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This as a basic all-explaining concept worked when they taught in school that Jill has an apple and will only consent to sell it at a certain price and Bob is willing to pay only a certain amount, and the price of the apple magically arrives at a point where both consent to engage in the transaction, and a shortage of apples or an increase in demand for them affects where the price point lands...but in these kinds of "how the market works" examples, Bob and Jill are able to do business as EQUALS in terms of power in the transaction.
We do not factor into "demand" the question of whether Bob can survive without that apple...
Actually, economics does indeed factor that in, as well as substitutes for apples, to arrive at the optimal allocation of capital toward apple production.
Quote:
Originally Posted by Sonic_Spork
...nor the possibility that apples WOULD have been abundant if Jill had not bought all the orchards on the continent, burned most of them to the ground, locked up the remaining apples and hired armed guards to protect them, and was then selling the few remaining apples one at a time for a million dollars apiece because hey...they are rare now!
Actually, economics does indeed factor in the potential for both natural monopolies (with declining long-term average price per unit) and also for stupid capitalists who attempt to "corner the market" and fail miserably in the process -- see The Hunt Brothers who, back in the 80s, attempted to "corner the market" for silver.
Quote:
Originally Posted by Sonic_Spork
Scarcity can be manufactured artificially
Actually, ALL goods are scarce with the exception of a handful of public goods. Indeed, Economics is the study the allocation of resources in a world of infinite wants & desires yet scarce resources.
Quote:
Originally Posted by Sonic_Spork
... the forces of supply and demand manipulated to serve the interest of the more powerful party
Such an emotional statement might pass muster in some left-wing social justice organization, but it fails miserably in any actual economics context.
Quote:
Originally Posted by Sonic_Spork
in situations where the product in question is a need and not a want...
Incorrect. Econ 101 teaches us that what people mistakenly think are needs actually are wants and desires.
Quote:
Originally Posted by Sonic_Spork
ownership is consolidated into big capital holdings
Certain industries are indeed more efficient to be large, but then they reach increasing average costs of expansion and cannot economically grow larger. That's called optimal firm size. You don't expand beyond optimal - or if you do, you collapse and fail.
Quote:
Originally Posted by Sonic_Spork
and now there's even software that can gauge to the penny where the tipping point is, where a problem of vacancy would offset the benefit of rises in rents.
That's a wonderful thing, right?
Quote:
Originally Posted by Sonic_Spork
It drives me nuts that people come into conversations about inflated rents, speaking as though most residential rental units are being managed actively by some individual who owns them. Well, sure, plenty are...not most, but plenty. About 40-45% of residential units for rent are managed by the owner, in a "mom and pop landlord" way. But they (obviously) follow the lead of the bigger fish in their metros. Who would price a unit dramatically below market? No one.
The first class in pricing at HBS has a case (well, it used to at any rate) with tons of cost data on manufacturing and selling sprockets (like bicycle sprockets), tons of data on channels of distribution, etc. and students spent the night before in groups massaging the data to come up with the best answer to pricing a product, and the professor finds ways to shoot all of them down in class. The professor then calls on a guy who didn't do any of the reading (shocking, I know) to get the proper price for a new entrant into the sprocket market. Rather than having exercised spreadsheets for hours, he gulps, and replies, "I'd call up a competitor, find out what they charge, and charge the name amount minus a penny." The professor says, "Finally - someone gets the right answer. Class Dismissed! And next time, do the reading."
Quote:
Originally Posted by Sonic_Spork
But when big...
Here we go with emotional adjectives
Quote:
Originally Posted by Sonic_Spork
... distant ...
Oooh - another adjective
Quote:
Originally Posted by Sonic_Spork
corporate interests
There we have the trifecta. "Big, Distant, Corporate." The boogie man.
Hint: size is irrelevant, as is location of headquarters, as is corporate ownership. By the way, please notice that "corporate" is not a 4 letter word.
Quote:
Originally Posted by Sonic_Spork
cause serious problems for "the people" in terms of market manipulation and exploitation, we get bubbles.
