Housing Crisis Economics: A Critical Analysis of Breadtube's Misunderstanding

[00:00:01][Music] this might come as a surprise to you but bread tube doesn't understand economics more specifically for our purposes today they don't understand the housing crisis if you've been paying attention to the housing market right now prices of homes everywhere are skyrocketing rents are up and poor people are feeling the pinch your favorite bread tubers and online lefty commentators will tell you that capitalism is to blame due to its inherently predatory nature that landlords are parasitic entities of evil that need to be guillotined that the housing market must be abolished for the good of the working class to those of us who actually live in reality there's certainly a housing bubble that's inflating right now but maybe you and i can talk about it a bit more seriously than the champagne socialists do let's start with philosophytube who has made some absolutely stupid housing takes before yeah this clip is going to be starting off strong but why not thatcher's criterion for responsibility was owning property and the problem there is that is a thing that is mathematically impossible for everyone to do at the same time you cannot have a housing market and no homeless people because if everybody has secure housing you cannot sell them housing it is quite stunning how somebody can be this monumentally wrong and be this confident about it demand for housing is not constant over a person's life the 18 year old looking for a dorm room the 20 year old looking for their first apartment off campus the transient worker only in the city for a six month contract the family man with three kids needs a yard and some space and the retiree whose kids have moved away all have different housing needs moreover the existence of the market mechanism to determine the value of housing isn't what causes homelessness that is an incredibly one-dimensional take if you just gave everybody housing through a state program and then used state force to ensure that housing couldn't be traded what you're doing is simply assigning people hovels at gunpoint and nobody's going to have the option of living anywhere more in line with their desires because they still cost labor and materials to make making housing a right does not automatically generate infinite houses what does housing market actually do well he distributes homes to people who can afford them he encourages developers to develop more he lends money to people so they can get on the property ladder hang on those are all the exact corollaries of the villain's powers distributing homes only to people who can afford them is just the other side of the coin of housing crisis power to raise rents and increase house prices encouraging developers to develop more is what led to the birth of gentrification one of the series darkest secondary evil doers and lending money to buyers was the basis of the villains plot in the 2008 storyline crisis of infinite subprime mortgages let's apply philosophytube's reasoning to other markets a capitalist market distributes things to people who can afford to buy them but this fact doesn't necessarily mean that some people will be excluded from that market if there's enough supply and everyone can afford the item then there's no exclusion at all philosophy tube is acting like the market mechanism itself is the problem and it's not let's examine a market where everybody can afford the product like say the cracker market let's say you want to buy a box of crackers cracker companies still make profits even though everybody can afford a box of crackers even a homeless man who panhandles and only has a few bucks can buy a box of crackers therefore exclusion from the market is not necessary to generate profits that being said there are some pretty serious differences between crackers and housing and i think actually discussing the topic and not just grandstanding like philosophytube does might allow us to understand something about the housing crisis the first difference is that people don't buy crackers to store them away as an investment crackers are a pretty poor unit of exchange as they decay relatively quick you know i mean there are some food stuffs that have seen their value increase due to rarity and novelty like old crystal pepsi or mres or something but those are exceptions to the rule to contrast housing is often purchased as an investment with the expectation the owner will one day get money back sometimes more sometimes less based on the market housing is not a thing that is purchased to be wholly consumed and then taken off the market as its consumption literally turns it into [ __ ] like crackers it's meant to retain at least some value after you're done using it while crackers only have value in their use housing has value as an asset the second difference is that crackers are a product of labor and materials while houses have another component land land is always going to be some form of natural monopoly there's only so much land in any given area when a location is popular to live in like say a city there's a fixed amount of land there and unlike other types of property labor cannot create more supply of land labor can allow a single unit of land to be used by more people simultaneously like you build smaller houses or you construct an apartment building or whatever but labor cannot create more units of land additionally land is permanent sinking coastal properties are expensive reclamation projects notwithstanding this is why you can have two purely identical hoses in all respects where one is valued significantly more in downtown la and the other significantly less valued in the middle of tennessee compare this with crackers crackers can be continually produced with more labor and materials if for some reason crackers suddenly became really trendy among rich people companies would create premium luxury crackers with fancy gold labels that make them feel more exclusive or whatever the cracker market can provide ever-increasing quality and quantity of crackers people you can afford to pay more but you can't