A headline caught my eye tonight, so I pulled up the article about a 26-year-old MIT grad who "may have cracked the code to income inequality."
Since I believe income inequality is one of the main reasons our nation is in such an economic mess for the middle and working classes, I wanted to see what this presumably intelligent person might have to say.
Okay--I'm not an MIT grad, but either this article or this kid's theory (or both) makes absolutely no sense at all.
Matthew Rognlie's supposedly revolutionary theory is that our economy is totally driven by housing.
"Ferenstein states that Rognlie's theory 'attack[s] the idea that rich capitalists have an unfair ability to turn their current wealth into a lazy dynasty of self-reinforcing investments," states author Zahra Taneez.
I don't see where that idea is attacked at all. Having the wealth to purchase twenty-some homes for one's own family, true of so many of our wealthiest co-citizens, doesn't suggest lazy dynasties of self-reinforcing investments, does it?
The article then goes on to list several claims with which Rognlie supports his theory. Some of these border on the absurd.
I guess I'll tackle them one by one.
1. "Software, robots, and other modern investments all depreciate in price as fast as the iPod. Technology doesn't hold value like it used to, so it's misleading to believe that investments in capital now will give rich folks a long-term advantage."
What, exactly, does this sentence even say? Okay, take the first part: Technology depreciates quickly, therefore it doesn't hold value --"
Well, yes, individual pieces of technology depreciate quickly, but that's where the money is made. Things that depreciate must be replaced. This statement is worded to suggest otherwise, but investment in technology remains a sound investment. Okay, next part:
. . . so it's misleading to believe that investments in capital now will give rich folks a long-term advantage."
Talk about muddy language! The essence, as I parse it, is "rich folks will not have a long-term advantage if they invest in capital now."
Okay, so this follow the original bogus premise that technology is a bad investment, and he's arguing that the rich won't get richer if they invest in capital. Is that capital for technology firms? Or capital for capital? That statement is extremely vague. But I guess it makes some readers feel better to know that the rich won't have a long-term advantage, even if they don't understand what is (supposedly) being discussed.
2. "Land/housing is really one of the only investments that give wealthy people a long-term leg up."
Well, I say this statement means absolutely nothing since "is really one of the only" as a phrase actually says is one of the investments that gives the wealthy a leg up--the word "only" does not restrict the meaning enough. "One of the only" investments still leaves room for a whole host of other investments. So what are those? And why aren't we talking about them, too? Doesn't this water down the force, if you want to call it that, of this statement?
Besides, land and housing have always been sound investments, so what's new here? And, yes, wealthy folks have a hell of a lot more land and a lot more houses than any of us working schmucks do, so what's yer point, Matt? Everything comes down to land in the end anyway; that's what wars have always been fought over. And it seems to me that as the richest in this land have bought new mansions before selling their old ones, and most of the working class today can't afford to buy a house at all, this argument is not only empty, it's kind of cruel.
3. "It might be wiser to redirect anger towards those who get in the way of new housing, rather than rely on taxes to solve our problems."
Once again, an empty statement. Throwing "anger" into the mix does up the ante of the rhetoric--but does it serve to justify the next statement, or is it mere fireworks thrown in to appeal to emotions rather than logic?
So we're told to redirect our anger (against the way our economy is going, one must assume) against those who "get in the way of new housing."
And who might those unnamed persons or organizations be? At this point, I smell government bashing on the horizon. So easy to blame the government for everything, but before we get to throwing blame, I haven't yet been convinced that this specious argument about housing is even remotely correct!
New housing has been the barometer for the U.S. market for a very long time--but does that still make sense in today's economy? We already learned from the 2008 subprime crisis that we can't afford to give mortgages to citizens in the "working poor" category, though plenty of money was made on the experiment for the tippity-top income bracket in this nation but only hurt the middle and working classes in the end.
And guess what, sports fans? That did not happen because of the government. That was corporate greed. Which is, in fact, individual greed, and not only because corporations somehow convinced our Supreme Court that they deserve the same protection as persons in this country. Corporations are made up of persons, human beings just like you and me, and those at the top have figured out (mostly by buying our nation's legislature and media) how to protect and grow their own interests no matter the effect on the rest of us. They do so using dubious and downright illegal means--illegal, that is, until they have sufficiently lined the pockets (through newly "legal" avenues for lining those pockets) of legislators to make those means legal.
I smell the stink of this same greed in this so-called economic "theory."
Let's just give everyone another go-round with those subprime mortgages, shall we?
Of course, if the working class, and those in the middle class who are sliding ever closer to said working class, earned a liveable wage, they could afford to meet fair mortgage requirements and would find themselves in the market for a home rather than remaining as tenants the rest of their lives.
Who else is going to buy these new homes, if not the working and middle classes? But who of us can afford to as we watch our salaries, our savings, our retirements, and our economic stability smashed to smithereens by this juggernaut of overarching wealth? And whom, I daresay, is behind this article on this so-called revolutionary economic theory?
4. "Just 14% of homes are affordable to middle-class families. In the once diverse Mission District, where many young tech workers are now relocating, it's hard to find a new home for less than $1.5 million."
