If I go visit my grandma over the weekend, my activities do not register on GDP. If I hire a care assistant for $800 per day to do so, that's $800 to national GDP. The encroachment of the market into society correlates with record levels of mental and physical health crisis. US life expectancy has declined over the past three years, even as 'the economy' has surged ahead. The measures are wrong - and we all know it - apart from the financial press it seems
I was thinking the same thing the other day. Like how much of the US GDP is tied to their suburb-living car-dependent lifestyle. What percentage of the GDP is all that infrastructure (sewage, heating, power plants, power transmission, car production, road maintenance)?
Sure that create jobs, especially lower-skilled jobs which are important for society. But at the same time they didn't really need to exist. It feels like much like defense spending, it create jobs, but it doesn't create value.
> much of the US GDP is tied to their suburb-living car-dependent lifestyle. [...] , but it doesn't create value.
The "value" is for the citizens that prefer suburbs style living.
People who prefer dense city living with mass-transportation and walkable errands like European cities or downtown NYC/Chicago are missing the fact that there's another group of people (possibly the majority) that actually prefer the suburbs. Yes, I know it seems illogical.
But don't suburbs have the dependency on cars, and those ugly "stroads", and the "parking lot deserts", and "soulless cookie-cutter housing", etc, etc?!? Yes, all of that is true and detractors can keep piling on more derogatory labels but it still doesn't change the fact that many people really like the suburbs. A lot of USA college kids living in dorms in the middle of a "walkable city" have aspirations of buying a nice house out in the suburbs and hope they can land a high-paying job so they can afford that dream. Why do so many of these young people who have actual experience of living in the city want to get away from that and live in the suburbs?
> People who prefer dense city living with mass-transportation and walkable errands like European cities or downtown NYC/Chicago are missing the fact that there's another group of people (possibly the majority) that actually prefer the suburbs. Yes, I know it seems illogical.
Of course. There are also people who enjoy walkable pedestrian and bike friendly places with lots of small local businesses to patronize.
That doesn't require living in a "big dirty city", it really just means making actual towns with dense downtown centers where people can work, live, shop, and dine.
Based on my experience with real estate prices, where townhomes near such thriving downtown developments can cost easily double of one in a suburban neighborhood a 15 minute drive away, the demand for that kind of living currently exceeds supply in many places.
The answer isn't to remove all suburbia and replace it with dense walkability, the answer is to stop preventing the dense walkable development with strict single-family-detached zoning laws, parking minimums, etc. and let the supply of such places increase to meet demand. Nobody will come take your suburban house away from you, they just want to have as much freedom in choosing what they want as you get to choose what you want.
And those that do prefer to live in big cities are just advocating for making those places better. The US has a lot of places that are definitely "city" but are still also car-dependent or at least not as friendly to walking, cycling, and mass transit as they should be. We can improve those without changing your suburban life one bit.
it's and/and. Suburbanites impose their values on the city (free parking, highways, vote against bikelanes, ...). I don't care if they'd be in their suburbs and just live there. go live in the burbs, be happy, but don't degrade my neighborhood with your cars.
we really can have our cake and eat it, nice cities for the people who prefer them, suburbs for the others, so much room.
Absolutely this. Every time someone suggests dense urban living or asking for people to pay for their car-dependent life, suburbanites come out of the woodwork and scream and holler that their rights are being taken away. As if the majority of the country isn't suburban sprawl catering to car dependent life. We only have a handful of dense, walkable cities with public transit in the entire country. Suburbanites have plenty of places to choose from, literally anywhere else outside of NYC, Chicago, SF, and Boston.
As a New Yorker, I'm totally fine with people choosing a suburban life. Do you, I don't care. But don't kill congestion pricing and think you're entitled to drive into the densest part of the United States and park for free in my neighborhood just because. Don't block funding for public transit for 40 years and then complain you need your car because the train is scary to you the two times a year you use it.
The political strategy in Ontario was to force amalgamate the cities with the suburbs so that the suburbs could politicaly dominate the cities.
Gross stuff.
You can see at the voting district maps the city of Ottawa for example will 100% vote for a different candidate that all the distant suburbs attached to their municipality and the suburb candidate wins.
My city (Seattle) is part of a large county that includes suburbs. My city is also part of a state with a mix of many types of areas. Legislation and budgets happen at all three levels, and because the city is a primary economic engine of the state, others have an interest in dictating what happens in the city.
Province of Ontario literally just passed a bill (212) to rip up already-installed bike lanes in City of Toronto at an estimated taxpayer cost of ~$50MCAD, despite opposition from city residents AND city officials, which is unheard of because municipal infrastructure is outside the scope of the province.
yeah luckily seattle (and other cities like tacoma etc) aren't like that.
seattle is always a poster child for this stuff but it really isn't that bad for the upper middle class (anyone with a software job).
it's probably tougher now. but i started my career in seattle proper 10y ago and 2020 was a giant boon. low interest rates, 3k sqft house outside seattle (but still easily drivable to it thanks to reverse commute) for sub-$600k (went under asking) and sub-3% (-> inflation proof)..what a way to spend that salary the 2010s gave me to save up and enjoy the remote career I'd long established.
preparation meets opportunity isn't gonna stop being true even in a "bad" economy.
There’s drain effect where as the city gets defunded, people with money and an interest in civic engagement move to the suburbs, and start voting accordingly.
Having kids is a pivotal moment. Suddenly that rich urban life looks like danger for your little ones.
I was an urban kid and we stayed in the city when we had kids, so my kids got to go to a school where the janitor had to arrive early and remove the needles and broken beer bottles from the playground.
Nope, it's not. But urban hellscapes happen somehow.
I grew up in my city when it was smaller, safer, and more economically varied. Now the middle has hollowed out and we're headed toward Manhattan, where hedge fund managers step over the homeless to get to their penthouse.
It pains me to think that this is inevitable. I don't begrudge anyone moving out of the city. I personally cannot stand the thought of getting in a car to do absolutely anything, but I know lots of people who live that way and are happy.
my city has consolidated with the burbs. so anything that benefits the core areas gets no traction because it doesn't immediately benefit the burbs. vice versa, other cities haven't consolidated, and they do have better city amenities.
they're not my fellow city dwellers. they've turned their back on city life, live 15-30miles away, rarely if ever visit. it's just an administrative, historical quirk that they have a claim on the city and local politics. other cities have different administrative boundaries, that hug the city proper much closer. Those cities have much better urban amenities (traffic calming, light rail, bikelanes, ...) than mine, because they don't have people who loathe city life have a voice in city matters.
Suburbs efficiently filter out poor people. To live in suburbs, you have to sustain a particular burn rate. You (or your parents) also have to have had enough money to get and keep paying the mortgage.
College kids hope to make it big, or at least big enough to afford a pampered expensive living among other such people. It's not an unreasonable hope to have. Some of course dream to live in a penthouse on top of a skyscraper, but that's much less realistic.
(Of course there are poor suburban areas with rundown houses and clunker cars, but it's not where the college kids aspire to go.)
Dense walkable cities are few in the US; they predate the advent of the car, and accepted a lot of immigrants when Ellis Island was still open for "the wretched refuse" [1]. After WWII, a lot of better-off families moved to suburbs, but the worse-off had to stay.
It does not help that some cities, in a misguided attempt to not trample on the rights of the destitute, or maybe out of incompetence, don't keep their streets clean, and even don't enforce the law. The authorities of San Francisco are, of course, way ahead of the pack; what they have done to their once-beautiful city tarnishes the reputation of cities as the form of living.
(Disclaimer: I live in NYC, take subway and/or buses every day, walk for my grocery shopping, don't own a car, etc, and love it. Politically not left-wing though.)
The people advocating to replace suburban homes in the Bay Area with multiplexes, low rises, etc., do seem to want to ‘come take your suburban house away’?
It’s been mentioned many times on HN in regards to Palo Alto, Atherton, Cupertino, etc… and often times not for altruistic motives either.
If zoning allows a multiplex to be built on your lot, and you decide to sell it because the market values redeveloping it more than you value staying, then I think that's your decision.
In the big picture, if you want single-family suburbs to continue to exist and be affordable it makes sense to allow at least some places to become dense. The more people who want density and can choose it, the less competition there will be for farther-out suburban houses.
If redevelopment is the assumed outcome of the zoning change, then that means the single-family suburb is existing in spite of market demands, held back only by such zoning laws preventing denser development.
I don't know the specific situation there, and I'm not saying that shouldn't ever exist, but it's worth considering why we are using zoning to preserve artificial anti-density in a place that has grown to demand higher housing density, and what the effects are of doing so on a widespread basis.
The immediate first order consequence would be higher housing prices, which seems to be the case across the US, with the cost of housing increasing much more rapidly than overall inflation or wages.
So I absolutely deplore the "what's your point?" attempt to try to pretend that somebody you disagree with didn't actually have a point. In fact, I downvote it when I see it - if the point was clear, and someone asks "what's your point?", I downvote.
I'm not doing that. I really can't tell. Who are these people who want to ‘come take your suburban house away’, and how do they attempt to do so?
You seem to be referring to specific people in the Bay Area. I'm not in the Bay Area, and I don't really know the politics there as it relates to real estate. So, who specifically wants this, and what are they doing?
I am not accusing you of false pretenses. I am asking for the specifics of what you are talking about. You won't answer (or at least, so far you haven't).
I will ask one more time: What, specifically, are you talking about?
Indeed, many people prefer living in the suburbs, but a big reason for this is the hidden subsidies the US provides for suburban development.
When housing units are close together (town-homes, multi-unit buildings) the cost of infrastructure (sewer, water, roads, sidewalks, etc.) are shared by more units, and thus by more taxpayers. If the houses are farther apart, the cost per unit goes up.
