> Why does the stock market reward idiot shit like this?
Well at a first order, the answer is that the stock market as a system for promoting value creation is an imperfect approximation of an ideal value creator, and more and more we are beginning to see the myriad of ways this concept produces antisocial results. (See for example the state of hospitals and schools, and the rising rate of individuals with crippling medical and college debt.)
More directly there has been some criticism of the stock market for rewarding short term gain over long term value, which among other things has led to the creation of the Long Term Stock Exchange:
I should add that our short term market-based approach to economic activity fails to produce appropriate housing outcomes, and that the approaches in Vienna or Singapore could end our homelessness crisis and make everyone happier. I recently read a doctor’s account of the homeless people who use the ER as a community space by complaining of minor illnesses, and it seems so clear to me it would be cheaper to give them small private subsidized housing (not the awful and alienating “shelters” that offer no privacy or storage and have strict rules, making the street more appealing). Fixing housing could be cheaper than them using the ER or paying for their prison space, and it would also make the streets of San Francisco smell a LOOOT better (and BART), but our short term market based system just chops up everything good, sells it for parts, and speculates on all the land and buildings.
>I should add that our short term market-based approach to economic activity fails to produce appropriate housing outcomes
>Fixing housing could be cheaper than them using the ER or paying for their prison space, and it would also make the streets of San Francisco smell a LOOOT better (and BART)
It's extremely unfair to blame "market based solutions" for failing to fix SF housing problems when it's pretty clear the largest hurdle is NIMBYism politically blocking new housing developments.
People defile them, use them for shelters, or drug ingestion stations. There's no innovative way to solve homelessness. It's an insidious problem that defies any method to redress. Any angle you try to approach it from will be abused or defeated in some way.
Well, you can either have human rights (non-authoritarian states who won't use the police to crack down on this behaviour) or clean public toilets. Of course Singapore for instance has the cleanest public toilets, but you can also pay a 2k fine for chewing gum.
Vienna's approach worked because it happened after WW2 when the country was bombed and broken, land, construction materials and labor were dirt cheap, so the state built over half the city's homes and turned them into public housing cheaply no problem.
But fast forward to today where most of the land and buildings in a city are privately owned, how to you expect a city, any city, to buy up over half the buildings in the city at today's market and turn them into public housing?
The city would probably have to go broke or into huge amounts of debt and everyone would be screaming communism.
Even in the rest of Austria, this approach today would not be feasible due to how insane the cost of urban housing ahs reached no city could afford to buy up over half of it.
The monetary appreciation of housing prices and and turning it into an speculative asset is the west's biggest policy failure. You'd have to undo this first before you can think of implementing Vienna's policies.
> Vienna's approach worked because it happened after WW2
It didn't though, they already started in the 1920ies! The most famous builing, Karl-Marx-Hof, started construction in 1927.
And they are building new public housing to this day, making use of inner city land that comes available from old factories, storage facilities, rail yards or alongside private construction projects etc. Other austrian cities do this too.
>And they are building new public housing to this day,
Sure, a bit yes, but the bulk was acquired/made back when property was dirt cheap, not at today's prices. Vienna couldn't replicate the same move from scratch today.
You cannot start to do today in any city what Vienna started 100 years ago. It's too late now. The fiscal policies of the last decades have made that unfeasible.
>Other austrian cities do this too.
Not even remotely as much as Viena. Graz has next to no public housing, it's mostly private.
Right so you’re saying Vienna’s approached worked but we would have to change things to make it work for us. That is exactly what I am saying too.
I’m also saying that it could be worth considerable effort to try to make those changes, because the reward is a much better system.
For example we might introduce bills now that help stabilize (reduce) housing prices by limiting large scale corporate speculation on housing, such as these two bills [below] introduced into congress. With cheaper housing available, the need for social housing goes down and so does the cost to build it, dramatically lowering the total cost to implement.
Yes and part of what I’m saying is that we might want to stop doing that and think about what is actually going to fix our problems, even if gasp the government is involved. Nobody can afford housing and our planes are falling out of the sky and we’re having a cold-war political debate while every other major country offers cheaper medical care and education.
That would require actually listening to each other and experts, and not using demagoguery to villainize people who disagree with us on minor culture issues. Again, the financial incentives align for the anti-social aspect, since yelling at each other draws in more engagement and viewers and sells more ad-space.
> the stock market as a system for promoting value creation is an imperfect approximation of an ideal value creator
yet
> See for example the state of hospitals and schools, and the rising rate of individuals with crippling medical and college debt.
Ummmm. State hospitals and schools are not traded on our stock exchanges. If there's a failure here, it's not with equities markets.
There's an obvious common denominator between the examples you give, and that these are the most highly-regulated industries in America. My first guess as to where to lay blame would be on those regulations - although we'd really need to dig into whatever the specific failures you're thinking of, if we want to be sure.
“See the state of hospitals” meaning the situation with hospitals, many of which it seems are private. Our schools are a mixture of state and publicly owned (I’m including college) but even state funded schools suffer due to their reliance on stock market driven suppliers such as textbook companies and the housing the teachers live in.
> My first guess as to where to lay blame would be on those regulations
Considering medical and educational costs (total system costs including government expense) are much higher here than they are for example in Germany which has State run institutions for both, I would see this as a poor assumption.
However I’m not actually advocating for State-run institutions, as I would rather see locally owned cooperatives for housing and schools, and larger federations of cooperatives for medical research. My point is that short term market-based winner-take-all approaches are hurting us.
I should add that the broad topic of discussion here is Boeing, which degraded in critical safety metrics after moving to a relaxed regulation environment and focusing on market based short term optimization.
Well at a first order, the answer is that the stock market as a system for promoting value creation is an imperfect approximation of an ideal value creator, and more and more we are beginning to see the myriad of ways this concept produces antisocial results. (See for example the state of hospitals and schools, and the rising rate of individuals with crippling medical and college debt.)
More directly there has been some criticism of the stock market for rewarding short term gain over long term value, which among other things has led to the creation of the Long Term Stock Exchange:
https://en.wikipedia.org/wiki/Long-Term_Stock_Exchange