That was just a line to keep the proles subservient and waiting.

Huh? The trickle down line comes from comedian Will Rogers who was making a joke about how President Hoover, who was an engineer, was accustomed to water trickling down, but that he didn’t realize money trickles up.

It was a line to serve the exact opposite – to tell the ‘proles’ that the economic plan was fundamentally flawed.

IF you have the capital to do so.

Even if you don’t, it society is much more accessible today. Look at how dramatically the cost of food has fallen as a prime example. Not that long ago, food took up around half a typical family’s budget. Now, more like 10-15%.

In the 1920s, a bushel of wheat was worth around $1 USD; or $15 USD today. Today’s price is $6 USD for a bushel of wheat. That’s a decline of $9 per bushel in real dollars over the past 100 years. And wheat is inflated right now due to the conflict in the Ukraine. Should that come to an end any time soon, that $9 will grow even larger.

That stark cost reduction enables things – like being able to subscribe to telephone and Internet service, which opens whole new doors to engage with society. Nearly everyone has phone and/or internet service today. That historic farmer most certainly didn’t. They had church on Sunday. That’s about it.

Today, if you live your life with nothing but church on Sunday, you really can laze around for most of the rest of your time. But, indeed, almost nobody is content with having nothing but church on Sunday anymore. For a lot of people today, church isn’t even considered an activity worthy of their time because our standards for what makes for a good social activity have been able to rise so much higher.

As in, you’ve profited from the sale of every car you’ve owned?

I profited from owning productive capital. You know, an investment!

I don’t think most people would want to own a car

I certainly wouldn’t. I don’t like owning a car. But it has been hard to turn down the return on investment potential. Where else were you going to get those kinds of returns?

In the past, that is. I haven’t bought a car recently. With the price of vehicles today, it’s not clear if there is still much ROI to be had – it seems pencils have been sharpened pretty sharp. But I’m not looking for one right now either so I haven’t crunched the numbers very hard.

I also don’t think many regular consumers are buying cars for some chance to profit from the sale of them afterwards.

I wouldn’t think so either. If they are looking for a bank account that returns some interest, they’re more likely to go to a bank. But if they’re looking for an investment, cars have been pretty good (maybe no longer; we shall see).

The original poster seemed to have a problem with people being able to recoup and profit from the sale of their home.

The original poster seemed to have complained about government involvement distorting the market. I’m not sure that’s quite the same thing.

The difference between a money pit (i.e. a car) and an investment (i.e. a home) is that you can get the money back that you invested + extra if you are lucky.

Every car I’ve ever owned returned all the money back that I invested and then some. Why the hell would you buy one otherwise? They also depreciated, but that doesn’t matter when the gross investment returns are greater than the depreciation cost.

The comparison between cars and homes is silly and we can end it here.

They are not comparable in every way, but with respect to depreciation, the reason they both depreciate is the same: They both deteriorate over time and with use. Depreciation measures the cost of that decay. The original context was specific about it referring to the deprecation aspects.

We’ve also established that a home that’s been maintained and updated should not only hold its original value, but be worth more than it cost.

I’m not sure that is established. It is established that it is technically possible for that to be true if new homes prices are rising in kind. That has definitely been the case over the past decade, or even the past few decades.

But over the long history? Traditionally, homes in good condition have only kept pace with inflation. Historically, if you bought a home for $100,000 then you should be able to sell it for $100,000 (we’ll assuming inflation is zero to keep things simple) a decade later, assuming you’ve kept it in the same condition. Great.

But let’s say you had to put $25,000 into upkeep during that decade. So your original cost was actually $125,000. You had to eat $25,000 in depreciation costs when you sold it for only $100,000. Had you done nothing, letting it rot over those 10 years, then the house would only sell for $75,000. You also had to eat $25,000 in deprecation costs. It’s the same either way.

I still don’t understand what the argument is.

I didn’t see an argument. What are you referring to?

the data on why we need more people for the same education isn’t available.

Not available because it doesn’t exist, not available because your request to see it was rejected?

Probably doesn’t apply to education.

It would not apply to teachers hired by a public school board, but that’s hardly where teaching ends. Guitar teachers, for example, are quite likely to not be employees. We don’t know the breakdown of what kind of teachers are involved.

For example, farming has historically had high idle time

Modern farming has high idle time, for the most part. Which is why 80% of farmers today have off-farm jobs. Being a farmer myself, I’m able to be here right now thanks to that idle time. Historically, not so much. There was always something needing to be done – stuff we can sick capital at nowadays.

but the byproduct that we have increased the costs to participate in society.

The byproduct is that you get to participate in society. Historically, that farmer you speak of maybe got to town once a week to stock up on supplies and got to see his neighbours at church on Sunday. Otherwise, that was his only real interaction with the outside world.

I can’t see anyone wanting to spend tens of thousands of dollars keeping their Toyota Corolla running for generations.

