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PaperclipPerfector  4mo ago (text post)   30157 thread views

Culture War Roundup for the week of August 12, 2024

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New homes and end to price-gouging: Harris sets economic goals

The Democratic presidential nominee's plans build on ideas from the Biden administration and aim at addressing voter concerns after a surge in prices since 2021.

The campaign's proposals include a "first-ever" tax credit for builders of homes sold to first-time buyers, as well as up to $25,000 in down-payment assistance for "eligible" first time buyers, a move that her campaign estimated could reach four million households over four years.

She has also called for capping the monthly price of diabetes-drug insulin at $35 for everyone, finding ways to cancel medical debt, and giving families a $6,000 tax credit the year they have a new child.

She is supporting a federal law banning firms from charging excessive prices on groceries and urged action on a bill in Congress that would bar property owners from using services that "coordinate" rents.

Though analysts say some of Harris's proposals, such as the ban on price-gouging, are likely to be popular, they have also sparked criticism from some economists. Bans on price-gouging already exist in many states, applied during emergencies such as hurricanes. But economists say the term is difficult to define and widening such rules could end up backfiring, by discouraging firms from making more at times of short supply.

Everyone likes free money, right? Building houses is good, having kids is good, paying less for life saving medications is good, taking power out of large landlords hands is good. But maybe trying to apply emergency price gouging laws to non-emergency situations is not so good. Maybe write a law that you have to lower prices when things are good as quickly as you raised them when they weren't so good. What are Trump's plans?

With populism ascendant in both parties, that cost has not dissuaded Trump's choice for vice president, JD Vance, from backing an even bigger tax credit expansion.

Economists predict that increased drilling would have limited impact given the global nature of energy markets and have warned that Trump's pledge to impose a tax of 10% or more on imports would drive up prices.

We're already producing a boatload of oil, but with russia somewhat out of the picture our european friends might appreciate it. Not sure about bringing down prices though.

Somehow Harris has a degree in economics, and, as an undergrad, chaired the college's economics society (per wikipedia)?

She was also a prosecutor and actually did that job for years and actively mocked left-wing views on crime before turning around when BLM was big and downplaying her experience.

It's not a mystery and she's not stupid, just a weathervane.

As a California attorney who went to school with, and now professionally deals with, prosecutors, they are definitely not all smart. They generally have craptons of sitzfleisch and are workaholics. But raw brainpower is not necessarily a pre-req.

I said she wasn't stupid. Which is what's implied by wondering how an econ student could make these basic mistakes.

She's not making mistakes, she's pandering. We know this because of how she treats something she has even more experience with. She was openly contemptuous of a (very stupid imo) left-wing view up until it suited her politically. Whatever else she is, she wasn't stupid enough to believe that view when she actually had to enforce the law and practicality mattered. She simply doesn't care now that her job is different.

Btw - CNN and WAPO are very critical of this parts of her policy? Any explanation for that especially CNN? Convention surprise?

I think it's possible that no one wants to starve, even journalists, and they are hoping to dissuade Harris from committing to this policy while still hoping she wins.

Yes, I think this is exactly right. Of course these writers don’t want Harris to lose, they’re writing because they want her to win and they want that win to be successful.

CNN is a centrist(well, center left), establishment platform. Left populism is not that. CNN understands basic economics when it benefits their 'team' and that team is 'let the experts rule'. The experts really hate price controls.

I mean, after the past month I'm certainly inclined to consider political motivations. But it seems most likely to me in this case that the media outlets actually see her proposals as bad for the country. Being a partisan hack doesn't preclude calling out genuine insanity if you see it. Especially when there are people from the Obama admin saying they're very critical. They get to quote "experts" and look fair and balanced at the same time.

They may also think that by proposing dangerous economic policies, she's setting herself up for failure, whether in November 2024 or November 2028. And they don't want the first female president to fail.

Being a partisan hack doesn't preclude calling out genuine insanity if you see it.

That's not how I remember the last decade. So I think your latter explanation is a lot more likely. Especially given how the criticisms are phrased.

The sudden disloyalty is surprising, but I think the people fantasizing about a convention replacement may be deluding themselves.

There is a legitimate case however, that Harris essentially coup'd herself into the candidacy and the people whose hand were forced shut up for a time, but were not going to shut up forever.

Convention replacement would truly be absurd.

I don't fantasize for convention replacement because I think she is the second worst candidate democrats have. The worst is Biden ofc. And she plateaued in polls lately - so media frenzy can push you so far.

I always want both parties to put forward their best candidate.

They are.

Debatable, Abott is arguably the GOPs best canditate but part of what makes him the best candidate is being smart enough to keep his head down and keep building up connections and parallel institutions.

To be clear, Abbott is also smart enough not to take on Trump directly. From his perspective waiting for 28 is a win-win.

Everyone who knows him in the Texas GOP is quite clear that he intends to be president one day. He just thinks 'successor to Trump' or 'Trump was a good president, but he's 83' are both better pitches than going toe to toe with him. He can also expect abortion(his biggest liability) to take up less room in the discourse the longer he waits.

That scans.

