[rtpg]

Except that "Basic economics" has a series of prerequisites that people like DannyBee are ignoring.

Free Markets are only efficient with perfect information, fluidity, and lots of jobs (Necessary but not sufficient). Labor markets are almost never as fluid or with enough supply to make them efficient in the way people seem to imply.

Misapplying economic theories has led to so much misinformed political thought in the past century I almost wish we stop talking about supply and demand in schools (joking, but only slightly).

[DannyBee]

"Except that "Basic economics" has a series of prerequisites that people like DannyBee are ignoring. "

I actually don't believe free markets are particularly efficient, and labor markets certainly aren't.

But I also don't believe you can magically provide a way to make it feasible for everyone to stay exactly where they are, for as long as they like, regardless of job market, housing, etc.

At a base level, as you can see in a lot of the replies, it comes down to "people believe that if they've been somewhere long enough, they now have a right to stay there as long as they like, and anything else is harsh and mean".

Even if i thought this was right, I doubt you can find an economic model that allows this to happen, and can survive long term (and as evidence i offer that, in the history of civilization, nobody has accomplished this).

If you can, great! I'd love for it to be the case that people can always afford to live where they like, no matter what.

[QuantumChaos]

>At a base level, as you can see in a lot of the replies, it comes down to "people believe that if they've been somewhere long enough, they now have a right to stay there as long as they like, and anything else is harsh and mean".

>Even if i thought this was right, I doubt you can find an economic model that allows this to happen, and can survive long term (and as evidence i offer that, in the history of civilization, nobody has accomplished this).

Insurance against changes in housing prices might let people avoid the effects of gentrification much longer. Imagine a bond that pays the difference between the current average rental rate and some "strike price" $X (when this difference is positive).

[QuantumChaos]

Labor markets are inefficient, that's the primary reason the field of "Labor Econoimcs" exists.

However, these inefficiencies do not explain why Facebook bus drivers make so little. Classical economics is sufficient for that.

You cannot simply point to frictions as a get-out-of-jail-free card from classical economics.

[rtpg]

Likewise, you cannot simply hand wave away prerequisites if they're big enough. The friction here is enormous (the cost to move to another city can be extremely large).

[QuantumChaos]

The argument was that people should move to a cheaper city if being a Facebook bus driver can't support them.

But that doesn't imply that Facebook is forcing people to move cities. Facebook isn't altering the labor market by employing drivers at market rates.

I hope you'll agree that the frictions from moving arise from changes in cost of living (or in the labor market, which doesn't appear to be changing). If the change in the housing market is gradual enough, the frictions need not be very significant, since they are amortized over a longer period of time.

[DannyBee]

"the cost to move to another city can be extremely large"

In what sense? Monetarily, i don't believe you. Emotionally, sure.