An excellent analysis from a micro-economic viewpoint. You are quite correct when stating: "Perhaps we must dangle fat, juicy, golden carrots in front of the most privileged, wealthy, entitled generation in history." I am from the last of the Silent Generation and remember the privations of post-war Britain, living as I did in a working class community in the depths of Luton backstreets. I know poverty and being kept in my place.
I rose through the ranks by the vehicle of scholarship funded by the state to reach the sunlit uplands of my profession. I am aware that my generation benefited immensely and disproportionately because of the macroeconomic environment as fossil fuels drove prosperity during the 20th century. All this ended abruptly around 2000 as EROEI (Energy Returned on Energy Invested) turned negative at this tipping point and real GDP has never been positive since - economic growth has ended and this is what you have detected by observing through the wrong end of the telescope and was predicted decades ago if you read the relevant books.
I have written a book about all this and write a weekly 'Letter from Great Britain' charting the decline and fall of Western civilisation and my 'Chapter 13 - The New Emergent Economy' details what will likely face our younger generations and how they might manage in a world changed beyond all measure. It is the end of the consumerist/landfill excesses of oil-fuelled gift that kept giving.
But don't take my word for it. Dr Sid Smith (mathematician) has a talk of just one hour explaining the reasoning behind what you are observing, which of course are the effects of the global shift, and the naive belief that politicians and governments can change anything - they can't and never have been able to more than tinker on the edges of our complex adaptive global systems which will go their own natural way. All we can do is adapt, protect and survive:
As a note however, a net 745,000 new persons a year to our shores is clearly unsustainable, we would need to build approcimately 600,000 new homes per year every year to meet this demand, no-one is arguing for no immigration , just sustainable levels and a slower pace to keep up with infrastructure.
A good well-thought out article, whose basic premise (the young are screwed over by unaffordable housing) is manifestly correct.
The problem is, though, that the high cost of housing is not fundamentally an issue of supply and demand, any more than the high cost of tulips during Tulip Mania was. It is true, obviously, that increased demand and restricted supply will lead to sustained price increases, but not to the extent seen in Britain and capitalist economies across the world. Rather, the cause is simple. Every house is bought with a mortgage; every mortgage is a fractional reserve loan, that means every mortgage creates money, that means prices go up. Specifically, prices go up where the money is being spent, which is houses. After two episodes of messing up and causing high inflation (20s and 70s), western financial elites have successfully figured out how to channel inflation into the stock market and asset prices, without it leaking out too much into general consumer prices, which they can then call 'economic growth'. And, indeed, this does create the effects of economic growth, except for those at the end of the queue.
In short, housing is a bubble. At this stage of the bubble increasing supply will not even exert a downward effect of prices. All new houses have to be bought with a mortgage. Every mortgage further blows up the bubble. There is no escaping this, except by popping the bubble, which will bankrupt most financial institutions overnight.
And yet there is no choice short of accepting homelessness as the new normal.
An excellent analysis from a micro-economic viewpoint. You are quite correct when stating: "Perhaps we must dangle fat, juicy, golden carrots in front of the most privileged, wealthy, entitled generation in history." I am from the last of the Silent Generation and remember the privations of post-war Britain, living as I did in a working class community in the depths of Luton backstreets. I know poverty and being kept in my place.
I rose through the ranks by the vehicle of scholarship funded by the state to reach the sunlit uplands of my profession. I am aware that my generation benefited immensely and disproportionately because of the macroeconomic environment as fossil fuels drove prosperity during the 20th century. All this ended abruptly around 2000 as EROEI (Energy Returned on Energy Invested) turned negative at this tipping point and real GDP has never been positive since - economic growth has ended and this is what you have detected by observing through the wrong end of the telescope and was predicted decades ago if you read the relevant books.
I have written a book about all this and write a weekly 'Letter from Great Britain' charting the decline and fall of Western civilisation and my 'Chapter 13 - The New Emergent Economy' details what will likely face our younger generations and how they might manage in a world changed beyond all measure. It is the end of the consumerist/landfill excesses of oil-fuelled gift that kept giving.
https://www.theburningplatform.com/author/austrian-peter/
But don't take my word for it. Dr Sid Smith (mathematician) has a talk of just one hour explaining the reasoning behind what you are observing, which of course are the effects of the global shift, and the naive belief that politicians and governments can change anything - they can't and never have been able to more than tinker on the edges of our complex adaptive global systems which will go their own natural way. All we can do is adapt, protect and survive:
https://www.youtube.com/watch?v=5WPB2u8EzL8
My new Substack might interest you especially a recent posting about the cold war MAD policies on the 1960s- 70s:
https://austrianpeter.substack.com/p/the-fourth-turning-pits-the-people?token=eyJ1c2VyX2lkIjoyOTUwMzA1MCwicG9zdF9pZCI6NDk3NzM5OTUsIl8iOiIzeUliVSIsImlhdCI6MTY0NjQ2Nzg2NSwiZXhwIjoxNjQ2NDcxNDY1LCJpc3MiOiJwdWItNzYyNzkyIiwic3ViIjoicG9zdC1yZWFjdGlvbiJ9.X1KevQrseJH5GUU9qTgOZ1tdINEr_Bl0VUCLTx2e82o&s=w
Keep writing though, your research is exceptional, I wonder from whence you came to achieve such erudite discourse.
As a note however, a net 745,000 new persons a year to our shores is clearly unsustainable, we would need to build approcimately 600,000 new homes per year every year to meet this demand, no-one is arguing for no immigration , just sustainable levels and a slower pace to keep up with infrastructure.
Great article, thank you
A good well-thought out article, whose basic premise (the young are screwed over by unaffordable housing) is manifestly correct.
The problem is, though, that the high cost of housing is not fundamentally an issue of supply and demand, any more than the high cost of tulips during Tulip Mania was. It is true, obviously, that increased demand and restricted supply will lead to sustained price increases, but not to the extent seen in Britain and capitalist economies across the world. Rather, the cause is simple. Every house is bought with a mortgage; every mortgage is a fractional reserve loan, that means every mortgage creates money, that means prices go up. Specifically, prices go up where the money is being spent, which is houses. After two episodes of messing up and causing high inflation (20s and 70s), western financial elites have successfully figured out how to channel inflation into the stock market and asset prices, without it leaking out too much into general consumer prices, which they can then call 'economic growth'. And, indeed, this does create the effects of economic growth, except for those at the end of the queue.
In short, housing is a bubble. At this stage of the bubble increasing supply will not even exert a downward effect of prices. All new houses have to be bought with a mortgage. Every mortgage further blows up the bubble. There is no escaping this, except by popping the bubble, which will bankrupt most financial institutions overnight.
And yet there is no choice short of accepting homelessness as the new normal.
Did real incomes and wages really increase in Britain until 2008? I thought the turning point was 2980, like America.
Oh, it's here now.
I wrote a long comment but ti didn't appear?