> But I think just focusing on enjoyment in life is a poor human experience. Life has much more to offer that is equally interesting. Enjoyment isn't the only game in town.
I assume this person is employed, so they're probably already doing quite a lot more than just hedonistic enjoyment.
With the Leetcode stuff going on I'm doing a lot more than 40 hours per week. Nevermind I also need to learn actual tech developments outside my job.
Other than that I put 10 to 20 hours of time into personal development. I've done this since I was a teenager.
All of this feels brutal, but my life does seem to get better over time. Though, I am not at a place in my career where I want to be, but in part that's because I find it really tough to know where I want to go, so I tend to do everything. Unfortunately, being an average/above average xyz in multiple domains doesn't do much (currently in pentesting, software engineering, data engineering and being a data analyst).
> This isn't the conclusion I was most hoping to reach before moving here; there's a world in which a robust safety net, paid for by such taxes, actually incentivizes entrepreneurship by cushioning the fall - but I just don't see the evidence for us living in that world, at least not here.
Well Sweden and Finland's GDP per capita are currently within only a few thousand dollars of one another, with Sweden slightly taking the lead. I found that out just now, actually, and find it mildly surprising, I thought Sweden was further ahead. So I would first claim that as grounds to say Sweden is mostly suffering under the same yoke. They would probably become a richer nation faster by cutting back on the taxes, same as Finland. In fact the fact that the GDPs are so unexpectedly close makes me more convinced their mostly similar taxation structures are to blame, not less.
That being said: You are right, it's interesting that the combined worth of all Swedish startups appears to be very roughly 2-3x that of the combined population-scaled worth of all Finnish startups. What's the deal?
A Gini coefficient comparison shows a mild but not overwhelming difference. Sweden's currently hovers around 0.30, while Finland is at 0.285. (The US Gini coefficient is a whopping 0.48 or so for scale.)
I guess the only thing I could point to as a casual mechanism is that Sweden did in fact start quietly neoliberalizing out of some of its more distortionary taxes in the 1980s, in a way Finland hasn't seemed to yet. Sweden has abolished both its inheritance taxes and its gift taxes, for example, whereas Finland retains both (details vary a lot but you can ballpark 10-15% for both of them for ordinary folks). Maybe that has a disproportionate effect on the kinds of people who want to try their luck getting uber wealthy, so they can pass something down to their kids? I don't know, seems like it doesn't explain enough of the gulf. Maybe you can explain the $4k or so of extra GDP per capita through a confirmation of higher Gini, less tax distortion in certain areas, and being closer to the continental mainland. But that's a small enough difference that you could also feasibly call it due to the random walk of history. Both of these things are mysterious to me.
Taking a month long vacation in summer would leave exactly zero days off for the rest of the year, for most people I know (not counting weekends and holidays).
Op here. I don't have sugar in my house, haven't had it for years. It's not needed for recipes I use, it's not in bread I bake, I would have no use for sugar.
But sugar is IMHO not mind altering drug like caffeine, sugar is just pure calories.
Nobody does that (or almost nobody?). Sugar consumption comes from almost everything nowadays, from white bread to sauces to... everything. Or maybe your comment was ironic and I didn't get it, sorry then.
I didn't go for ironic, but it was meant rhetorically. Attacking the OP by equating coffee intake with sugar intake is a bad faith argument, precisely because sugar is a prevalent food additive while coffee is not. Moreover, the OP clearly said "drinking coffee". not "ingesting coffee/caffeine".
I wouldn't blame your reader; Medium only puts the RSS tag on the main blog page (https://medium.com/@steve.yegge) and not on each post, which is IMO not a good practice.
You are right, I would have to be asking the reader to special case medium or search up the path from the post. In this case it is Feedly which is excellent and does special case the xkcd alt text so I was a little surprised they didn’t do the dirty work.
I went through this same process. Registered for Medium... googled on Bing how to subscribe to RSS, and then added the feed to my reader and logged back out of Medium.