They just might if a 2023 Toyota Corolla was effectively the same as a 1823 Toyota Corolla, differing little beyond coming in a more appealing colour of paint. Only needing to spend tens of thousands of dollars to have a new car would be a good deal.

That doesn’t happen because of the technical innovation happing in cars. Restoring your 1823 Corolla to new condition is nothing like a 2023 Corolla. It will still get you around, but with no cabin, air conditioning, power steering, radio, slower speeds, etc. who would want it? We already discussed this.

the person I was replying to makes it seem like a house’s value should always be in decline.

They are always in decline. You can spend more to buy the depreciation out when you restore it, or you can let it slip and spend that when you sell it, but the decline happens either way. There is no avoiding it.

Well, there is one way to avoid it: If the cost of new housing goes up sufficiently, it will drag the used market it with it. That could see an appreciation in value even with some wear and tear. In fact, we saw exactly that happen in the used car market recently when the “chip shortage” sent the new car market sky high. People were selling their used cars for more than what they were new.

A shortage of arbourist is relatively inconsequential to a shortage of pool maintainers, if you have 40% more pool repairers for only 15% more pools.

40% more pool repairers are inconsequential if they will only work on residential pools and what you have is a commercial pool. You haven’t dug deep enough into the data yet.

If we use payroll employees from the vacancies table, rather than global employment

I believe we are talking about workers, not employees. A thing you might have heard of that happened over the last few years is said to have been especially hard on workers not categorized as employees. Perhaps they are who disappeared? Either by leaving the workforce or by becoming employees, rebalancing with any employees who left the workforce in the same period?

The people who put their code up as open source, only to have it repackaged as proprietary, not so much.

Obviously. As we have already discussed at length, capital only provides when it works for you. Throwing some code up on GitHub doesn’t put it to work, and if someone else puts it work it isn’t working for you.

Sure, still need less labour hours per output.

Yes, but, as before, need more hours to fill in the new opportunities for workers. Maybe you haven’t noticed, but we aren’t living like they did in the 1800s. If we did, then yes, capital could do most of the work and people could laze around most days, having little to do. But that’s not the choice we made.

The article in question is about education on Québec.

The article is, but the labour market doesn’t exist in a vacuum. It’s not like some sci-fi program where you are born to be a teacher and can never be anything else. People can do whatever work they want. And it’s not like teaching is going to be exactly high on anyone’s list, so when there are other vacancies to fill…

but I’m bogged down with quarterly data, nothing annual.

Then just average the quarters. Good enough. Problem solved.

I’m pretty sure people innovate, not capital.

Going back to digitization, to use an as example, it is a computer that provides that digitization. The computer is what reaps the rewards. More specifically, the benefactor of the computer. And, indeed, those who have innovated in the computer space have become filthy rich. If you look at the world rich-list, the vast majority of them are there because of their contributions to computing.

So, yes, that is quite right. If one choses to innovate, they can become a benefactor of the capital. Again, that is why university was once promised to provide higher incomes, as it was believed that people would go there to use its facilities to innovate and then attach themselves to the capital that came out of that innovation. Of course, we know how that turned out…

output ratio should still be trending towards needing fewer workers over time.

No, it should be (and is) trending the other way. Capital may relax the need for people in certain existing roles, but it also opens new opportunities. Why do you think women didn’t enter the workplace in any meaningful numbers until automation arrived? That is not a coincidence. That automation created a need for them.

Either way, were talking relatively minor undulations

We’re not exactly missing that many people. We need around 300,000 people to restore job vacancies to the historical norm. Which, conveniently, is the size of that undulation.

Your workforce assumption was misinformed

Only if Statscan is misinformed, as the numbers come straight from they.

but there have also been many improvements in I-O, timekeeping, and digitization.

Those improvements came from capital, and as such capital gets the reward. If workers want a bigger piece of the pie, they are going to have to figure out how to become more productive themselves (or get their own capital).

We’ve never had as many working age people as we do today

In absolute numbers that is true, but the workforce has declined relative to the size of the population. If there are two people and one of them is in the workforce, that might be okay. If the population then grows to 100 people and now two people are in the workforce, you’ve doubled the workforce!, but you’re bound to have a bad time.

The questions are “why can’t we attract workers into X fields”

Because the workforce has shrunk, relative to the need for workers. A larger population needs more productive capacity.

but more national, question of “why does a worker, that produces more than ever, have less purchasing power than ever?”

Because we reached peak worker productivity a long, long time ago. Overall productivity is up only because capital has picked up the slack.

Funny thing is, once upon a time we encouraged our youth into university research labs to develop new capital which they could capitalize on, promising a higher income on the back of the productivity of the capital. Curiously, we heard the university part, and we heard the higher income part, but glazed over the rest. For some reason that message turned into people thinking they should go to university to get a job where they can be no more productive than any other person has ever been. And, unsurprisingly, incomes have held stagnant for that segment of the population, to which they now act like we have no idea what’s going on…

And the remaining lifetime of a home kept in good condition could be many generations.

