fbonetti

It’s illegal to build denser housing. It shouldn’t be hard to see why this policy would cause housing prices to skyrocket.

It’s swapping an existing asset (a treasury) for an asset that was created completely out of thin air (reserves). It increases the monetary base. If you don’t believe me, look at the Fed’s own data.

https://fred.stlouisfed.org/series/BOGMBASE

QE has not caused excess inflation in terms of the consumer price level, but it has dramatically increased the price of interest-rate sensitive assets like real estate, equities, and bonds.

The Federal Reserve, which is the central bank of the United States, is creating new money in order to purchase US government debt, which is essentially equivalent to the government printing new money in order to finance its own spending.

Looking at it another way, it’s no different than some guy printing counterfeit US dollars in his basement and using them to buy real assets. The outcome is the same in either case - the counterfeiter and the government both get to spend newly created money while simultaneously devaluing of the purchasing power of the dollar for everyone else.

> The report’s authors warn that treating the world’s resources as limitless is leading towards global disaster.

This is the same fallacy that lead people to fear “peak oil” every decade for the past 50 years. Nobody treats resources as if they’re limitless. The reason we don’t coat everything in gold is because it’s rare (and thus expensive), leading to producers only using it when it’s absolutely necessary. Wood is abundant (and therefore cheap), so it’s used in everything from packing materials to building houses. If these conditions changed and wood for some reason became rare and expensive, it wouldn’t be used in the same way we use it now. People would choose to build their houses out of a different material, and tree farmers would choose to plant more trees.

The idea that we’re “running out” of resources doesn’t make sense. Resources are and have always been scarce. When something becomes exceedingly rare, people choose to consume less of that resource.

It’s funny that the author on one hand acknowledges that the government sucks at everything it does, whether it’s education, infrastructure, or health insurance. He also acknowledges that the federal government has a tendency to constantly engage in costly foreign wars regardless of who happens to be in office. Yet his proposed solution is to give the government even more money and even more power.

These numbers are very misleading. If you at the graph of effective tax rates of the 1% going back to the 1950s, the 1% only paid slightly more in income taxes than they do now (~40% vs ~35%).

https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/

By the year 2030, the amount of fine print and opt-ins at the top of each website - in order to comply with every state and country's bespoke data regulations - will be larger than the warnings on cigarette packs.

I find it pretty disturbing (and hilarious) how much the hive mind sentiment has shifted on HN. I remember back in 2013 when Snowden blew the whistle on government surveillance the overwhelming majority of HN users expressed the opinion that giving the government too much power would inevitably lead to tyranny. Likewise with Bitcoin, the consensus here seems to be that decentralized money would be a good thing because it would remove the government’s ability to devalue its own currency.

Now the pendulum has flung in the other direction and people are clamoring to not just break up FAANG, but to nationalize them and put all of their data under government control! It’s absolutely bizarre.

That already exists. You’re describing mortgage-backed securities broken into tranches.

There’s a difference between being the dominant player in an industry and having a monopoly. Consumers overwhelmingly prefer Google because it’s the best search engine, period. The second that changes, users will switch to something else.

Remember that AOL, Yahoo, and MySpace “monopolized” the internet not that long ago. There were hysterical articles in the mid 2000s speculating on whether or not these companies had a “cyber monopoly”. I doubt you think those companies are still the dominant players on the internet...

Why don’t you just check out the numerous other historical examples of rent control and see how they turned out.

Are you willing to pay to use a search engine? How much?

From Blue Apron's SEC filing:

> We have experienced net losses in each year since our inception. In the years ended December 31, 2014, 2015 and 2016, we incurred net losses of $(30.8) million, $(47.0) million and $(54.9) million, respectively.

Blue Apron and AirBnB are not comparable.

> I'm probably missing something, but I think the company is going down and they're pulling an exit scam.

AirBnB is doing fine. They've posted healthy profits for the past few years, which is more than can be said of nearly every other tech/startup company that has announced an IPO recently (Uber, Lyft, Pelaton, WeWork, Cloudflare, Slack, Postmates, and Pinterest are all unprofitable).

> Fannie and Freddie do not buy subprime loans, subprime stays in the private market.

I'm not sure where you got that idea. Fannie and Freddie exist for the explicit purpose of making mortgages more accessible to people who would otherwise be considered too risky to lend to (low down payments, low income, no assets, etc.). They do this by purchasing mortgages that are underwritten to lower standards and at lower interest rates than would be acceptable to private lenders, effectively shifting the risk from private lenders to the taxpayers.

Fannie and Freddie bought a tremendous amount of subprime loans. From page 454 of the Financial Crisis Inquiry Commission report[1]:

> "...on June 30, 2008, immediately prior to the onset of the financial crisis, [Fannie and Freddie] held or had guaranteed 12 million subprime and Alt-A loans. This was 37 percent of their total mortgage exposure of 32 million loans, which in turn was approximately 58 percent of the 55 million mortgages outstanding in the U.S. on that date. Fannie and Freddie, accordingly, were by far the dominant players in the U.S. mortgage market before the financial crisis and their underwriting standards largely set the standards for the rest of the mortgage financing industry."

[1] https://fcic-static.law.stanford.edu/cdn_media/fcic-reports/...

> The moment it's possible to sell the mortgages on, that incentive is removed.

It's not. Investors in the secondary market don't want to buy shitty subprime loans. The only reason lenders originate these awful loans is because the government incentivizes them to do so by guaranteeing to buy them via Fannie and Freddie. Fannie and Freddie buy half of all US mortgages, and in doing so dramatically distort interest rates and the amount of liquidity in the housing market. They also guarantee these loans, something a lender would never do, which is why mortgage-backed securities were considered "safe" leading up to the crash in 2008.

