1/OK, let's take a little break from Coup Twitter, and think about an economic issue:

How can we build up the wealth of the middle class?

2/The typical American has surprisingly little wealth compared to the typical resident of many other developed countries.

This is a fact that is not widely known or appreciated.
3/Now, some people argue that stuff like Social Security or social insurance programs should be included in wealth. But I chose to focus on private wealth because I think having assets you can sell whenever you want is important to people.

https://t.co/rcRHSHkTMd
4/For many decades after World War 2, middle-class wealth in America was on a smooth upward trajectory.

Then the housing crash came, and all that changed. Suddenly the rich were still doing well but everyone else was seeing the end of their American Dream.
5/Why the divergence?

Because the American middle class has its wealth in houses -- specifically, in the houses they live in.

It's the rich who own stocks.
6/OK so how do we fix this? How do we get middle-class wealth *back*?

Well, the option we've apparently chosen so far is just to tell people "Suck it up. Start at the bottom, and save it all back."

Seems a bit inadequate, no?
7/Now, we can give people more income -- for example, with UBI -- to help them save faster. I'm certainly not averse to that. But it's going to take a while, and it's politically tough, and it depends on people saving what we give them...
8/We can also have the government save money on people's behalf, with a Social Wealth Fund. But while it's a cool idea, I don't think it would feel like "real wealth" to lots of people, any more than Social Security does. It's more like UBI, really.
9/So that basically leaves: Housing. The way the American middle class traditionally gets its wealth.

Can we still use housing to generate broad middle-class wealth? Should we?
10/Well, the answer to the question of "can we" is "yes". The returns on housing are typically very good, when you include rental yield.

As long as people and companies keep moving to cities, the value of urban location (i.e. land) will appreciate.
11/But SHOULD we distribute that wealth via home values?

Doing so presents some obvious problems. It invites NIMBYism -- homeowners leveraging local government to push up the prices of their homes, even at the expense of the economy.
12/Owner-occupied housing is also an illiquid asset that's hard to diversify.
13/But there are advantages to building wealth through homeownership as well.

For one thing, most people SUCK at stock investing, but most people kinda-sorta understand homeownership.
14/Also, having a mortgage nudges people to save more each month, nudges them to invest in a riskier but higher-return asset class, and allows them to take on leverage -- all of which have their downsides, but which allow middle-class wealth to keep pace with the rich.
15/Finally, it's just...what the American middle class is used to.

It's hard to completely revamp our wealth-building system. We may simply be locked in.
16/But then the next question is: How can we change our housing system so that every generation can build wealth, instead of one generation (cough, Boomers, cough) getting all the wealth and then pulling up the ladder behind them?
17/Well, there's the YIMBY answer: Just make cities allow more private housing development, and more housing wealth will be created, and increased supply will push prices down, allowing young people to buy in.
18/A second idea is down-payment assistance -- having the federal government give first-time homebuyers and low-income homebuyers some money to help them buy a home.
19/The problem is, you have to do both YIMBYism AND down-payment assistance at the same time, so you don't just end up pumping up prices and handing taxpayer money to existing homeowners.

That's a tricky trick to pull off!
20/So I had another idea -- a Modified Singapore System, in which the government actually builds new housing and then sells it at discounted rates to first-time and low-income homebuyers.

https://t.co/2GwiFm7rib
21/This idea has plenty of challenges, of course. And some drawbacks too. But if we want to get wealth into the hands of the American masses fast, and if we're going to do it through housing, this is an idea worth considering.

(end)

https://t.co/Ask8xPgBrg
Oh, and if you like stuff like this, remember to sign up for my Substack's free email list!

https://t.co/FGppA1M8W6
Anyway, now back to your regularly scheduled coup attempt fallout...

More from Noahtogolpe 🐇

Today's @bopinion post is about how poor countries started catching up to rich ones.

It looks like decolonization just took a few decades to start

Basic econ theory says poor countries should grow faster than rich ones.

But for much of the Industrial Revolution, the opposite happened.
https://t.co/JjjVtWzz5c

Why? Probably because the first countries to discover industrial technologies used them to conquer the others!

But then colonial empires went away. And yet still, for the next 30 years or so, poor countries fell further behind rich ones.
https://t.co/hilDvv0IQV

Why??