Food shortages in the US. Lovely. I do have an economist friend who was annoyed with this. I suggest him and his buddies look into making estimates about how many people will starve to death given different food pricing laws.

Of course people like free money, but the free money leads to the inflation that leads to the calls for price controls. The price controls lead to shortages. The shortages lead to government takeovers, or onerous regulation that forces private entities out of business. Its happened before in a dozen different leftist/socialist/communist countries. It would be nice to not repeat the cycle here.

I mostly have hope in the legal structure and republican opposition stopping the craziest parts of this slide into a leftist dystopia. Of course they have to spend political effort and will to stop these things, and while they are busy stopping things from getting worse things certainly aren't going to get better.

I mostly have hope in the legal structure and republican opposition stopping the craziest parts of this slide into a leftist dystopia. Of course they have to spend political effort and will to stop these things, and while they are busy stopping things from getting worse things certainly aren't going to get better.

26% chance of a dem trifecta following this election. Let's hope Sheehy pulls through in Montana.

Things don't necessarily get solidified in law for a few years.

There is also the phenomenom where politicians will propose policies A, B, and C. Where C is the most unreasonable and controversial. The opposition will exhaust themselves arguing against C, and the politicians will just drop it after they have accomplished A and B.

I see the grocery anti-gouging laws as the "C" in the this Kamala policy list.

Even so, that just makes C the new A in the next round.

It does

The US has a federal structure in which red state governors benefit politically from undermining or preventing the exercise of federal power when a democrat is in the white house, and almost all non-luxury crops are red state production.

There might be localized shortages, but not on a national level.

A localized shortage is more than enough to cause a riot in this day and age. The riot and looting will then make the situation worse.

You'd start seeing cases of state level emergencies being declared in cities as they run out of food, everyone rushes the stores for what's left, and then suddenly nothing is left.

Most nations outside of third world countries have learned not to mess too heavily with grocery prices.

Sure, you can have local riots. But middle class people will generally be able to drive to the next town over for their grocery run, even if it results in a more basic diet at higher cost. The US is too wealthy for mass food shortages.

Never underestimate the ability of government regulations to ruin a functioning market. We have an ongoing housing shortage, many rich western countries have to wait months for medical care, and finding a rental unit in a rent controlled city can be impossible.

Middle class people won't be the problem. It will be poor lower class people that are stuck in "food deserts" that lack personal and public transportation.

The US is too wealthy for mass food shortages.

Price controls are a way of taking that statement as a challenge.

A localized shortage is more than enough to cause a riot in this day and age.

There were no riots over infant formula shortages in 2022. If Harris gives us Soviet-style supermarkets, we'll just stand on the lines and hope like good Communists.

That impacts less than three percent of households. And notably does not impact young teenage men who are most likely to participate in riots.

Apples and oranges

Infant formula shortages also by definition affected parents of young children, who have a lot to lose and aren’t exactly known for their riotous ways. I can imagine a food shortage that affected society more broadly being the cause of genuine unrest, especially if it’s perceived as directly being caused by the powers that be.

if it’s perceived as directly being caused by the powers that be.

I doubt it would be so perceived in a Harris/Walz government. I suspect the mainstream media would loudly proclaim that the causes are corporate greed and republican obstructionism in congress.

I suspect the mainstream media would loudly proclaim that the causes are corporate greed and republican obstructionism in congress.

Yep, in other words the powers that be. Obama being president didn’t stop riots related to police shootings. All that needs to happen for a riot to break out is for the potential rioters to perceive that the unstoppable powers that be caused their problems. And in your hypothetical, the media has gladly provided such an explanation: “corporate greed and republican obstructionism in congress!”

Don't mean to 'directly' shit on Harris, but the government needs to have supply driven policies. I don't really care which flank they're from, it needs to come from this side, even at a cost to housing prices through increased supply.

Demand policies also work. The government can do a lot to bring demand for housing in the hot places down.

Like what?

Confiscatory taxation?

The government can do a lot to bring demand for housing in the hot places down.

Indeed, by crashing their economies so they're no longer hot.

Or by spreading out the economic opportunity so that other places are also hot. Which can be done either by making the pie higher bigger, or by distributing the pie more equally.

Which one is possible, or desirable, cuts to the very heart of the differences between the economic left and right.

Government is terrible at making the pie bigger, and when it goes about distributing the pie more equally, a lot of the pie tends to disappear. The economic left has moved openly pretty far to the "tall poppies should be cut down" side, but having the intention to spread it around without destroying it won't actually make that happen.

What can she promise to boost the supply of housing instead of subsidizing demand? As long as cities have downtowns, you are limited by the driving distance and the quantity of roads and parking downtown.

She can't promise to raze and rebuild the cities with decentralized offices.

She can't promise to found new cities to allow first-time buyers to buy new homes cheaply.

She can't promise to upzone existing suburbs.

Even if she can somehow double the supply of housing, this will destroy housing as an investment. Which is also something people very vocally do not want. It's not like Trump can do anything about housing either. Maybe when the US population finally starts to dip...

Let's say you are grandma who bought a good sized house for 200k. You are about to retire and all the kids are gone so you sell the house.

