Robert Reich: Why American Capitalism is So Rotten

[Doctor CamNC4Me]

Water feels wet...but should it?

Did you know we don't have a receptor in our skin for wetness? Wetness is a sensation we take for granted – an experience our brain picks up from other cues, such as temperature and touch, but no ‘hydroreceptors’

Why do I bother to point that out? I dunno, to be irritating I guess. Either way, honor’s post is a little more nuanced than +/-.

- Doc

[Gunnar]

Reich describes the typical economic arguments between Rs and Ds over the last several decades: (1) free markets v. government regulation and (2) redistribution of income and wealth. But, according to Reich, these typical arguments function as a diversion that keeps people from understanding how the market itself has been altered in the U.S. over past decades.

This is true.

This question is a proxy of other similar questions, and I think gets to the heart of the problem:

Do you believe your home should be a good investment?

I am inclined to believe that it is more important that an adequate home should be affordable for the vast majority of ordinary, working people rather than it be a good investment. There is something inherently wrong and even evil about even basic homes becoming so high priced that only the very wealthy can afford to buy, or even rent one. There are too many people in this country with full time minimum or even above minimum wage jobs who are homeless simply because they can't find housing they can afford to pay for.

[Gadianton]

I am inclined to believe that it is more important that an adequate home should be affordable for the vast majority of ordinary, working people rather than it be a good investment.

Right. I'm coming at this from a little bit different angle than Res Ipsa's link, but I agreed with the observation made there, that there has to be a better way than let the market do its thing and then hope you can tax the rich more to help the exponentially increasing poor class. But I'm fundamentally a libertarian, and I get lost in discussions about how to re-align political power.

The American Dream as I understand it is fundamentally flawed -- it's a giant pyramid scheme. America is big. The only difference between America and any EU country is that it has more room to run the scam before time's up. If you roll the dice, immigrate here, get a piece of property and hold on for dear life, you've made it on the backs of the next round trying to pull the same stunt. Inheritance is passed down tax-free and the children have a slight advantage.

I had a co-worker doing the extreme, Anthony Robbins version of what V is talking about back in 2007. He had the same job I did, a little older, so he probably made a little more. He had 12 houses, all bought with HELOCs against slightly appreciated houses. When the financial crisis hit, he went bankrupt. Had he made the same play in 2017 instead, he'd be retired in style. I'm not saying that people shouldn't take risks or buy more houses as investments, people are going to do what it takes to secure as good of life as possible for themselves and their families based on what options are available. It's just that, it's ultimately a pyramid, and unsustainable.

This is a duplicated NYT article, forgive the dicey link:

https://www.businesstimes.com.sg/intern ... affordable

But what if, in some cases, it's not the free market that's the problem, it's policy that serves a deeply established way of thinking? The article is about Tokyo, and that fact that Tokyo at the height of world inflation, is the one big first-world city that is still affordable and virtually no homelessness. Why? Because of the free market. Virtually no zoning laws and opposition to new building. The beating heart of NIMBY isn't distasteful poor-looking projects -- does being surrounded by tents and broken RVs look better? -- but any new building goes against the ingrained belief that a home is an investment, because the more homes that become available, the less yours is worth, with new buyers in the riskiest.

Tokyo makes little effort to preserve old homes. Historic districts subject to preservation laws exist in other Japanese cities, but the nation’s largest city has none. New construction is prized. People treat homes like cars: They want the latest models. Between 2013 and 2018, new homes accounted for 86 per cent of home sales in Japan.

Consider the opposite paradigm: What if culturally, homes were viewed as cars, a disposable good rather than an investment? Tokyo is a solid data point that this isn't just a thought experiment.

[Morley]

This is an interesting point, Gad. And I agree that zoning laws are at the root of the US housing crisis. In the US, we've carefully crafted the housing hell that we've forced a great number of our people to endure.

That said, I can't help but comment on the gray blandness that is Tokyo. The city was bombed out during WWII and was rebuilt in the years immediately following the war. Now, it's all uniform, concrete weariness. I love Japan, I love big cities, I hate Tokyo. If the city is an example of what libertarians are going to bring once they become our overlords, I'll go live in a tent in San Francisco.

