Links - Calamities
Don't aim for icebergs!
Alternative title: Calamities in Three Acts
Up first is the calamity that could be …
Michael Munger details the worst idea you’ve never heard of: ULTRAs (AKA, Elizabeth Warren, et al.’s plan to tax wealth).
The effect is rather startling, looking at the example. In a relatively short time, the government literally takes substantial ownership of all successful private businesses. Rather than being a drawback, advocates have actually become excited about government ownership of “the Metaverse,” and giving the Treasury Secretary extremely broad and unilateral discretion about the use of ULTRAs in lieu of cash payments.
The motivation behind wealth taxes is greed and envy. That is a dangerous mixture for developing public policy. We've seen this play before: It is technically fascism that evolves into communism. Where is John Galt when we need him?
Of course this is nothing—which is obviously really saying something—compared to Biden’s completely insane proposal for capital gains taxes.
Trump’s absurd idea to replace the income tax with sufficiently high tariffs tells you a lot about how economically illiterate his base is. These proposals from the left perhaps show the Democratic base wins this round of Hold-My-Beer.
(Related regarding Trump’s tariff idea, Cato offers this quite-handy chart.)
Moving on we find the calamity that is …
Kevin Erdmann gives a succinct rendition of the vicious cycle of American housing.
In addition to the cycles of failed housing policies, Americans have also sought to blame various sources of demand for costly housing: short-term rentals, wealthy foreigners, immigrants from the south, low interest rates. A conventional description of the Great Recession is that the housing bubble fooled Americans into thinking we were richer than we really were. You could say that the Great Recession was our attempt to make ourselves poor enough to fit into our inadequate stock of housing. And it briefly succeeded. Maybe the most popular idea of the past 20 years among the financial layperson is “Raise interest rates until the bubble pops.”
Before 2008, even at the bottom of our deepest recessions, America never produced fewer new homes per capita than we produce today. What does it say of America if this is now too much housing demand for us to handle?
It clearly should not be. And to recognize that is to rediscover an optimism for what we are capable of if we simply allow it.
As promised, I’ll continue to link to Erdmann’s work on this until we understand our incredible housing mistakes and start working in earnest to reverse them.
Finally we end on the calamity that was not …
Despite the conventional wisdom telling us otherwise, Jeremy Horpedahl demonstrates that young Americans continue to build wealth.
Always a fascinating analysis, Horpedahl updates here for the latest inter-generational wealth comparisons. The kids are doing GRRRRREAT! For all those who want to paint a doom-and-gloom narrative—right and left are equally guilty of this—the data here present a very big dose of cold water.
What’s notable about the data is just how much the youngest “generation” in the chart has jumped up in recent years. They have now have about double the wealth that Gen X had at roughly the same age. Average wealth is about as much as Gen X and Boomers had 5-6 years later in life — and while there are no guarantees, odds are Millennial/Gen Z wealth will be much, much higher in another 5-6 years.