do this with land the housing crisis is therefore less of a production crisis and more of a land crisis the third and biggest difference in my opinion is that crackers have functioning market feedback while hoses don't consider that an avid consumer of crackers can buy a box of crackers every day consider that there are many alternatives to crackers available different brands different types of crackers alternative snack foods like chips or ice cream or a fruit i guess consider that crackers can be created transported and stored relatively easily and consider that it's not too hard to tell a good cracker from a bad cracker whether that refers to your own personal taste in the cracker type or if the product is damaged or rotten or something like that in this situation the market feedback mechanisms of capitalism function very well because consumers have the opportunity to change where they buy crackers which crackers they buy and how much they buy and the producers of crackers can respond to the sales data they receive in order to maximize their business this is something that a socialist planned economy can't actually do frederick hayek described this as the calculation problem in a capitalist system the average consumer doesn't need to be well informed of the intricacies of the creation and distribution of five competing types of crackers even if that information between the five different brands is highly specialized because all of that information shakes out in the price of the crackers or more specifically the price to enjoyment ratio for each consumer maybe you just want the cheapest cracker and you don't care about quality maybe you want the highest quality cracker in that case it's a reasonable bet that the highest priced crackers are the highest quality or maybe you have some specific taste that leads you to buy a niche product and you actually prefer it over the more higher priced stuff i mean who knows the point is the pricing of an item serves to tell you information about the item's generalized quality while the sales numbers of that item serves to tell the manufacturers the wishes of their customers a moneyless communist economy has no way to provide feedback to the manufacturers of goods and will therefore always be highly inefficient even a market socialist economy will not be able to stimulate genuine competition as individuals with local knowledge of local trading practices and markets have no incentive to share that knowledge with the central planners however even though hayek's observation of the calculation problem is completely correct this doesn't mean that it's functional in every market and the housing market is one time where it doesn't work houses are different from crackers you may buy a box of crackers a day and then the price to enjoyment ratio will shake out on its own but nobody's really buying a house a day unless you're hyper-rich or something the housing market is far more limited you're only really comparing highly non-standard products in a specific area that you want to live and even then only with the other houses on the market at that time buying a house is complicated both legally and financially and a layman will probably have to employ an agent even standardized housing layouts are going to differ from each other in terms of finishings or age or quality or location problems with houses are sometimes not easy to discover at the time of purchase but only pop up years later you cannot know if the experience of living in the house that you're about to buy is comparable to the experience of living in other houses that are available for sale at the same time in this market it's much harder for an individual on their own to make a rational informed decision about their purchase necessitating housing inspectors housing insurance trust in real estate agents and if all else fails government regulation the housing market is one area in which natural pricing feedback mechanisms don't function and therefore a purely free market wouldn't work i know that libertarians and encaps don't like to hear this but sometimes you guys are just as wrong as the socialists but hey at least they're not wrong like philosophytube is whose conclusion sounds a bit like this and if it's already canon that people can have their property expropriated for a new mall it's surely not that much of a leap to say they could be expropriated so people could actually live in them only this time the money for that forced buyout would be all the rent that's already been paid over the whole time the series has been running but uh nile if that's the case then who owns all the properties well that's the awesome bit nobody does you know what that means that means that if a character in the comics has a job that they hate or their boss is an [ __ ] or they need to take time off of work to care for a relative or paint a painting write a novel go on a protest join a union get involved in politics they can do it they can say screw you i don't need your job anymore because i don't need to make rent because there is no more rent some fanfiction writers like to imagine that the state could take over some of housing markets powers but that's kind of already been explored in an alternate universe run of the comics set in russia which remains pretty controversial even among fans although another comic book writer called hugo chavez wrote his own spin-off series set in venezuela where he used the state to recognize small teams of venezuelan superheroes called communes and gave them the power to expropriate and administer property that left the communes to do their own thing without the stake getting too massive and bureaucratic but still gave those small teams of superheroes some backup and legal legitimacy when they needed it yeah apparently landlords should have their property seized no profit should ever be gained from owning houses and control of housing should be devolved into communes this is how you get soviet era style apartment blocks with communal kitchens and bathrooms for each floor because since there's no longer any pricing mechanism at all the resources used must