I also remember when the government owned its buildings-like post offices. Now the post office closest to me moves every few years since they’ve been forced to rent from private owners. All this costs a whole lot more than when the government was allowed to own its buildings, which in turn gets passed on to us.
This is broadly true and I agree we desperately need more/better housing/education/healthcare/good things, but some aspects of this scarcity are not a plot or evidence of market forces failing, but perversely result from the labor market *working* to unfortunate effect. There's a phenomenon called Baumol's Cost Disease: roughly, it explains that if some parts of the economy become more productive, it drives up costs even in unrelated sectors.
Imagine a city like San Francisco experiencing a tech boom: software is going crazy, computers are getting 100x better/faster/cheaper every few years. Anyone who is clever enough to be a high school science teacher could instead go become a web developer and triple their salary overnight. Education hasn't gotten any better or more efficient, but suddenly you have to pay more to attract and retain your teachers.
Some variation of this effect is at play in most of these sectors like healthcare or education that are not susceptible to efficiency gains and automation. The financial sector has been wildly profitable over the past four decades, and so many of the top students have flocked to finance. It costs more to hire a math teacher because so many potential math teachers are now Wall Street quants.
Cost Disease says productivity gains in tech force up wages everywhere else, making healthcare and education expensive forever. You don't see that. Teachers and nurses got flat wages for decades. What you see instead is administrative bloat. The US runs 8.9% overhead in healthcare. The UK runs 1.9%.
If the diagnosis were right, you'd see it everywhere. Japan delivers better healthcare outcomes on roughly half the per capita spending. Same wage markets. Same productivity dynamics. They just made different choices.
The diagnosis fails. And that matters because accepting it means there's no solution. But there is one. Government supply. Build housing, run clinics, operate childcare centers. State level, city level, county level, federal. Pay good wages, provide good working conditions. Charge fees if you need to. Prove you can deliver more efficiently than the private sector. That forces reform across the board.
The whole point is there is potential here. It just takes building.
I'm not an economist but as I understand it, cost disease doesn't apply only to the folks doing the real work. Academic administrators get paid very well; insurance staff, healthcare execs, etc. are all part of the cost disease. Furthermore, US healthcare staff ARE very well compensated. Doctors in the US make on the order of $250,000/year, compared to ~$100,000 in the British NHS.
You mention Japan, but Japan is absolutely not the "same wage markets". The average software engineer in America makes ~$110,000; in Japan it's $36,000. The most successful parts of the US economy (finance, technology) are simply wildly more productive than their counterparts around the world.
I don't think accepting the reality of cost disease means you give up and do nothing. We can work to make less-efficient sectors more productive (I take this to be a large part of your thesis: cut deadweight loss and fix it so we get more output for our money, and sometimes that means providing a public option) but we can also tax high frequency trading to subsidize universal pre-K. As a society, we can choose to redistribute the gains made in one sector to other sectors less amenable to automation but more socially valuable.
I don't think rising wages among teachers are driving prices higher. The finance sector is itself the problem. Why is that where the money flows? Why is the profit in automobiles in the financing and not manufacturing? Not because labor to make the car is too high. Au contraire! The money from interest and indebtedness is greater and growing. Slavery by any other means...
At least partly because it's much easier to innovate in a spreadsheet than it is to innovate in the real physical world. Making a better car is harder than tricking people into paying more for the same car by spreading out the payments.
Good point. Virtual reality of digital economy, a redefining of social relations with the stroke of a pen (or esign robosignature) is easier than building an undivided house!
k-math, You are correct. Money from financing the car is easier to do than build a factory, equip it, hire workers and engineers. American Corporations quit building anything in favor of financing everything.
The Baumol effect is an interesting idea to consider, especially in the nearsighted look at building affordable housing that seems to generate the NIMBY effect. What I have seen in terms of building is renovation and repurposing other type of buildings for housing and the development by the small owner who is able to then afford owning a property and earn an income from it. Unfortunately owning property seems to engender some of the same ethics as the corporate owners/builders model. And that is to take as much profit as can be had with as many corners cut as possible. Together, this is the market model that generates slum landlords and difficult neighborhoods, it is the extractive method to the max. Seeing affordable housing as badly made and not kept up gives us the NIMBY effect. Not paying attention to what housing IS is the problem. It is a necessity for life and health. People must be educated to understand that it has consequential importance to the whole society. It is not just a commodity. Therefore, it must be developed, not as some substandard enterprise that clearly carries its stigma but to be as 'good' as the others. There were many post war buildings developed like this in NYC making those neighborhoods competitive with all the "luxury" towers that are being built now (basically gated communities) that give little or nothing to the neighborhood in which they get built. Looking at some '50s and '60s ideas, when things other than money created value, would be worthwhile.