Situation 1, the price of your house rose to 1 mil, you net 800,000. You spend a third to buy a condo in an old person condominium, and now you have 700,000 on top of your 401k and SS to spend in your dotage.

Situation 2, the price of your home went back down to 300k. You net 100k. The price of the condo also fell, now it's 100k. You only have 200k extra to add to your nest egg. Assuming other costs stayed the same, you are worse off.

There are lots of people who would be better off too. But it's the Baby Boomers who are retiring, and they are such a huge voting block no one wants to mess with it for now. Maybe when Gen X retires.

Maybe when Gen X retires.

Gen X doesn't get to retire, because once the Boomers start dying off, the Millennials will vote to take all we've saved and all the more foolish of us believed we were promised.

God, I hope so.

Boomers as a voting block are too formidable but millennials outnumber genx so it might be the first opportunity in a generation to actually smash that Ponzi scheme to a million pieces.

Someone’s got to take the hit when we draw the line, and millennials got mega fucked economically by a combination the vagaries of history and poor public policy.

How much sharper than a serpent's tooth....

(ha, good thing I didn't have kids)

I’m a millennial with young kids so it’s do or die for me at this point.

Couple of thoughts:

  • People who own homes often spend against their equity, and dropping house values would at the very least put a stop to this money faucet;
  • People who own homes often don't want their neighborhoods to become more affordable, as they do not wish to live near People of Affordability;
  • People who don't own homes often have pensions and retirement accounts affixed to the nominal value of homes.

Under the current regime, if you're savvy, you can buy an asset that more than pays for itself, appreciates over time, becomes completely yours after 30 years, and even gets a lot of tax benefits. Why put your money anywhere else? This can't go on.

I agree with the general thought that homes as an investment is incompatible with a functioning nation, because it by definition requires housing to become only less affordable over time. When you consider the fact that what can't continue won't, it's simply inevitable that this arrangement will end at some point. The only question is who will be left holding the bag, which I imagine will be a hotly battled political contest.

Not sure if I want my money in that fight. Difficult to imagine that property owners will somehow win. On the other hand, the tide doesn't look like it's turning quite yet. We're still patching in buffs to what is already the best asset class.

I wonder how this will interact with population effects. Birth rates are below replacement and falling (though thankfully not as much as in some other places), which if that were the only effect, would mean that demand for residential housing should be decreasing. That hasn't been happening, because of other factors: increasing lifespans, a lower person:household ratio, and immigration. But we shouldn't expect that to continue, except maybe immigration—otherwise housing values will start falling as the population declines. So we can't expect houses to be a permanently appreciating asset (adjusting for inflation), without changes to society, or immigration.

Birth rates are below replacement and falling (though thankfully not as much as in some other places), which if that were the only effect, would mean that demand for residential housing should be decreasing.

Demand for residential housing increasing is in part why the birthrate is collapsing. Demand for properties drives up the cost of family formation, so fewer families get formed.

Under the current regime, if you're savvy, you can buy an asset that more than pays for itself, appreciates over time, becomes completely yours after 30 years, and even gets a lot of tax benefits. Why put your money anywhere else? This can't go on.

You usually can't actually do this; it only works in a few places and times. If you can see those times and places when they happen, go to town, but most people can't. Buying a house is still often a good investment but it's a rather ordinary one with the exception of the fact that it displaces a necessary expense.

My house has likely appreciated over $200,000 since I bought it in 2011. But I've put more than $100,000 into it outside of interest and taxes (which are not small either). It would be a loss if you didn't consider the fact that I get the use of it.

As for housing-as-investment requiring houses to become less affordable, no. It merely requires that any particular house grows in value in real terms. Housing-as-savings-vehicle doesn't even require that.

Once we have self-driving cars, there will no longer be any pressing need to have the parking lots immediately adjacent to the places that people are going. The cars will be able to drive empty to the parking area after dropping off passengers. This will also increase the willingness of people to commutte long distances, since people spend most of their time on their phones and laptops anyway.

This will also increase the willingness of people to commutte long distances, since people spend most of their time on their phones and laptops anyway.

Personally, I get motion sick if I try to read in a car, so that's useless to me.

But how far away are we from fully automated driving becoming a legal reality? I feel like I've been hearing it's 2-3 years away since almost a decade ago.

Waymo exists, and Tesla's tech is pretty advanced, I believe. I wonder how much of why we haven't seen it much yet is fear of heavy lawsuits and regulation.

and we were 2-3 years away from useful AI for 3 decades. And then chat gpt happened. There are self driving cars in SF now. So it could swing either way - the last couple of percentages could require new paradigm or we are very close.

and we were 2-3 years away from useful AI for 3 decades. And then chat gpt happened.

Right, so we still don't have useful AI.

Cubicles-on-wheels will be such a game-changer.

A first time home buyer is also just someone that hasn't owned a house in three years. I can literally sell a property to my wife and still qualify 3 years later. 'An individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property. This includes a spouse (if either meets the above test, they are considered first-time homebuyers).' Hot tip!

I wonder if we'll see a black market in "first time buyers" who get paid a commission to buy the house, then immediately turn around and sell it to the real buyer for its cost.