[Chap]

The city was bombed out during WWII and was rebuilt in the years immediately following the war. Now, it's all uniform, concrete weariness. I love Japan, I love big cities, I hate Tokyo. If the city is an example of what libertarians are going to bring once they become our overlords, I'll go live in a tent in San Francisco.

Are you worried that the "libertarians" are going to bomb US cities flat and rebuild them in uniform style, as you say happened with Tokyo? If not, what exactly is your problem?

[Morley]

The city was bombed out during WWII and was rebuilt in the years immediately following the war. Now, it's all uniform, concrete weariness. I love Japan, I love big cities, I hate Tokyo. If the city is an example of what libertarians are going to bring once they become our overlords, I'll go live in a tent in San Francisco.

Are you worried that the "libertarians" are going to bomb US cities flat and rebuild them in uniform style, as you say happened with Tokyo? If not, what exactly is your problem?

I’m sure you know that I’m joking, Chap. The concept of a libertarian overlord is something of an oxymoron, don’t you think?

[Chap]

I’m sure you know that I’m joking, Chap.

Oh, I hoped you were joking. But on this board one can never be quite sure ...

[Morley]

I’m sure you know that I’m joking, Chap.

Oh, I hoped you were joking. But on this board one can never be quite sure ...

And I don’t really hate Tokyo. I’m sad as to what it lost. Modern and new are not always the answers.

[Chap]

And I don’t really hate Tokyo.

Good to know! There are other cities in Japan where (given the choice) I would prefer to live, but there are some areas in Tokyo that have an atmosphere not paralleled in more elegant places.

[Gunnar]

I am inclined to believe that it is more important that an adequate home should be affordable for the vast majority of ordinary, working people rather than it be a good investment.

Right. I'm coming at this from a little bit different angle than Res Ipsa's link, but I agreed with the observation made there, that there has to be a better way than let the market do its thing and then hope you can tax the rich more to help the exponentially increasing poor class. But I'm fundamentally a libertarian, and I get lost in discussions about how to re-align political power.

The American Dream as I understand it is fundamentally flawed -- it's a giant pyramid scheme. America is big. The only difference between America and any EU country is that it has more room to run the scam before time's up. If you roll the dice, immigrate here, get a piece of property and hold on for dear life, you've made it on the backs of the next round trying to pull the same stunt. Inheritance is passed down tax-free and the children have a slight advantage.

I had a co-worker doing the extreme, Anthony Robbins version of what V is talking about back in 2007. He had the same job I did, a little older, so he probably made a little more. He had 12 houses, all bought with HELOCs against slightly appreciated houses. When the financial crisis hit, he went bankrupt. Had he made the same play in 2017 instead, he'd be retired in style. I'm not saying that people shouldn't take risks or buy more houses as investments, people are going to do what it takes to secure as good of life as possible for themselves and their families based on what options are available. It's just that, it's ultimately a pyramid, and unsustainable.

This is a duplicated NYT article, forgive the dicey link:

https://www.businesstimes.com.sg/intern ... affordable

But what if, in some cases, it's not the free market that's the problem, it's policy that serves a deeply established way of thinking? The article is about Tokyo, and that fact that Tokyo at the height of world inflation, is the one big first-world city that is still affordable and virtually no homelessness. Why? Because of the free market. Virtually no zoning laws and opposition to new building. The beating heart of NIMBY isn't distasteful poor-looking projects -- does being surrounded by tents and broken RVs look better? -- but any new building goes against the ingrained belief that a home is an investment, because the more homes that become available, the less yours is worth, with new buyers in the riskiest.

Tokyo makes little effort to preserve old homes. Historic districts subject to preservation laws exist in other Japanese cities, but the nation’s largest city has none. New construction is prized. People treat homes like cars: They want the latest models. Between 2013 and 2018, new homes accounted for 86 per cent of home sales in Japan.

Consider the opposite paradigm: What if culturally, homes were viewed as cars, a disposable good rather than an investment? Tokyo is a solid data point that this isn't just a thought experiment.

I agree that most of what you said here (as usual) makes good sense to me. But you misspelled my name again.