So its fine if you want to live in the suburbs, be we should have an honest accounting of the costs so suburban households are paying the full price of their spacious lifestyle.
Many suburbs are accounting for this in other ways already, by foisting ownership of that local infrastructure onto the HOA instead of handling them centrally through taxes or direct billing.
I'm grateful that I was able to afford a home for my family. I am the sole provider and it costs half my income per month to live in a townhouse in the suburbs an hour away from a major city. It's hard enough as is.
The trouble is that if suburbs weren't subsidized, there would be little reason to live there, seeing its residents move further out into more rural areas. The cities are willing to subsidize them as it is net beneficial to the city to have people who won't live in the city proper to still be nearby, improving economic activity in the "downtown" with access to more workers and consumers.
This comes up a lot but infrastructure is not the expensive part of government. It's schools, criminal justice, and other labor intensive services. All of which are more expensive per capita in cities than suburbs.
> People who prefer dense city living with mass-transportation and walkable errands like European cities or downtown NYC/Chicago are missing the fact that there's another group of people (possibly the majority) that actually prefer the suburbs. Yes, I know it seems illogical.
That’s because American cities do their best to make themselves as car-dependent and unpleasant in downtown areas as possible. Of course American college kids want to move out to the suburbs, because American downtowns are not nice places to live. Offer people the choice to live in nice central walkable neighbourhoods like in Europe and they tend to take it.
How much of this preference is genuine, versus just taught or forced?
I live in Brussels and every time I welcome new American friends here and show them around, their mind is blown that it’s even possible to live in a city center at an affordable rate within walking distance to groceries, restaurants and activities.
Ditto Dublin. Incredibly walkable, with light rail and light tram services as well as a very mature (albeit expensive) taxi infrastructure and rentable bicycles for last-mile stuff.
Even in the very heart of the city centre you have full sized German discount supermarkets like Aldi/Lidl, or Asian/E.European foodmarekts. A far cry from the food deserts and bodega pricing endemic in American cities.
Even in the midst of a generational defining housing crisis, in what most people in Ireland would deem unfathomable HCOL, you can buy a 2 bed apartment around 70-80m2 in the CBD for less than €500,000.
This is in the middle of the Silicon Docks for example, @ 90m2 with dedicated parking space underground, and a concierge service open 7 days a week. 10 minutes walk to Meta/Google/AirBnB/LinkedIn HQ.
My kids like to play in our yard. I do woodwork as a hobby. My neighbors spend summer by their pool. I like my privacy. I like quiet and space. I like strong community.
I spent 15 years apartment living all over the world, and couldn’t be happier moving to the suburbs.
Suburbs and detached houses are available in Europe as well, often with good public transport access (although there are plenty where you need a bicycle to get to a train station).
It is just apartments are much cheaper and you can often not have a car if you live in an apartment.
Suburbs are cheap where? On what salary? Munich suburbs are equally unaffordable to buy something on a Munich wage, unless you're talking about buying in the boonies where you need to drive everywhere but that's no longer the suburbs but a whole different city/village, or you're a high roller at a FAANG, but that excludes 95% of working class people.
My ex originally is from there and I used to work there and my colleagues from the Texas office had more purchasing power at local real-estate than their counterparts from the Munich office.
It seems like it might be taught. I live in a Chicago neighborhood and have all of these things (a yard with a garden, space for woodworking, neighbors with pools, privacy, quiet space, strong community).
Not everyone who lives in a city is in a highrise downtown, most aren't. Not everyone that lives in a city is in an apartment. You wouldn't know that by reading this thread. The two options seem to be a large house in the suburbs or a highrise downtown.
All of these things have magnitudes. Have you ever built a cedar strip canoe, or are you making wooden spoons?
It would cost double what I pay for me to live with 1/4 of the space in a city.
I made a pretty intentional decision about what I wanted, and actually have far more space than where I grew up. I was actually taught to live on less, but have gone in the far opposite direction.
I live in Chicago. I have 350sqft garage and a partially-finished conditioned 280sqft attic room that functions as a studio space. I have more "workshop" space than most of my friends in the suburbs who mostly just treat their garages as a storage space with a little workbench in the corner. My home is over a century old, although the garage is only 25 years old.
Now, can suburban homes offer you MORE space? Absolutely! And if I had the kind of hobbies that merited that additional space I'd probably want to live there. However, as someone who grew up in the suburbs, has friends in the suburbs, etc - the number of friends I have who actually use that space for enjoyment and not junk storage is literally just 1 guy who has a sweet CNC and metal working space in his garage and basement. Everyone else has a garage used for cars + storage and a basement rumpus room with maybe a tiny 8x8 workshop somewhere near the mechanicals (HVAC and Water heater)
The thing is in the United States there's an abundance of properties and communities available that give you lots of personal living and working space. In fact, it's pretty much the default. The frustration is that there's a shrinking pool of available higher-density living spaces that are all astronomically priced because of high demand and low supply, and any attempt to grow this pool of higher density space is met with stiff opposition.
==Have you ever built a cedar strip canoe, or are you making wooden spoons==
No, I haven't built a cedar strip canoe (nice flex), but I do have the room in my 2.5 car garage if I wanted to. Partly because we only need one car in the city for a 4-person family (which is also part of the "cost" calculation). I could also use my basement, if I was inclined.
==It would cost double what I pay for me to live with 1/4 of the space in a city.==
This is impossible to say without knowing how much you pay and how much space you have.
It’s likely linked to my non-trivial ADHD that I need the space to work on whatever thing I go into a rabbit hole on any given year. Even in the suburbs I’ve had the fire department called; I probably would’ve been arrested had I been in a townhouse.
I moved from Brooklyn NYC to NJ suburbs and my 15 year mortgage on 4 bed 2 bath decent yard was about the same as a 1 bed 1 bath 3rd floor walk up that was pretty snug once you had two people and two cats.
I agree. I wouldn't move to city center no matter how affordable or cheap it was. Living in an apartment block severely limits the way I can spend my free time compared to an actual house with a yard.
> Or just come visit a bit and be another name on the list of Americans who had their mind blown.
I’m not American (but live here), and have lived in Europe and traveled most of it.
This HN hivemind if believing there is one type of person and one type of lifestyle is absolute lazy nonsense. I’m guessing you already know why I don’t need to drive a large pickup truck too?
I was talking about city centers. Good luck finding a house with a yard from city center of a major European city, for a price that you can afford without being a millionaire.
Just like in America, living in a proper house in Europe does usually mean moving further away from city center into suburbs. The main difference is that those suburbs do have better public transportation.
European cities have suburbs as well. In fact most people live in them, not in the city center. They are just VERY different from US ones.
Mostly 4-6 story tall buildings clustered around a major transportation hub like a metro or train station (which also hosts shops, restaurants and groceries), with row-homes or single-home detached houses farther away.
I live at the heart of Brussels, 2BR, 1250 eur a month. It’s not the cheapest of the city but it’s also not the most expensive; in fact the most expensive side of the city is one of its suburbs.
And living in the suburbs here doesn’t mean you have to use your car to buy milk, unlike the US. Stuff is still walking distance there.
Cost of life is average. Belgium is actually pretty great for that. It’s just the weather that’s shit.
Indeed. Look at the most expensive places to live in the Bay Area - it’s not the urban centers, it’s the suburbs.
Americans like space. They like big houses. They like not hearing their neighbors. They like to live on a street that is quiet.
Even the ones that don’t like driving are willing to do it as a trade off for all those things.
Most of the young people I knew in SF who lived there in their 20’s - about 90% moved to the suburbs when they got older. Being close to bars or restaurants doesn’t matter much for most older people. What matters is low crime, space and good schools. They can drive to the city if they need to.
> Look at the most expensive places to live in the Bay Area - it’s not the urban centers, it’s the suburbs.
Price per sq.m. in San Francisco for the top neighbourhoods is way higher than the suburbs, e.g., Nob Hill or Russian Hill or Pacific Heights. Getting a townhouse in those neighbourhoods is crazy expensive.
What proportion of DINKs versus Families live in the suburbs vs the cities?
The simple answer relates to raising kids - both in terms of safety/enrichment and in terms of basic things like school catchment areas, distance to young peoples amenities, and distance to the average friends house based on school catchment.
You're watching people respond to price pressures and calling it their unforced preferences. This is like saying "obviously people prefer to be childless", or, possibly soon, "apparently people prefer to eat only rice and beans". The outcome arises from a coordination failure that individual actors cannot resolve just by making best-responses within a market.
Family homes in the best suburbs are also very expensive, even after being subsidize by the broader tax base. There are lots of places to live in cities that aren't the "city center" just like there are types of family homes that aren't single-family-homes.
This line about suburbs being subsidized is a lie that keeps getting repeated. If I live in a suburb and commute downtown to work my income counts towards the city GDP and tax base but I would be receiving government services from the suburbs. This isn’t a subsidy it’s providing people the services they need where they live instead of where they work.
> my income counts towards the city GDP and tax base
You pay taxes were you work instead of were you live? That is very unusual, typically you pay income taxes where you live. I don't see how paying taxes were you work could even work, what pays for your school or roads if all the money goes to another area?
> If you are a New York State nonresident you must file Form IT-203, Nonresident and Part-Year Resident Income Tax Return, if you meet any of the following conditions:
> . You are a nonresident with New York source income and your New York adjusted gross income Federal amount column (Form IT-203, line 31) exceeds your New York standard deduction.
IANAL, this isn't tax advice, I'm going by what I'm reading and what I was told by people who lived and worked there, but looking at this if you have an income made from working a job in the state of NY and ended up with more than $21k of income you need to file for NY state income taxes.
