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Sorry, thought it would get lost in the last thread on Gary but have gone over to have another look at what Dickie has to say, as maybe I've been too hasrh;
His latest video above telling us, once again, the end is nigh - comments section is very illuminating, lots of people saying you keep telling us there's a crash, last summer you promised us a crash, you've predicted a 50 of the last 3 crashes etc etc
This type of scaremongering is really dangerous because impressionable people will pull their money from the markets and the opportunity cost of missing the best years for a long term saver/retirement investor is catastrophic.
At the end he does get round to saying, have a more diversified portfolio but there is 15 mins of scaremongering before that and most people won't watch too the end. Also, he speaks as though he's swallowed a word salad - I'm still unclear on most of the key points he's trying to get across.
It's unfortunately clickbait that can have some fairly profound real world impacts if people actually listen to him - which I hope they don't.
Shouldn't be allowed - discuss economics and MMT by all means, don't start telling impressionable, often inexperienced, investors that they should be timing the market.
Absolutely outrageous he's allowed to spout this. At some point there will be a crash and no doubt Dickie will be there to say I told you so but that rather goes with the territory if you predict one every year...
[Post edited 9 Jul 12:47]
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Economist: Richard J Murphy on 13:40 - Jul 24 with 221 views
Economist: Richard J Murphy on 13:30 - Jul 24 by commuterblue
It not often I find myself defending Gary. But I can give you a link between unequality and
Let's start with a statistic from the House of Commons library.
"The share poorer households spend on housing has been increasing over time: in 1968, housing costs were 9% of average disposable incomes for the poorest quarter of the population, and this rose to 26% in 2015 before falling to 21% by 2024/25."
Some of this increase may be due to higher quality of housing. But, given the vast real increases in properry prices over the time period, it is fair to say that most of it comes from increasing property prices.
Property is of course a form of wealth. Wealth is much more unevenly distributed in the UK than income (Gini of 0.59 vs 0.33 for income [0.37 for income after housing costs]). Property wealth is 0.66.
So, increasing property prices benefits holders of property wealth. Which is very unequally distributedš. They also increase the share of income spent on property, particularly for the lowest income.
So policies that by objective effect increase property prices will both increase inequality and reduce living standards.
Now, thats not to say policies to aolve this are difficult, or that it meeds solving. But imo to say there is ni link between inequality and stagnating living standards is a stretch.
[Post edited 24 Jul 13:31]
'The share poorer households spend on housing has been increasing over time: in 1968 ...'
that's true. house prices rising is part of the story. but so is the real fall in other costs. eg, in the same period the real cost of food has halved. if you spend less on one thing then other things, eg housing, will necessarily rise as a proportion. technical change and productivity push down prices of most things but can't make housing cheaper which is more of being in fixed supply.
And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show
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Economist: Richard J Murphy on 15:08 - Jul 24 with 125 views
Economist: Richard J Murphy on 13:30 - Jul 24 by commuterblue
It not often I find myself defending Gary. But I can give you a link between unequality and
Let's start with a statistic from the House of Commons library.
"The share poorer households spend on housing has been increasing over time: in 1968, housing costs were 9% of average disposable incomes for the poorest quarter of the population, and this rose to 26% in 2015 before falling to 21% by 2024/25."
Some of this increase may be due to higher quality of housing. But, given the vast real increases in properry prices over the time period, it is fair to say that most of it comes from increasing property prices.
Property is of course a form of wealth. Wealth is much more unevenly distributed in the UK than income (Gini of 0.59 vs 0.33 for income [0.37 for income after housing costs]). Property wealth is 0.66.
So, increasing property prices benefits holders of property wealth. Which is very unequally distributedš. They also increase the share of income spent on property, particularly for the lowest income.
So policies that by objective effect increase property prices will both increase inequality and reduce living standards.
Now, thats not to say policies to aolve this are difficult, or that it meeds solving. But imo to say there is ni link between inequality and stagnating living standards is a stretch.
[Post edited 24 Jul 13:31]
I don't think that example demonstrates Gary's broader argument. What you've described is a housing policy problem, not evidence that rising wealth inequality generally causes stagnating living standards.
Property is a special case because planning restrictions, limited supply and policy choices have inflated prices. That simultaneously enriches existing homeowners and makes housing less affordable.
Property is an area we have got consistently wrong in this country - good example in 2022 when we decided to amend the BTL rules on interest deductions, at exactly the time we needed more rental supply coming to market because mortgage rates went through the roof. We are still suffering the consequences of that now.
But in any case, the above is very different from saying people are poorer because the wealthy are buying up all the assets and therefore you can't afford any.
[Post edited 24 Jul 15:09]
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Economist: Richard J Murphy on 17:44 - Jul 24 with 59 views
Economist: Richard J Murphy on 13:40 - Jul 24 by lowhouseblue
'The share poorer households spend on housing has been increasing over time: in 1968 ...'
that's true. house prices rising is part of the story. but so is the real fall in other costs. eg, in the same period the real cost of food has halved. if you spend less on one thing then other things, eg housing, will necessarily rise as a proportion. technical change and productivity push down prices of most things but can't make housing cheaper which is more of being in fixed supply.
Respectfully it won't, that argument could only hold if the stats were share of spending. It isn't. It's share of income.
So the poorest quartile could simply save, spend more on other lesiure etc.
Economist: Richard J Murphy on 15:08 - Jul 24 by nrb1985
I don't think that example demonstrates Gary's broader argument. What you've described is a housing policy problem, not evidence that rising wealth inequality generally causes stagnating living standards.
Property is a special case because planning restrictions, limited supply and policy choices have inflated prices. That simultaneously enriches existing homeowners and makes housing less affordable.
Property is an area we have got consistently wrong in this country - good example in 2022 when we decided to amend the BTL rules on interest deductions, at exactly the time we needed more rental supply coming to market because mortgage rates went through the roof. We are still suffering the consequences of that now.
But in any case, the above is very different from saying people are poorer because the wealthy are buying up all the assets and therefore you can't afford any.
[Post edited 24 Jul 15:09]
That is fair to an extent.
But if we could find policies to reduce wealth inequality that would reduce the property price boom and reduce the share of income spent on property, there would be less stagnation in living standards. If we choose to avoid any such policies then he would be, at leastin part, justified in his claim.
For example he might claim that the reducing progressiveness of income tax over the last three decades on C20 and the increasing use of indirect taxes such as VAT and excise duties has contributed to greater income inequality. Ceteris paribus, greater income inequality, leads to greater wealth inequality due to greater differences in saving. We see an increase in second homes, in property for investments, both reducing supply or increasing demand. Whichever curve shifts, prices increase. Making it harder to buy, and more expensive to rent.
I was renting out my former home when the BTL rules changed. Frankly i was split. I could see why that would make existing rentals more expensive. At the same time, it is illogical that it was cheaper to borrow money for a home to rent than to buy. (An argument that would support his contention).
Of course, in Norway, where there is a wealth tax, there is also interest deduction for all mortgages. So you are better off when young, but if you get a certain stage of wealth you pay it back.
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