Kept in good condition is the key. If you keep a car in good condition, it can last many generations too.

In fact, homes can often be renovated to extend their original life far beyond even a few lifetimes.

Same goes for cars, of course. There is a whole automotive industry around taking beat up old cars and restoring them to pristine condition. And, indeed, many of those cars can sell for way beyond their original price.

Right, so it wouldn’t be depreciated like a car

Right, it would deprecate because houses deteriorate. If you keep your house in good condition, it’s just you paying the deprecation cost up front when you restore it rather than taking the hit with the next guy in line. The math works out the same either way. The depreciation doesn’t go away.

It’s rare to see just a home (without the land) being sold.

Less common, but not unheard of. It happens often enough that there was once a Canadian TV series about moving houses.

In your example, the homes are still the same value, only the land changes the sale amount.

Exactly. Their values are evaluated independently of each other. The house can depreciate and the land can appreciate.

A car and a home are two very different things, so they can’t be compared here.

With respect to depreciation they are quite comparable. Deprecation is just the reflection of the remaining lifetime value of something.

Depreciation just tends to be more obvious in cars, because:

1. Cars have pushed the technical advancement envelope a lot faster than houses. A 20 year old house still feels like something that was built recently. A 20 year old car feels like it was built by a much earlier civilization. This keeps greeter interest in having the absolute latest model in cars.
2. Because of #1, people are more likely to recondition a home back to new condition. If a support structure in a house is seeing signs of rot, you are bound to fix it. If a car’s frame starts to rust through, you’re apt to throw the car away and get a new one.

I’ve yet to see a home in good condition that’s worth less than the amount it was purchased for.

A home in good condition has approximately the same remaining lifetime value as a new home, so that stands to reason. Not to mention that with ever more stringent building codes, new construction cost has gone up, up, up. The used market always follows the new market.

Even the land your home is on increases in value over time

Land does, but that’s independent of the home. I mean, they are usually sold together, but the buyer will determine their utility value independently. Two identical houses will not fetch the same price if one of them sits on more desirable land.

Everyone says every organization lacks workers. Film at 11.

My entire life we talked about how this was going to happen when the boomers retire. With the average boomer turning 65 within the past couple of years, that time has come. And now all of a sudden we’re surprised and unprepared?

It appears the average Singaporean home was $1.2MM in March, $1.6MM in June, and $2MM as of a week ago. I’m surprised he hasn’t adopted it already!

Housing is only a safe investment if it keeps its occupants productive (e.g. allows one to take a job by living nearby). The job market is strong right now, but we’ll see how safe those investments are when that starts to turn…

But, if you truly believe what you say, why aren’t you buying one of those $100,000 homes in Newfoundland? Anyone can afford that. If the government is going to protect you, how can you lose?

A home is meant to be a depreciating asset like a car is.

It is. Granted, it has become crazy expensive to buy a new home, so the used market has risen to compensate. Actually, we’ve seen the same thing happen in cars recently. New cars have become crazy expensive, so the used car market has gone up in price too.

But that’s outside of investing. Nothing says depreciating capital cannot be an investment. Consider a widget that cost $100 to buy and after one year is completely worn out and worth $0. But that widget during its useful life produced trinkets that you were able to sell for a profit of $120. There you go, a 20% return on investment, even though the capital is now worth nothing.

Cars and houses will always fundamentally be investments as long as they remain useful tools of production.

Even bananas and cucumbers and things that don’t need plastic?

Cucumbers, like many other foods, are wrapped in plastic because they last longer that way. Less spoilage comes with many obvious benefits, like not needing to produce/transport as many, which reduces greenhouse gas emissions. Of course, nothing in life comes free of tradeoffs. Pick your poison.

I don’t think I’ve ever seen a plastic wrapped banana in the store, but it is documented that wrapping bananas in plastic also slows their rate of decay, so no doubt the calculus leans towards plastic in some situations as well.

We chose to live in a capitalist system. Inflation, amongst other issues, is a problem with this system.

Inflation is merely observance of people believing that a currency has become less valuable than in the past. In what way is that a problem of capitalism? Currency is not a feature of capitalism, nor is assigning value to something a feature of capitalism.

Perhaps you mistyped ‘currency’ when you wrote ‘capitalist’? Autocorrect can be a harsh mistress. It is true that we live in a currency system.

Yes, of course. Canada and its provinces stand as a democracy. The population at large are in charge. They can do whatever they want. The only thing that can get in their way is themselves.

And that population has tested the electoral reform waters numerous times, especially provincially where referendums have been hosted on multiple occasions to gauge opinion, but interest in change has struggled to present itself.