There are a number of cities with income taxes. Detroit, Baltimore, Columbus, Cleveland, Louisville, Toledo, and many more. Of those I bothered looking in to, they apply if you work in that city regardless of wherever you live.
It isn't about where you live or work, it is about the cost of providing services. When homes are farther apart, the infrastructure is physically more spread out. This creates higher costs to build and (especially) maintain roads, electricity, water, sewage, etc.
I am going off of the study described here [0]. I'm happy to view anything you have to provide which proves it is a lie.
It isn't illogical. Americans move to suburbs because there aren't enough affordable cities. Then they complain about the cost of gas, energy, housing and taxes which are inherently worse with lower density.
Suburbs aren't for standard of living, but affordability. You take the most available labour, the most available construction, and connect it with the most available transportation and you get suburbs. All without the need for much effective planning, organization or innovation.
But eventually someone else does those things. And then suburbs are expensive in comparison.
I want more space, both in my home and in my yard, than I can get in the city. I want a 2+ car garage where I can build and drive a go-kart with my kids, fix my own car and have a little workshop to do woodworking.
I want a garden that isn't blanketed by city air, and room for some fruit trees. I want room for a fire pit, and enough trees that I don't have line of sight into my neighbors windows.
I don't want a farm. I don't need country living. Somewhere between 0.25 and 0.5 acres is about right for what I want to do, and that means the suburbs.
I live in a Cologne, Germany right now. I have lived in Sao Paulo in the past. Big cities with lots to offer. I know big cities and their conveniences, and they're fine. But for the life I want to live, suburbs offer a better standard of living.
That is the thing many young people don’t see until they have a kid and realize how much more difficult urban living is with kids unless you have a lot of money. Cities eat your time when you have kids.
That is still affordability. When cities are expensive you get more for you money in a suburb. A hobby room, home office or cooking space. But the cost of suburbs are inherently expensive. So when cities are affordable you get more for your money in a city. Because you get some space but also better access to things like offices, makerspaces or restaurants.
I don't want to rant to much, but most people don't like woodworking. They even less like doing woodworking on their own. It is something they conclude they should do because they can and don't have many alternatives. I'm sure it is covered somewhere online.
The first point is reasonable enough, but the point still stands you can't find the same size house in the city for the suburb price.
Most cities simply don't have more than a handful of spacious houses with big yards.
Your second point is invalid, as you're arguing against his assumptions. It's only possible to argue againt someone's logic, arguing someones assuptions is the same as calling names. I like woodwork and have alternatives.
You don't need the same space. That is the point. Yes, if I lived in a suburb I would also want more space because everything else would be harder to do.
I'm not arguing against their assumption. I said most, that isn't them. This is exactly why I didn't want to elaborate, so I won't.
A post explaining the reasoning behind a personal preference for living in the suburbs almost made you throw up?
Your close-mindedness of the opinions that others are allowed to have makes me almost want to throw up.
The person you are responding to isn’t displaying a lack of empathy for people that can’t afford to live in the suburbs. They are explaining the very real and understandable reasoning behind a behind their preference.
That’s not selfish and privileged. That’s a preference.
Look, I understand that the fringe groups you might associate yourself with throw around the word “privilege” as an insult at anyone that does something not inline with the group’s thinking, but it’s just not the insult that you think it is outside of those fringe groups.
Just wanted to mention that what the OP is asking for is completely achievable in a great urban city.
I live in an ideal mixed-use walkable neighborhood with a 2.5 car garage (that only holds one electric car). Not every house has that nor should it, but we can certainly build those features for those who want them and maintain walkability and good transit practices alongside mixed use.
The problem with the suburbs isn’t the existence of the single family home, the problem is the zoning and design of the homes.
> Man, this almost made me throw up because your post reaks of selfishness and privilege. Anyways, I hope you're at least aware of your extreme privilege.
This doesn’t convince anyone of anything and it doesn’t help us with building better transit and walkable neighborhoods. When you tell someone that what they want is “extreme privilege” and “selfish” you turn them away from the conversation. Instead we should focus on showing them how their lifestyle isn’t actually incompatible with good urban planning and good transit, because it’s not.
The future of American cities isn’t NYC, which I love and adore. We won’t have the density for that and skyscrapers and that level of density have their own problems too. Instead, we should look at mid-sized European cities and towns as a better model. We may have more single family homes and cars, but we can still build at the appropriate level of density and build different types of dwellings to meet people where they are in their life. Today it’s illegal to build an apartment building, coffee shop, restaurant, or small grocery store in the suburban neighborhood and we can’t build small, affordable units for folks either. This creates pricing imbalances and other issues.
A house with a big yard in the suburbs is the epitome of “standard of living” as far as I’m concerned. I’d take that over a walkable city block any day (personal choice, of course, I’ve lived in both).
Yeah, I live in a rural area and cities make my skin crawl. I'll take my quiet space with lots of room for my kids to play, explore, and to garden and grow food. Where I know everyone and we all have each others backs. Where the vegetation is natural, and there's plenty of bugs and birds, amphibians and mammals. Clean air and clean water. Surrounded by miles and miles of forests.
So many of the things people love about cities are the things I want to get away from, and would sacrifice a huge amount of income to do so.
The suburbs offer people a little taste of that magic and it's no suprise people want that.
You don't have to ban cities to get all that though, there are such areas all over Europe as well just that people prefer the density more until they have kids, and then they move further out to get a house with a yard and need a car.
I've lived in both and prefer the suburb. Inner city has all sorts of issues, from very little space, smokers puffing away as you try to enter/exit buildings, endless harmful noise & smells.
Actually I prefer rural over either of these..
>With regard to the United States, you’re not even close. 80% of the US population live in cities. [0]
For purposes of this discussion thread, we're just using "living in the cities" as shorthand for "high-density living with convenient mass-transit and walkable amenities". E.g. downtowns or multi-family housing near the city center where people can walk to the grocery store.
The majority of USA citizens do not live in that arrangement. Instead, most Americans live in areas that depend on cars.
The web page you're citing is using "cities" as shorthand for "downtowns + suburbs i.e. metroplexes" - vs - "rural farms".
Have you ever been to the US? Sure, 80% live in cities but the majority of that number are suburban cities. LA, DFW, Miami...all cities with large populations but all requiring a car.
> According to the Census Bureau, 80% of the U.S. population lives in urban areas. The remaining 20% lives in areas classified as rural. *There isn’t a specific category for suburban areas*
Sounds like the suburbs are counted as urban wrt the census.
That statistic is defined as “urban” vs “rural”. By that definition, all American suburbs are counted as cities/urban areas. So the statistic doesn’t disprove their assertion.
Defense spending is necessary, if you want to keep your globalised markets and reasonable level of international security. Europe is now experiencing what happens if drop the "useless" defense spending too low.
I agree with you. I will go even further by saying that the EU being caught with it's pants down is by design.
Everybody rushed to join NATO and decided since the US was there as a backstop, they no longer needed to invest in their own defense.
It's a little bit like what happened in 2008 with the too big too fail banks and the bailout. If someone else is always there to pick up the slack, then what is the point of changing the status quo.
The EU countries were happy about this because they are broke. The US was happy to keep it's status as the global cop of the world making sure everybody stays in line. This line of thinking worked since the fall of the USSR but the rise of China, India and the global south is changing the world order as we speak.
> the EU being caught with it's pants down is by design
Being by design means they weren't really "caught" with their pants down (in the classical "caught exactly at the wrong time") as much as they chose to always wear just underwear expecting the US to punch anyone who laughs in the face. The EU chose to "purchase" protection from the US, paid via various means. Mainly providing credibility for whatever US needs done, and make the difference between "righteous" and "callous".
What they discover now is that either the US can be said was caught with the pants down unable to properly project power and provide that purchased security, or maybe the EU was caught with the pants down because they were unable to pay (less likely). Regardless, this is like realizing your service provider is no longer reliable, you'll look inside or elsewhere. At the very least you no longer look at that provider as trustworthy, and stop building anything relying on their services.
The cost of this will be spread all around but effectively it gave China, who has no issues thrusting ahead even without someone to clean up their image, an even bigger boost. It even gave Russia a boost, if you could have believed anything in the world can still do that. But a couple of decades of weak leadership on both sides of the Atlantic conspired to achieve just that... a US desperately scrambling to stumble China after realizing that the go-to for all their problems (the "war for freedom") is hard to pull off this time, and an EU that realized that outsourcing critical safety and security aspects is a bad idea long term.
My pessimistic 2c are that the next rounds of leaders will make it worse, on one side by not understanding that the "war for freedom" is hard to pull off this time, on the other side by thinking that outsourcing to someone else will definitely make it better.
Everybody except Eastern EU countries closest to Russia. It's not just NATO, but also knowledge that they won't be attacked first which has resulted in low defense spending in Western Europe.
the issue is that, at least for a long time, they where too naive believing Russia never would go as far as attacking NATO member or economical partners
was that dump, yes, but that was a _very_ wide spread believe
and while I have seen that mindset a lot I haven't really seen any one not worrying because there are other countries in between. I mean maybe such people do exist, further west then I live.
Like in general until recently, even after the annexation of the Crimea, there commonly was the consensus that the time of offensive wars between European countries (including eastern EU and Russia) is over because it makes so little sense (economically, power wise) that none one would be dump enough to do that. But no one calculated in a autocrat with Napoleonic complex, or should be say soviet union complex. And if told the pleasant truth, with facts, people did what they always do with unpleasant truths: Try to ignore them.