Next time, try just nouns and verbs. No adjectives or adverbs. There is no such thing as "market manipulation." There is no such thing as "exploitation."
Most importantly, there is no such thing as a housing bubble. No. Such. Thing. Prices go up, prices go down, prices go up - just as they do in all active markets.
Quote:
Originally Posted by Sonic_Spork
And eventually, bubbles burst.
Back to basic economics. Savings ≡ Investment. To say that the price of real estate has been bid up too high ≡ savings are too high. Do you really want to argue that savings are too high???
Quote:
Originally Posted by Sonic_Spork
And other problems arise in connection to the exploited industry.
Again, there is no such thing as "exploitation" in economics. No. Such. Thing.
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Originally Posted by Sonic_Spork
Like, for instance, how if a city needs X minimum wage level workers,
Nope. Cities do not "need" minimum wage level workers.
Quote:
Originally Posted by Sonic_Spork
but there is not adequate housing that they can afford for that pay
That's the beauty of the pricing system - minimum wage employers can't attract minimum wage workers. They raise their pay - except for the ones who cannot raise pay & still make a profit. They fold, and capital is reallocated to better uses.
That's wonderful.
Quote:
Originally Posted by Sonic_Spork
the delta ends up being people who either end up homeless
That is far too simplistic a view of homelessness. That doesn't pass muster.
Quote:
Originally Posted by Sonic_Spork
or move away or find other changes they can make to survive
Again, that's wonderful!
Quote:
Originally Posted by Sonic_Spork
Something's gotta give.
Yeah, people who lacked economic reasoning skills said much the same thing back in the 1970s. Ditto in the 1980s and 1990s and -- well, you get the idea.
Quote:
Originally Posted by Sonic_Spork
And if the REITs' leasing software (with which I am VERY familiar) just keeps pushing up rents even more to try and gobble up every gain in wage increases and then some... It ends up being unsustainable. You get waves of urban blight from these kinds of conditions.
A very naïve view of urban blight.
Quote:
Originally Posted by Sonic_Spork
It is a consequence of short sightedness on the part of big companies.
Corporations have, as their majority owners, public sector union pension funds that provide pensions to elderly public sector retirees. Other major owners include public sector non-union pension funds, private sector union pension funds, private sector 401Ks, individuals through their corporate-sponsored 401ks, IRAs, and people saving for their own retirements & their kids college & to take a family vacation.
When you demonize corporate interests, you are demonizing people - real people.
You mean you can’t remember what you wrote? Maybe just bits of it?
Part of my post was referring to you calling investors who buy mobile home parks and raise rents as carpetbaggers as if they just greedily raised rents but then you have no idea how much they invested and what return they needed.
Yes, of course I remember that. Then you (or whoever it was) said "what about THIS guy" referring to the guy who raised his rent 57%. I said I think that's different, because he didn't have a renter already and made pretty much an entirely new unit by renovating over 18 months and spending $30,000. Of course that unit would then be worth more.
Actually, economics does indeed factor that in, as well as substitutes for apples, to arrive at the optimal allocation of capital toward apple production.
Actually, economics does indeed factor in the potential for both natural monopolies (with declining long-term average price per unit) and also for stupid capitalists who attempt to "corner the market" and fail miserably in the process -- see The Hunt Brothers who, back in the 80s, attempted to "corner the market" for silver.
Actually, ALL goods are scarce with the exception of a handful of public goods. Indeed, Economics is the study the allocation of resources in a world of infinite wants & desires yet scarce resources.
Such an emotional statement might pass muster in some left-wing social justice organization, but it fails miserably in any actual economics context.
Incorrect. Econ 101 teaches us that what people mistakenly think are needs actually are wants and desires.
Certain industries are indeed more efficient to be large, but then they reach increasing average costs of expansion and cannot economically grow larger. That's called optimal firm size. You don't expand beyond optimal - or if you do, you collapse and fail.
That's a wonderful thing, right?
