Friday, November 16, 2018
Bonn vs bond
This article on wealth inequality comes from Univ of Bonn, the same place that did the wonderful experiment on electrostatic fish senses. So I decided to read it.
Is scholarly quality widespread at Bonn? No. This economist goes wildly wrong from the start, just like all other paid economists. He misses the BASIC MEANING OF WEALTH. When you start out wrong, you can't end up right.
What do we find? Most importantly, we show that rich and poor households have very different assets. Middle-class households prominently own houses, while the top-10% predominantly own shares and business equity. This gives rise to a race between the housing market and the stock market in shaping the wealth distribution. Housing booms lead to wealth gains for leveraged middle-class households and tend to decrease wealth inequality. Stock market booms primarily boost the wealth at the top of the wealth distribution.Right about the fact that inequality is getting worse, wrong about the reason. Housing booms lead to wealth gains for leveraged middle-class households and tend to decrease wealth inequality. WRONG. A mortgage is the PRECISE OPPOSITE of wealth. MONEY is wealth, whether it's in an accessible checking account or a delayed form like bonds. A house may be worth something or nothing, and the only way you can turn it to cash is by moving to another house, which may cost far more than the sale price. Worst of all, a mortgage turns to bankruptcy when you miss a few payments. A checking account or bond doesn't require you to do anything. It can be turned to cash without uprooting your life. A paid-for house is an asset which provides physical security and comfort, but still drains money to some extent for insurance and maintenance. If you think it's anything more or anything else, you're a SUCKER. This economist is maintaining the RACKET of debtism by misdescribing wealth.
Labels: Natural law = Sharia law, Natural law = Soviet law
¶ 8:24 AM
