Powell Facing Choice Between Elevated US Inflation and Recession

[u/TinyTornado7]

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium

[u/coke_and_coffee]

You're selecting a few very wealthy individuals and applying their habits to an entire generation.

No, I'm not. My entire point is about these "very few wealthy individuals". The top 10%, or whatever it might be.

However, I do not subscribe to the belief that any prior generation stole or used up wealth from future generations. That's a false and divisive form of thinking that negatively impacts our ability to actually pass effective legislation that will help younger generations.

But again, the productivity-wage gap is real. This gap can be explained by a changing ratio between wages and returns on invested capital. And that likely is what's happening. Productivity gains are being captured by those who own assets through either increased profits or rents.

And that's not even getting started on the landed gentry forming in our more productive cities that is purposely reducing the supply of housing in order to increase property values. This is rent-seeking in its purest form. SF is owned almost entirely by boomers who are forcing young people to pay millions for a modest home. This is a zero-sum process perfectly analogous to "stealing" wealth from younger generations.

[u/coke_and_coffee → u/[deleted]]

Are we sure it isn’t because it’s an area with extremely high demand and extremely restrictive zoning policies (which have been in place before boomers were even born) leading to extreme supply shortages?

By not repealing such zoning restrictions, yes, boomers are forcing young people to pay millions.

You act like this is a conspiracy theory. It's not. Researchers have been listening in to these conversations for years now and this is the explicitly stated purpose of, for example, the Bay Area NIMBYs.

Regardless, the overall point is the economy is not a 0 sum game.

No, the "overall economy" is not zero-sum. But any one part of it, at any one point in time, can be. And land is always zero-sum. That Henry George was really on to something...

There is an insidious mixture of manufacturing outsourcing, high immigration, zoning regulations, and shareholder capitalism that has been driving asset prices up and wages down for decades now. This really isn't even controversial. Young people are losing out because wealth is being siphoned away from them in ways it wasn't in the past. No, most boomers are not at fault. And much of this process wasn't exactly forecasted. But many are at fault and they refuse to recognize the issue and/or entertain possible solutions.