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Economist - How Cheaper Housing Can Boost Productivity

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SINCE the financial crisis, sagging productivity growth has given politicians and economists alike sleepless nights.

8 years of sleepless nights and now it clicks and now it even rates an article in the Economist. It seems to typify economists (and politicians) but they know their reputation already of course.

Interesting article - needless to say it's been applicable in the UK for many years and well before the financial crisis as well.

To understand how cheap housing could boost productivity, consider the British economy. Inner London is by far the most productive region of the country, thanks to its clusters of finance, technology and nerds.

Debt and money printing with overseas money setting house prices etc. It sounds like another definition of the word "productive" is needed.

As usual no mention of how levels of credit affects house prices.

Edited by billybong

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"How Cheaper Housing Can Boost Productivity"

53b0451f49406952107875ea6ac6ceeba16f21df

Quite!

The most basic and often ignored feature of a productive society. Ignored because it means that only hard work is rewarded, far better to accumulate free money at the expense of others.

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The article does't actually explain how cheaper housing can boost productivity unless it's trying to claim that the old discredited solution of jobs through building and selling/exchanging houses is the solution. It comes up with less commuting but misses the ability to be more competitive through lower wages argument.

It even contradicts itself by claiming that inner London the most expensive part of the UK is the most productive.

Edited by billybong

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Is London productive? Or just busy.

i fail to see how being stuck on the M25 every day in 2 hours worth of tailbacks is productive.

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i fail to see how being stuck on the M25 every day in 2 hours worth of tailbacks is productive.

wait for the Google robotic cars you can work or sleep for these 2 hours ... :)

some can even pick up a friend and have a sex ...

this is called multi tasking :lol::lol::lol:

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Cheaper housing will boost DEMAND for stuff across the board, because people - particularly the younger generations - will learn what it is to be a CONSUMER again, rather than a "frugalist" - because they will have more disposable income, which can pollinate the wider economy, which in turn will boost productivity (productivity follows demand). It's the most obvious thing in the world, but ....eh....HPI forever innit. Back to the idiocracy.

Edited by canbuywontbuy

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wait for the Google robotic cars you can work or sleep for these 2 hours ... :)

some can even pick up a friend and have a sex ...

this is called multi tasking :lol::lol::lol:

Not sure I'd be able to get it up with him watching.

JohnnyCab.jpg

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From the article the Economist seems to be suggesting that more jobs in itself equals more productivity which isn't necessarily true as more jobs doesn't necessarily mean more production or more output. For example more part time jobs increases the total number of jobs but doesn't necessarily increase production or output.

At its core the Economist is suggesting a continuation of the policies that have got the UK into its current uncompetitive/high debt bind rather than shedding any real light on the true benefits of cheaper housing. Extolling inner London with its crazy house prices shows where its core beliefs are.

Edited by billybong

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Fine until someone works double overtime and hoovers up 4 houses.

Why would anyone want more than one......or possibly a holiday one bought with 100% cash no debt or btl mortgages to buy excess property to rent out or for investments.

Falling or level to real inflation rate rises together with affordable min living wage rents with a touch of tenancy protection....why they will not be hoovering them up they will be dropping them like a hot brick......there will always be something else more lucrative to take the place of property. ;)

Edited by winkie

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Its a kind of 'soviet' productive. Has high outputs of things people dont want or need but are forced to buy anyway...think loans, insurance, lawyers, government.

Lol! Exactly.

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To me it's incredibly obvious. Britain has become a largely 'service economy'- as in most people sell each other stuff they don't actually need but enjoy having/consuming, like flat screen tellies and restaurant meals. If we weren't all slaving away to pay ludicrously over the top rents or mortgages we'd all have a lot more money to spend on stuff we like, and which keeps other people in employment...so they in turn have money to spend etc.

That's the way it should be in the 21st century, automated farming has made food production very cheap; automated production has made all forms of consumer goods similarly so. There is absolutely no reason IMO why any person should actually need to work more than 20 hours a week. Fine, if you want a Ferrari and a 5-bed detached rather than a Focus and a 3-bed semi keep putting in the 60 hour weeks. But that should be the choice we make. And everyone should be angry at banksters, politicians and VI boomers that it is not.

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To me it's incredibly obvious .... If we weren't all slaving away to pay ludicrously over the top rents or mortgages we'd all have a lot more money to spend on stuff we like, and which keeps other people in employment...so they in turn have money to spend etc.

Indeed, and this illustrates why "economists" are for the most part are just oxygen thieves because barely a single one of them can see what is completely bleedin obvious to a lay person with an ounce of common sense. This is why I call them "playstation economists" because they cannot reason about reality itself, only about how to achieve a "high score" by manipulating a flawed and incomplete abstraction of the real world represented by the particular metrics they have been told are important.

Edited by goldbug9999

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Why aren't the major retailers who are losing out to high fixed costs complaining about said high fixed costs? Tesco blame Aldi/Lidl and their own incompetence, but it's really down to people becoming more frugal. Productivity is lower in the UK - nominally, literally - than what it was in 2007. Demand for stuff is low - because....the bleedin' obvious - wages v fixed living costs. To look at it perversely, if the government want to LOWER productivity, just stick props up on the fixed costs side of things. Just like........they've been doing....it's madness.

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