor force and will then be thrown into the bin.
I suppose if it comes to that, I'll find a way to sacrifice my then-worthless life for the greater good. And it will be sad, but important.
I rather believe that the individual problems in each country are very different (even though you summarize them by "this wealth inequality is so common around the world"). Additionally, it often happens that the interests of people in one country are antagonistic to the interests of people in another country, so I don't believe that people from different countries will club together, and have common wishes.
I find this honestly kind of difficult to believe, except when it comes to distractions by the people who want to stay in power
Should a country implement some very nationalist policies that serve the interests of the not so well-off people in its own country, but will be against the interests of other countries and their people?
Think of the uprise of right-wing, nationalist parties in many European countries that often present themselves as "the new worker parties", i.e. they intend to implement policies that are good for the workers in their own country, but on the other hand make it very clear that they have not the interests of people of other EU countries in mind.
When it comes to housing prices and general cost of living the patterns are extremely similar in most Western countries. Especially after covid and the infinite money hoses..
Remember the plurality of the rich are working off asset loans on paper wealth. Those credit lines get cut by an event, that triggers an asset sell off which creates a vicious cycle.
https://ourworldindata.org/explorers/poverty-explorer?tab=li...
Making electric vehicles more mainstream seems like a net-positive to the world.
https://ourworldindata.org/explorers/inequality?tab=line&cou...
Some people will say "what about the people with one leg? Should we cut off everyone's left leg so we're equal?" - it is bad that they have one leg while everyone else has two, but nobody except a certain satirical film actually suggested doing that.
I actually think that free market competition has been the main driving force behind human progress for quite a while now. The issue is that the “winning condition” of capitalism results in the complete subversion of that process. So it’s always a balance.
It is no problem if the best snack vendor can afford to buy the biggest snack truck. In fact that should be encouraged so we can have more of the best snacks. It's also no problem if he can afford a mansion. He deserves it for working so hard on snacks. It's bad if he can do anything that negatively affects his competitors, like buying the adjacent stands to leave empty, buying up all the snack ingredients so nobody else can get them, bribing the market manager, or making a law that all snacks must be french fries.
"The scale of the destruction that followed the debt crisis was extraordinary. Between 2009 and the trough of the bailout years in 2016, average household wealth fell by roughly 35%, wiping out more than a third of Greek families' assets"
...
"The labour market has improved markedly since the darkest years of the crisis, with unemployment falling sharply and the informal economy shrinking. But structural weaknesses remain deeply embedded. Long-term unemployment, low participation in the workforce and a high reliance on self-employment continue to shape opportunities and outcomes"
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Tl;dr - Greek households still haven't recovered from the Eurozone and Greek Debt crisis.
https://x.com/AiSimonThompson/status/2070900546119114970/pho...
I think that median household disposable income is a much better way of looking at this than GDP.
2014 is the turn. The US gained shale, isolationism is possible, Trump 2 is created by the general (true) perception that things were good under Trump 1. The European war starts and China is left to dominate Asia.
Basically you had companies like Google or Meta constantly leeching from everyone while providing approximately zero real value in return.
If everyone gets 10x richer, half the people will still be in the poorer half, and will still feel poor in some sense.
This is surely not the only factor in this story, but it's you need to keep it in mind in these discussions.