I do wanna give Corbin credit for grokking that “credits” are just going to exacerbate the problem of Cost Disease Socialism.
But OTOH he perversely seems to imagine that public construction — PHIMBY — won’t get defeated by the same NIMBY machine we’re currently trying to defeat. The relevant part is the “-IMBY”, not the “PH”.
It's frustrating how many things Corbin says seem like common sense, but aren't taken as such by a lot of people. If you have lived sixty years, you've seen - or had the opportunity to see - the hope for a good future for your kids and neighbors start to disappear in real time. The extraction is obvious these days. I wish we could put advertising back to *only* telling us what is available, and where. Make coupons be coupons instead of an extractive trick. Let phones be just phones, and let people own what they buy. Regulate all things that can be harmful, especially when so many off us don't have a clue how dangerous they are.
This is one of the better production arguments I've seen, and I agree with most of it: money without supply just relocates price. Two additions from a different angle, for what they're worth.
The tax-the-rich fixation you're describing has a specific political function, and it's not really about revenue. A target that both sides can rally around is politically useful because named targets are what drive movement solidarity. That's why the debate keeps returning to the wealth tax even after everyone involved knows it won't fix housing or health care on its own. The wealthy are targeted not due to their wealth alone, but due to the fact that their wealth has been used to skew the rules in their favor.
My other addition cuts against your frame a little. Some of what you're calling a production failure is real; more doctors, more housing units, and more capacity would genuinely help. But some of the goods on your list (the right school district, the top-tier college, the best hospital) are positional. Their value comes from other people wanting them too, not just from scarcity of supply. Build twice as many houses in a metro area and you haven't built twice as many houses in the neighborhood with the good schools, because the good schools are partly defined by who else lives there. That's not an argument against building. It's a reason building alone won't fully deflate every price you're pointing to. The issue is not solely supply; it's also the tangible things that go along with certain things like a house in a neighborhood with superior schools.
Your TVA line is the strongest part of your argument. A cash transfer doesn't build a durable political coalition, because nobody can point to it and say the government did that. A public utility, a public housing project, or a rural co-op all generate the kind of visible, attributable win that holds a coalition together past the next election. That's a large part of why redistribution politics keeps losing to production politics even when the numbers favor redistribution. People don't organize around a check. They organize around something they can see get built.
You're right about the positional part and I won't pretend otherwise. A $20,000 handbag costs that because it's a $20,000 handbag. Competition is part of our nature and part of how we understand success, and that means somebody's above and somebody's below.
But look at the school example. Those neighborhoods are desirable partly because schools are funded differently. We don't have enough teachers, we don't pay them well, and we've cut arts and sciences and STEM. The quality gap between schools is a supply problem before it's a status problem.
I don't think accepting that people compete means we can't have high quality, highly accessible healthcare, housing, food, infrastructure, clean water, clean air. Those are the floor. What people do above the floor is their business.
Definitely, and you're right about school example, because I mashed two different things together. Fund every school properly and pay teachers what they're worth, and the gap gets a lot smaller.
I'm not saying supply isn't the core issue either. Some competition is baked into scarcity itself. The positional stuff shows up when people take basic competition and elevate it way past what's at stake. Look at Tesla's stock price right now, which has no relationship at all with its fundamentals. People bought into it because other people bought into it. That's how every bubble works, and it's also likely how some "good" neighborhoods are perceived.
So yeah, build the floor. Supply's necessary, just not always sufficient once you're talking about desire instead of need. It's still the right place to start, since it's something we can do.
How do we convince people that the ultra-wealthy didn’t earn their wealth — that they benefited from structures that funnel money away from the public good and from worker wages? I find so many people snookered into defending the musks of this world as “successful” instead of as the exploiters and plunderers they are.