The first class in pricing at HBS has a case (well, it used to at any rate) with tons of cost data on manufacturing and selling sprockets (like bicycle sprockets), tons of data on channels of distribution, etc. and students spent the night before in groups massaging the data to come up with the best answer to pricing a product, and the professor finds ways to shoot all of them down in class. The professor then calls on a guy who didn't do any of the reading (shocking, I know) to get the proper price for a new entrant into the sprocket market. Rather than having exercised spreadsheets for hours, he gulps, and replies, "I'd call up a competitor, find out what they charge, and charge the name amount minus a penny." The professor says, "Finally - someone gets the right answer. Class Dismissed! And next time, do the reading."
Here we go with emotional adjectives
Oooh - another adjective
There we have the trifecta. "Big, Distant, Corporate." The boogie man.
Hint: size is irrelevant, as is location of headquarters, as is corporate ownership. By the way, please notice that "corporate" is not a 4 letter word.
Next time, try just nouns and verbs. No adjectives or adverbs. There is no such thing as "market manipulation." There is no such thing as "exploitation."
Most importantly, there is no such thing as a housing bubble. No. Such. Thing. Prices go up, prices go down, prices go up - just as they do in all active markets.
Back to basic economics. Savings ≡ Investment. To say that the price of real estate has been bid up too high ≡ savings are too high. Do you really want to argue that savings are too high???
Again, there is no such thing as "exploitation" in economics. No. Such. Thing.
Nope. Cities do not "need" minimum wage level workers.
That's the beauty of the pricing system - minimum wage employers can't attract minimum wage workers. They raise their pay - except for the ones who cannot raise pay & still make a profit. They fold, and capital is reallocated to better uses.
That's wonderful.
That is far too simplistic a view of homelessness. That doesn't pass muster.
Again, that's wonderful!
Yeah, people who lacked economic reasoning skills said much the same thing back in the 1970s. Ditto in the 1980s and 1990s and -- well, you get the idea.
A very naïve view of urban blight.
Corporations have, as their majority owners, public sector union pension funds that provide pensions to elderly public sector retirees. Other major owners include public sector non-union pension funds, private sector union pension funds, private sector 401Ks, individuals through their corporate-sponsored 401ks, IRAs, and people saving for their own retirements & their kids college & to take a family vacation.
When you demonize corporate interests, you are demonizing people - real people.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,572,211 times
Reputation: 16698
Quote:
Originally Posted by ocnjgirl
Yes, of course I remember that. Then you (or whoever it was) said "what about THIS guy" referring to the guy who raised his rent 57%. I said I think that's different, because he didn't have a renter already and made pretty much an entirely new unit by renovating over 18 months and spending $30,000. Of course that unit would then be worth more.
I'm not really sure what your point is.
Of course you don’t, you don’t remember what you wrote.
I made a comment about you calling investors carpetbaggers and gouging tenants when you had no idea of the investors costs and margins and if it truly was gouging.
Would you like a screenshot of your post and what you wrote?
I know, you still won’t conveniently get what the point is.
Of course you don’t, you don’t remember what you wrote.
I made a comment about you calling investors carpetbaggers and gouging tenants when you had no idea of the investors costs and margins and if it truly was gouging.
Would you like a screenshot of your post and what you wrote?
I know, you still won’t conveniently get what the point is.
I still think a lot of those investors are carpet baggers. When you come in and buy a trailer park that already exists and triple or quadruple labs use fees immediately just because you can because you know the people living there can’t afford to move their trailer, I’m gonna call you a carpet bagger. But when you asked me whether I thought that poster was one, I said no and explained why. I’m not talking about mom and mom landlords in any way.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,572,211 times
Reputation: 16698
Quote:
Originally Posted by ocnjgirl
To me it is.
So you think they are carpet baggers or you know some facts that prove they are carpet baggers.
I don’t think it’s fair to label them as such without knowing the facts which you have not provided.
I am proud to be a carpet bagger - thank you very much
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