be allocated as anti bourgeois as possible at the expense of things like comfort security functionality and the consent of those who live there this inevitably leads to the same live in the pod mentality we're seeing come out of la right now the only difference is that the soviet version comes in 50 different shades of grey instead of rainbow colored paradoxically in philosophy tube's system who decides to build new houses where does labor and materials for those houses come from who owns these houses and what rights do they have in the end it can only be the state in this regard there's no difference between libertarian and authoritarian leftism those people who call themselves libertarian socialists must by necessity behave like stalinists because those people who build houses still need to be paid and they still need to receive feedback from the desires of their customers in order to allocate their resources efficiently without that they end up being forced to build a bunch of [ __ ] that nobody really wants and will go entirely unused like china's empty cities unless the state forces people into them like the soviet union did another person who has a pretty awful take on this topic is unlearning economics which i found surprising because generally he's pretty insightful at least for a socialist and his criticism of philosophy tube hits a few of the same points that mine does he released a video titled the death of economics 101 where he tackles a number of different topics including the housing crisis this time the sub-topic is rent control rent control is when government regulation artificially lowers the price of rent below what the market can bear in an effort to provide low-income housing to poor people however in my opinion rent control lowers the quality and the quantity of rents available here's my hunch like all products in a free market supply and demand for rental units eventually reach an equilibrium but because rent control targets a specific type of property and artificially lowers its price below that equilibrium we should be able to observe a few effects first new buildings that will be constructed will likely be of a type not subject to that rent control and so the supply of non-rent controlled units will rise accordingly secondly old buildings that are covered by rent control will be converted into other types of property if it's profitable to do so lowering the supply of the controlled units thirdly there will be cases where it might be better for the landlord to simply destroy the property or keep it empty if the rent control is severe enough and finally maintenance on the controlled locations will be less frequent due to less resources the landlord has to perform them leading to a slow decline in quality over time in other words long-term rent control should cause the quality and quantity of rental units to decrease and learning economics as a counterpoint to this is that the reduction of quantity is not in the supply of housing but in the supply of housing specifically used for renting the supply and demand for houses should balance with rents r star and quantity at q star what does rank control do in this situation it's represented by the horizontal line rc which forces rents down at this low rental rate the quantity of houses supplied is lower than the previous equilibrium even though more people want to rent we have a shortage and a fall in rented units compared to the free market the blanket opposition to rent control that derives from this is hugely overstated i would contend that the supply demand model can mislead people into thinking that the reduction is in housing supply rather than the number of houses specifically used for renting maybe i'm an idiot but i don't see how that's a meaningful difference in fact i think that's the point of the criticism of rent control it means that there's less places for people to rent like here let's assume that you've got a bunch of mid-range houses that private owners want to rent but rent control makes it more profitable to sell them suddenly there's a bunch of new houses on the market maybe the extra supply causes the price of these houses to drop a little bit and maybe a middle-class family that couldn't afford that house right away can now do so instead of having to wait another year or two that is a good short-term benefit but the lowest classes the people who would never be able to afford that house and must rent it they suffer because the landlords can no longer afford to rent it to them it's kind of like minimum wage it might help some people in the middle but those at the bottom suffer disproportionately as they are priced over the market due to an external force fixing the variables and speaking of minimum wage unlearning economics shows the igm chicago polls on rent control but he doesn't show the igm chicago polls during his minimum wage part of this video which would have massively weakened his minimum wage arguments but that's for another time next up unlearning economics brings up an article about how rent control ruined the berlin rental economy a paper on the phenomenon unfortunately only available in german shows that rents for the controlled locations plummeted as is to be expected but there's no discussion on whether or not these were rental units held by people who actually needed that relief for example a person making six figures while living in a hole in a wall with five other guys for a year so you can save up money and launch a startup or buy a house or something he certainly doesn't need the relief of rent control but a poor family with no other option but to live in that location might actually need that help but also rent controlled apartments ended up being worth less in sale value and as expected the value and rents of their uncontrolled counterparts skyrocketed the supply of controlled units dropped by 50 while the supply of uncontrolled units shot up disproportionately over 100 percent and unlearning economics is response to say that these things are good and that the article he's reading is just crap as you're all now budding natural experiment enthusiasts