And if you look back, you will note that I addressed this exact model and claimed it was too simplistic to provide a useful solution to homelessness.
It’s not a solution to homelessness, which was precisely my point (though not @wat0n’s point, I’ll grant you). My point was that capitalism, left to its own devices, cannot solve the problem of homelessness. The market value of homes, at equilibrium between supply and demand, will always price some people out of the market. And even if we do not leave capitalism to its own devices, we have the problem of unintended consequences of any intervention in the market - market forces and the profit motive will tend to erase any good we try to do. This is not an argument for more capitalism, it’s an argument to end
capitalism. You can’t fix it just by tinkering with it or trying to ‘reform’ it. Ultimately, only socialism can resolve the problem of homelessness.
For example, demand is not stable. It is increasing. Another: the value of a dollar is decreasing, so prices increase regardless.
None of these factors are relevant to the analysis. Demand increases slowly from generation to generation, due to population increase, and inflation has been close to zero for more than a decade now.
So simply providing more incentives for builders to make crappy but expensive condos and suburban houses will not magically make builders work themselves into overabundance.
Crises of overproduction are a thing, @Pants-of-dog. And they keep happening, which rather suggests that capitalists magically will
work themselves into overabundence, time and time and time again. Market forces and the profit motive drive the Gaderene swine over the cliff again and again and again….
@wat0n seems to be parroting a libertarian meme that was made famous by a man named William Tucker who wrote a book about how rent control creates homelessness. People like the Cato Institute have made the same claim.
Studies that have looked at it have found some very slight correlation, while other analysts have described the claim as “just plain silly”.
The logic of capitalism leads to it, @Pants-of-dog. If it didn’t, then rent control and zoning would have solved the problem of homelessness long ago. And it hasn’t. The problem is not that the rents are too damn high, the problem is that we live in a capitalist system.
No builders intentionally built so many houses as to force them to reduce their prices.
While your simplistic model of supply and demand that you and others have repeated many times in this thread is displayed in this last graph, the builders at all times thought they would get the price they were planning on getting before the 2008 financial crisis.
Intentionality has nothing to do with it, as @Truth To Power has pointed out. Market forces under capitalism are impersonal and remorseless - man proposes, the market disposes.
The crisis, by the way, was a far more significant factor when it comes to dropping housing prices.
To simply show that last graph without mentioning the crisis and letting reeaders assume it was due solely to high inventory is incorrect.
The financial crisis of 2008 was caused by making mortgages too easy to obtain by people who could never have realistically repaid those loans. This led to an artificially inflated demand for housing stock, which led to a crisis of overproduction in that sector of the economy. Hence the scenes we saw of street after street after street of brand new, empty houses left to rot.
Yes, those are the steps that happened.
None of that supports your claim that builders will intentionally do it all over again.
Crises of overproduction are a thing, @Pants-of-dog. And capitalists never learn from their mistakes. How can they? This is the whole point that Marx was trying to make when he wrote Das Kapital
- capitalism cannot be saved through reform or better management. Capitalists cannot “learn from their mistakes”, because these ‘mistakes’ are inherent to capitalism itself as a mode of production.
"Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies." - Marx (Groucho)