Logically they'd have to do something like the Obama-era first time homebuyer tax credit, where if you sold the house in less than 3 years (or converted it to a business property, etc) you had to pay the money back.

She can promise (though not actually deliver) all of those things, but the only one of the three she's likely to want is upzoning existing suburbs (since doing so would encourage movement from deep blue cities to purple suburbs, turning them blue). She won't promise that either because the existing suburban residents don't want it, and she wants their votes.

Obviously she can’t fix local zoning. But if she was interested, she could do a bunch of things that make larger developments cheaper (eg reduce EPA regulations, OHSA, etc)

Are there any carrots or sticks that the federal government can wave in front of state governments to make them change their zoning laws?

They have enormous carrots and sticks that can be applied to Fannie and Freddie's purchases. If there's a condition that the GSEs won't buy mortgages that aren't on properties with certain zoning characteristics, that greatly limits financing options currently!

The big obvious one is boosting or restricting federal funding for related (or unrelated for that matter) stuff, which is how they went about sidestepping the 21st amendment and forcing every individual state to raise their minimum alcohol purchase age to 21.

In that case they withheld federal highway improvement funding on the order of dozens of millions of dollars per state until the state raised their purchase age to 21. https://en.wikipedia.org/wiki/National_Minimum_Drinking_Age_Act

This is easier to apply to state level than local level obviously, but there are still plenty of federal dollars going to programs carried out at municipal levels. In fact such programs are probably concentrated in the unaffordable cities.

Even if she can somehow double the supply of housing, this will destroy housing as an investment.

I am slowly becoming convinced that this is eventually necessary, but will be incredibly painful for many. There still are places we can build -- home prices in Texas are mostly down from two years ago, and California is trying statewide zoning changes that might work somewhat.

But we seem stuck with the choice of following other Anglosphere countries in making housing cost a lifetime or more of wages, or burning a whole lot of folks who thought it would be a nest egg. IMO the best course is probably to spread the hurt over a generation or so rather than rip off the bandaid into a culture where housing isn't expected to appreciate (Japan, somewhat?), even though that will probably hit my net worth too.

It seems like the Anglosphere is trying to square that circle by (a) restricting supply in the high-income, liberal voting areas and (b) letting in a flood of immigrants to do cheap construction labor and build up new housing in low-income, conservative voting areas. We'll see how long that can last.

Of course housing should be destroyed as an investment. Living in a house is consumption. It causes wear and tear on the house. A twenty-year-old house is inherently less valuable than a brand new house. In a healthy economy, a house should depreciate in value like a car, albeit more slowly.

New builds these days kind of suck. They lack a certain classic style.

If my house burned down, I could then sell the charred frame for over $1 million.

I bought the house and the land it is on for much less than $1 million. My wear and tear on the structure and the aging waterheater and whatnot are round off errors in the property value.

So long as tech jobs remain hyperconcentrated in a few areas, housing prices will have to increase within commuting distance of those jobs. Unless we start making Chinese style housing blocks and Chinese style hard restrictions on urban car ownership.

My wear and tear on the structure and the aging waterheater and whatnot are round off errors in the property value.

Exactly. Amount of people I know who renovate and then try to claim that the 5% appreciation in their house's value in the time it took them is value added instead of just underlying market fluctuations is insane to me

This might not be the case in every city but in Toronto when the market was super hot plenty of homes would have increased in value if they burnt down to a pile of ash.

The people who make "heritage building" designations are quite overzealous since it doesn't cost the city anything. It just puts obligations on homeowners.

A pile of ash means that they don't have any justification to stop an owner from building a new home.

San Francisco famously maliciously designates random buildings historic in order to block development. You can't replace a dumpy laundromat with housing, it is "historic" you see. Multi-year legal battles trying to make some apartments. If the local government did nothing, then more housing would create itself all on its own. But instead they fight like cornered animals to prevent it.

https://missionlocal.org/2018/06/the-strange-and-terrible-saga-of-san-franciscos-historic-laundromat-represents-the-worst-of-planning-and-development-in-this-town/

Anyways, I bet that ""historic"" laundromat owner wishes that a freak tornado or lightning stike would have ruined that building so he could make an apartment complex out of it.

The sorts of people who own laundromats seem more likely than average to arrange for a "freak lightning strike" to cause a fire.

In a healthy economy, a house should depreciate in value like a car, albeit more slowly.

Houses tend to be maintained and upgraded better than cars. I never put a new roof on any car I owned, not even the convertibles.

Sure, and a car can last a million miles if diligently maintained.

I've lived in over 50 year old houses that are fine. Not as some ridiculous outlier like a million mile car, but in a neighborhood of perfectly suitable houses that just happen to be a few decades old.

Houses (the physical structures) depreciate very little over very long periods of time.

I know people who live in 100-year-old rowhouses, in a city of sufficient age to have substantial numbers of them. The neighborhood's inconvenient if you have a car, since it wasn't designed to accommodate parking, but the houses themselves are perfectly liveable.

