just one more hit, bro
2025-08-26 19:29:45.051612+02 by Dan Lyke 0 comments
The Spinoff (New Zealand): Newly sober nation begs for one more hit of high house prices:
Warburton draws an analogy to consumer electronics: if the government were to strictly control TV imports, resulting in the price of old TVs shooting up to $10,000, would that be an economic boon because TV owners were better off? “It’s bizarre that so many people, including economists, tout the supposed wealth effect in housing,” he says. “For no other product would we pump money into a historically supply-constrained market and say that the inflation from that is a good thing. In a recession, Reserve Banks are meant to pump money into an economy to actually produce stuff – to increase output and jobs. We should not be pumping money into an economy to do anti-social policy – transferring money from those without to those already with.”
At some point, productivity actually has to occur to support the value that created "wealth" purports to be able to control/move. If we, through inflated housing prices, lock that wealth into people lucky enough to be born in a particular generation...