> In terms of total returns, residential real estate and equities have shown very similar and high real total gains, on average about 7% per year.
> The data summary in Table 3 and Figure 2 show that residential real estate, not equity, has been the best long-run investment over the course of modern history.
> Although returns on housing and equities are similar, the volatility of housing returns is substantially lower, as Table 3 shows. Returns on the two asset classes are in the same ballpark— around 7%—but the standard deviation of housing returns is substantially smaller than that of equities (10% for housing versus 22% for equities).
> Predictably, with thinner tails, the compounded return (using the geometric average) is vastly better for housing than for equities—6.6% for housing versus 4.6% for equities. This finding appears to contradict one of the basic assumptions of modern valuation models: higher risks should come with higher rewards.
Seems the way the real estate market works has caused a big drain both on economic growth (as investments have gone into real estate rather than more productive products), and on economic equality.
So a Georgist land value tax does seem like a pretty good idea.
Real estate returns have been juiced by government policies for decades. The interest deduction, government backing of mortgages, and implicit guarantees of mortgage backed securities. Aka the cost of buying a house to the consumer is lower than it should be on a risk adjusted basis.
The cost to the consumer of buying a house is probably higher than it would be without these incentives, actually, because it ends up causing more money to spill into real estate.
It's the same with college costs: every additional dollar of federally subsidized loans made available to the public adds a dollar to the cost of college, almost necessarily so.
The point is that the government subsidies make the profits on buying real estate high, which leads to high prices.
So both are true: "high cost of buying a house" "high returns on real estate"
Obviously they can't be true forever, the upper limit I guess is the ability of the lower classes to rebel divided by their tolerance of being priced out of their own land.
The grandparent was describing the long-term vs short-term effect of broad subsidies.
The short-term effect of a subsidy is a reduced cost to the consumer.
If subsidies are generally and persistently available, this reduced perceived cost increases demand, causing increased prices. The ratio of price increase to amount of subsidy (and thus whether the consumer or producer benefits from the subsidy) will depend breadth of the subsidy and on elasticity curves of supply and demand.
Then there's the increased demand because the subsidy increases ROI. further increasing prices of the fixed input (land/existing housing) to the good (living space).
Thank you. That is roughly what I meant to convey.
Mind you, because these subsidies are never really temporary, I suspect the immediate effect on prices is always to raise them. And perhaps even temporary subsidies cause price rises just by increasing demand, though the price rises might only be temporary.
I was... responding the last sentence of the parent.
All economics and human societies, really, are bubbles. Very, very long-lived bubbles. Obviously growth on Earth is ultimately limited, so yeah, these very long-lived bubbles cannot go on forever. The real trick is to predict when any one bubble will burst!
If you look at Figure 1 at http://voxeu.org/article/rate-return-everything, the advantages of housing returns predate those policies by decades, although it looks likely that the policies have stabilized the returns since they have existed.
Edit: The actual paper breaks down the data between all data and post-1950. The advantages of housing appear actually greater pre-1950, before those policies.
All true, but since I can't get the PDF to load maybe you can tell me, how were the costs of real estate included? Calculating yield for real estate is not as obvious to me.
And thousands more write offs. I can't write off my lunch at 50% either for simply talking about "work".
Having owned 7 small businesses in part or in whole, you get away with a hell of a lot if you try. Having been an auditor, companies do so many illegal things they get away with, the ethical isn't even in the same category.
I do like seeing confirmation of what is patently obvious. Real estate is The Problem, at least in economically healthy areas.
In economically vibrant cities real estate hyperinflation has soaked up all the gains and locked them up in non-productive assets, serving to enrich only banks and rentiers at the expense of individuals and more productive entrepreneurial activity. I've been whining about this for over a decade.
Yes. And a big part of the problem is people's perception of real estate. This idea, that real estate is doing "well" when prices go up, is completely flawed. When RE prices go up, it should be considered a bad thing, a sign that the market is sick: supply is not allowed to increase sufficiently to meet demand, causing endless negative externalities, needless suffering for everyone.