Well, no duh. No one is buying homes because no one can afford them. Throwing in the Mission District prices is unfair, since the average new home does not cost nearly that much. But even the more "affordable" homes can't be afforded by average families in today's economy.
So new jobs is the answer, not new housing. With better jobs, a greater demand for housing would occur as well as a greater ability to meet financing terms for those homes. Not only that, retail sales would increase. The working and middle classes would be able to maintain a decent quality of life, rather than feeling as if they're about to slip under any day now.
But remember where the mighty rich in this nation, and the corporations they run, did with our jobs? They sent them overseas. AND their lackeys in Congress passed laws to give them tax breaks for doing so.
I ask you, without jobs with fair and decent wages, how are we going to buy new houses?
5. "The government should focus more on housing policy and less on taxing the wealthy, if it wants to properly deal with the inequality problem."
Ah, so here we have it. Not only does the government screw new housing with regulations on doing business in this nation, it is focusing too much on taxing the wealthy.
And because of this, we have an inequality problem.
What utter hogwash.
The wealthy got out of paying fair and reasonable taxes years ago, thanks to Reaganomics and the lie of trickle-down economics. The wealthy no longer pay the same tax rate as the rest of us, as they did before then. They get to keep a much greater percentage of the money they make, which means a much huger piece of the pie than do the efforts of the middle and working classes.
But the wealthiest of our fellow citizens still want us to believe that if we put the full load of our nation's treasury on our own hard-working backs and let them keep the bulk of the spoils they will somehow be sure we benefit, well, all I can say is only the stupid will continue to keep falling for this despite the evil tactics of their propaganda machine.
In short: What a heap of bull manure.
I noticed at the bottom of the article its ownership by Benzinga.com. This was not a news report in the way we children of the mid-Century were taught. This is a bought advertisement by said Benzinga.com.
So I wasn't at all surprised to learn that this company is owned by Fox News, the most evil entity to show up on the U.S. stage since 1776. This propaganda whore for the wealthiest of our fellow citizens will happily stoop to the deepest levels of that bull manure to drag the rest of us down there with them.
The scary thing is that they've turned this Benzinga thing into a "do it yourself" investment page--another way to twist the average U.S citizen's mind just as they try to join the market where the mega-rich continue to win, as well as in all the other institutions they own. I think I'll take my investment advice elsewhere.
The United States has lost its heart and its soul. We are permitting the heartless and soulless to overtake our Congress, our media, and our thoughts at the expense of what has always been good and uplifting about this nation--the belief that we are all created equal and should, therefore, be treated as equals, not as serfs sniffing for handouts by the tyrannical filthy rich, as we now find ourselves.
Since I believe income inequality is one of the main reasons our nation is in such an economic mess for the middle and working classes, I wanted to see what this presumably intelligent person might have to say.
Okay--I'm not an MIT grad, but either this article or this kid's theory (or both) makes absolutely no sense at all.
Matthew Rognlie's supposedly revolutionary theory is that our economy is totally driven by housing.
"Ferenstein states that Rognlie's theory 'attack[s] the idea that rich capitalists have an unfair ability to turn their current wealth into a lazy dynasty of self-reinforcing investments," states author Zahra Taneez.
I don't see where that idea is attacked at all. Having the wealth to purchase twenty-some homes for one's own family, true of so many of our wealthiest co-citizens, doesn't suggest lazy dynasties of self-reinforcing investments, does it?
The article then goes on to list several claims with which Rognlie supports his theory. Some of these border on the absurd.
I guess I'll tackle them one by one.
1. "Software, robots, and other modern investments all depreciate in price as fast as the iPod. Technology doesn't hold value like it used to, so it's misleading to believe that investments in capital now will give rich folks a long-term advantage."
What, exactly, does this sentence even say? Okay, take the first part: Technology depreciates quickly, therefore it doesn't hold value --"
Well, yes, individual pieces of technology depreciate quickly, but that's where the money is made. Things that depreciate must be replaced. This statement is worded to suggest otherwise, but investment in technology remains a sound investment. Okay, next part:
. . . so it's misleading to believe that investments in capital now will give rich folks a long-term advantage."
Talk about muddy language! The essence, as I parse it, is "rich folks will not have a long-term advantage if they invest in capital now."
Okay, so this follow the original bogus premise that technology is a bad investment, and he's arguing that the rich won't get richer if they invest in capital. Is that capital for technology firms? Or capital for capital? That statement is extremely vague. But I guess it makes some readers feel better to know that the rich won't have a long-term advantage, even if they don't understand what is (supposedly) being discussed.
2. "Land/housing is really one of the only investments that give wealthy people a long-term leg up."
Well, I say this statement means absolutely nothing since "is really one of the only" as a phrase actually says is one of the investments that gives the wealthy a leg up--the word "only" does not restrict the meaning enough. "One of the only" investments still leaves room for a whole host of other investments. So what are those? And why aren't we talking about them, too? Doesn't this water down the force, if you want to call it that, of this statement?