I’m fighting this on a smaller scale with Untrickled. I’m not convinced there is a more important issue than this, because it affects every other issue. EVERY issue. Economic inequality is tearing down families, robbing youth, starving elders and tearing down democracy.
This brings to mind how much misery there is among heirs who have fabulous wealth they didn’t earn. There’s even a philanthropic nonprofit that started decades ago as a support group for their situation. Most people have to feel like they deserve what they have to get joy from it. Let’s get all their money circulating AND build things.
Public works. Direct government employment building housing and infrastructure. Apprenticeships in the trades with a job at the end of them. Long term contracts for domestic materials so suppliers actually scale up production instead of riding the price spike.
The constraint isn't money. The constraint is whether we're willing to build instead of writing checks and hoping somebody else builds.
Zoning and permitting reform has to be part of the solution. Not just on housing either. Roads, bridges, power lines, the whole nine. That's a fact, and there's an entire movement around it. I'm not arguing against it.
But unless you take on who is doing the building and how they get the supply they have, you'll find additional bottlenecks down the line. Look at Texas and Tennessee. Less zoning, less regulation, and housing is still well out of reach for most people at median income. The scale of development is still relatively low. Supply still isn't meeting demand even with deregulation. Part of that is expected profit margins. Part of it is the supply of the building trades. Part of it is lumber, wire, panels, electrical components.
Every time we've had a boom in construction, commodities shoot through the roof. That happened during COVID. There's an inelastic connection between the rising price of homes and the building of them. They're not responding to the market the way the theory says they should.
So it's going to take intervention in the supply chains and intervention in developing the skilled labor force. Direct intervention. That's what I'm committed to.
And I'd say this. The political movement that reignites public building and public ownership will absolutely be able to bring along zoning reform. That's already embraced by plenty of people in the moderate wing of both parties. It just doesn't have the political will behind it right now because on its own it doesn't solve the problem.
RE your last paragraph, if it doesn’t have the political will behind it AND both major parties are fine with executing on the rest without your public ownership, then my challenge to you is that you need to figure out how to convince them to bother entertaining your ideas. You have to demonstrate that your ideas will serve their interests better than their own ideas.
There will always be bottlenecks, because there are finite atoms in the universe and finite seconds with which to move them.
What matters here is to always have a supply-first mentality. Zoning and permitting is the lowest level of that, but at the higher levels it’s just turtles upon turtles of ensuring that the political system can sustain a supply-first mindset in perpetuity.
If that means social democracy, then great. But it could also quite easily mean some variety of liberal or libertarian democracy as well. Social democracy is not inherently more valid than any other form of democracy just because it’s nice to people or uses some given economic structure; it’s only valid to the extent that it can deliver abundance to the people.
So, I don’t really care about any specific “interventions” you want to go with. If taxing the billionaires does it, great! But what I DO care about is whether you’re mistaking the intervention for the end goal, which your rhetoric doesn’t give me a firm grasp on and is why I’m leery of the way you’re formulating it.
We don’t have anything that scales anywhere near what we had during the new deal. Put people to work building public housing, fixing our rotting infrastructure, taking care of delayed or abandoned projects in National Parks due to GOP defunding, building high speed rail projects, green energy infrastructure, etc. But most importantly, keep these projects and assets publicly owned and not sold off to private interests.
Oops! Meant to say “permitting hampers the scale”.
Our current programs don’t scale BECAUSE of permitting. We’ve HAD programs in places like SF where they try to build “affordable” housing by the city, and it ends up costing $800k/unit because of all the NIMBYs and the permitting veto points. Even relatively permissive Vermont can’t get it done for less than $300k.
You can’t scale $800k/unit without breaking the public budget. Doesn’t matter if the public “owns” it once it’s built, it costs too much to build at scale, period.
RE infrastructure, go read Chuck Marohn’s Strong Towns book. The infrastructure crumbles because the suburban form is not dense enough to pay for itself and is a huge drag on everything else.
Taxing the wealthy for such projects is dependent on political will and a big shift in public thinking, and it stands to reason that the same would apply to changing zoning and dealing with NIMBY-ism as well (and would likely affect the same folks as the tax increases to pay for it - for sure they aren't going to do any of this without a fight).
