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Seems like housing again:
> Rents have surged in recent years, driven by tourism, foreign investment and a shortage of affordable housing. The cost of housing now consumes one of the largest shares of disposable income in the European Union
My impression is that where housing is expensive, there will be complaints of unaffordability (obviously), but also vice versa, that where there is unaffordability, housing always seems to be a large component (at least in "the west").
in most places basic food (rice and beans or an equivalent) is cheap. Services can usually be skimped on. Transportation can usually be flexible (new car / cheap used car / transit / bike). Housing costs seem to be relatively non-flexible though.
I wouldn't be surprised if Greece has strong NIMBY factors.
You are right that it's due to housing but in my opinion most of unaffordability comes from immense pressure due to tourism. Housing situation is better outside the touristy areas (and Athens). If anything Greece has seen massive housebuilding up until the economic crash in the early 10s. I remember block of flats appearing left and right in most major cities in a span of months. They still do but in a lot of cases they are almost exclusively short-term lets (again especially in tourist hubs). Why let a flat for €500 monthly when you can charge €150 per night? It's maddening.
> Why let a flat for €500 monthly when you can charge €150 per night?
Isn't a tax the obvious solution here?
It's wild how much housing is a big issue but local government with direct control, choose to do nothing. I know of a rural area where folks are upset about housing prices, there's no lack of space, they just do not zone more housing. They simply don't do it ... and the locals are happy to blame outsiders and seemingly wallow rather than really address it.
Granted it's not all zoning, new houses won't be super cheap, but it's a start.
>I wouldn't be surprised if Greece has strong NIMBY factors.
No doubt. You see it in tourism economies the world over.
Cheap services + cultural/historical novelty + nice climate make tourism highly viable -> tourism becomes outsized part of economy -> those enriched by peddling tourism write the rules to their benefit -> it becomes all but illegal to develop any other industry, build housing, etc, etc because all this activity winds up punitively regulated lest someone do something that scared away the tourists.
Why are prices up even though population is down over the past ten years? Did everybody decide to move to the city or something?
Somehow the economic indicators feel the same as looking at crypto.
> Between 2009 and the trough of the bailout years in 2016, average household wealth fell by roughly 35%
35% of the land didn't disappear and I'm guessing 35% of the buildings didn't disappear... So what changed was the measurements... GDP values seem even shadier.
I wouldn't be surprised if Greece has strong NIMBY factors.
> (at least in "the west").
It is the same in the east - it is either housing, or housing related tax.
The article gives a dozen reasons why people in Greece feel poor. Housing is just one of them. A big one, perhaps, but there are many others in the article.
It's interesting that housing is the one that all the HN commenters pick out to comment on. It's probably the most universal complaint, the one that's easiest to sympathize with from halfway around the world.
There's no paradox here. Distribution of wealth matters. Rich got richer and everyone else didn't. Simple as that.
As Ray Dalio has mentioned, you should measure results on how it impacts the bottom 51% of the people (the majority) it's a lot more illustrative than looking at the average.
Yep. I'm not an economist but my social democratic common sense would tell me to look at the bottom 10% income bracket and see how they're doing.
Incidentally these people are the best economic citizens because if you give them money they'll spend every cent of it because they need to buy food and energy, use health care and pay rent.
In other words if a rich person gets a million they (if they're sane) spend a fraction of it and put the rest in assets, stock market, property, etc. If you give 1000 poor people each 1000e every cent will go into local economy immediately.
Should we perhaps look at the top 51% instead? Why pick one perspective over the other?
I’m not familiar with Dalio outside some weird pseudo-academic paper he wrote where he attempts to provide a new grand theory of economics based on “transactions”, but I would be interested to hear this perspective supported.
Edit: samiv above answered my question
Considering how skewed tax participation is, this would be a very one sided view. Just tax the top 49% more, no matter what's their current level of taxation, and redistribute to the lower 51%. It'll always make this criteria look like a success.
Problem is, this creates systemic effects. If you look longer term, a society that does this will end up a lot poorer than one that doesn't. Even for the bottom 51% you were optimizing. Because there are two variables to control: the redistribution, and the actual productivity. If you just focus on splitting wealth, you stop growing wealth.
Growing wealth on the other hand will make everybody richer, including the botton 51%. Simply participating in a richer economy has advantages. Plus the smaller redistribution percentage will actually end up bigger in absolute terms.
The median is usually used for this; it throws away outliers on both sides.
Sometimes I think economists don't know what a median is.
or mathematically speaking ... use the median instead of the arithmetic mean.
<https://rentierblackhole.com/>
"The Rentier Black Hole"
A theory of land, housing, and open-economy failure: how a non-reproducible asset absorbs global savings, breaks wage-price adjustment, and hollows out the productive economy.
Feel poor??? Man... this is some prime ragebait title.
I live here. Few facts: normal salary €1000 per month; houses €150–200–300k; house prices are rising because of foreign investors; seasonal workers from the philippines earn €500+ per month.
Officially, it's a 6-day working week - 48 hours (!)
The tourism economy requires only cheap labour, ideally buying all the properties and bringing in seasonal workers. That's sad.
While income taxes are low for the majority ( the salaries are low anyway) the indirect taxing is the way the Greek Goverment managed to recover.
The prices of everyday goods rose (sometimes more than double) and the profits from VAT(24%) with them.
High duties on fuel + fuel price went up, combined with rent prices (living far away from your workplace) => longer work commute, bad infrastructure and older vehicles ( no money to buy a fuel efficient one when you are poor)
Liberalization of the energy market forced by EU which lead to extreme prices. (new companies that don't produce anything got in the middleman position with only goal higher profits)
In summary, everything has been and continues to be done at the expense of the majority (low-wage earners), while making them even poorer.