Possible reasons:
1. Bad institutions (dictators, communism, autarkic trade regimes)
2. Civil wars
3. Lack of education

But then, starting in the 80s (for China) and the 90s (for India and Indonesia), some of the biggest poor countries got their acts together and started to catch up!


Global inequality began to fall.
1/I'm thinking about the end of Apu in the context of the national debates on immigration and diversity.


2/Apu's presence in Springfield represented a basic reality of America in the late 20th and early 21st century: the presence of nonwhite immigrants.

3/As Tomas Jimenez writes in "The Other Side of Assimilation", for my generation, immigrants from India, China, Mexico, and many other countries aren't strange or foreign. On the contrary, they're a

4/But that America I grew up with is fundamentally ephemeral. The kids of immigrants don't retain their parents' culture. They merge into the local culture (and, as Jimenez documents, the local culture changes to reflect their influence).

5/Simpsons character don't change. But real people, and real communities, do. So a character who once represented the diversity that immigrants brought to American towns now represents a stereotype of Indian-Americans as "permanent foreigners".
Time for panel #3: Big Tech and regulation!

I will be live-tweeting again, and you can also watch video at either the Twitter or Facebook links below!


Kaissar: Every industry gets regulated when it gets big. The question is what kind of regulation Big Tech will get,and whether the companies will be proactive in shaping it.

Kaissar: More profitable companies have higher returns. Why? Maybe it's a risk factor, because more profit = higher risk of getting regulated.

Bershidskyis showing a diagram of GDPR complaince pop-ups. What a massive ill-conceived bureaucratic mess.

Ritholtz: It's 2018 and we're still talking about Facebook privacy settings?! If you're still giving your personal data to Facebook, you just don't care about privacy!

More from Economy

True that all the people cherishing the support of IMF or WTO for farm reforms need to cool it down a bit, because that is a model we do not want to emulate to the t in India here.

But here are some issues that deserve to be better discussed by all:


1. People who say we are emulating the Western model of agriculture are way off with this assumption. The process of primitive accumulation, the alienation of their people from their land and the way these 'first-world' countries have pushed their people into Industrial sector +

+ was a merciless phase.
But the same assumption won't work for India, because we have always had a large workforce in agriculture, agri subsidies have always run high, protection has been the hallmark of agriculture and rural representation in the parliament has always been+

+ high. Still, it is our utter failure from the beginning that we have not been able to incentivize the movement of our people to other lucrative sectors.

2. This brings us to the another point of providing MSP on all the commodities and the demand side of the issue that we+

+ conveniently ignore. Here's the thing, Food prices in India have about 65-70% weight in calculating the Consumer Price Index and 25-30% of wholesale price index. These indices affect the general price level in the economy i.e. the inflation. If MSP is offered on all the+

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https://t.co/6cRR2B3jBE
Viruses and other pathogens are often studied as stand-alone entities, despite that, in nature, they mostly live in multispecies associations called biofilms—both externally and within the host.

https://t.co/FBfXhUrH5d


Microorganisms in biofilms are enclosed by an extracellular matrix that confers protection and improves survival. Previous studies have shown that viruses can secondarily colonize preexisting biofilms, and viral biofilms have also been described.


...we raise the perspective that CoVs can persistently infect bats due to their association with biofilm structures. This phenomenon potentially provides an optimal environment for nonpathogenic & well-adapted viruses to interact with the host, as well as for viral recombination.


Biofilms can also enhance virion viability in extracellular environments, such as on fomites and in aquatic sediments, allowing viral persistence and dissemination.
I like this heuristic, and have a few which are similar in intent to it:


Hiring efficiency:

How long does it take, measured from initial expression of interest through offer of employment signed, for a typical candidate cold inbounding to the company?

What is the *theoretical minimum* for *any* candidate?

How long does it take, as a developer newly hired at the company:

* To get a fully credentialed machine issued to you
* To get a fully functional development environment on that machine which could push code to production immediately
* To solo ship one material quanta of work

How long does it take, from first idea floated to "It's on the Internet", to create a piece of marketing collateral.

(For bonus points: break down by ambitiousness / form factor.)

How many people have to say yes to do something which is clearly worth doing which costs $5,000 / $15,000 / $250,000 and has never been done before.