Thanks for the book recommendation, I've noted it for possible further reading. I'm always interested in theories of how we can organize society better and more humane ways.
My point still stands: you can tax the wealthy all you want, and it still won’t be enough to pay for $800k housing units for everyone. The math literally doesn’t work!
If we seized all of Elon’s $1T, and even granting a more fair $400k per unit and taking the lower end of the best-estimate 10-20M units needed, his money would only pay for $100k of that cost.
You can waste all your political capital trying to take Elon’s money and only get a quarter of the houses you need to show for it, or you can spend it savagely defeating the NIMBYs and the market will happily build you all those houses for much less than $400k/unit without having to spend a single public dime. You can spend that tax money on giving every child a puppy dog for all I care! And you’ll actually have MORE tax revenue from all the construction activity.
Dean Baker used to write about how the financialization of everything is a huge part of the problem. Our financial sector used to be 3% of GDP and now it’s 20%. Banking is like trucking. You need it to have the economy functioning, but it doesn’t actually do anything. The goal should be to have it be as small as possible.
This guy, as young as he is, gets it!!! What he speaks is the truth. I don't know if we can ever get back to the place we need to be as described in his post; but I do know that if we don't find a way quickly a lot of us will not make it. I truly believe that this is in fact the plan! "Humanely" get rid of a lot of the pesky poor people while keeping just enough to continue doing the grunt work that the wealthy wouldn't be caught dead doing. Frees up more for the top 1% and gets rid of a lot of the "waste" on subsidies to the bottom 90% . Kills 2 birds with one stone; or many of the "common" people without lifting a finger. I hope I'm wrong; but I don't believe so. Our government and most of our representatives have been bought out by the extremely wealthy and they don't even pretend to see the rest of us. I hope we can turn it around, but I also know that these people with all the power and most of the money are not going to go quietly. This will take more than a movement; it will take a lot more. I hope we're up to it.
I read your more recent piece on wealth extraction versus building first. This expands on that so much. So great! I agree - wealth extraction and holding versus building is literally killing us. Effective economies move money around and create. We aren't creating. AI creates nothing, really. It extracts and uses what was created by others. I miss solving problems for customers (consumers, even businesses) - that's where wealth lies.
It's content like this that makes me a monthly donor. I'll gladly give up two video subscriptions for regular content such as this. I hope Trent and HCR get together soon for a video. They are both sharing the same message in their own way. There has to be a synergism between them.
Good for you! You handed it Jennings, who is one of the most despicable media talking heads. I so agree. Tax the wealthy a fair amount? Yes. Is that enough? No. What is required is economic system redesign. AND while we rebuild the ability to manufacture and produce, we must ask the hard questions of what kind of growth, and what are we producing because we have crossed critical ecological thresholds. Production and manufacturing that are just of the same stuff in the same way that feeds a consumption and extraction-based economy would only make the whole mess worse.
I'm 75. I have seen this country taken over by corporations. Wall Street Healthcare ? HMOs have destroyed our affordable healthcare you used to be able to buy like car insurance. An example: an xray costs $500. The HMO gets $150 off the top (30%) to pay for CEO salaries, buildings full of people trying to deny your claim and stockholder dividends. Obviously, it serves the HMO if the xray is $1000 - then they get $300. How will prices ever be controlled ?
As someone who has lived abroad, it really irks me how 'socialism' is such a bad word in this country, and always will be. If only our entire progressive movement could replace the word 'socialism' with 'Public Ownership', maybe then would people begin to wake up.
"We need reparations in addition to tax reform to fully atone for our nation’s sins and achieve racial and economic justice."
I thought it was going to be about how we can't fix the way it was, but need a different take on reality. But it turned out to be another important perspective.
I agree with this solution.
I also remember when the government owned its buildings-like post offices. Now the post office closest to me moves every few years since they’ve been forced to rent from private owners. All this costs a whole lot more than when the government was allowed to own its buildings, which in turn gets passed on to us.
This is broadly true and I agree we desperately need more/better housing/education/healthcare/good things, but some aspects of this scarcity are not a plot or evidence of market forces failing, but perversely result from the labor market *working* to unfortunate effect. There's a phenomenon called Baumol's Cost Disease: roughly, it explains that if some parts of the economy become more productive, it drives up costs even in unrelated sectors.