It can, but the result will likely be you pay a lot more than replacing it a few times. And the result will still be a million mile car with high maintenance costs. So it makes less sense to keep maintaning an old car, and as a result they lose their value. It only very rarely makes financial sense to tear down a house and build anew, so old houses maintain their value.

Of course in areas where the land is far more valuable than the house, there's the additional factor of the land not suffering appreciable wear and tear.

I agree, but I dread to think of what kind of economic crisis would be required to make this realignment palatable. 2008 wasn't big enough to do that. American-Chinese war?

I’m not sure the 6k credit for birth year would be popular. Many families have kids but won’t have more. So they won’t benefit. At the same time, 6k is basically nothing in the grand scheme of things. So you kind of piss of recent parents and don’t do enough to win over future potential parents.

I’m not sure the price controls will be popular either.

The larger problem is that it'll be ineffective. As you said, it really isn't enough to defray costs. Every 1st world country is running into population replacement problem, but the larger problem is sticky wages, the lack of young men willing to be fathers, the lack of infrastructure in cities for children and families, and the widespread popularity of reproductive services. Current societal standards aren't supportive for children, and the increasing selfish nature of young generations is compounding the problem. At some point throwing money at the problem isn't effective, it is the culmination of many social issues compounding into the lack of family formation.

Free money is popular.

I have a low effort quip I've used for years. Something alone the lines of:

Build more? Afraid we can't do that. Best we can offer is subsidizing demand.

It keeps exactly characterizing a significant portion of politicians, so I'm going to keep using it.

“If you can’t laugh, you’d cry.”

The meme is "Can we stop restricting supply? Best I can do is subsidize demand".

The pic and snowclone are apparently based off a reality TV show about a pawn shop, with one of the proprietors having a catchphrase of "best I can do is [$X]".

Done

Original suggestion

No, I meant I've already seen this as a meme. Here, for instance, a month ago, and I'm pretty sure it wasn't new then.

It turns out I'm much less original than I would have thought.

Ahh ,my bad. Still pretty accurate and funny in a dark humor way.

We're all out of ideas. We've tried restricting supply, we've tried subsidizing demand, and nothing works!

Extruding housing supply through a regulatory sphincter with a subsidy plunger.

Whoops

As a modern sage once said: "If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

Again, a libertarian quip. But it keeps happening. This one is all too accurate.

Everyone likes free money, right? Building houses is good, having kids is good, paying less for life saving medications is good, taking power out of large landlords hands is good. But maybe trying to apply emergency price gouging laws to non-emergency situations is not so good. Maybe write a law that you have to lower prices when things are good as quickly as you raised them when they weren't so good. What are Trump's plans?

Are you familiar with the Econ 101 arguments against price controls?

Are you familiar with the PoliSci 101 arguments against campaigning on sensible economic policy?

We really need to teach all this in schools. Sure, two thirds of the people will forget it all, but it would be really useful if that additional third of people exists.

The libertarian can scream bloody murder at a policy that has never ever worked, economically speaking. But that would be missing that that self same policy has a great political track record. Hell, once the shelves are empty, you can just blame those awful wreckers and have fun trials.

Free money is insane. It is also very popular.

This is why Thomas Jefferson disliked democracy by the way.

The 17th amendment, and the turn to the popular vote for president, were mistakes.

Universal suffrage was a mistake- not in a 'repeal the 19th' sense, in a 'only landowners should vote' sense.

I'd be so fascinated to see landowner suffrage, in the sense of how the West would look. How would we chop up Wyoming if you needed acreage to vote?

In the United States, most people are expected to own a home, and there is already a system for keeping track of owners of their primary residences for tax purposes.

Sure, but I have friends who rent who could afford land in another location.

Don't kid yourself that suddenly the government would get better at tracing things than they are now.

I think it's kind of implied that if NYC residents buy land in rural Alaska to be able to vote and then spoof primary residence requirements, that enables them to vote in rural Alaska, not in NYC.

More comments

There is a fundamental disconnect between libertarians and progressives. In my debates with progressives, I've basically come to the conclusion that they don't view supply and demand the way I do. I, a libertarian-leaning centrist, believe it to be a fundamental law of the world, which follows very quickly from a few basic facts regarding limited supply and how people respond to financial incentives. That's not to say I buy it hook line and sinker, I know there are some economist notions about free markets that don't make sense in most real world situations, like that everyone has complete knowledge and will act accordingly.

Progressives seem to believe supply and demand to be something changeable, or a specific viewpoint of a situation, or at worst, a Western colonial system rigerously enforced to privilege white men over marginalized groups. Once might argue that this falls into the post modernist progressive track record of believing that human nature and/or reality itself is all malleable, and we can change it if we try hard enough.

I don't have enough debates with modern conservatives to know whether they have what I would consider to be a realistic view of supply and demand, or if they have their own fantasy picture of what the would should be like in their heads. I'd be interested to hear what they think.

I would gesture vaguely at Lee Kuan Yew for the ideal of conservative paternalism, or the Bismarckian creation of the German welfare state. There are certain situations which allowing free markets and individuals to make bad decisions is harmful to the nation, and interventionism can be worth the loss in efficiency.