i know what you're going to ask is there any more credible evidence than this crap on rank control this this isn't a reply man rent control seems to have some short-term good effects for some slice of the population but it also seems to have long-term bad effects for everybody except the ultra-rich and learning economics then talks about a study conducted on rent control in san francisco in 1994 where a recent city policy saw that old units were rent controlled while newly built units were not he says that this paper claims the policy led to a 15 reduction in total rental units available what the paper actually claims what he presents on screen in his own video is that 7.2 percent of rent-controlled properties underwent renovations to evade rent control but still remained on the market as non-rent controlled units while 8.1 percent of rent controlled units were sold to owner occupants meaning the new owner decided to live in the property themselves rather than rent it out taking it off the rental market the paper's abstract restates these effects as well rent control limited renters mobility by 20 15 of rent-controlled units were either sold to people intending to live in them directly or redeveloped by landlords to become non-controlled units but still available for rent and while rent control prevents displacement of renters in the short term long term it drove rent prices up across the entire market he also says that a specific graph from this paper shows rents fell we can see on these graphs that top left rents fell but look at it it says renters it says renters not rents people renting not price of renting the number of people renting a rent-controlled unit fell at the same rate as rent-controlled units were sold or converted into higher-priced non-rent-controlled counterparts in other words those landlords who either found it more profitable to renovate or sell the property or could no longer afford to keep renting at the new controlled rate had a higher chance of just folding and so the tenant suffered paying a rent that's bankrupting you is certainly bad but being entirely priced out of the market is worse the problem isn't necessarily that inequality is bad after all we all know that inequality is required for innovation and production to actually happen the problem is that extreme inequality has a snowballing effect into other areas of society and that rent control is a force that exacerbates those other effects the paper suggests that one of these knock-on effects is that middle-class people are less and less likely to move into a rent-controlled area it turns out that a rent-controlled neighborhood ends up containing only homeless people until they migrate away or they get arrested or something those few middle class people who did actually snag a good housing deal and the ultra wealthy and if the majority of an area is wealthy the other non-housing amenities in that area will also see their prices rise in other words the demand for high priced high quality goods from upscale stores will outpace the demand for low-priced low-quality goods sold at walmart or dollar tree and eventually those people living in rent-controlled housing will only be able to afford their rent and nothing else in their area in essence if some suburb or sub-community is a highly priced bubble with its internal economy being quite expensive a rent control law does serve to increase lower class access to that location but the long-term effects of this is that those people who gained access will rapidly find themselves priced out of not only their own neighborhoods but surrounding neighborhoods as well because this sort of unearned access has knock-on effects in the larger economy the 1994 san francisco paper ends by stating that rent control has contributed to gentrification by simultaneously bringing in higher income residents while preventing the displacement of minorities and here's how unlearning economics applies to this keeping existing residents in the area while rich residents join is a bad thing the solution is obviously to have only rich residents so the income inequality in the area is low in his defense it's hard to see this effect is not always visible but a big problem with rent control is what i mentioned earlier there will always be people who would move into the community and contribute to it but now do not because rent-controlled units are over-consumed due to the lower price and the additional housing stock being created will be overpriced for them supply goes down costs go up and now you've got an entire class of people who aren't moving in while rich people can still afford the area increasing the inequality you're aiming to fight with your regulation and learning economics ends his talk like this so it's bad when existing tenants stay but also bad when they leave gentrification is good but also bad i found this paper quite confusing and it seems to be a go-to reference for opponents of rent control with such a variety of competing effects the authors eventually conclude that the overall effects of rent control are awash and he's just lying to you the paper does not state the effects of rent control are awash instead the paper states that the beneficiaries of rent control are more likely to remain at their current location because they're getting a good deal that rent control disproportionately helps minorities as well as people who have a longer history at their current location and that on the flip side non-controlled areas saw people cycling through their rental units faster as both landlords and tenants try to get better deals they also found that landlords avoid rent control by converting rental units to condos or by renovating the building to avoid regulation the reduction in low-cost rent supply as well as the new availability of high-cost rent supply or condos and houses for sale ultimately created a housing market geared more towards higher income individuals in the long term this is not a wash this is a failure of the policy the last video we'll talk about today is hassan's and his is probably the funniest of all because to be honest hassan