Sewage, heating, and power plants are included in GDP figures. Government spending is a GDP subheading. And such things certainly create value. I derive significant value every day from my warm, insulated, suburban bathroom.
Furthermore, your assertion that the defense industry doesn’t provide value is questionable. Until you can convince the various state governments of the world to unite in a global superstate, defense spending is a necessary deterrent to invasion and exploitation by other states, so it is, in fact, valuable.
And while I agree that suburbs aren’t the ideal form of urban organization, they aren’t actually the cause of all the social ills that you imagine them to be. Depression and addiction are driven by loneliness, and loneliness is almost as high in urban societies as suburban ones. Obesity may be slightly aggravated by car dependence, but it is still historically high and a major problem in the walking/public transport countries of Europe.
So no, the demon of suburban car dependence does not provide the explanation for all ills.
I haven't phrased it very well, I meant to say _american_ style suburbs are very... wasteful on resources, land and capital. European cities have suburbs as well, they are just usually 4-6 store tall buildings close to metro stations with row-houses and detached houses a bit farther out.
Detached houses are not the main means of living for most people in Europe, but if you want one you can still get one, it just costs more than an apartment (especially in colder countries).
> Obesity may be slightly aggravated by car dependence, but it is still historically high and a major problem in the walking/public transport countries of Europe.
I’d like to learn more about this. That hasn’t been my personal experience at all. Looking at the national level is challenging, as urban and suburban and income levels must be a strong factor.
> It feels like much like defense spending, it create jobs, but it doesn't create value.
This is the safest period in human history by a huge margin. It may not feel that way given the ultra connected, headline consuming nature of most people these days. But it is true.
Global trade has lifted more people out of poverty than anything else, and that was first enabled by maritime trade which was implicitly secured by the US Navy post WW2. The Internet is the second coming of that, the invention of which was a result of US military spending.
You may think that US defense spending is too high, or take other faults with the US military industrial complex. But to say that it provides no value is uninformed.
> This is the safest period in human history by a huge margin.
There has been almost ten times more victims of conflict in 2023 as in 2005. [1]
And, as you said, we are now a bit more aware of those deaths (although I suspect a large amount occurred in conflicts that don't make western news headlines.)
The number of victims might pale against WWII, of course - but we're slowly arriving at time where WWII is not only "last century", but a "century ago".
I don't think anyone compared the figures of the Vietnam War of the 1960s to the US civil war of 1860s. Or did they ?
Anyway, in the average life span of an average human being with a normal memory, this is more likely to be one of the _worst_ period.
In this case we actually agree, but we draw completely different conclusions.
You're absolutely right that 18-20 years is a small period compared to human history, and that the average person has a lower risk of dying in a conflict than, say a century ago.
However, I argue that 20 years is _huge_ in terms of human _life_. Consider that the median age of the world population is 30 years old ! To most of the people, the way the world was 50 years ago or 100 years ago is as much "abstract" as what the world was 1000 years ago.
However, they remember the 2000s or 2010s. They were there ! And they saw more people fleeing wars or coming back in bodybags recently when they did in their youth. You might consider that only a "feeling" ; but I would think twice before dismissing it as irrelevant, because "it's only a feeling".
I argue that "local" inflexions in the long stream of history still matter. They can ripple in the long run.
It certainly provides value—mostly the internationally wealthy. Certainly not to the people footing the bill, who are largely restricted from accessing the windfalls of these profits.
hmm what could have happened in the last 3-4 years that would impact US life expectancy? also a huge part of that decline is preventable death due to drug overdose.
That doesn't really matter if all you're doing is measuring the relative change in GDP though, and the amount of activity that doesn't register on GDP isn't increasing.
In other words, if you assume non-GDP activity is constant, then GDP does genuinely and accurately reflect economic growth.
Indeed, this is one reason why economists recommend GDP as a useful measure of growth in a country year-over-year, but not for comparing different countries' GDP directly -- the ratio of activity not counted as GDP may be quite different between countries.
Now, if you think that a massive social transformation is underway of non-GDP-registering activities to GDP-registering activities -- e.g. people used to care for their grandmas, now all those people have gotten jobs to pay for care assistants to do it instead -- then yes GDP will show "false growth" in productivity.
But that really doesn't seem to be a major factor. We really are seeing massive amounts of innovation in the economy that improve people's lives. Economists don't just look at GDP -- they look at lots of measures that all tell the same story. Productivity really is going up. GDP growth may not be 100.00% accurate, but it is mostly.
> Now, if you think that a massive social transformation is underway of non-GDP-registering activities to GDP-registering activities -- e.g. people used to care for their grandmas, now all those people have gotten jobs to pay for care assistants to do it instead -- then yes GDP will show "false growth" in productivity. But that really doesn't seem to be a major factor.
But isn't that the issue?
Before: one working-age person in the household worked part time, or did not work at all. She (it was usually a she) could get the kids off to school, pick them up after school, check in on grandma, do the shopping, cook a simple meal.
Now: the working-age person goes to work, perhaps because the family fell apart, perhaps because other rising costs (e.g. health care) forced it. Before and after school care is paid for. Someone is paid to check in on grandma. Walmart+ or Amazon occasionally delivers heat-and-eat meals.
GDP went way up! Amazon contractor has a job delivering boxes. Someone is paid to check in on Grandma, and someone else to watch the kids. Someone works in the factory making heat-and-eat meals.
But are we really better off? Is it better to staff out the kid- and Grandma-watching and to heat up a dinner in the microwave? I'm not sure anyone knows the answer to that question, but I'm certainly not sure that "we really are seeing massive amounts of innovation in the economy that improve people's lives."
I've got two young kids in full-time daycare. Our daycare is crazy expensive. We tried the route of one parent stay home to be a caregiver this year. In the end, our kids weren't continuing on the same trajectory as what they were when they were in daycare. One child continued on part-time at the daycare doing a two day a week schedule and was noticeably falling behind his peers in his education and socializing. Not for a lack of us trying, my wife was very active in trying to be with both kids. But two very young children can be quite demanding. And in the end our house was messier (kids tearing everything apart all day long versus just a few hours), we still had pretty much the same diet, my wife was more tired and frustrated at the end of the day, etc.
My wife is back to having a wage, and both kids are back to full-time daycare. They both really enjoy school. And comparing them to their peers who stay at home, they're usually way ahead when it comes to counting and numbers, vocabulary, spelling, reasoning, and social skills. Which I mean makes sense, they're around people who got degrees in education with professionally thought-out lesson plans every day.
But has this changed massively over the past 30 or 40 years? Not really.
Frozen dinners have been around since longer than most of us have been alive. Working couples in the 1980's were figuring out what they'd do with grandma. Nursing homes have been around for a looong time. Mail-order delivery of boxes has been a thing since the end of the 1800's -- there were Sears warehouses long before Amazon warehouses.
That's all I'm saying. However, employees genuinely are much more productive than they were in the 1980's, thanks to e-mail and cell phones and the Internet and collaborative online document editing and so much more. You can get things done in an hour that used to take you 2 weeks of back-and-forth.
The productivity growth is real. It's not an illusion based on what GDP doesn't capture.
The GP's point matters quite a lot, because the ratio of GDP to non-GDP value is going up. Terms like "financialization" or "commodification" describe a process that makes things visible and measurable. I think this is also what the book Seeing Like A State meant by "legibility".
And the whole reason it's a bad thing is that the human values that can't be converted to a measurable, tradeable commodity are often thrown away, because they're invisible to the commodification process.
You can assume what you want if it makes you feel better, but assuming that I am both seeing Grandma at 2PM and working for wages at 2PM is going to disappoint someone.
One of the ways we seem to be absolutely destroying the social fabric for younger people is by eliminating ("privatizing") every last public space and time in which they're allowed to exist without driving there and paying a fee for a structured transactional recreation. We have privatized the commons in an analogous way to the Enclosure Movement in industrializing Great Britain.
Cell phones are getting better. There are lots of websites on the internet. Batteries are getting better. Cars are getting better.
It is very common to focus on some large things that are bad and think that is the big picture without considering how much all the little things really add up to.
I don't really care a lot about any of those. I'm a lot more interested in relationships with people, the state of the environment, and general happiness. A better cell phone has never made more than the most marginal difference in my happiness.
All cell phones in my price range now have buggy firmware: this did not used to be the case. Good websites are much harder to find than they were in 2014. Cars are bigger and scarier and more numerous than ever before.
There are things that are better, but "batteries" is the only one from your list that I agree with.
I just picked up a $200 oneplus just for work accounts. It's completely fine. No lag. No issues. Zero bugs so far. 10 years ago were using what? Android 4 and iOS 6?
Are better cell phones making everyone's life better? I am doing nothing on my current smartphone that I didn't do on my first. I'm not even sure if I'm charging it less often. I guess the camera is a little better.
Like many of the other items on the list, it’s a change that few people actually asked for and it’s more in the name of surveillance capitalism than consumer preferences or consumer choice.
Sure, social media can con children into thinking they need this. And after it’s normalized then adults might point it out as an improvement, but in the end it’s part of why the “improved” phone takes more hours of labor to pay for and the consumer has fewer options than ever with an illusion of more choice.
what good is it if you have a ton of gadgets and iphones all over the place but no place to live? I'd take a home with a bed over all the gadgets in the world, if i could only choose 1.
it's a fact that the housing standard of living has gone down for the last 26 years. See this graph: Nominal gpd per capita / case shiller housing index. and you'll see it's down 34% over the last 26 years!
And it's no longer even legal to make basic cars without luxury toys like built in screens. Oh I'm sorry, I mean ""essential safety features"", that we managed to get on fine without only a few years ago.