It's because real estate inflation is considered a profit, while most other kinds of price inflation are considered a cost.
The "logic" of that argument betrays some interesting biases.
Of course if you privilege an asset class it will appreciate in value. This has nothing to do with conventional mechanisms of supply and demand, and everything to do with systemic political bias that rewards the ownership of certain privileged asset classes, while forcing the rest of the population to pay economic tribute to those who own those assets.
Could not agree with you more. London is a classic example at the moment! Even after 5 years of working in the city, most people struggle to buy a studio apartment in a bad neighborhood.
Economically healthy means there are jobs with healthy wages, etc. Los Angeles, San Francisco, and Boston would be healthier than say Detroit, Cleveland, or Bakersfield.
Productive means the money causes things to actually happen like new product development, entrepreneurship, research, health care, etc., vs. just sitting in a bank. Productive also means it benefits people doing real things vs. just collecting rent and sitting around.
Look at Silicon Valley and imagine how much more angel capital there might be if real estate were not so inflated. When someone buys a $1.5M starter home, that's $1M not available for other investments.
> When someone buys a $1.5M starter home, that's $1M not available for other investments.
Why do you feel the money disappears? From my perspective, the $1.5M is now in the hands of the seller, who is equally free to invest in other investments.
If you are buying and selling real estate you are de facto wealthy. Money in the hands of the rich is substantially less stimulative to the economy than money in the hands of the poor, because a dollar in a poor mans pocket goes towards real tangible demand for goods and services they want to spend it on, while money in the hands of the rich goes into investment accounts (stocks / loans) and money sinks (like real estate or futures) that are only meant to make more money.
This is the fundamental mechanism of why wealth inequality is bad for everyone. It slows the economy down if you are moving money from consumption into investment and never seeing it come back out (and income trends in the last 30 years / average wealth / income mean vs median all demonstrate that wealth goes to the top and stays there). Loaning that money back out just deflates the wealth of the poor even more, which increases debt, lowers net wealth, and the general availability of credit for small business creation is pretty damn low compared to decades ago, and the success rate of new businesses is awful. This means the money never goes back down the ladder - it gets swallowed up into money markets that move money around to make money while all the profits are just the productivity of the working class siphoned off.
So when working class people are giving larger and larger portions of their income back to the bankers that loaned them the money to buy a house from a real estate baron, that money is dramatically less stimulative going into the bankers investment accounts (be they stocks or <rarely> further loans) than if it were being put into raw consumption by the homeowner.
I think what you describe is true for the secondary market, but not the primary. Buying real estate and hoping market forces solely will help you generate a return would seem a poor use of money for the purpose of increasing the general quality of life for everyone.
On the other hand, real estate development, turning a barren lot into apartments with amenities, or single family homes, would seem to be productive and helpful, both are investments.
The same is true for investment accounts, secondary market trades in stocks and the like would match your analysis, but not so for IPOs, which presumably is being used for productive things by the company.
But market-based economics doesn't distinguish between those cases. If it's more immediately profitable to speculate, then speculation happens. If it's more immediately profitable to build apartments for the super-rich then apartments for the super-rich will be built. (And there will probably be a bubble in which the apartments remain empty "for investment", followed by a price crash, as numerous cities have discovered.)
What will not happen is affordable housing for the majority of the population.
Simplistic monetary analyses are incredibly bad at estimating social value, and even worse at maximising the returns from network effects that become possible when you allow for the benefits of wider wealth distribution.
Your definition of healthy wages is absurd. I work with a woman delighted to move to Phoenix from the Valley. She makes less, but has a house with a yard and constantly remarked on how cheap things are here. She’s living better despite her wages being “less healthy”.
That’s a really one dimensional analysis. Real estate has been and remains one of the major drivers of economic activity.
The stuff you are upset about is just the downside of increased productivity and consolidation. The only reason you have the wacky real estate costs in certain places is that the money people have concentrated in a few places. Their convenience is more meaningful than the inflated salaries required to support housing that’s 10x the national average.