Besides, land and housing have always been sound investments, so what's new here? And, yes, wealthy folks have a hell of a lot more land and a lot more houses than any of us working schmucks do, so what's yer point, Matt? Everything comes down to land in the end anyway; that's what wars have always been fought over. And it seems to me that as the richest in this land have bought new mansions before selling their old ones, and most of the working class today can't afford to buy a house at all, this argument is not only empty, it's kind of cruel.
3. "It might be wiser to redirect anger towards those who get in the way of new housing, rather than rely on taxes to solve our problems."
Once again, an empty statement. Throwing "anger" into the mix does up the ante of the rhetoric--but does it serve to justify the next statement, or is it mere fireworks thrown in to appeal to emotions rather than logic?
So we're told to redirect our anger (against the way our economy is going, one must assume) against those who "get in the way of new housing."
And who might those unnamed persons or organizations be? At this point, I smell government bashing on the horizon. So easy to blame the government for everything, but before we get to throwing blame, I haven't yet been convinced that this specious argument about housing is even remotely correct!
New housing has been the barometer for the U.S. market for a very long time--but does that still make sense in today's economy? We already learned from the 2008 subprime crisis that we can't afford to give mortgages to citizens in the "working poor" category, though plenty of money was made on the experiment for the tippity-top income bracket in this nation but only hurt the middle and working classes in the end.
And guess what, sports fans? That did not happen because of the government. That was corporate greed. Which is, in fact, individual greed, and not only because corporations somehow convinced our Supreme Court that they deserve the same protection as persons in this country. Corporations are made up of persons, human beings just like you and me, and those at the top have figured out (mostly by buying our nation's legislature and media) how to protect and grow their own interests no matter the effect on the rest of us. They do so using dubious and downright illegal means--illegal, that is, until they have sufficiently lined the pockets (through newly "legal" avenues for lining those pockets) of legislators to make those means legal.
I smell the stink of this same greed in this so-called economic "theory."
Let's just give everyone another go-round with those subprime mortgages, shall we?
Of course, if the working class, and those in the middle class who are sliding ever closer to said working class, earned a liveable wage, they could afford to meet fair mortgage requirements and would find themselves in the market for a home rather than remaining as tenants the rest of their lives.
Who else is going to buy these new homes, if not the working and middle classes? But who of us can afford to as we watch our salaries, our savings, our retirements, and our economic stability smashed to smithereens by this juggernaut of overarching wealth? And whom, I daresay, is behind this article on this so-called revolutionary economic theory?
4. "Just 14% of homes are affordable to middle-class families. In the once diverse Mission District, where many young tech workers are now relocating, it's hard to find a new home for less than $1.5 million."
Well, no duh. No one is buying homes because no one can afford them. Throwing in the Mission District prices is unfair, since the average new home does not cost nearly that much. But even the more "affordable" homes can't be afforded by average families in today's economy.
So new jobs is the answer, not new housing. With better jobs, a greater demand for housing would occur as well as a greater ability to meet financing terms for those homes. Not only that, retail sales would increase. The working and middle classes would be able to maintain a decent quality of life, rather than feeling as if they're about to slip under any day now.
But remember where the mighty rich in this nation, and the corporations they run, did with our jobs? They sent them overseas. AND their lackeys in Congress passed laws to give them tax breaks for doing so.
I ask you, without jobs with fair and decent wages, how are we going to buy new houses?
5. "The government should focus more on housing policy and less on taxing the wealthy, if it wants to properly deal with the inequality problem."
Ah, so here we have it. Not only does the government screw new housing with regulations on doing business in this nation, it is focusing too much on taxing the wealthy.
And because of this, we have an inequality problem.
What utter hogwash.
The wealthy got out of paying fair and reasonable taxes years ago, thanks to Reaganomics and the lie of trickle-down economics. The wealthy no longer pay the same tax rate as the rest of us, as they did before then. They get to keep a much greater percentage of the money they make, which means a much huger piece of the pie than do the efforts of the middle and working classes.
But the wealthiest of our fellow citizens still want us to believe that if we put the full load of our nation's treasury on our own hard-working backs and let them keep the bulk of the spoils they will somehow be sure we benefit, well, all I can say is only the stupid will continue to keep falling for this despite the evil tactics of their propaganda machine.
In short: What a heap of bull manure.
I noticed at the bottom of the article its ownership by Benzinga.com. This was not a news report in the way we children of the mid-Century were taught. This is a bought advertisement by said Benzinga.com.
So I wasn't at all surprised to learn that this company is owned by Fox News, the most evil entity to show up on the U.S. stage since 1776. This propaganda whore for the wealthiest of our fellow citizens will happily stoop to the deepest levels of that bull manure to drag the rest of us down there with them.
The scary thing is that they've turned this Benzinga thing into a "do it yourself" investment page--another way to twist the average U.S citizen's mind just as they try to join the market where the mega-rich continue to win, as well as in all the other institutions they own. I think I'll take my investment advice elsewhere.
The United States has lost its heart and its soul. We are permitting the heartless and soulless to overtake our Congress, our media, and our thoughts at the expense of what has always been good and uplifting about this nation--the belief that we are all created equal and should, therefore, be treated as equals, not as serfs sniffing for handouts by the tyrannical filthy rich, as we now find ourselves.
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