True, we did get along fine without them, but at the cost of injury, death, and property damage. "Backover crashes" cause hundreds of deaths in the US each year.
Add the backup camera to the improved restraints, the collision warning system, the blind-spot monitor . . . and soon you're talking about some real money.
One can argue about whether this is good or bad, but they're not really luxury toys.
"Hundreds" in a country with hundreds of millions of people is inconsequential. The vast majority of people never backed over anybody because they used tricks called looking around and situational awareness. Techno gadgets meant to solve non-problems are toys in my books.
No, humans are not cavemen, as cavemen lived thousands of years ago and had a different lifestyle than modern humans. The term "caveman" is a stock character that became popular in the early 20th century.
Feels more and more like it's the best of times and the worst of times...
Things feel off,but you have (mostly well-off) people talking about how great things are going to be and are. I suspect a lot of this correlates to the stock market.
For the median millenial atleast, whatever you were taught growing up is just the wrong guide to understanding the world today.
I think social media by its very nature, has to be understood inverted. A high number of posts about how great things are suggests otherwise. Comparisons with Europe have gone exponential that tells you more about how the posters feel than anything else...
As I complete my travels through Argentina and a layover in Lima
I realize that differences between poor and rich are much less stark in my opinion in the US and these LatAm countries where the percentage of population living below the local poverty line is 3 to 5 times higher than that of the USA
People don't realize that being broke poor in the US is a luxury life in most developing countries.
I'm not from the US but I saw some video of of how some homeless people live in the US, and it's a lifestyle most of the developing world would kill for: dumpster dive for freshly made pizza or quality supermarket produce that's still good just not legal to be sold anymore, all free of charge. If you have a medical issue, go to the ER and get top quality healthcare. Dumpster dive for perfectly usable clothes, computers, etc. That's a luxury life for 80% of the planet.
Yeah they have, but being broke poor in those developing nations sucks much more than in the US. Their development is mostly reflected in the lifestyle of middle and upper class not of the poor. You have no idea how good the poor in the US have it compared to large parts of the world.
You said luxury life, that is different than saying the poor in USA are better off than the poor in for example China. American poor don't live as well as luxury life in China.
Why use China? I’d rather be poor in the US than rich in DRC, Sudan, Yemen, Libya, eritrea, Somalia, Bangladesh, Pakistan, Afghanistan, Syria, Haiti, etc etc
Using the second largest economy which has many mega cities you can tour on Google earth and plenty of millionaires and billionaires isn’t really the right comparison. Like using Japan or Germany.
Well, 71% of the world’s surface is ocean and about 10% is desert. So that’s over 81% of the planet. I think we can now both agree that you are completely wrong and I am completely right.
Enormous amounts of valuable activity is not captured in GDP and never has been. This makes it dangerous to take two GDP numbers from different polities (or even GDP PPP) and compare them to compare their wealth.
However, change in GDP can tell you something broader about a society. It is a compounding value, which means only a trivial amount of GDP change can be explained by moving some of a society's value into or out of the GDP measure. Over a century, the compounding effect eclipses the non-measured component.
So if two societies, over the long term, have different GDP growth numbers, one of those societies will end up rich and the other end up poor.
Slow down GDP growth even a little and you will impoverish your grandchildren. They will have to choose between becoming doctors in their poor society, or emigrating and waiting tables in the rich society.
Growth is only valuable in the long-term, and in a long-term analysis PPP (which I generally find very hard to reason about) is going to wash out, just as the fraction of the economy measured by GDP washes out. The non-linear function dominates.
Year-to-year, the difference between 2.5% and 5% doesn't matter, which is how people convince themselves to downplay growth. But they are two radically different worlds for your grandkids.
The problem is that countries who don't want to compete on the marketisation of everything will lose out eventually.
In your example of elderly care, an extended family in Italy may care for their own grandmother (and they'd probably live longer). But the market in Italy isn't so bouyont so the younger generation can't get high paying jobs and move out even if they wanted to.
The high spending and marketisation in the US skews the game for everyone whether they like it or not.
You highlight and try and predict the eventual problems of non-marketisation but you don't seem and try and do the same to the eventual problems of marketisation.
These things are difficult to predict, but already for example we notice some problems with ultra-marketisation in the UK where house prices are now 10-12x average annual salary (it used to average 6-8x for the last two decades), and all the social strife this is causing in society. For example it can eventually lead to mass violent protests against migrants or electing extreme political parties.
Another example is that it has seriously degraded public services, since nurses can barely survive on their salary there is huge shortage of medical employees leading to huge waiting list for medical, even critical, operations.
Not disagreeing with your central points - but average UK salary is now £35k and the average house price is £289k - therefore house prices are currently 8.25 times the average salary.
Regional variations will make this far worse in many popular and coastal towns - but the average is 8.25 times in 2024.
Yes you are right, I think I was referring to London, not UK (although 8.25 ratio for the UK is pretty bad given that it was around 4-5 not that long ago).
Average London salary: £44,000
Average London House: £531,000
There are many other UK-wide statistics pointing out to the jump in housing unaffordability (including rent) over the last 5 years.
Even if house prices is slightly more sane outside metropolitan, one needs to factor in how difficult it is to find jobs outside metropolitan areas, so the quantity of jobs outside expensive metropolitan areas need to be factored in, not just the average salary.
Totally agree - I live in a small (coastal) town where a there are very few jobs outside of service roles - and they are highly seasonal. Average salary for peole that work in the town must be around £20-25k and even cheap houses here are £200k - but often far far higher.
London is wild - I was lucky to buy a flat (£142k) when I was still young (2006) - which would have been 4.7 time my salary (though I bought with my wife). Even then, and with two good salaries, staying on in London with 2 kids wasn't really an option for us.
And as you say, this is replicated up and down the country in other major cities - people are just priced out or trapped in renting. No idea what my kids will do.
If there would be a market for better urban zoning (instead of the mandatory bribing "attempts" of various officials) housing could be built much much more efficiently.
(It's a tragedy that most housing constructions are basically suburb expansions or "terraced properties" or these few sad few storey things. There's no vision at all.)
Interesting that you call this a problem of marketization and not of the governments callous immigration policy and the racism/nationalism of the average brit.
If people can't afford a house then they can easily look to other markets, they just don't want to because they feel entitled to "their county". The largest culprit after mass immigration is the unwarranted fear of bodily harm from living "poor countries"
"If people can't afford a house then they can easily look to other markets, they just don't want to because they feel entitled to "their county"."
Your comment is seriously detached from reality. If your whole life, job etc is located in one area, then moving far away for cheaper housing often isn't easy. It's especially hard for someone with a family.
UK and most other Western countries have high housing prices mostly because houses have become speculative assets for rich investors.
Worth noting it's not a linear relationship - 100k immigrants do not take 50k or whatever homes that would have gone to people already there. That's because immigrants also create building companies and incentives for existing ones to build more houses, and because immigrants disproportionately work in construction and thus provide workforce to build more.
The UK experienced this when Brexit caused many Eastern Europeans to go home, and even more not to come; there's now a big construction workforce shortage and housebuilding is being held up.
Cost of housing is rising in places where there's barely any immigration. (Yes, in places where there are more influx of people with money to a place - migrants from abroad, migrants from the next town, or in some lucky places we even have birth rate above death rate - demand [in the economic sense] will go up even more.)
But most of the price increase (ie. actual demand, meaning potential buyers with enough money) is because over the last few decades houses got much better (triple glazed windows, heat and noise insulation, safety standards increased, HVAC for the whole house not just 1 sad split unit, oh and houses got bigger, so all in all we put in more material, more stuff and so on), and service costs got higher (in part due to the Baumol effect) and availability of credit increased with the price (banks love to give bigger loans when it's backed with a relatively safe liquid asset), so buyers can and do pay these enormous amounts.
And then there's the supply side. "Cities" are horribly mismanaged. Most development happens in suburbs. (Because it's easy.) Productivity of the construction industry is so ridiculously low that people are in complete and utter denial even about the prospect of building things. Housing? Rail? Nuclear power plants? (They have given up, they just want to preserve the status quo apparently.)
It's good that our cities are not burning down regularly anymore, but this forced stasis is still bad. It's good that we don't have monarchs or urban planners who randomly reshape half of our cities every generation without fair compensation.
At the same time it's still very bad that we ourselves don't reshape our cities to adapt to each generation!
About the "nursing shortage" in the UK: The solution is simple, pay fair salaries from the NHS. This would probably required higher taxes to better fund the NHS, but good luck with that in the current UK political environment. Instead, the UK has decided to pay poor nursing salaries and import cheap labour from poor countries. Is this a win? I doubt it.
> The problem is that countries who don't want to compete on the marketisation of everything will lose out eventually.
It goes both ways though, when shit hits the fan if your economy is based on airbnb and food delivery you're fucked.
Look at Russia, half the GDP of Germany but twice the steel production, 4 times the wheat production, 1st producer of fertilizer, huge amount of gas, &c. They had roughly the same military budget as Germany in 2020, yet the german army virtually doesn't exist.
It depends if you think our current mass productivism/consumerism practices are a bubble or the end game of humanity, history seems to prove that it goes in cycle of good and bad times. Poor countries would probably even fare better than most in case of major events, the bigger they are the harder they fall.
Germany is much richer than Russia because their economy adds much more value to raw inputs. Their industry produces much more refined, valuable goods. For example, before the idiotic invasion of Ukraine, Germany imported huge amounts of Russian gas, that was used by industry to created refined, valuable goods.
Also, it is weird that you chose to comment about the German military. First, due to WW2 era agreements, they are severely limited in how they can deploy their military. Japan is similar. Also, Germany spent 50B EUR last year on their military, and that is set to rise by another 10-20B EUR this year with some extra, one-off spending. These are not small numbers!