is a joke it's 30 minutes of him whining about not being able to buy a house the video title is correct but he brings to the table a simple explanation for all of these things filtered through his own political lens hope he actually paid the editor this video this time i put an out offer out for two houses with a recommendation of my agent i put a offer that just straight up was the asking price okay like just straight up the asking price which is you know that's what the apple is right five dollars is what he's gonna sell it for ten dollars and both of those offers came back with counters that were a hundred thousand dollars above the asking price but the worst part is there wasn't even any other buyers dude like normally there are other buyers and that's why you're like well the other buyer wants more money so you know i like you so what's good so that's not even the asking price then you these people are crazy because it's such a ridiculous position it doesn't matter uh what the what the price is they're just like you know i want more like you get treated like absolute hassan doesn't understand that the value of a house is largely dependent on the value of their houses in the same area on the market this is a complex formulation that takes into account location house quality willingness to sell but it's not nearly as simple as the sun makes it out to be like if there's 10 comparable houses on the same street and they all get listed and the first one goes for way over asking price the others probably will too the bank comes in to appraise the house to give you a loan on the house because that house is now collateral and let's say you buy a million dollar house and the appraisal comes back and says well this is a five hundred thousand dollar house what normally you would do in that situation is go back and forth with the with the other seller and say well this house is 500 000 i'm not going to pay that because now i can't even you know i'm going to have to put down so much more money because the bank won't cover it like the bank is not going to cover the the million dollars for the uh loan because there's not enough collateral so you have to pay out of pocket i have to pay 500 000 out of pocket that's crazy and these guys were like no we don't [ __ ] care that you are not even allowed to renegotiate after the uh after the appraisal if it's lower then you have to cover the additional on top of the down payment you have to cover the additional amount out of pocket if the bank won't cover it for you i want you to understand that this is happening in los angeles as in every house that you purchase is already insanely priced regardless because it's really funny listening to hassan complain about these numbers knowing how much he makes this is not a problem for him this is what bread tubers do when they try their hand in economic analysis you know they [ __ ] all over one side of an economic transaction and ignore the other side because that's all they're interested in right now people selling their homes are making a killing they're doing very well but people like hassan only care about the buyers of homes that are getting [ __ ] over meanwhile when it comes to the buyers of labor right now they're having to jack up wages because no one wants to actually work for minimum wage during this climate and these same bread tubers complaining about the difficulty of buying homes are laughing at the difficulty of buying labor simply because it suits their politics and the targets are acceptable to them the actual truth is both of these things can be negative if pushed too far upward pressure on wages can certainly be a bad thing you know probably not yet but if it was like 50 an hour for a burger flipper job or something absolutely same with housing but hassan only cares about the buyer's side of the housing equation just like he only cares about the seller's side of the labor equation because he doesn't actually care about the damage done by his idealized policies he only cares if the correct people are hurt by that damage the house itself is a depreciating asset the land on the other hand is an appreciating asset especially when you're purchasing land in like [ __ ] los angeles in like a really good area of los angeles um i don't know why hassan thinks houses are depreciating assets they're not quite like cars you know yeah there's maintenance but houses can absolutely appreciate over time depending on the market like hedge funds are straight up purchasing as much as many houses they [ __ ] can so that they can turn around and start renting it to people so they can become landlords which ironically creates a system where buying a house is unaffordable for most average joes so they are stuck renting forever so it is a problem that basically creates another opportunity for uh you know these hedge funds to make more money it's it's not just [ __ ] hedge funds buying up all the houses and renting them to people this is like a child's take on housing and that's not to say it's not happening in some places it certainly is a little bit you've got a massive crash during covid the value of everybody's property went down businesses closed up et cetera et cetera and the people who made a killing are the ones who vacuumed up property when they were at coveted lowe's because that property value will inevitably bounce back that's not the only variable here what's also happening is now that lockdowns are coming to a close in a lot of places you've got tons of people moving whether that be out of cities or back closer to work as work at home ends you've got a historically low interest rate on mortgages you've got many potential sellers shelving their plans due to uncertainty you've got many potential buyers who have reduced their incidental spending due to lockdowns while working at home and saving money or taking pay raises for outside essential work this all resulted with more buyers having more money and less sellers willing to sell it's not just opportunistic rich people monopolistically buying everything it might sound cool when your dad makes you know a hundred thousand above