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Posts Tagged ‘housing costs’

On the Necessity of Being a Multi-Millionaire under Late Capitalism: 2

August 2, 2020 8 comments

In the previous part of this series, I made a point that over the past 30 years, living standards of almost everybody in west have diminished considerably. This has occured due to the convergence of two factors. Firstly, the cost of the basics such as houses, automobiles, higher education and in case of USA- healthcare, have increased far faster than “official” rate of inflation. To make things worse, wages have either remained stagnant or decreased and in an increasing number of cases- the jobs have been shipped overseas without being replaced by anything comparable. Even the few well-paying jobs left in this country have become far less stable than they used to be just two decades ago. Furthermore, these changes have impacted those under 40 or 50 much harder than those above that age. So it is not just a “Millennials”, “Gen Y” or “Gen Z” thing.

So now let us talk about the role of financialism aka late capitalism aka neoliberalism in creating this terminal dystopia. Make no mistake, the situation the west (especially USA) has gotten itself into is, for all practical purposes, terminal. It has also fucked over the 99% to enrich the 0.01%.. and yes, there is a reason I wrote that sentence the way I did. To better understand what I am going to talk about, let us compare USA (the most afflicted country) with others such as Japan, South Korea and Germany (among least afflicted). How is life different for the median person in the least afflicted countries compared to the most afflicted one? Let us start by talking about the relative affordability of decent quality housing in nice or even OK neighborhoods.

If you have seen vlogs of expats in Japan and South Korea, one thing becomes obvious rather quickly. While many of their less expensive apartments are small- almost every single one of them is reasonably well built, adequately furnished and in areas that are not sketchy. Note that apartments in these countries come in a range of sizes allowing even somebody in a menial job to have an OK place of their own. More curiously, unlike in the anglosphere, East-Asian countries have been able to ensure that the rents and prices of these apartments are strongly linked to real income of the people. Even somebody living in Tokyo or Seoul, two of the largest megalopolises on earth, can easily find safe and affordable housing that is not too far away from their place of work and other amenities. Oh.. and they have excellent public transit systems.

Now compare this to the situation in Bay Area, where even a shitty bachelor suite within some century old building in the Tenderloin district of SF is somewhere between 2500-3000 $ per month. The same holds true for NYC, where anything that affordable in a non-sketchy area is both rare and rent controlled. Without going into too much detail, the same holds for other metropolitan areas in this country such as the LA megalopolis, Boston and its suburbs, Chicago and its suburbs, DC and its suburbs… you get it, right. But why is it so? Why can you find very affordable and OK apartments in two of most urbanized countries on earth with very little flat land suitable for building cities but not in one of more sparsely populated countries with tons of open areas suitable for expansion of cities?

But why restrict our comparison to East-Asian countries? Even more USA-influenced western countries such as Germany, Czech Republic or less-influenced ones such as Italy or Spain have no shortage of decent and affordable housing in their largest cities- with some exceptions like Frankfurt. My point is that the disproportional increases in cost of housing in Anglosphere and closely associated countries (Netherlands, Switzerland) during past 30 years is an aberration among developed countries. But why? Well.. the short answer is that this has occurred due to deliberate government policies, just as the relative inexpensiveness of housing in East-Asian cities is also due to government policies.

The slightly longer answer is that government policies in the Anglosphere have consistently favored the interests of who have capital and land over everybody else. In contrast to that many other countries, especially in East-Asia and continental Europe, have decided that the well-being of the majority is more important than extra enrichment of a minority. And let me remind you that it was not always like that. For the first three decades after WW2, any white person with even a mediocre job could afford to rent or buy a pretty decent place to live in almost any part of the country. Sure.. those places did not have 5 bedrooms and a man-cave, but they were quite acceptable and in OK neighborhoods. Even as late as mid 1990s, the median person with a job in SoCal or the Bay Area could afford an OK house in a non-sketchy neighborhood.