If Fannie and Freddie didn't exist, subprime loans would either not exist or would have dramatically higher interest rates in order to properly protect against the risk of default.

> Growing food has turned into an engineering problem where people think you solve it by investing the least possible resources into it.

This is not a bad thing. Food is so abundant that globally, more people are obese than underweight. This is pretty remarkable considering that for all of human history, up until recently, periods of mass starvation was the norm.

> That's why I’ve proposed banning the “dark patterns” that feed tech addiction.

Further proof that both Republicans and Democrats are the party of big government these days.

They're trying to wield the power of the government to ensure that none of their competitors will be able to survive. It's the same reason why some big companies, like Amazon, are lobbying to increase the federal minimum wage, seemingly against their own interests. Smaller competitors won't be able to absorb the shock of the wage increase and will be forced out of business. The net result will be a less competitive market.

> We have incurred operating losses in the past, expect to incur operating losses in the future, and may not achieve or maintain profitability in the future

> We have incurred operating losses each year since our inception in 2012, including net losses of $(71.1) million, $(47.9) million, and $(195.6) million for fiscal 2017, 2018, and 2019, respectively, and expect to continue to incur net losses for the foreseeable future.

They've never been profitable.

The fact that you feel like you’re “under the thumb” of companies that provide a majority of their software products for free is really a testament to how wealthy the market has made us.

Microsoft bundled Internet Explorer for free into its operating system, whereas Netscape Navigator was not free at the time. This was deemed "unfair" because Navigator was Netscape's flagship product, so if users were given a free alternative, Netscape would be put out of business.

It was really an absurd case considering that 100% of internet users use a free browser these days.

It's funny that you mention supermarkets, because the A&P grocery store chain was from 1915 to 1975 the largest grocery retailer in the US. At its peak in the 1940s, A&P captured 10% of total US grocery spend. It too came under scrutiny and was accused of being a "monopoly", as its cheap prices forced smaller competitors out of business. And yet despite being a "monopoly", it began to decline in the 1950s when it failed to keep pace with competitors that opened larger supermarkets with more modern features demanded by customers. It continued its slow decline until it completely shuttered in 2015. A&P was once as recognizable as Google or Walmart is today, and yet most people have never even heard of A&P.

Sears too once had a "monopoly" on mail order products. People marveled at how amazing it was that you could order a product, mail in a check, and receive the product six weeks later, all without stepping into a store! Now they're bankrupt.

The whole concept of a business "controlling" the market is ridiculous. Amazon operates in a highly competitive, low margin industry that requires a tremendous amount of logistical overhead to function. The minute they stop innovating, they're toast.

Yahoo "owned" the net not that long ago, now they're completely irrelevant. Microsoft "owned" the browser market with Internet Explorer not that long ago, now people cringe when they have to use IE. MySpace was at one time the most visited social media site in the world, now it's merely a quirky bit of internet history.

Google, Facebook, Amazon, etc. do not "own" anything. They are businesses that exist in a fiercely competitive environment in which consumers have zero loyalty and will gladly switch to the next hot thing at the drop of a hat. These businesses are successful because they continually innovate and deliver products that people want. There's no guarantee that any of these companies will still be around in a decade, much less "own" the market they operate in.

You’re confusing “contract rent” (an amount paid on a recurring basis for the temporary use of goods, services, or property) with “economic rent” (an amount that is paid on top of the “natural” price due to a distortion in the market). Rent-seeking refers to the latter definition of rent.

Renting property is not rent-seeking. Wielding the power of local government to prevent new housing from being built is rent-seeking.

There are tons of regular businesses available for sale (laundromats, car washes, hotels, bars, etc.). You could buy one and hire people to run it for you.

> More available housing would also create more demand, no?

By that logic, I could build a massive apartment tower in the middle of nowhere and people would flock to live there. China tried that - it didn't work.

https://www.businessinsider.com/these-chinese-cities-are-gho...

Housing is a market just like anything else. In any market, if the price gets too high, competitors jump in to create more supply to meet the demand. If apples were $100 a piece, everyone would grow apple trees in their backyard and make a fortune until the prices came back down to a reasonable level.

So why aren't developers pumping out cheap apartment buildings left and right? Why aren't they buying empty parcels of land and putting up massive towers? Because they can't. Because local zoning laws won't allow them to.

1. Most of the buildings in NYC are already illegal according to modern zoning laws

2. It's not always profitable or practical to tear down a building. Tearing down a 3-flat and replacing it with a 4-flat, for example, would not be economically feasible even if it were allowed. Replacing a 3-flat with a 12-story building, on the other hand, would result in a much more productive use of the land, but it's typically not possible to upzone a parcel to that extent.

> The shortage isn't about the amount of available housing at all

Yes it is. That's literally all there is to it. A housing shortage by definition means that there's not enough housing to satisfy the demand.

> it's about people's ability to live there too

People can't afford to live there because the shortage of housing has caused the price of housing to go up.

> This stuff is super complicated!

It's not complicated at all. Onerous zoning and land use laws have made it impossible for developers to build to the level of density necessary to support NYC's rapidly growing population.

> No. The literal definition of the economic drag on value creation is "rent seeking".

No, that's not the literal definition of "rent-seeking", not even close. I really wish this term had a different name because I see people on HN misusing it on a daily basis. "rent-seeking" is a specific term in economics that refers to entities colluding with the government to distort the market in their favor. The taxi medallion system is a classic example of rent-seeking. Owning property and leasing it out, whether it's land, vehicles, apartments, or machinery, is NOT rent-seeking.

> Be a part of the solution and build something. Do not be a part of the problem and become a landlord.

Would you prefer a world in which people are not allowed to rent apartments?