People have a fundamental drive to improve their home to enhance its value but also be more pleasant and suited to their wants and desires. That drives everything from home improvements to furniture to art.
This ideal of a higher density residential society with lots of landlords that is popular on HN right now is a terrible future. Landlords want one thing — maximum return on assets. That means high cost, minimum possible opex.
> This ideal of a higher density residential society with lots of landlords that is popular on HN right now is a terrible future. Landlords want one thing — maximum return on assets. That means high cost, minimum possible opex.
How is that different from what homeowners want? Don't homeowners already block legislation that would allow higher density units to be built because it would decrease the value of their homes?
At least in the Seattle area where there are many high rise apartments and a lot of competition, companies seem to have to invest in making their apartments nice.
I fight against medium density development in my city because they are assessed by a different standard and my property tax burden is like 10x the developer. The development drives costs for school services and I get to pay.
Valuation is based on net income, which is easy to game.
Also, most new development in my area is getting partial 10 year tax abatements. So the owners get to undercut the rents, which drives more of the traditional 2-4 family houses to lower rents and less maintenance, and eventually to section-8, which is the price floor.
So I get to pay more property tax, I get to pay for tax abatements via sales taxes, and we get to enjoy more traffic and a decline in the maintenance of legacy housing stock.
I'm not sure what the situation is for the OP, but in some areas, local governments give tax subsidies to developers. I like development, but I don't like tax subsidies for developers.
Density alone does not imply landlords, though. It is a very business centric view of housing to have density imply rent. In a simlar vein to how I wish more people would even talk about business cooperatives you can have a residential building that is also managed in a cooperative of its tenants. Such arrangements share swathes of the issues more general cooperative businesses have (like how nigh-impossible it is to start one) but there really are not only two roads out of the development hell we are in right now, where one leads to self determination where everyone is a property owner of a factory minted mcmansion with a standard slab of astroturf while the planet desertifies into an inhospitable fireball or everyone is subservient to tyrannical money hungry landlords in cramped conditions with rationed electricity and water access.
Anything less than higher density in more areas is a catastrophic future for all of us. Sprawl is driving climate change. Sprawl hurts environmental air quality. Sprawl hurts health with long commutes and a lack of walking and exercise.
Can they walk to visit friends, the local shops, park, school, library, etc? All of these things were much more important to me as a child than a big backyard.
I live in a 1800 ft^2 single family home on a 50x140 lot in a city. Our block is 50% single family, 50% 2-4 Family. We walk to school, library and grocery.
Because of the developer incentives, there is no incentive to build old neighborhoods like mine. 5-6 story sticks on bricks crappy apartments, or McMansions on cul de sacs rule the day.
When I looked at building a home, you can see why. It’s very difficult to build a 1700-2500 ft^2 home unless you go prefabricated, have cash, or can do the finish work yourself. The financing only works for real big or real small.
How does this all square with the Case-Schiller home price index, which showed something like a 1% real rate of return (i.e., just barely above inflation) for properties over time. As I understand it their data is based on comparable house sales and isn't subject to many of the common errors that occur when the mix of homes for sale shifts drastically.
Apologies for replying to my own comment, but apparently they are including the "imputed rent" in the calculation. That is, the amount of rent you would have paid if you didn't own the home. The thing is, you have to live somewhere, so if you didn't own the home you would have been paying rent. That's why the imputed rent isn't included in Case-Schiller, because as an investment you're not living in the home and it would be double counting to assume that you are. So I'm quite skeptical of this analysis that equities are the same rate of return as housing.
Can you link an article/journal on why a land value tax is good? I have seen this come up a few times in hacker news and yet I still can't find a good article/journal for why land value taxes are better than other alternatives and I have read dozens of economics/accounting/finance textbooks none of which back up land value taxes.
I assume this person is employed, so they're probably already doing quite a lot more than just hedonistic enjoyment.