I believe there’s a misconception about what’s driving the forces that are distorting real estate prices in America’s primer cities it’s a merry go round effect that is the result of the way we have been doing business since the 80’s. The dismantling of the post Wall Street crash economic consensus that corporations run by boards of expert technocrats bounded by financial regulations from the Federal Reserve would keep another depression from happening by preventing reckless risk taking.
The model of using high-interest loans or junk bonds to finance hostile takeovers of US industries fundamentally changed the socioeconomic model of the country. A company would be asset stripped or downsized and the profits would go to paying back the loan and leveraging more capital to make bigger acquisitions. Companies either got with the program or were swept up by the market corporate goals moved away from making money by creating tangible products and services with stock value reflecting the health of the business. The switch to creating a business model that would satisfy investors and shareholders accelerated offshoring & deindustrialization at home. Moving manufacturing to the cheapest possible location with the lowest overheads lead to doing massive amounts of business in countries that are fundamentally run on corruption. Tax havens can hide the source money that comes from questionable business practices so it can be put into the western financial system and these corrupt companies can use the assets to build legitimate public faces that can hide more dirty dealings. NY is the heat of the world financial industry for a Russian oligarch or a Chinese Communist Party member who has a stake in making knock off iPhones getting cash flow back from western financial institutions can be about more than just making a buck. Having cash flow to reward loyal underlings pay bribes and control life chances of the population loyal or otherwise is essential to staying in power. This trickle back dark economics is further distorting prices up an already unbalanced & distorted economic system. I don’t buy for a minute that America can’t have a healthy high tech manufacturing industry along with a strong financial sector as well as being at the cutting edge of R&D & implementation of new technology.
The incentives have been going against type of expensive long term investment in education, science, technology, infrastructure & R&D that take a generation or more to bare fruit when you can reap instant huge returns by being an insider in the financial services sector. The effects fact that geopolitical shocks and the fact that we dont control our supply chains or they have single source bottlenecks in adversarial competitors have only begun to cause (financial) problems lately while the national security implications have been highlighted in the forefront of the public spotlight.
*post script* I had some more detailed thoughts that meandered way off topic so I rewrote and condensed this bit of musing. I’m not here to blame foreigners for American’s problems, in some cases savvy overseas business people will move their assets and invest the US because its assets are among the safest bets in the world. Furthermore there are individuals who are afraid of their own governments because of various reasons after becoming successful and economically powerful that they wish to have their assets safe in a country where the rule of law is much stronger. My main concern is the opaque nature with which the financial industry operates we have our own revolving door issues of corruption with lobbyists & federal & state governments. The leaders of industry that were ousted by the corporate raiders were American Patricians the system wasn’t some golden days of yore. But the ripping up of the post war social contract didn’t lead to anything better it greatly exacerbated underlying equalities, there’s a whole other series of points and debates dealing with government, political & policy that need to be devolved into to scratch the surface as context to get a closer to full and fair picture. I singled out Chinese companies with ties to the government and post soviet oligarchs as offenders distorting the price of real estate in NY and other major NA & EU cities because their east. Our struggles to have a more equatable system being stymied by our open financial access to cash flow from corrupt governments is a result of our own making and is a symptom of the problem though becoming a more complicated one as geopolitical competition heats up.
NY is the center of the world at least in the sense that it’s the center of the US-western sphere of influence and as a the greatest city in the world issues that effect the country & world are over represented or played out on a different scale. I sort of just took an opportunity to not promote isolationism or push a political narrative but work out for myself certain opinions and ideas I believe are important. If a green high tech industrial revolution opens up America to creating a more solid base to the economy and much of that technology has been driven by venture capitalists who have are an outgrowth of our unchained financial system that will be a happy ending. As humans doomed to die we are imperfect and self interested and that reflects in our society I’m not day dreaming that we can build a shining city on a hill or heaven on earth. I am pointing out that with the erosion of the middle class and the rise of the “service class” (the classical working class has been decimated worse than the middle) isn’t sustainable and is vaguely similar to the social class system at the turn of the 20th century. I don’t have any answers but am trying to ask the right questions we are more interconnected & yet more isolated than ever this social aspect of individualistic retreat from the social movements of the 60s along with stress Cold War conflicts, possible Nuclear Armageddon at an inflection point historically with the birth of modern technology as a whole other rabbit hole that can be seen as at least an interesting side note if not more connected in a way.
We need to come up with practical solutions that most people can agree on (they’re out there for many issues) I hope some kind of shock to the system can end these ideological culture wars we’re fighting. People have a right to be who they are and that shouldn’t be an issue as long as we all aren’t trying to force our views on others but the pseudo connectivity brought about by social media (which has its benefits) isn’t a good replacement for the community we live in local, national and beyond if your an internationalist like myself.
I dug up a couple of Adam Curtis documentaries I watched years ago to double check my thoughts while I chewed on the issues of our day. The Mayfair Set (#2 & #3) especially are interesting and would recommend em.
https://m.youtube.com/watch?v=zpeoRKi8exk
https://m.youtube.com/watch?v=CD4tuHs86KA