Review of Liz Warren's Book: The Two-Income Trap
Added 2019-01-14 05:22:29 +0000 UTCThe gang (mostly Matt, apologies in advance) talk about Elizabeth Warren's book The Two-Income Trap. As with most things, the book errs in not recognizing the superiority of the welfare state in solving the problems identified.
Comments
Matt is right on the big picture, but I think wrong on the idea that housing prices are fully captured by inflation adjustments. If one kind of housing (good schools) doubles in price, as Warren is saying, but other things are not going up as fast, that means you can’t just say that inflation adjustment covers it. Inflation is an average! That’s why some prices rise faster than inflation, and some slower. The segment of the population that got the second income to buy houses in good school districts, by all doing the same thing, drove the prices up and saw their incomes devoured (Warren says); but inflation adjustment to incomes doesn’t fully account for that price, because good-school-housing is only a segment of one good in the basket of goods.
James Geluso
2019-03-25 17:54:34 +0000 UTCI don’t know what measure if inflation Matt was referring to, but if he was referring to CPI I thought housing was excluded from that. So that implies Warren correctly handled inflation adjustment. Am I missing something?
Wes Collier
2019-02-11 19:32:46 +0000 UTC