As such, paternalism's policies are not set in stone and are highly specific to the region the politician comes from.

The caveat is that conservative paternalism's aim is to enact reforms to prevent communists, socialists, and progressives from gaining power, to keep the status quo. The latter's aims with reform is to enact revolutionary change unmoored from economic realities.

The campaign's proposals include a "first-ever" tax credit for builders of homes sold to first-time buyers, as well as up to $25,000 in down-payment assistance for "eligible" first time buyers, a move that her campaign estimated could reach four million households over four years.

To anyone with even a rudimentary understanding of economics, this is just gibs for her constituents. It'll of course raise housing prices in general, hurting all the people who don't qualify for the tax credit.

  • A: Behold our new policy: Subsidize Demand!
  • B: How will this help lower prices?
  • A: Lower prices?

Which... totally makes sense if one believes her constituents are good people and deserve more than they're getting right now. Or that the people hurt by the policy are bad people (a.k.a. status competitors) who deserve less than what they have.

Inflation has dissolved the buying power of everybody to the degree that fast food is becoming non viable as a business model, and politicians are running on price controls, deficit spending and giving free money to buyers to inflate assets even more.

It's hard not to fall into end of empire clichés here. If the Fed cuts late and unemployment strikes too at these prices, you're going to see a lot of misery.

Remember to buy assets and not take too strong political sides and you may end up an oligarch at the end of this. But short of some miracle, the future of the common man is looking pretty grim.

Fast food is less viable because the real, inflation-adjusted wages of fast food workers have increased like 100% since 2019. People who made $10 an hour pre-COVID now make $25, a vastly above-inflation increase. US fast food prices are now closer to those of rich European countries like Switzerland and Norway.

People who made $10 an hour pre-COVID now make $25

This is a nitpick but it was more like going from $8 to $13 outside of HCOL areas and/or areas with obscenely high minimum wages. I don't think this has much bearing on your point however, given how these things scale.

So outside of the economic bubble areas where wages grew by 250%, they instead only grew by 60%.

So many dollars have been created that people don't actually know what a dollar's even worth any more. Realignment (and worth noting the first realignment of this sort in the American Empire's history; remember, the UK took 300 years to fully pay off the South Sea Company debt) is not going to be pretty.

Remember to buy assets

What assets specifically do you have in mind?

Land, Stocks, Gold, Bitcoin, Ammunition, Collectible Lego sets, anything that isn't US Treasuries or derivatives thereof. And in particular anything that is safe from seizure.

History shows most of this stuff tends to fluctuate highly in value during economic crises, and some of it can get wiped out by war, economic repression, etc; but government paper is by far the worst performer.

Granted it doesn't always lose, sometimes governments do manage to dig themselves out of the hole by seizing enough assets, but it's rare indeed for currency holders to come out on top. Much more common is the scenario where government prints itself out of debt by rendering the currency worthless.

Picture what happened in Russia in the 90s where they printed and distributed stock certificates to all ex soviet citizens. Those that kept the stock and bought it from others are now oligarchs, those that sold the certificates for food fell prey to starvation, drugs and misery in general. Avoid that position, try to secure autonomy for your daily needs and hold onto assets long term.

Remember to buy assets and not take too strong political sides and you may end up an oligarch at the end of this. But short of some miracle, the future of the common man is looking pretty grim.

I think this is true.

Every time there is even the whiff of a recession, the Federal Reserve and the U.S. government come in with helicopter money, pushing asset prices up to new heights. House prices increasingly grow out of reach for normal people.

Speculators, on the other hand, have been rewarded immensely in the post-2008 regime. For example, if you bought $10,000 of TQQQ (Triple-levered NASDAQ) in 2010, you would now have $1.47 million. In theory, the TQQQ should get wiped out every few years during market downturns. But we don't get those anymore because even the threat of a recession brings in more helicopter money. Even Covid was just a blip.

We are well and truly on the way to national ruin no matter who wins, but a Harris election will hasten it greatly.

The campaign's proposals include a "first-ever" tax credit for builders of homes sold to first-time buyers

What about first time buyers who want to live in a place where there aren't newly built homes?

It is totally retarded that owning a home has become a load bearing part of the retirement saving strategy in this country because it basically requires that it becomes gradually impossible for young people to actually buy a house in a place they might want to live (after all, good investment houses can't be affordable). Tragically, without a modern day unaccountable cigar smoking Volcker type to rip off the bandaid and whisper "no" as millions beg to be saved, this will never change until the wheels fall off entirely.

Not to mention the fact that this does nothing to address the reasons houses are unaffordable in the first place. If you want a vision of the future, picture a government subsidizing demand and restricting supply, forever.

Well, not forever. There's a lot of ruin but there's still a finite amount.

A few months ago I commented on how vote buying is becoming commonplace of late.

Kamala's latest salvos have taken this to ridiculous new heights. It's hard to keep track but so far I see:

  • Student loan forgiveness
  • Medical debt forgiveness
  • Payments for people buying new homes
  • Payments for people paying more than 30% of their income as rent
  • Payments for newborns
  • Price controls on groceries !?