asking price on his [ __ ] house but it's not gonna be so great when he can't find another house to purchase and that's the reality when people are leaving california they're not leaving california because of taxes that's a lie it's poor people leaving california because they can't afford to live in california so they [ __ ] go somewhere else they simply cannot afford to rent or even purchase a home here's one thing assange's actually correct about it's not about taxes it might be for corporations might be for business owners people who can work from literally anywhere but it's not for the average person average people don't make nearly as many decisions based on taxes as we think they do it's highly unlikely that you'll choose a job or a place to live based on the marginal tax rate of the area in most situations it's it's okay if people are priced out of some markets hassan not everybody has to live in california stop looking down on what you coastal elites call flyover states that dude who called you a snob in your own chat and you got insulted by it you just [ __ ] proved them right [ __ ] that are finally able to afford a home because they have like a an amount of capital that they've accrued over the over the course of the [ __ ] pandemic are so [ __ ] when basically they're not able to refinance when basically they realize that the investment property that they purchased and now that they're stuck with is not going to uh hold its value especially if they [ __ ] bought it in some random area that is not slated to appreciate uh to the goddamn moon like you would in certain parts of california like in [ __ ] los angeles and then they're [ __ ] and even if they are able to refinance at that point the interest rates are going to be higher so no matter what their refinance works now they have a property that's value is lower that you're absolutely stuck with didn't you just say that hedge funds are buying up everything and making a killing and renting it all out to people and turning us all into surfs but now people who buy homes are [ __ ] because they won't be valuable would that also affect the hedge funds you can only tell when somebody's making an analysis based on ideology and not on the facts i'm still so mad that like i lost the dream house that i literally found it was like the second house i went to and it was my dream house it was still of course expensive obviously above like uh what the market rate would be for something like that but it was affordable in comparison to like all these other [ __ ] places i've seen and i lost it and it [ __ ] sucks i was gonna have a pool boys it's the second okay dude listen it'll be fine it's not your it's not your dream house i'm sure there are other fish in the sea this is definitely like a first time home buyers story isn't it oh it was my dream house dude you're hassan just just buy it you have the money pay for it like this is a rich guy coming into a poor neighborhood talking to a poor homeowner complaining that he sold his house to another guy who's also poor just pay the [ __ ] price dude son is so angry he couldn't [ __ ] a dude out of his house like what is his solution here should he be able to force the seller to sell him that at the lower price like what does he want sold for 78 over asking it was listed at one million dollars it's over 2.12 a three-bedroom three-bathroom in [ __ ] mount washington it's actually kind of cool though holy [ __ ] hassan is looking at one of the richest areas in the world are you seriously talking like these these secluded stately mansions are somehow relevant to the wider housing market are you actually complaining that you can't pay like 300 500 a month or something and live in some woodland compound is the us running out of houses the housing shortage conversation is kind of [ __ ] and here's why there are so many vacant [ __ ] properties dude there are so many vacant properties it actually is because inventory is historically low that is the main driver of the situation we are at the lowest point in history for housing availability anna kasparian had a [ __ ] take about this subject recently she tweeted america is short of homes is a strange focus when foreign capital and private equity funds are snatching up all available housing for their portfolios i'm sick of hearing about the shortage of housing as homes owned by people who don't even live in the u.s sit empty and that does happen sometimes but the problem with this point of view that rich people are buying homes and keeping them vacant and that's the driver of the housing crisis and therefore we shouldn't have to worry about building new homes is that it's ultimately a counterproductive view one most vacancies aren't where people want to live the highest vacancy rates in the united states are in low demand places of course the lowest vacancy rates are on the west coast and in the northeast telling somebody in the bay area that there's an abandoned house in detroit they can move to isn't really a solution to their problem two vacancies aren't all the same census data shows us that 50 of all vacancies are called market vacancies which is a term describing the inevitable gaps in tenancy that can occur when a lease ends sometimes there's trouble finding new tenants sometimes a deal falls through last minute sometimes there's repairs to be done whatever landlords lose money when a home is vacant and they're already incentivized by the market for these market vacancies to be as short as possible three landlords love low vacancy rates because it gives them much more market power if somebody shows up in their neighborhood and builds a bunch of new rental units the vacancy rate goes up competition goes up rents go down and the power of currently existing landlords over the market goes down as well not building new units strengthens the position of those currently existing landlords while building more homes opens the market to further competition pressure four a vacancy rate of zero is disastrous you would not be able to ever move into a new location because there would be no available locations at all kids moving to