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Comments (86)

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  taylortbb
  > They should lift incomes, not suppress pricesI think this misses the psychology of inflation.If wages go up 20%, and prices go up 15%, everyone is better off and got a 5% raise, right?Go poll people that experienced that and they won't tell you they're celebrating being 5% richer, they'll tell you they're outraged about the 15% inflation.Psychologically they'll believe they earned that 20% raise through hard work. Putting in extra hours to get that promotion. But then the inflation robbed them of their 20% raise, and turned it into a measly 5% raise. They'll be outraged.Politicians get this. No one will credit politicians for raising average wages, people will believe they earned their raise themselves. But there's lots of votes available for lowering prices.
• jsrozner
  This misses the primary cause. There's an affordability crisis because most of the capital continues to concentrate in the hands of a small set of people who maximally extract rents. As one small example, private equity buys up businesses of all kinds and extracts a rent; both the consumer and the worker suffer.If you said during the feudal era "there is an affordability crisis: the peasants don't have money to buy castles," perhaps you were right. But the solution was to revolt against the king.
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  BLKNSLVR
  A group of people unaffected by a problem will rarely correctly handle the problem. And the further they are away from it, the further from 'correctly handle' will be their handling.Most of the people responsible for Government decisions are fairly well insulated from most crises, hence the crises will continue and grow.
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  verteu
  The article is light on concrete policy suggestions.One possibility is "adjust the minimum wage for inflation," but they seem to be against this: https://www.google.com/search?client=firefox-b-1-d&q=the+eco...
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  Avicebron
  https://archive.ph/Xr9fz
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  oatmeal1
  The majority of the affordability crisis stems from car dependency and excessive need for infrastructure due to bad zoning policy.
• silverFork
  Many of the issues that are currency related. The same labor being priced in different currency having different value is the most major issue. When a currency dives, then labor gets discounted due to inflation.
• mochacosine1206
  Lots of vibes in the comments and not enough citations.
• boilerupnc
  https://wallhop.io/https://www.economist.com/finance-and-eco...
• anon
  undefined
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  slopinthebag
  the affordability crisis is downstream of inflation. governments should stop inflating the money supply, but of course they won't ever do this because they would then need to generate revenue another way, which would be to raise taxes. inflation is really just a hidden tax and it's easier for them to "tax" without pissing off citizens.and so really the solution is to reduce spending. which, to some extent, is so obvious it kind of hurts.
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  jmyeet
  Reaffirming my view that The Economist is a neoliberal dishrag, the word "housing" appears zero times. Because housing is the number one problem and it'll never get fixed because ever-increasing house prices have become an explicit policy goal and, more importantly, homeowners will never vote for decreasing house prices.High house prices are simply stealing from the next generation and increasing house prices raise the prices of everything because housing is an input to the cost of everything.In many Western countries, housing is the best performing asset class so it's reached the point of stealing investment dollars that might otherwise go to productive output. Housing is the black hole at the heart of the economy.The only country that has attempted to correct this thus far has been China. Xi Jinping quietly popped the real estate bubble a decade ago and the real estate sector has been in recession ever since as prices correct. As Xi says, houses are for living in, not for speculation [1].The only countries that have even partly avoided this are because they implemented systems long ago that have prevented land hoarding, such as Red Vienna [2]. Interestingly, the post-WW2 UK almost ended landlords but then along came Thatcher [3].[1]: https://en.wikipedia.org/wiki/Houses_are_for_living,_not_for...[2]: https://www.youtube.com/watch?v=jO52FWzJoyQ[3]: https://www.theguardian.com/lifeandstyle/2024/mar/19/end-of-...
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  Herring
  > They should lift incomes, not suppress pricesRedistribution is a left-wing policy. A lot of elected governments went right-wing recently. It's as simple as that.The issue is not "governments". This is what the voting public wants.
• Beijinger
  [flagged]
• AtlasBarfed
  It's almost like they are run for the benefit of the ultra rich...Let them eat cake.
• cowlevel
  The buck stops nowhere any more and I hear it's approaching the speed of light. The government is the ultimate legal power though, and whenever bad stuff is legal we all know who made it legal.It is not "mishandling" the affordability crisis - it created it and actively maintains it. Most recently and least subtly by bombing and blockading all the places that we get oil from, in an economy that was deliberately designed so it can't do anything without oil.
• newCrotchSmell
  They should outlaw financial engineering of human agency and build decision models developed and deployed within full public view that bubble up for vote national, regional, or local initiativesBut since government is a euphemism for the more verbose "humans whose biology drives them to select self" they will continue to mishandle the "affordability crisis" by propping up its roots, doing nothing to stave off future gilded ages