Imagine a city like San Francisco experiencing a tech boom: software is going crazy, computers are getting 100x better/faster/cheaper every few years. Anyone who is clever enough to be a high school science teacher could instead go become a web developer and triple their salary overnight. Education hasn't gotten any better or more efficient, but suddenly you have to pay more to attract and retain your teachers.
Some variation of this effect is at play in most of these sectors like healthcare or education that are not susceptible to efficiency gains and automation. The financial sector has been wildly profitable over the past four decades, and so many of the top students have flocked to finance. It costs more to hire a math teacher because so many potential math teachers are now Wall Street quants.
https://en.wikipedia.org/wiki/Baumol_effect
Cost Disease says productivity gains in tech force up wages everywhere else, making healthcare and education expensive forever. You don't see that. Teachers and nurses got flat wages for decades. What you see instead is administrative bloat. The US runs 8.9% overhead in healthcare. The UK runs 1.9%.
If the diagnosis were right, you'd see it everywhere. Japan delivers better healthcare outcomes on roughly half the per capita spending. Same wage markets. Same productivity dynamics. They just made different choices.
The diagnosis fails. And that matters because accepting it means there's no solution. But there is one. Government supply. Build housing, run clinics, operate childcare centers. State level, city level, county level, federal. Pay good wages, provide good working conditions. Charge fees if you need to. Prove you can deliver more efficiently than the private sector. That forces reform across the board.
The whole point is there is potential here. It just takes building.
I'm not an economist but as I understand it, cost disease doesn't apply only to the folks doing the real work. Academic administrators get paid very well; insurance staff, healthcare execs, etc. are all part of the cost disease. Furthermore, US healthcare staff ARE very well compensated. Doctors in the US make on the order of $250,000/year, compared to ~$100,000 in the British NHS.
You mention Japan, but Japan is absolutely not the "same wage markets". The average software engineer in America makes ~$110,000; in Japan it's $36,000. The most successful parts of the US economy (finance, technology) are simply wildly more productive than their counterparts around the world.
I don't think accepting the reality of cost disease means you give up and do nothing. We can work to make less-efficient sectors more productive (I take this to be a large part of your thesis: cut deadweight loss and fix it so we get more output for our money, and sometimes that means providing a public option) but we can also tax high frequency trading to subsidize universal pre-K. As a society, we can choose to redistribute the gains made in one sector to other sectors less amenable to automation but more socially valuable.
https://www.medsalarydata.com/2025/10/doctor-salary-by-country-2025-us-vs-uk.html
https://www.codesubmit.io/blog/software-engineer-salary-by-country?
I don't think rising wages among teachers are driving prices higher. The finance sector is itself the problem. Why is that where the money flows? Why is the profit in automobiles in the financing and not manufacturing? Not because labor to make the car is too high. Au contraire! The money from interest and indebtedness is greater and growing. Slavery by any other means...
At least partly because it's much easier to innovate in a spreadsheet than it is to innovate in the real physical world. Making a better car is harder than tricking people into paying more for the same car by spreading out the payments.
Good point. Virtual reality of digital economy, a redefining of social relations with the stroke of a pen (or esign robosignature) is easier than building an undivided house!
k-math, You are correct. Money from financing the car is easier to do than build a factory, equip it, hire workers and engineers. American Corporations quit building anything in favor of financing everything.
The Baumol effect is an interesting idea to consider, especially in the nearsighted look at building affordable housing that seems to generate the NIMBY effect. What I have seen in terms of building is renovation and repurposing other type of buildings for housing and the development by the small owner who is able to then afford owning a property and earn an income from it. Unfortunately owning property seems to engender some of the same ethics as the corporate owners/builders model. And that is to take as much profit as can be had with as many corners cut as possible. Together, this is the market model that generates slum landlords and difficult neighborhoods, it is the extractive method to the max. Seeing affordable housing as badly made and not kept up gives us the NIMBY effect. Not paying attention to what housing IS is the problem. It is a necessity for life and health. People must be educated to understand that it has consequential importance to the whole society. It is not just a commodity. Therefore, it must be developed, not as some substandard enterprise that clearly carries its stigma but to be as 'good' as the others. There were many post war buildings developed like this in NYC making those neighborhoods competitive with all the "luxury" towers that are being built now (basically gated communities) that give little or nothing to the neighborhood in which they get built. Looking at some '50s and '60s ideas, when things other than money created value, would be worthwhile.