The problem of marketisation is that it's a shredder for human values. The economic machine doesn't care what the constituent parts are, as long as they move correctly.
My ideal world we would pay a reasonable wage to people to take care of their own children and the eldarly relatives. These are real valuable and nessasry jobs that end up being an economic drag on those that can least afford it. So instead of paying a stranger to help grandma do household chores make meals and drive her to her medical appointment why not pay her granddaughter to take care of her instead taking a second job to pay for the assured living facility? Why have both parent work two job and pay for all day daycare when dad can stay at home clean house and watch the kids? We fear population colapse as younger generation put off or decides not to have kids and yet child care cost so much that they cant aford to have kids instead pay people to be parents and nurture and raise children.
Is there evidence for this? In wealthy, developed European countries, I would bet in the southern ones, they are less likely to live in elderly homes, and vice versa with northern ones. I guess that this trend is more about culture than ability to pay.
Very good point because in my country elder care is free. Daily visits by an assistant is on the municipality. We're not a leader in GDP, but we take care of our citizens, whether they be sick or old.
That is not the point GP was making. The assistant you mention is still paid by the municipality, so they show up in GDP numbers just as much as if you paid them yourself.
What doesn't show up in GDP numbers are cultures where people take their elderly relatives into their own homes and care for them themselves. Same as hiring someone to look after your kids, or taking them to day care, shows up in GDP; while having their grandparents or other family care for the kids while you're off to work does not.
Except the municipality is not run for a profit, and can benefit from economies of scale, so the difference in GDP contribution for the same event could be an order of magnitude lower.
I can't believe you're actually arguing these semantics when one person has to pay 800 dollars for an assistant and the other person gets it for free.
One person's elderly parents never have to worry about being assisted, while the other can only do so if they can afford it. And you're arguing GDP semantics? There is something seriously wrong and sick with this.
Quit the grandstanding, this conversation is about the GDP and what does or doesn't count towards it. There's nothing wrong with somebody just be cause they kept track of that context instead of getting lost on a tangent.
GDP semantics matter enormously for policy decisions because GDP is the easiest metric to use when making those decisions. But it's a metric and highly biased towards measurable values instead of less fungible ones.
But without the profit motive and the need to turn a profit for a few layers of middlemen, the impact on GDP will be much smaller than in the US.
There's a reason why healthcare expenditure per capita in the US is multiple times higher than any other OECD country, and why health insurance companies are some of the biggest public ones.
And if you borrow that money is even better because they just created the money for you to add to the GDP, and now it will have lots of sweet service fees and interest in top of that.
And on a side note because US dollars are the reserve currency and only created in one country they can go shopping around hovering up every asset and resource.
Consider this scenario. Dollar holds value for the next 1 year. FED prints dollar. It gives them to BlackRocks of the world. And these vehicles go shopping around the world in emerging markets buying up ownership. Similar to Cantillon effect, others and emerging market are left holding the bag.
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I was just highlighting a scenario of cantillon effect on the back of reserve currency status. But such a convergence of factors is possible, don't you think? Or atleast it could play out in this manner.
The US produces a lot of things others want to buy, including stability and security, and that is why non Americans want USD and hence others give Americans purchasing power.
They are not given a choice mate, the US has shown itself quite willing to unilaterally dispose of any government it feels to not be doing exactly what they want. And is on record to at least plan to kill it's own citizens to justify such actions.
The narrative that we all have peace because of the US is well and truly broken, the propoganda can't cover the smell, it stinks to bad.
And the US allows articles to be written about China and Saudi Arabia considering buying and selling oil in Yuan, ostensibly to provide cover for the fact that the US is actually forcing both China to buy in USD and Saudi Arabia to sell in USD.
It couldn’t possibly be that Iran trusts USD to have a more reliable purchasing power than an Indian Rupee, or that Saudi Arabia would rather bet on stability from USD rather than the Yuan.
Trade balance shows US doesn't produce that much others wants to buy while others produce a lot of things US wants to buy. You almost never see "Made in USA" outside of USA, except some agricultural products like almonds from California.
Look at the biggest software tech stocks. They generate enormous amounts from exports. Same for pharma. Same for AMD, and most of their final product is manuf in Taiwan, Malaysia, and Korea. Made in X will most often be seen on clothing and cheap consumer goods. Those are low value products, produced in poorer countries. Even the iPhone is mostly assembled in China, but where do most of the profits land? With Apple.
Trade balance isn’t going to show a lot of what the US offers, which is not readily convertible to a numeric figure.
Changes in currency exchange rates are the best way I know of to get a pulse on what the collective population of the world thinks about what the US offers.
Things like choosing to do business in the US because they overall trust the courts, or investing in US companies because they overall trust the management and SEC oversight. Or even just investing in US land because they trust the internal stability and lack of external threats.
> Changes in currency exchange rates are the best way I know of to get a pulse on what the collective population of the world thinks about what the US offers.
No it isn't, many non-American companies trades in US dollars without anything ever having to do with the USA. The world doesn't change what currency it trades in that easily, people will stick with the dollar until USA screws up majorly, like every previous world currency did.
A French bank was fined $9 billion by the United States because it routed Iran-France trade payments through US banks in dollars, violating American law (despite the trade being legal internationally), demonstrating the power of the US dollar as the global reserve currency.
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> The continued strength of the USD is just a vote of confidence in the buying power of the USD in the future.
Right, but that buying power comes from buying Chinese goods, so a European likes USD since China accepts it and you can buy stuff from them with it. Nobody buys American so that isn't a factor.
If China stopped accepting USD the demand for the currency would drop like a rock, since it is the main exporter in the world.
And why does China want USD? At the end of the day, demand is demand. One or multiple people want to use USD, and why would people want to use a specific currency? Because they trust it to get them something else they want in the future.
China has yuan, Europe has Euro, why can’t they trade that? Clearly, they don’t want each other’s currency, and the best option for both appears to be USD.
(Assuming the premise is true, I don’t know how eurozone countries pay China).
China isn't a free market, the government does strange things for reasons other than maximizing their own wealth. That completely screws over your analysis, companies go to where there is the most profits but undemocratic governments do not.
It is perfectly possible that China does this to weaken the US production industry making it more dependent on Chinese exports since it lets US buy Chinese goods with printed dollars instead of having to deliver anything in return. Then by suddenly ending this agreement it would devastate the US who is now unable to get those goods while China is left with the whole production pie.
> I don’t know how eurozone countries pay China
Europe exports to US and buy China, they are on average trade neutral since USA buys their stuff and they buy Chinese stuff. USA is the source of money and China is the source of goods.
It isn't like China is buying a lot of American stuff, but China hoarding USD makes everyone want USD at least. I'm not sure why they do it, your guess is as good as mine, but at least the world isn't getting USD to buy American stuff, they do it to buy Chinese stuff.
US is the very reason why there is instability around the world. US touts security for itself as reason while causing insecurity for other nations, (either through military adventurism or social engineered coups) so that they can't rise.
That's like saying the government is the biggest source of instability since they are sole entity performing the most violence.
Saying the US is preventing other countries from rising in the same thread where people are complaining about US industrial decline is paradoxical, it's precisely those industries were given to developing countries to foster their rise, what the neoliberals underestimated was how that convergence would lead to resurgence of palingentic ultranationalism that is why the world is so unstable today.
US is happy if a country becomes its vassal state just like G7, EU and Japan. US likes if other countries don't have independent thought or freewill.
There is nothing largesse about US in this "those industries were given to developing countries to foster their rise". If it wanted to help others, it would have helped Africa the most. I can't believe the amount of brainwashing people have undergone.
How the U.S. Uses Wars to Fuel Perpetual Consumption｜Yanis Varoufakis
Except Africa has in fact received billions in aid. Building factories & infrastructure like the BRI was all tried in the 60s, it never worked out due to failures of ISI development and weak governments and instuitions.
We've had 40 years of learning hard mistakes, if you believe the Western System is exploitative then the logical conclusion would be that isolation from that system would provide better outcomes, when in reality those that did stagnated. Domestic consumption markets are far too weak initially to drive growth, it's only through the focus on export surplus capacity to sell to open foreign markets that one can provide the impetus for growth.
But that's only possible so in as far the West or really the USA willingly chooses to open it's markets and let it's industries and blue-collar workers decline. From a global perspective, with the assumption that these developing markets would open their markets eventually would have been optimal in providing a path for everyone to develop. Except in reality, many of these countries especially now in the 2020s never intended to open their markets, they're perpetuating the massive trade imbalance with their neomercantalism. Which Varoufakis himself btw points out in The Global Minotaur as unsustainable.
Can you really say the USA is the oppressor in this instance or the victim in maintaining that massive trade deficit? If America decides to go protectionist (which is happening with Trump), the entire damn system collapses and the pathways for development will be closed for future nations.
It's not a question of whether China is building infrastructure or cheap cars for developing nations, it's whether they will be willing to let their industries be gouged by future upstarts. And with economic nationalism, the answer will always be no. And that goes for most of the "global south" for that matter. A zero-sum world for a zero-sum worldview. Compared to that, I would argue that America's attempt at positive-sum world was alot more charitable.
Why is Yellen crying loud about "overcapacity" in China then? According to market principles, overcapacity is good and people will get cheaper goods. Maybe US has overcapacity of WMDs.
GDP is C + G + ... and the C is personal consumption, so I guess if you pay 100 USD that's what gets added, and the premiums (and whatever your employer pays for you)
Taking a loan for $1000, buying something for $1000, paying back $100 and then declaring bankruptcy also increases GDP by $1000. The intention is to measure the total value of services exchanged, which is $1000 in both cases.