their own place nope they gotta stay at home immigrants nowhere for them to go zero vacancies means that if you want to move you have to trade house with somebody else while the existence of at least some vacancies allows for market fluidity the problem with the current housing crisis is there's no easy solution all the dumb [ __ ] that bread tubers say equate to entitled whining that just makes things far worse than they already are but because land is a constant rather than a variable means that we will always have this problem in the most costly cities on earth no matter what not everybody can live in downtown l.a or on manhattan island and that's that there's just not enough space and you know what that's okay it's okay if people are priced at a certain locations not everybody has to live in a mega city and forcing yourself into a tin can to stay in southern california isn't really good for you driving on the highway to and from your job every day cramped in your car breathing in the city smog because you want to live in the place to be is probably the biggest most dumb [ __ ] way you can waste your life let's say you work for 10 years commuting two hours a day you're going to end up in your 30s with chronic incurable back pain a lot less money than you should have and if you properly use that time you wasted in your car you could have become master class at some skill or hobby i have the right to live in la shut up no you don't millennials and zoomers have this feeling that metropolis is the only place you should aspire to end up that hometowns are places to be moved on from and be embarrassed by and they're rapidly discovering that even though the city has its amenities it doesn't have community i think this is why progs throw around the community as a label so much they don't actually [ __ ] know what it means my generation spent so much time considering their small town origins as a waiting room feeling some indescribable pull towards the rootlessness of city life and its revolving door of new people new experiences and new locations that a lot of millennials who are now in their 30s are finding themselves lonely and not actually able to understand why but here's why the transient nature of that lifestyle the in-betweenness that's so appealing ultimately leaves you with nothing solid to stand on i can't find the article at the time of writing the script but i'm sure i'll be able to put it on the screen and post about a journalist who was having a farewell get-together at the bar for a colleague who was moving to hong kong for a new job back in early 2020. i'm uh i'm sure that probably turned out not to be a good career move actually but the point is among the transients the in-betweens there's no sense of community there's no neighborhood there's no family you get to know next door as your kids grow up together you've got your work colleagues whom you only talk to about work and whom you only get along with when you're drinking and there's no guarantee that connection will remain when they suddenly fly off leaving nothing behind they don't really care about you and you don't really care about them your life paths simply happen to align for a little while it doesn't have to be this way even living in a city it doesn't have to be this way but there's certainly something about a specific type of city living that makes people think that they're disposable and treat others as if they were disposable in return it's no surprise to me that millennials and zoomers are having trouble forming lasting relationships i'm not saying that everybody has to return to tradition and live in the same house they grew up in or farm on some homestead with five acres or whatever you can live in some suburb half an hour outside of downtown and maintain a sense of community just fine i'm saying that embracing a lifestyle that prioritizes novelty over connection that values width over depth will ultimately make you unhappy and that lifestyle is uniquely incentivized by city living these are people who think that their real life will finally start once they move ignoring the fact that their life is already passing them by right now as they wait failing to realize that even if they manage to do more they're still the same person with the same baggage this is just armchair psychology for me but i think the reason they do it is because they have big dreams and rather than knuckling down and doing the work right now it's easy to keep the looming failure at arm's length by saying that they have to move to the big city before they can really get going or if they're already in the big city they have to move to the next spot a lot of people have been messaging me recently about georgism as a solution to the land problem a philosophy created by henry george jordanism is the belief that people should own the value they produce themselves both in labor and in trade meaning no income taxes no trade taxes no purchase taxes but that because land will always be some level of natural monopoly the economic value derived from the land itself and its natural resources should be taxed in other words if you own a business and generate profit it shouldn't be taxed if you build a house that shouldn't be taxed but the land your business or house sits on should be taxed as should any resources you pull from the natural world like water or minerals the logic is you may have created your house or your business either directly with your labor or indirectly by working elsewhere and then paying for it but you didn't create the land or its resources that was provided by nature it holds its value because of society and therefore a land tax rather than a capital or labor tax should be what funds the government many economists since the days of adam smith have noted that unlike all other forms of taxation a land tax doesn't create economic inefficiency like the minimum wage or generate holes in the market like rent control and modern experiments seem to bear this out queensland australia ran a land tax experiment and the results seemed to show that it had little effect on the price of housing but it did increase