<story><title>Why Rent Is So High and Pay So Low</title><url>https://lareviewofbooks.org/essay/why-your-rent-is-so-high-and-your-pay-is-so-low-tom-streithorst</url></story><parent_chain><item><author>nostromo</author><text>This article doesn&amp;#x27;t answer the question and seems primary based on nostalgia.&lt;p&gt;My theory: the Fed&amp;#x27;s zero interest rate policy is very good at inflating asset values: S&amp;amp;P500, housing, you name it.&lt;p&gt;Rising income is a second-order effect: we hope that rising asset values will lead to increased wages.  That used to be the case, but no longer is.  Why?  Because of automation and globalization probably.&lt;p&gt;So, the Fed has the pedal to the metal for seven whole years and we get mediocre job growth, no real wage growth, but screaming high housing costs and stock market.  And who owns the most real-estate and stocks?  The wealthy do, which is why inequality is growing.&lt;p&gt;Even though I&amp;#x27;m critiquing the Fed&amp;#x27;s policy, I don&amp;#x27;t have the answers and would probably pursue the same policy.  It&amp;#x27;s a real conundrum.  Perhaps basic income, or some other &amp;quot;throw money from helicopters&amp;quot; idea is the solution.</text></item></parent_chain><comment><author>adam419</author><text>Here&amp;#x27;s another solution:&lt;p&gt;Respect the wisdom of markets. Allow corrections to take place and don&amp;#x27;t bury malinvestment under the rug only for it rear it&amp;#x27;s ugly head worse later on by acting as if you have a better intuition on what the price of money should be.&lt;p&gt;Most people accept the virtue of free markets. Yet many don&amp;#x27;t see that the actions the Fed has been taking destroys the concept of a market by artificially supplementing supply or demand in an unbounded way based on a perceived sense of greater understanding.&lt;p&gt;The problem is it&amp;#x27;s really hard for most of these policy makers to build a platform based on &amp;quot;Let&amp;#x27;s do nothing and let the markets correct themselves&amp;quot;. In such complex domains like an economy the action bias is very real, problematic, and the best thing to eliminate if you want to renormalize markets.</text></comment>
<story><title>Why Rent Is So High and Pay So Low</title><url>https://lareviewofbooks.org/essay/why-your-rent-is-so-high-and-your-pay-is-so-low-tom-streithorst</url></story><parent_chain><item><author>nostromo</author><text>This article doesn&amp;#x27;t answer the question and seems primary based on nostalgia.&lt;p&gt;My theory: the Fed&amp;#x27;s zero interest rate policy is very good at inflating asset values: S&amp;amp;P500, housing, you name it.&lt;p&gt;Rising income is a second-order effect: we hope that rising asset values will lead to increased wages.  That used to be the case, but no longer is.  Why?  Because of automation and globalization probably.&lt;p&gt;So, the Fed has the pedal to the metal for seven whole years and we get mediocre job growth, no real wage growth, but screaming high housing costs and stock market.  And who owns the most real-estate and stocks?  The wealthy do, which is why inequality is growing.&lt;p&gt;Even though I&amp;#x27;m critiquing the Fed&amp;#x27;s policy, I don&amp;#x27;t have the answers and would probably pursue the same policy.  It&amp;#x27;s a real conundrum.  Perhaps basic income, or some other &amp;quot;throw money from helicopters&amp;quot; idea is the solution.</text></item></parent_chain><comment><author>WalterBright</author><text>One thing nobody mentions is the increasing share of the GDP that the government consumes:&lt;p&gt;&lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.usgovernmentspending.com&amp;#x2F;total_spending_chart&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.usgovernmentspending.com&amp;#x2F;total_spending_chart&lt;/a&gt;&lt;p&gt;That wealth has to come from somewhere.</text></comment>