Yes. GDP tries to measure "production", it's just easier to add up various types of spending, investment, etc. But if the service has been consumed then it was - by definition - produced, or in this case the service was rendered, I guess.
That's why bubbles are a problem because they represent a misallocation of real resources. (Especially when they're debt fueled. And crucially so when it's private debt like the typical mortgage.)
But that's why the fiscal multiplier is above one, because public debt is usually cough spent on things that increase productivity, growth, or at least has a positive ROI (eg. regularly screening the mythical token at-risk individuals likely prevents enough very expensive private+public spending, and people will spend that money on things like education or mayhaps even just allows them to have more productive years), etc.
If a $1000 service was provided but not paid for, that's $1000 to GDP, and it was an expense for the person providing it instead of the person receiving it. It's as if you paid $100 to the hospital and the hospital paid $900 to itself. I think. Probably depends on the measurement methodology.
> If I go visit my grandma over the weekend, my activities do not register on GDP.
Yes they do. How do you visit her? What do you do while you're together? Eat some food? There's almost no way your visit doesn't register on GDP.
In reality, economic growth makes peoples lives better in simple, concrete ways. Ironically, we've started to question this only because we've become so rich due to so much growth that we're no longer dealing with "simple" problems (hunger, cold, etc).
> What do you do while you're together? Eat some food? There's almost no way your visit doesn't register on GDP.
People typically eat food even when they don't visit someone as well, the total amount remains the same. It is really common to just cook food and eat together, your life doesn't get better if you go out to eat eating your parents home cooking doesn't register on the GDP.
> If I go visit my grandma over the weekend, my activities do not register on GDP.
How do you mean? There are travel expenses and you were also doing that instead of consuming. Saving shows up in the numbers so I'm really not following what you mean here.
If you pay someone to clean their room or watch their kids, that becomes part of GDP, whereas if they simply do it out of love or social obligation, that isnt part of GDP.
There are no travel expenses, if grandma lives in a walking distance (or a couple of bus stops away, not that uncommon in Europe). She is also fine watching her grandkids from time to time, to everyone’s delight.
The point is that someone who spent 300$ to be in the exact same situation as they were before but the gdp seemingly is doing well. So they could have had a window and a sofa but only have a window in the example. So the gdp is increased but the people are not better of.
This example also cuts into personal efficiency going up. Not needing a car or burning gas because of a badly insulated house is negative for the gdp but good for the wealth of individuals.
if you hired care assistant then you have time for some other activities like work which is more profitable than cost of care assistant thus economy has more goods. Life expectancy lowers when young people die, most often in work accidents which is related to low unemployment.
You're completely missing the problem. The care assistant, being a fungible and commoditized service provider, can never provide the kinds of illiquid unmeasurable goods that are generated by long-term and durable relationships.
My wife had a good job. She made the median household income in the area on her salary alone (my salary was still better, but that's beside the point).
When we had our second kid, the hustle wasn't worth it. Two kids in daycare took 90% of her take home pay. It was costing us more for her to work than to stay home with the kids.
Also, kids need their parents. An infant being away from their mom for that long is unhealthy for the infant
It's a choice, economy is about choices and math (staying at home cost < cost of kindergarten) is the tool. (in EU you may prefer to go to work because additional income is that time is added to retirement, even if money is low it has some value).
Your argument hinges on my work being more profitable than a care assistants. While that's maybe true, the difference showing in GDP is not the difference of profitability or "value" in our work. What if I'm a care assistant myself? Imagine two care assistants and two scenarios:
1. They are working from Monday to Saturday. They can't take Saturday off, so they hire a care assistant to take care of their grandma on Saturdays, they happen to hire each other.
2. They are working from Monday to Friday. They take care of their own grandma over the weekends.
Any metric that most directly relates to military spending ability seems the most pertinent these days. But of course GDP doesn’t relate to quality of life—I don’t think anyone suggested it did but of course many think it should.
Are you implying that GDP has only been measured for the last 3 years? Because I think it has been much longer, over a period where physical health has improved greatly.
This is a good point, but at the same time GDP correlates with many metrics of national wellbeing. The USA isn’t the destination of choice for migrants for no razón
There was a big dip in 2021, but it has started rising again, and it's possible it might rendezvous again with the old trend. This means parent-poster might be technically correct in the sense of "between T to T+3 it decreased", but I would not jump straight to blaming the the longer-term background horribleness of US health insurance for it.
It's far more likely to be that teensy-weensy COVID-19 pandemic, both in terms of direct damage and also reduced care for everything else.
Covid and opioid deaths. Opioids are bad. To quote the lancet “Opioid overdose mortality rates are alarmingly high, but measures based on death counts alone do not fully capture the impact of this crisis as they do not account for the young age at which most opioid-related deaths occur…” (https://www.thelancet.com/journals/lanam/article/PIIS2667-19...)
The particular article found opioid deaths lowered life expectancy by 0.67 years, which is a crazy number.
Drug overdose deaths finally seem to be trending down in 2024, but they are still elevated and awful.
Years of life aren't the most important thing. Opiods might reduce life expectancy but increase the averge quality of life of those living in a given year.
For those using them according to prescriptions maybe, sure. But the opioid crisis isn't an opioid crisis because people are using them according to what their doc told them. It's a crisis because they are abused.
Seriously, just looking at the examples of "stagnated and failing economies" like Japan should be a give away that this measure is total BS.
In Germany a life saving brain surgery creates 5K USD of economic activity and the same surgery creates 500K USD of economic activity in the USA.
True story, a YouTuber I'm following recently had her mother operated in Germany and then again in the USA and she made a video about the experience and the numbers:
https://www.youtube.com/watch?v=G-p1nP6hH6U
This obsession with GDP isn't healthy, among other obsessions like the "Number of gigantic companies" which is supposed to show that you are falling back in technology if you don't have extremely large companies by market capitalization metric.
It worries me because it's BS and BS can last just till a point. What happens if at one point in the future people start demanding benefiting from all that riches and success? I'm worried because I don't believe in(goodness of?) revolutions and the situation makes me anxious that the west with the US in particular is headed to some kind of revolution. They had one with the last election I guess but the revolutionaries appear to be pushing for the extreme version of the same thing which eventually might collapse with another revolution with the opposite thing like what UK ended up getting as a Labour landslide after Libertarian landslide.
> I'm worried because I don't believe in(goodness of?) revolutions
That's strange, revolutions have been the some of the most acute moments that improved things for the world population and brought rights to the common people. I'd definitely not want to live through one because it sucks for those during it, but it's great for those that come after.
Sometimes revolutions are also stolen. Often people agree that the current thing needs to go down but don’t agree on what should follow and you end up with things like leftists destroying the elites only to end up in theocratic dictatorship.
That’s probably survivorship bias. The Nobel Prize in Economics for 2024 was awarded for research that has demonstrated that the single most influential factor in the wealth of a nation is the stability of its institutions. Frequent civil wars, coups, and revolutions in certain regions of the world have left them further and further behind.
So I think in general, revolutions are high risk high reward gambles. The rare ones that work out and align with the needs of the population make important strides for humanity, but most revolutions fail or are corrupted and end up a net negative for the society.
I'm yet to see a revolution that improves anything. They certainly destroy a lot and change who's the elite though.
Any benefit, IMHO, comes purely from starting over. Any revolution benefit can be achieved through debt purge, elevating those in precarious state and break any fast feedback loops that led us to that point.
> Any revolution benefit can be achieved through debt purge, elevating those in precarious state and break any fast feedback loops that led us to that point.
Breaking things is very difficult. The status quo would not be the status quo unless a significant part of the people in power wanted it. This means that there is always a significant resistance to overcome, which requires very strong incentives, which historically tends to be despair or starvation. In other words, revolutions.
I don't even think you're wrong in your dislike of revolutions, like I said, I was clear in saying I don't want to live through one, but the extreme view that nothing good every happened is simply, blind.
Fair enough, the correct wording should be something like "revolutions are not worth their cost" as some good does come from revolutions. I'm sure many will argue that the its worth the cost but thats much more subjective.
I agree with this latest comment of yours, and I think I know where you're coming from as counterpositioning to some things one reads online. It's definitely muddy, even the one I linked you was very complex during the following months, but was on the whole good - in my opinion. My parents and grandparents lived through it and would choose to go through it again as many many others.
The American revolution has changed the world hugely. The French revolution carried on from there etc. It is very much better for most people (not the aristocracy).
> The French revolution carried on from there etc. It is very much better for most people (not the aristocracy).
That's a common misconception, but the first three (original, 1830, 1848) French revolutions were failures. They paved the way for future improvements, and established important precedents like human rights and equality... but materially for the average person little changes because of the revolutions. The revolution with the biggest impact in France was undoubtedly the Industrial one, which brought social and economic mobility on a large scale.
Revolutions definitely change things, not necessarily for the better though(depending on what you expect from the revolution). You can have change without a revolution, like with the Brits and Magna Carta.
If for you democratic elections are a form of revolution than how, in gods name, Magna Carta isn't? Fucking wars were waged for Magna Carta. Just historical illiteracy rearing its ugly head again.
I did present an argument. My argument is that wars were fought to enact Magna Carta(historical fact) and thus if we consider, as you do, that January 6th was a revolution there is no imaginable reason, at least I can't think of one (and you refuse to share yours), to think that there was no revolution that brought about Magna Carta.
Saying "fucking" isn't throwing a tantrum. Nor is pointing out something as an example of historical illiteracy calling somebody names.