She even copied Trump's rather feeble attempt to buy votes with his "no taxes on tips" idea. (Not direct vote buying since this only offers relief from taxes, not direct payments).

Needless to say, subsidizing demand and price controls have a disastrous track record wherever they've been tried. Her policies, if implemented, would create huge disruptions in the market and likely to lead to high inflation as well as a serious and deep recession. If you are a net contributor to the tax system, things will become much worse for you as your taxes go up massively to pay for the freeloaders.

In other news, the price of gold hit an all-time high today.

On an semi-anecdotal note, this might tank support for Harris amongst Latinos, which was already weakening.

I’m hearing the word “Venezuela” a lot bandied about in TikTok & Instagram when taking about the rule of the Democratic Party, and none of it is flattering. Rather, it is dripping with absolute dread and seething hatred.

Unlike the college freshman types (both literally and in spirit), most 1st gen Latinos have extensive direct experience with left populism and this type of shameless vote buying and looting of the treasury. And contrary to what some segment of the anti-immigrant crowd likes to say, those amongst the immigrants that go through the bother and expense of naturalization very much do not want their adopted homeland to resemble the country they escaped.

I used to get a lot of pushback from my Latino part of my social circle for my open support of Trump, but not anymore. I’ve witnessed almost all of the blue-leaning Latinos slowly flip in the last eight years to at least tacit support for Trump. And I’m not in any way a bubble; my own family is a mixture of Amerikaner with some ADOS sprinkled through it. And my Latino family connections are very geographically widespread. I was even shocked to hear one of my friends, a very feminist coded Latina from New York, say she’s voting for Trump. Four years ago my views upset her deeply, but the reality of our situation has sunk in.

Although I personally am very in favor of heavily restricting immigration, it clearly comes with many benefits; one of which is a rich and varied experience with the many possible failure states in which a society can find itself. Much how people with direct experience of the Soviet Union are overrepresented in the vocal part of the anti-woke movement, so too it seems that 1st gen Latinos are populating the opposition to this profligate left economic populism.

What does Amerikaner mean?

The genetic swirl of Scots / Irish / English / Germanic / Nordic blood that eventually settled as the “generic white” main European ethnicity of the USA. Often the people who list “American” on the census as their ethnicity. The main population of Appalachia & The Midwest.

The equivalent of Afrikaner, for the appropriate continent.

In practice, it means Native American, or ethnically American.

I mean, to be fair, no taxes on tips acknowledges a de facto reality: who reports their tips in their tax returns? Enforcement would be impossible. As a handout to Nevada, it makes sense politically.

Harris's proposed policies make Trump look like the king of austerity. Considering how spendthrift he is, that's an accomplishment.

Most tips these days are on credit card payments, which the employer reports anyways.

Now certain bartenders can and do get away with underreporting income, but mostly in bars where paying big cash payments is A Thing as a status symbol in the scene. Almost all of these people use cash payments to steal from their employer anyways(through various scams enabled by the structures of bar management), so bar owner economics is to disincentivize cash payments. Waitstaff usually isn't that sophisticated and just reports that cash payers tip them 0%, then pocket the money- but you won't catch them because they're smart enough not to deposit the cash. OTOH restaurant managers tend to tell me that a higher percentage of cashiers(waiters usually aren't allowed to cash out their own checks) have been pilfering from the till recently; I suspect that this is related to low-end labor shortages making it harder to hire honest people for those kinds of jobs, so some of the same factors apply- it's impossible to steal credit card payments from your employer without much more sophistication than these people have.

TDLR there's a large quantity of tipping done via credit card and no way for service workers to prevent it being reported. The incentives of owner-men in the hospitality industry are to increase this percentage due to employee theft.

Experiment: When a plumber, electrician, or handyman has finished his job and expects payment, ask if paying in cash is OK. You will see an expression of pure joy cross his face as he answers "yes".

Ask them for a cash discount. If they don't offer one up front, which they often do. I suspect the smarter ones are offering an X% cash discount and recording an X+N% cash discount, and the dumber ones are just not recording the payment at all.

and the dumber ones are just not recording the payment at all.

I don't know anything about taxes, why are they the dumber ones?

I imagine it looks more suspicious in an audit to have records (phone, email, etc.) that you performed a job but never got paid for it vs. getting paid (but only recording a fraction of what you were actually paid).

Wait a second. Audits mean the government gets to sift through all your communications???

I suppose they only have the right to see email accounts and phone records of your business, not you personally?

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It's too obvious. If an auditor comes in there will be obvious tells if a fair number of jobs just aren't recorded, like too many supply purchases. Presumably a good enough financial wizard could hide most of this as well, but it will be difficult. On the other hand, figuring out that the amount of cash discount is usually overstated would be much harder to find.

If they don't offer one up front, which they often do.

Although I think it's best to leave this one until the end. When the work is done, fix the price as if there are no discounts. Only once the price is firm do you then bring up discounts.

Otherwise you get the situation where they say "Oh, that's WITH the cash discount" when you go to pay.

I mean, to be fair, no taxes on tips acknowledges a de facto reality: who reports their tips in their tax returns? Enforcement would be impossible. As a handout to Nevada, it makes sense politically.