the total number of houses for sale the land tax was seen by karl marx as a method that would alleviate the working class's woes but ultimately rejected it as it would prevent a transition to a socialist economy at the same time milton friedman described the land tax as the least bad tax since it only targets what individuals did not create with their labor and it imposes little burden on economic activity if you can get these two guys to begrudgingly agree that the idea is a good one and the only reason they don't like it is because it doesn't square away with their pet projects you've probably got something special on your hands to be honest i don't know how i feel about georgism i had to begin reading up on it specifically for this video and my opinion isn't fully formed yet at face value it seems alright i know something that's commonly advocated for nowadays is a use tax meaning that if you own property but you're just sitting on it and not putting it to use you should be taxed for it considering the current problem in vancouver for example where chinese nationals want to hide money from the chinese communist party and do so by buying canadian homes and then simply letting them sit around empty because they don't want to go through the hassle of renting them to people i can see why this sort of use tax is becoming appealing but as long as there's an impetus to own your own property this will always be a problem and no the solution isn't to tell people that they'll own nothing and be happy or to live in the pod and eat the bugs and rent forever a society with strong self-defense rights the reason america has the second amendment in the first place it all sits atop of property ownership if you're a surf working for a lord or alternatively living in an amazon wage cage you don't give a [ __ ] about the property because not your property and its defense falls not to you but to its owners but that house that homestead that business it's yours on the emotional side of things there's a certain pride and there's a certain pride in being able to stand on your own two feet and say no matter what good or bad comes my way this is my place and i'm responsible for it on the practical side a society that has no self-defense rights is one that must rely on heavy state involvement for defense this is costly inefficient and often tyrannical towards those people who are being defended a property owner is incentivized to protect their property with their weapons it doesn't matter how much a [ __ ] marxist says under no circumstances if property rights go self-defense rates go right along with it if you want a further exploration of this idea i would recommend kraut's video on the origins of american gun culture and its sequel the discussion of the mexican-american border and just because the ideal is to ultimately move away from the rent away your whole life model and get some skin in the property game this doesn't make landlords evil landlords do indeed provide a service they bear the burden of the legal red tape of property ownership they're responsible for repairs and upkeep not you and that is what you rent in exchange simply living in a place doesn't mean that you should own it regardless of what breadtubers might say in fact i guarantee you every single popular bread tube out there makes way more than their landlords do which is why philosophy tubes call for a rent strike even as that channel's patreon income is set to private is all the more onerous but i've done a video on that already you know what to be honest it must suck if you're a bread tube fanboy bread tube doesn't really care about black people outside of what blm can do for them they don't really care about trans people outside of what the trans activists can do for them they're cool with women and femme boys because they can be sexual predators i guess the only thing remaining that the bread tuber can actually talk about is class conflict and material conditions and their content on these topics isn't rooted in any sort of knowledge wisdom or evidence but instead in a broad feeling that people are suffering or something must be done to help them and fair enough that's not nothing but it's not enough to build an entire philosophy around it's gotta suck to throw away all that wokeness and redefine intersectionality to be rad lib [ __ ] and not real leftism because it's all about being a part of the dirt bag left right now and then have the only thing that you can really fall back on is a complete lack of economic knowledge something from the fact that the only actual studying of the topic that breadtube does is reading twitter trending tags about marx's analysis which is already rapidly becoming outdated back when it was being written i'd like to thank not only the three stooges whose content i reviewed for this video but also anna casparian for being chunk's token armenian and sargon v destiny and kraut for some of the resources i used in my own analysis and of course i'd like to thank everybody who supports me on patreon or subscribe star to everybody who's a member on youtube or a sub on twitch thank you very much for keeping this content flowing here's the scoop guys tomorrow june 8th is my birthday and that 100 000 youtube sub mark would be an excellent milestone for that day wouldn't it please consider spreading my channel and this video around to your friends it would be highly appreciated i would also like to announce that on my gaming channel over on twitch twitch.tv gameboomers i intend to start doing a series of e3 streams over the coming week the schedule for which is currently on screen please consider dropping in and watching the conference's announcements with me as i guarantee it will be a hilarious train wreck i will continue to try and work on sfo videos during my downtime but please be patient as during e3 every year i make game boomers my first priority and you know what that's actually starting to pay off i am just a hair away from making twitch partner so as i mentioned please consider supporting me over there and spreading those streams around too alright i'll see you later i love you