I do wanna give Corbin credit for grokking that “credits” are just going to exacerbate the problem of Cost Disease Socialism.
But OTOH he perversely seems to imagine that public construction — PHIMBY — won’t get defeated by the same NIMBY machine we’re currently trying to defeat. The relevant part is the “-IMBY”, not the “PH”.
It's frustrating how many things Corbin says seem like common sense, but aren't taken as such by a lot of people. If you have lived sixty years, you've seen - or had the opportunity to see - the hope for a good future for your kids and neighbors start to disappear in real time. The extraction is obvious these days. I wish we could put advertising back to *only* telling us what is available, and where. Make coupons be coupons instead of an extractive trick. Let phones be just phones, and let people own what they buy. Regulate all things that can be harmful, especially when so many off us don't have a clue how dangerous they are.
This is one of the better production arguments I've seen, and I agree with most of it: money without supply just relocates price. Two additions from a different angle, for what they're worth.
The tax-the-rich fixation you're describing has a specific political function, and it's not really about revenue. A target that both sides can rally around is politically useful because named targets are what drive movement solidarity. That's why the debate keeps returning to the wealth tax even after everyone involved knows it won't fix housing or health care on its own. The wealthy are targeted not due to their wealth alone, but due to the fact that their wealth has been used to skew the rules in their favor.
My other addition cuts against your frame a little. Some of what you're calling a production failure is real; more doctors, more housing units, and more capacity would genuinely help. But some of the goods on your list (the right school district, the top-tier college, the best hospital) are positional. Their value comes from other people wanting them too, not just from scarcity of supply. Build twice as many houses in a metro area and you haven't built twice as many houses in the neighborhood with the good schools, because the good schools are partly defined by who else lives there. That's not an argument against building. It's a reason building alone won't fully deflate every price you're pointing to. The issue is not solely supply; it's also the tangible things that go along with certain things like a house in a neighborhood with superior schools.
Your TVA line is the strongest part of your argument. A cash transfer doesn't build a durable political coalition, because nobody can point to it and say the government did that. A public utility, a public housing project, or a rural co-op all generate the kind of visible, attributable win that holds a coalition together past the next election. That's a large part of why redistribution politics keeps losing to production politics even when the numbers favor redistribution. People don't organize around a check. They organize around something they can see get built.
You're right about the positional part and I won't pretend otherwise. A $20,000 handbag costs that because it's a $20,000 handbag. Competition is part of our nature and part of how we understand success, and that means somebody's above and somebody's below.
But look at the school example. Those neighborhoods are desirable partly because schools are funded differently. We don't have enough teachers, we don't pay them well, and we've cut arts and sciences and STEM. The quality gap between schools is a supply problem before it's a status problem.
I don't think accepting that people compete means we can't have high quality, highly accessible healthcare, housing, food, infrastructure, clean water, clean air. Those are the floor. What people do above the floor is their business.
Definitely, and you're right about school example, because I mashed two different things together. Fund every school properly and pay teachers what they're worth, and the gap gets a lot smaller.
I'm not saying supply isn't the core issue either. Some competition is baked into scarcity itself. The positional stuff shows up when people take basic competition and elevate it way past what's at stake. Look at Tesla's stock price right now, which has no relationship at all with its fundamentals. People bought into it because other people bought into it. That's how every bubble works, and it's also likely how some "good" neighborhoods are perceived.
So yeah, build the floor. Supply's necessary, just not always sufficient once you're talking about desire instead of need. It's still the right place to start, since it's something we can do.
How do we convince people that the ultra-wealthy didn’t earn their wealth — that they benefited from structures that funnel money away from the public good and from worker wages? I find so many people snookered into defending the musks of this world as “successful” instead of as the exploiters and plunderers they are.
I’m fighting this on a smaller scale with Untrickled. I’m not convinced there is a more important issue than this, because it affects every other issue. EVERY issue. Economic inequality is tearing down families, robbing youth, starving elders and tearing down democracy.