Taxing tips is basically a huge part of IRS enforcement. It is why you always see stats that most audits are on low-mid income people. The IRS knows they dont report so they audit them and check bank statements, and almost always find the person was committing tax fraud by underreporting tips.

check bank statements,

In my country tips are much smaller and they're left as cash. Would there be a way to audit those? Are US tips all credit card based or given as part of waiter's salary?

Yes. Cash tips get audited quite frequently. Along with the restaurants themselves.

Cash tips get audited quite frequently.

By what mechanism?

IRS sees you work in a service coded sector. They check your tip box. If its empty they get super suspicious. If its filled out their database compares your number to everyone else in your area and flags those that appear low. Those get assigned a case agent who sends you a threatening letter asking for proof of your reported number matches. You have none cus you're a lying liar who lied and got caught. Now they are looking at your bank statements for 3 years and eventually you enter some payment plan to pay back the last 3 years of tip fraud you committed.

You have none cus you're a lying liar who lied and got caught.

But in reality I have none because no one has any proof about cash tips, right?

Now they are looking at your bank statements for 3 years

To what end?

pay back the last 3 years of tip fraud you committed

So basically they just assume that I made the average tip amount in my area and calculate the fraud based on this?

It seems like the difference between my reported amount and the average must be very high for this method to be of any significance. If I work at an unpopular bar my tips might be 3x less than the average without any tip fraud whatsoever.

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Standard US tips are 20% of the bill. Restaurant owners strongly encourage credit card payments to 1) discourage employee theft and 2) prove their employees are making enough in tips to comply with certain regulations, both compensation and contract based. Tips left by credit card are paid to the waiter on a paycheck with the taxes already taken out.

That being said, waiters love it when they're tipped in cash and usually don't report it.

Standard US tips are 20% of the bill.

A cursory Google search suggests that 15 to 20 percent is the standard range.

Restaurant owners strongly encourage credit card payments

What about the big class-action lawsuit regarding credit-card fees? And the other lawsuit regarding credit-card policies that forbade businesses from "steering" customers away from credit cards and toward cash?

A cursory Google search suggests that 15 to 20 percent is the standard range

That's the commonly held definition by most people, but there has been a noticeable push towards making 20% the new standard. 20% is usually the default suggested amount on POS systems when I use them, and in some cases it's the lowest option displayed aside from "no tip". This is probably favored by both tipped staff and management, because it leads to larger tips and it reduces pressure for management to raise wages.

This is dumb for all kinds of reasons, chiefly that percentage-based tips are inherently indexed to inflation. And "muh inflation" is the most commonly employed defense of this movement by advocates.

I remember when a flat 15% was standard and 20% was reserved for exceptional service. It wasn't even that long ago. Bah humbug.

Believe it or not 10% used to be standard. And of course you are correct that tips are automatically adjusted for inflation (like TIPS, funnily enough) so there is no legitimate reason for the percentage to increase over time.

My family has severely curtailed restaurant outings for many reasons but personally that is one of mine.

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it leads to larger tips and it reduces pressure for management to raise wages.

Of course if management raised wages they'd have to raise prices accordingly, so it's a wash from the consumer perspective.

The real interesting part is the recent shit storm in CA about restaurant fees. Basically the legislature passed a law that businesses have to bake all fees into their listed prices. Restaurants shat themselves about this and an amendment to exempt them was fast tracked through the legislature like shit through a goose. However, I could never find a convincing argument for why they should care about this, unless they think that people are so stupid that they'll keep paying a 10% service fee but if they see the prices on the menu increase by 10% then they'll... Stay home? Restaurant owners are clearly insanely focused on sticker prices for some reason that they won't come out and say. Even their op eds never make any real argument, just gesturing at how hard it is to run a restaurant.

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I doubt that much would change if they made tips tax exempt. Tax fraud in those lines business is rampant anyway and not dependant on tips. IRS enforcement would still focus on those businesses and find about as much fraud, just using marginally different methods.

Making tips tax exempt just seems like a handout to some demographic (Nevada?), and not any kind of real attempt at improving either the IRS or general tax compliance.

Low-mid income people do get audited more than anyone but the very high income, but it's not about tips, it's about the earned income tax credit. They might find a lot of unreported tips once they do the audit, though.

I mean, to be fair, no taxes on tips acknowledges a de facto reality: who reports their tips in their tax returns?

The structure of the tip credit is designed to strongly encourage employers to force tipped-as-in-lower-minimum-wage workers to mark down at least (untipped) minimum wage in tips -- otherwise, the employer has to cover the gap out of their pocket -- and there are some other tax (and SSI) benefits to accurately reporting the typical tipped income.

I won't pretend that this means everybody complies even remotely accurately, and if you're on paper as a normal-minimum wage employee most of those incentives fall away, but it's very far from the free for all most expect

Cash tips are generally not taxed, it's literally one of the reasons why I tip servers cash when I think the did a good job. Automated tips are taxed though, and they should because waiters can make 6 figures at a good restaurant. There's a reason why pretty much every wait staff prefers tipping over regular wages.

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