Now that we are on the same page can you present your arguments on how what happened on January 6th is a revolution and how Magna Carta was not brought about by a revolution?
The Reign of Terror was executing practically any politically active person they could get their hands on (and their families), not just aristocrats. It didn't end until Robespierre was foolish enough to order the execution of one of France's most popular revolutionary politicians (Danton).
When actual peasants revolted, as in the Vendee, the result was what some call a genocide. Against the peasants. By the French Republic.
France continued to see revolutions, "reactions", and Napoleon because the Revolution did not make things better. It was quite some time before that happened for most people.
Oddly you get revolutions without debt purges. Haiti is probably the worst example of this: they were literally forced to pay for their freedom by France.
100% agreed, especially when you print money the GDP is evaluated in, there's no ceiling! What can be bought for money and in what quality, that's a different story... Purchasing Power of Money is what really matters. It's still good in some European countries, but with the current policies, EU has set itself up for times of poverty.
In Germany a life saving brain surgery creates 5K USD of economic activity and the same surgery creates 500K USD of economic activity in the USA.
It doesn’t because the insurer doesn’t pay $500k.
Not to mention that if something costs $10k in the US that costs $5k in Europe, that $5k that doesn’t get spent on something else (which would also increase GDP)
Yes that's the average spent per citizen which doesn't say that the brain surgery will cost just the double of EU. Many Americans apparently don't seek medical help if they feel like they can wait it out, hesitate when call an ambulance etc. Which is not a thing in Europe, its not something you give it a consideration from financial standpoint. If you are poor and you twisted your ankle, you call ambulance. If you have a rash that bothers you and you are poor and unemployed you still go to the dermatologist. If you are rich, you can seek private care(yes, many countries do have private hospitals where you can get an expensive care if you like to have hotel-like room etc).
Anyway, that's another topic and you are right that for the GDP purposes the spent per capita is a good metric. Which is still on the point, the same service costs at least twice as much resulting in useless numbers if you are trying to use GDP as a productivity metric(or anything humane, in fact).
We see a similar thing in Turkey for example when you use PPP(which is supposed to be an improvement). Turkey's PPP is quite high now, meaning that the Turkish lira is strong and on average Turks are supposed to be slightly richer than neighboring EU country Bulgaria. In reality, Turks are miserable because some basic stuff is taxed to extremes and the market is captured by a few groups and to achieve a Bulgarian lifestyle in Turkey you actually have to pay 2X or 3X.
Maybe we just should stop looking and these stats for a proxy to other stuff altogether. They don't work, just use whatever you are looking directly.
Revolutions are neither good nor bad, they just are.
It's what you do after that matters. If you keep on repeating the same mistake and never change the systems that led to the political instability in the first place, then you are bound to have the same results.
I agree. I'm not a fan of revolutions because the process itself is quite damaging - no matter what comes after it. I can definitely enjoy a good revolution if I'm not at the receiving end of it though.
The problem is that those riches and success is just on paper. They are projections and IOUs.
It's like the property market, if everyone has so much money the number of people who can live in Malibu doesn't actually go up. Just the prices of homes in Malibu go up.
No matter what the numbers in the bank account says, the number of people who can get the good stuff will be limited to the actual infrastructure and actual production output. If Americans get even richer, it will simply mean that more millionaires will room share in SV.
EU and Japan, largely cited as economical failure, happen to provide just as good or even better living conditions to their citizens because their infrastructure and actual production output is as good or better than the US.
> No matter what the numbers in the bank account says, the number of people who can get the good stuff will be limited to the actual infrastructure and actual production output.
Only if you define "the good stuff" as "the best stuff." If you define "the good stuff" relative to a subsistence farming or hunter-gatherer lifestyle, the median person today in a developed country is arguably richer than the richest person in town 50 years ago, the richest person in the country 100 years ago, and the richest person on the planet 500 years ago.
Translation: I don't want 'the good stuff', I want 'better stuff than other people.' You're not arguing for quality of life, you're arguing for privilege.
This is nonsense, you could buy a nice car and a home 50 years while working at the post office. Because we have faster computers and smartphones does not make us wealthier.
How's that related to the magnificent 7 and then SpaceX/StarLink and the AI revolution (which is nearly virtually only happening in the US: even if there are a few models in France, China, etc. it's a US game)?
I don't think you realize what's going on in the EU (failing into a third world continent at an alarming rate) or in China (where "little" cities of 30 million inhabitants are all about tech and feeling like you live in the future: not that everything is rosy in China).
EU carmakers are all in big trouble while Chinese EVs and Tesla are soaring. The EU has nothing to answer the mag 7, let alone SpaceX (the ESA was already way behind NASA).
That the US is growing at a faster rate than most other nation and continents is a fact and it's got nothing to do whether you or a care assistant goes to visit your grandma.
You’ve got an overly rosy view of what’s happening in the US and underestimating Europe. AI is big in the tech world, but it’s hardly moving the needle on the overall economy. Every 1% GDP growth roughly requires the equivalent of adding a new Google sized company every year, or as actually happens a more widespread increase.
SpaceX is facing the limits of how much people want to send into orbit. Plenty of growth in the next few years, but Starlink is only generating ~6 billion a year in revenue and not much else really wants to put that much stuff into orbit. Worse, Starlink is facing ever increasing competition from cheaper ground based providers especially cellular internet, so that business may start to shrink.
Is it any wonder that the German car industry is imploding?
I also don't share your pessimism about Starlink. Right now it's unclear what the killer application for Starlink will be, but it's awesome technology and even if it's only used in very remote areas it will still be worth it. When you only invest in technology that is immediately valuable you lose out on the technological revolutions that take a while to play out. Imagine having the capability of building something like Starlink but not doing it because the bean counters don't see the point.
I’d hardly call BMW’s current sales numbers “imploding” or “suffering”. They’re even doing quite well inside China.
VW saw a 12% increase in sales in 2023, the’re currently
#2 globally behind Toyota.
But that’s not really the narrative people have about European car companies. (Ed: Not that the nominal nationality of a company with global manufacturing and significant international ownership is telling the whole story.)
> LONDON/FRANKFURT, Nov 6 (Reuters) - BMW (BMWG.DE) on Wednesday reported a 61% drop in its third-quarter profit, missing analyst expectations because of slumping China sales and brake problems and sending its shares to their lowest level in more than 2-1/2 years.
> In October, the German automaker reported that its third-quarter sales in China had fallen by a third.
> Rival German automakers Volkswagen and Mercedes-Benz are also struggling with falling sales in China caused by a weak economy and intense competition.
> "I don't like talking about the competition so much but I drive the Xiaomi – we flew one from Shanghai to Chicago and I've been driving it for six month now and I don't want to give it up", Ford CEO Jim Farley
Chinese cars are getting better every year and nobody can match them on price. That's the real story here. The narrative is shifting because more and more people realize that the EU doesn't have an answer except for tariffs and other protectionist measures.
>the EU doesn't have an answer except for tariffs and other protectionist measures.
You can't have an answer if you're competing with a labor force that's working 9-9-6 while your labor force is working 35h weeks on paper (much less in practice), gets 40 vacation days per year, get paid sick leave whenever they don't feel like coming to work, and highly paid underperformers are unable to be fired due to unions.
German workers could afford that cushy lifestyle when their auto industry was the most cutting edge and valuable in the world, but once it's not anymore, they'll have to accept a new reality of more work for less pay if they want to have jobs or an industry.
Employee productivity is a flawed metric in most large companies, which are filled with dead weight cashing good paychecks but they're profitable because they monopolized certain markets or sectors which means they can afford all that inefficiency. The knives and chopping block come out the moment profits drop, and that time is neigh for a lot of German companies.
It’s unusually difficult to be dead weight on an assembly line. There’s definitely more and less effective employees inside of auto companies, but when you can directly measure productivity people can only slack so much.
Rather than competition the larger story is companies trying to managing the EV transition. It’s inherently difficult when most buyers are still choosing ICE but EV’s need huge R&D investments and are generally unprofitable. We just entered the territory where sales aren’t small enough to simply absorb per unit losses as irrelevant.
>It’s unusually difficult to be dead weight on an assembly line
I never said the dead weight is on the assembly line, because it's never there, it's in the offices and board rooms. VW for example is full of useless employee swinging their nutsacks (German expression for doing nothing) and cashing in near six figure wages and being unfireable. Meanwhile the workers on the assembly lines will have to loose their jobs.
Well yeah, a bumper on a car being bolted by a German worker is not gonna be held on better than if it were bolted by a Chinese worker. Germans can't compete with Chinese on a assembly lines. The advantage western manufacturing used to have to compensate for expensive labor was automation but guess what, China also has automation now in factories now. So what's gonna be VWs answer?
As crazy as it sounds if you know anything about the industry, better management and increasing wages in China.
Chinese firms are generally extremely dysfunctional internally. That didn’t matter when they paid people a small fraction of western wages, but significant wage growth for years adds up. Continue ~9%/year wage growth and things would be at near parity in a little over a decade.
Obviously, that’s no guarantee but rapidly developing countries eventually develop. Things are about to get really interesting.
Meanwhile China is still BMW’s largest market, well ahead of US sales.
It’s a little early to say they can’t compete rather than this being a brander situation as overall Chinese customer demand is down and they’re a luxury brand. So sure, profits are down significantly but it’s still a very profitable company.
If I go visit my grandma over the weekend, my activities do not register on GDP. If I hire a care assistant for $800 per day to do so, that's $800 to national GDP. The encroachment of the market into society correlates with record levels of mental and physical health crisis. US life expectancy has declined over the past three years, even as 'the economy' has surged ahead. The measures are wrong - and we all know it - apart from the financial press it seems