This brings to mind how much misery there is among heirs who have fabulous wealth they didn’t earn. There’s even a philanthropic nonprofit that started decades ago as a support group for their situation. Most people have to feel like they deserve what they have to get joy from it. Let’s get all their money circulating AND build things.
How though? The what is easy to think up: More supply. How do we create more supply? How, Sway?
Public works. Direct government employment building housing and infrastructure. Apprenticeships in the trades with a job at the end of them. Long term contracts for domestic materials so suppliers actually scale up production instead of riding the price spike.
The constraint isn't money. The constraint is whether we're willing to build instead of writing checks and hoping somebody else builds.
Why are you ignoring the defense budget? 58% of the total, would go a long way.
Public works programs like the CCC from the 1930s is a great place to start.
We already have those.
The problem is scale and permitting, which is hampered by scale.
Zoning and permitting reform has to be part of the solution. Not just on housing either. Roads, bridges, power lines, the whole nine. That's a fact, and there's an entire movement around it. I'm not arguing against it.
But unless you take on who is doing the building and how they get the supply they have, you'll find additional bottlenecks down the line. Look at Texas and Tennessee. Less zoning, less regulation, and housing is still well out of reach for most people at median income. The scale of development is still relatively low. Supply still isn't meeting demand even with deregulation. Part of that is expected profit margins. Part of it is the supply of the building trades. Part of it is lumber, wire, panels, electrical components.
Every time we've had a boom in construction, commodities shoot through the roof. That happened during COVID. There's an inelastic connection between the rising price of homes and the building of them. They're not responding to the market the way the theory says they should.
So it's going to take intervention in the supply chains and intervention in developing the skilled labor force. Direct intervention. That's what I'm committed to.
And I'd say this. The political movement that reignites public building and public ownership will absolutely be able to bring along zoning reform. That's already embraced by plenty of people in the moderate wing of both parties. It just doesn't have the political will behind it right now because on its own it doesn't solve the problem.
RE your last paragraph, if it doesn’t have the political will behind it AND both major parties are fine with executing on the rest without your public ownership, then my challenge to you is that you need to figure out how to convince them to bother entertaining your ideas. You have to demonstrate that your ideas will serve their interests better than their own ideas.
There will always be bottlenecks, because there are finite atoms in the universe and finite seconds with which to move them.
What matters here is to always have a supply-first mentality. Zoning and permitting is the lowest level of that, but at the higher levels it’s just turtles upon turtles of ensuring that the political system can sustain a supply-first mindset in perpetuity.
If that means social democracy, then great. But it could also quite easily mean some variety of liberal or libertarian democracy as well. Social democracy is not inherently more valid than any other form of democracy just because it’s nice to people or uses some given economic structure; it’s only valid to the extent that it can deliver abundance to the people.
So, I don’t really care about any specific “interventions” you want to go with. If taxing the billionaires does it, great! But what I DO care about is whether you’re mistaking the intervention for the end goal, which your rhetoric doesn’t give me a firm grasp on and is why I’m leery of the way you’re formulating it.
We don’t have anything that scales anywhere near what we had during the new deal. Put people to work building public housing, fixing our rotting infrastructure, taking care of delayed or abandoned projects in National Parks due to GOP defunding, building high speed rail projects, green energy infrastructure, etc. But most importantly, keep these projects and assets publicly owned and not sold off to private interests.
Oops! Meant to say “permitting hampers the scale”.
Our current programs don’t scale BECAUSE of permitting. We’ve HAD programs in places like SF where they try to build “affordable” housing by the city, and it ends up costing $800k/unit because of all the NIMBYs and the permitting veto points. Even relatively permissive Vermont can’t get it done for less than $300k.
You can’t scale $800k/unit without breaking the public budget. Doesn’t matter if the public “owns” it once it’s built, it costs too much to build at scale, period.
RE infrastructure, go read Chuck Marohn’s Strong Towns book. The infrastructure crumbles because the suburban form is not dense enough to pay for itself and is a huge drag on everything else.
Taxing the wealthy for such projects is dependent on political will and a big shift in public thinking, and it stands to reason that the same would apply to changing zoning and dealing with NIMBY-ism as well (and would likely affect the same folks as the tax increases to pay for it - for sure they aren't going to do any of this without a fight).
