Sometimes I'm awfuly harsh about Leftists - often in very polemic ways. I'm not very concerned with inequality or class systems - that's not my prime motivation. But for anyone who IS, however, I beg you to hear me out on this one.
Our Central Planning Board (=Central Banks) choose very low Interest rates little over a decade ago. This fueled a MAJOR Asset price boom, creating a major divide between haves and have-nots. People owning shares predominantly the wealthies) and people owning their homes (=middle class and above) suddenly had assets worth 2x, 5x, 10x their initial purchasing price. = a massive increase in wealth over a very short time period.
In 2008, after perverse U.S governmental incentives and GSEs, combined with collectivisation of mortage-debt spread across the financial world, the party was over - rapidly reduced demand for loans, the value of properties dropped and companies whose Income Statements were doped by too-low interest rates, and Balance Sheets heavy with debt went out of business.
What did Central Planners do? If your only tool is a hammer, every problem tends to look like a nail; so, they lowered interest rates AGAIN + printing trillions of dollars to effectively create negative interest rates, hoping that price indexes would skyrocket - some of that new money did put pressure on prices, but most of it went to properties and shares. Again, property prices bounced; share prices reach all-time-high even though the economies of US, Canada and western Europe are not much better than 5 years ago. Again, the haves are benefited while the have-nots can't afford neither house, nor savings, because their wages (=productivity) didn't increase because the government printed more money.
So the older middle-class generation, now safely and comfortably retired in debt-free high-priced dwellings pass on some of their assets to their children, so that they can get even a humble home for themselves. Again, have-nots don't have that luxury, and instead have to rent low-quality homes in neighbourhoods they don't like.
"Chances are being inherited", McLaren says; the younger generation's spending powers are artificially propped-up by the older ones who were lucky or insightful enough to be on the Boom to begin with. Now they're all tied to housing prices with new loans, and it's way harder for have-nots to get on the property ladder than 15 years ago.
"Chances are being inherited", McLaren says; the younger generation's spending powers are artificially propped-up by the older ones who were lucky or insightful enough to be on the Boom to begin with. Now they're all tied to housing prices with new loans, and it's way harder for have-nots to get on the property ladder than 15 years ago.
""And don’t even contemplate a housing crash. If that happens, we’ll all be screwed.", McLaren finishes. Indeed. But Central Banks would rather repeat the cycle than let the inflated prices crash down to reasonable levels.
======= Interest Rates must up to prevent repeat of last 15 years. But Central Banks won't raise them, because majority of population are addictively dependent on them for their mere day-to-day survival. So interest rates will stay down, creating the same Asset Price Booms we've seen, forging the divide between haves and have-nots.
My point is: Seeing as how Central Banks and Governments over the last 15 years made a mess of asset markets, disproportionally harming the poorest in society, increasing the wedge between haves and have-nots, all of it being done to help the poorest to more employment - SHOULDN'T YOU ALL LEFTIST AND INEQUALITY-PEOPLE BE ON MY SIDE?!