But what does any of this have to do with neoliberalism aka late capitalism aka financialism. Well.. everything! See.. the high and rising costs of housing in the Anglosphere has nothing to with the natural constraints on the ability to build more housing etc. Instead, it is about creating artificial scarcity via rules and regulations to extract an increasingly larger proportion of income from most people to line the pockets of those who already have tons of money so that they can use that extra money to play ever more elaborate sterile financial games which yield no return in the real world. Financialism is a form of parasitism that is too incompetent to even reproduce itself- just look at the poor fecundity of the so-called “elites” and “masters of the universe”.

In the next part, I hope to go into how financialism has fucked up healthcare, education and a whole lot more. We will also go into why boomers were cheering for deregulation in 1990s and early 2000s, which led to the rise of financialism.

What do you think? Comments?

Musings on the Growing Sterility of Suburbia: Apr 29, 2017

April 29, 2017 15 comments

Let me begin this post by telling you that I first considered writing it about 2-3 years ago. However for a number of reasons, it got bumped down the list of what I ended up actually posting. It is based on a peculiar observation I have made over the years. However to explain the context of those observations, I have to first tell you where I live- very vaguely.

I live (rent) in a pretty affluent and nice but somewhat established suburb built in the late-1960s and 1970s. The time of its construction is important for three reasons relevant to this post. Firstly, unlike many suburbs built later on which contain only detached houses, this one does actually have a decent number of condos and apartment buildings. Secondly, it is within walking distance of multiple malls which are still busy and profitable. Thirdly, it has a much more balanced age structure than many other suburbs which are either predominately young or old. It is also worth mentioning that I lived in that area for over a decade.

So, what changes did I notice over those years which led me write this post. Well.. it is an observation about long-term changes in the number (or percentage) of people in that area who have children. It is also about the demographic characteristics of people who still have children.

Ever since the suburb in question was built, it has been one of the more desirable and affordable residential areas of that city. Consequently, it always had a fair number of younger couples with children. I noticed that on moving there almost 12 years ago- largely because of the noise of kids playing outside their houses, which could be a bit too much sometimes. Anyway, the point I am trying to make is that younger couples with children had no problems being able to afford buying houses there from the time it was built up to 2007-2008.

Then something changed.. You see, house prices in that area increased by almost 300% in the 2006-2014 time span. Curiously, rents did not go by anything close to that percentage within the same time span. To make a long story short, it appears that many younger couples with children who owned their houses cashed out and moved further away from downtown. But houses can be sold only if somebody is willing to buy them and this brings me to issue of who bought them. Once again, to keep it brief, these houses were bought by somewhat older people and more affluent but often childless couples. The change in type of people buying houses in that area can account for a part of the decrease in percentage of people with kids in that area- but not most of it.

As I mentioned earlier, the area in question has a pretty decent number of renters- of both houses and condos. Also, many people renting houses and condos in that area had kids. So was there any change there? Well.. no and yes. The percentage of people renting in that area remained very constant, however the newer renters were far less likely to have kids in the first place. But why? Did they have less money than the previous groups of renters? As it turns out, that was not the case and the newer renters were just as affluent or more so than the group they gradually replaced. It is just that they did not have as many, if any, kids.

Curiously, there is an interesting exception to this general trend. It seems that younger non-white families (Asian, Indian, inter-racial etc) in that area still have kids. In other words, the general reduction in the number of kids per couple (if they have any in first place) is largely a white phenomena. To put it another way, over half the children in this relatively affluent and desirable area are now of non-white ancestry. Of course, nobody is having more than two kids but a majority who have any in that area are non-white. So what does that mean for the future? Well.. lets just say that it depends on what you consider desirable.

But coming back to the question of why the “majority” in that area now have far fewer kids than before- even when you adjust for age. In my opinion the answers are as follows: 1] The risk of getting ruined by divorce, alimony and child support is very relevant if you have enough money to lose. 2] Most people who lived in that area used to have stable and well-paying jobs. Now their jobs are just well-paying. 3] Perhaps it is getting even more expensive to raise children? I cannot be sure about that, but it appears to be the case. Let me know if you can think of any more reasons.

What do you think? Comments?