I could see this was bad reporting right away. Average wealth? Per-capita gdp? Pointless. Give me the decile values, or just show the histogram.
In no particular order:
- Per capital GDP still awful
- Quality of life continues to get worse thanks to rising global temperature.
- Everything else worth doing is still fairly terrible compared to better-off EU neighbors since tourism remains the economic staple. That strangles any other economic programs from working.
Also in that bucket:
- Average is one of the worst ways to measure wealth (use Median)
- Wealth is typically tied up in illiquid assets (e.g. housing), making people feel trapped or anchored to a place that may not be economically mobile (e.g. rural)
The idea that the answer to this question would not be intuitive to pretty much anyone that participates in an economy is a genuine shock.
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" -Upton Sinclair
Because, to the surprise of literally nobody who's ever been on the receiving end of these sorts of policies they cook up in far away think tank offices and the ivory towers of academia, there's a million ways to make the number go up that doesn't actually make normal people any better off.
At this point, I'd settle for not being better off. It'd be a helluva lot better than everything getting worse.
We need to eat the fucking rich. Bnch of parasitic fuckwads.
Same with Brazil or Portugal or Angola. Full of billionaires with poor people.
Yeah, its all inequality. Most people are going to be renters forever in my hometown and the government has absolutely no plan to fix it. People will just be pushed farther and farther away from where they work and will have longer and longer commutes because it is impossible to pay to live close to work with the salaries they're making.
> Most people are going to be renters forever in my hometown and the government has absolutely no plan to fix it. People will just be pushed farther and farther away from where they work and will have longer and longer commutes because it is impossible to pay to live close to work with the salaries they're making.
[emphasis mine]
I somewhat disagree: at least during the COVID-19 times the government did have a plan to partially fix it: At that time there were a lot of discussions whether work from home will be there to stay or not.
If it would have stayed, that would have partially solved the problem (not for everybody, but for a substantial subset of people):
Since people can live at places where rent or the price of houses is much lower, companies can pay smaller salaries, but employees (after subtracting the cost of living) still have more money. In other words: both sides get their slice of the pie: employers can decrease salaries while employees still have more money.
Unluckily, when COVID-19 was over, companies decided they basically want people to come back to to office (working from home should be an exception).
This was the central reason why this plan failed.
Renting itself isn't inherently the problem if you have very strong tenant rights. Imagine renting came with all the rights of owning except the money flowed differently (like a perpetual mortgage) - that'd be pretty okay, actually. It is within the power of a government to enable something like that.
> Most people are going to be renters forever in my hometown and the government has absolutely no plan to fix it
This seems to be the plan basically everywhere though. Yes, some countries still have a ladder for average people to own property and find success, but the global trend seems to be that this possibility is shrinking for the vast majority of people
That's what happens when average people have to compete with real estate conglomerates for housing though
The way this wealth inequality is so common around the world. makes me wonder if the next time the pitchforks come out, it will be some kind of global uprising. Perhaps accelerated by social media. Or are the elite better able to control the masses in this age?
Nah, it will be triggered by a debt crisis.
Remember the plurality of the rich are working off asset loans on paper wealth. Those credit lines get cut by an event, that triggers an asset sell off which creates a vicious cycle.
So the pitchforks will be the poors forming a mutual fund and busting/pump dumping the riches stocks?
>
The way this wealth inequality is so common around the world. makes me wonder if the next time the pitchforks come out, it will be some kind of global uprising. [...] Or are the elite better able to control the masses in this age?
I rather believe that the individual problems in each country are very different (even though you summarize them by "this wealth inequality is so common around the world"). Additionally, it often happens that the interests of people in one country are antagonistic to the interests of people in another country, so I don't believe that people from different countries will club together, and have common wishes.
> Additionally, it often happens that the interests of people in one country are antagonistic to the interests of people in another country.
I find this honestly kind of difficult to believe, except when it comes to distractions by the people who want to stay in power
Capitalism optimization: make the rich richer making the poor poorer
You live in the most privileged period in human history.
https://ourworldindata.org/explorers/poverty-explorer?tab=li...
Influence will be distributed similarly, regardless of political system: (Pareto Principle) https://en.wikipedia.org/wiki/Pareto_principle
Gotta love HNers who never read articles and use it as a soapbox:
"The scale of the destruction that followed the debt crisis was extraordinary. Between 2009 and the trough of the bailout years in 2016, average household wealth fell by roughly 35%, wiping out more than a third of Greek families' assets"
...
"The labour market has improved markedly since the darkest years of the crisis, with unemployment falling sharply and the informal economy shrinking. But structural weaknesses remain deeply embedded. Long-term unemployment, low participation in the workforce and a high reliance on self-employment continue to shape opportunities and outcomes"
----
Tl;dr - Greek households still haven't recovered from the Eurozone and Greek Debt crisis.
Frustraged by the endless prattle about GDP, europoors and Brexit, me and my agent frien's sat (manifested) together and brewed up some alternatives:
https://x.com/AiSimonThompson/status/2070900546119114970/pho...
I think that median household disposable income is a much better way of looking at this than GDP.
2014 is the turn. The US gained shale, isolationism is possible, Trump 2 is created by the general (true) perception that things were good under Trump 1. The European war starts and China is left to dominate Asia.
Also massive influx of money from Europe especially due to the dominance of the US megacorps and the tech sector in general.
Basically you had companies like Google or Meta constantly leeching from everyone while providing approximately zero real value in return.
Greek here. Fake news. Totally fake news. Greece is not Richer. Greeks become poorer every month.
Data says otherwise, over a years-long scale.
"Poor" is a relative concept!
If everyone gets 10x richer, half the people will still be in the poorer half, and will still feel poor in some sense.
This is surely not the only factor in this story, but it's you need to keep it in mind in these discussions.