(5l) Reversed poverty

Unfortunately but statistics show I'm not talking nonsense. The poverty division in Western society starts to reverse: pensioners now live a good old age as their poverty likelihood goes down. This is because they lived in the golden time, in general from mid 60s until about the 90s when they could afford relatively cheap houses while both parents worked to maintain smaller families so they could save in pension funds that didn't exist before but also in normal savings and even invest in shares during periods that stock exchanges made big profits because of the appearance of all the new technologies.

An example. I remember a time when houses costed between 1 and 4 million Belgian francs, i.e. between 25 and 100 thousand euros as many people don't realise how "cheap" (although with high interest on the mortgage to repay) because of the new current in the EU. Today, people have to search hard to find something that costs only 100 thousand euros and in cities even small studios cost easily over 150 thousands euros (6 million old Belgian francs) that is today considered to be cheap while families with kids need houses with 2 or 3 bedrooms that are easily between 200 and 300 thousand euros and more. Still, people think this increase in house price can continue whereby they forget the financial crisis in 2008/2009 was partially because house prices were inflated. Indeed, the older generation must sell their houses and flats at a higher costs to buy something smaller that is also a high cost and still have something left to live a good life during retirement. And thus young families also pay more when they want to buy something. A circle. And thus, although wages increased over the years, they didn't increase as much as house prices. And since the financial crisis (lower) wages are increasingly pressurised to no longer increase. And I don't even mention the increased cost of other products.

Indeed, the financial crisis should have been a wakeup call that changes to the system are needed as it showed certain short comings such as too little regulation. Mechanism to keep house prices within the reach of everyone such as a maximum number of houses individuals can buy in a certain region or higher taxes for people who buy a number of houses to let, houses that are no longer available for others and thus push up house prices but also rent when too few people can buy their own house. I think a partial return to the 70s and 80s would not be a bad idea with more control and rules although still free competition but within those rules. Indeed, as the financial crisis demonstrated, absolute free markets without much regulations are disasters- in-the-making, even for the rich because some such as hedge fund investors use other peoples' money to invest and some take huge risks to enrich themselves as it doesn't concern their money whereby some cheat with the potential to bankrupt other people's companies. A strict control allows a fair economy with fewer angry people. The yellow vests in France are an example when inequality results in anger.

Comments

Popular posts from this blog

Theresa May calls for immigration based on skills and wealth

(15d) Previous USA President Obama gave advise

Gay Pride Brussels