Thanks for the book recommendation, I've noted it for possible further reading. I'm always interested in theories of how we can organize society better and more humane ways.
My point still stands: you can tax the wealthy all you want, and it still won’t be enough to pay for $800k housing units for everyone. The math literally doesn’t work!
If we seized all of Elon’s $1T, and even granting a more fair $400k per unit and taking the lower end of the best-estimate 10-20M units needed, his money would only pay for $100k of that cost.
You can waste all your political capital trying to take Elon’s money and only get a quarter of the houses you need to show for it, or you can spend it savagely defeating the NIMBYs and the market will happily build you all those houses for much less than $400k/unit without having to spend a single public dime. You can spend that tax money on giving every child a puppy dog for all I care! And you’ll actually have MORE tax revenue from all the construction activity.
I know which one *I* would choose.
Release the idea into the wild, create consensus, make it part of the Defense Budget. Essential steps for any program to stand a chance. 😂
Thank you, Corbin, for saying it again and again. Your message and your math keep becoming clearer!
Dean Baker used to write about how the financialization of everything is a huge part of the problem. Our financial sector used to be 3% of GDP and now it’s 20%. Banking is like trucking. You need it to have the economy functioning, but it doesn’t actually do anything. The goal should be to have it be as small as possible.
This guy, as young as he is, gets it!!! What he speaks is the truth. I don't know if we can ever get back to the place we need to be as described in his post; but I do know that if we don't find a way quickly a lot of us will not make it. I truly believe that this is in fact the plan! "Humanely" get rid of a lot of the pesky poor people while keeping just enough to continue doing the grunt work that the wealthy wouldn't be caught dead doing. Frees up more for the top 1% and gets rid of a lot of the "waste" on subsidies to the bottom 90% . Kills 2 birds with one stone; or many of the "common" people without lifting a finger. I hope I'm wrong; but I don't believe so. Our government and most of our representatives have been bought out by the extremely wealthy and they don't even pretend to see the rest of us. I hope we can turn it around, but I also know that these people with all the power and most of the money are not going to go quietly. This will take more than a movement; it will take a lot more. I hope we're up to it.
I read your more recent piece on wealth extraction versus building first. This expands on that so much. So great! I agree - wealth extraction and holding versus building is literally killing us. Effective economies move money around and create. We aren't creating. AI creates nothing, really. It extracts and uses what was created by others. I miss solving problems for customers (consumers, even businesses) - that's where wealth lies.
It's content like this that makes me a monthly donor. I'll gladly give up two video subscriptions for regular content such as this. I hope Trent and HCR get together soon for a video. They are both sharing the same message in their own way. There has to be a synergism between them.
Good for you! You handed it Jennings, who is one of the most despicable media talking heads. I so agree. Tax the wealthy a fair amount? Yes. Is that enough? No. What is required is economic system redesign. AND while we rebuild the ability to manufacture and produce, we must ask the hard questions of what kind of growth, and what are we producing because we have crossed critical ecological thresholds. Production and manufacturing that are just of the same stuff in the same way that feeds a consumption and extraction-based economy would only make the whole mess worse.
I'm 75. I have seen this country taken over by corporations. Wall Street Healthcare ? HMOs have destroyed our affordable healthcare you used to be able to buy like car insurance. An example: an xray costs $500. The HMO gets $150 off the top (30%) to pay for CEO salaries, buildings full of people trying to deny your claim and stockholder dividends. Obviously, it serves the HMO if the xray is $1000 - then they get $300. How will prices ever be controlled ?
https://davcer.substack.com/p/wha-hoppen-purchasing-power
As someone who has lived abroad, it really irks me how 'socialism' is such a bad word in this country, and always will be. If only our entire progressive movement could replace the word 'socialism' with 'Public Ownership', maybe then would people begin to wake up.
Corbin -- You need to see "Taxing the Rich Is Incomplete Without Repair": https://mailchi.mp/patrioticmillionaires.org/taxing-the-rich-is-incomplete-without-repair.
"We need reparations in addition to tax reform to fully atone for our nation’s sins and achieve racial and economic justice."
I thought it was going to be about how we can't fix the way it was, but need a different take on reality. But it turned out to be another important perspective.
Hello Corbin... Another Good Post...