[The following post is by TDV Chief Editor, Jeff Berwick]

The sick fall into socialism continues to get worse and worse in the once capitalist leaning USSA.

Marxist, Thomas Picketty, has been hailed in recent years by the establishment as being the savior of the economy and solving the problem of income inequality in the socialist soyuz in the US by coming up with the idea of stealing money from those who have it and giving it to those who don’t via a global wealth tax.

Now, the latest socialist/collectivist hair brain idea comes from Matthew Rognlie, an “economics” graduate from MIT, who says that the real problem is housing!  There just aren’t enough houses!  It’s been getting traction across the interweb all day today showing just how degraded much of society is in understanding economics.

In Breitbart’s commentary on this great new theory the very first sentence starts off with falsehoods, “Wealthy tech founders and the automation of middle-class jobs are often blamed for increasing concentrations of wealth in fewer hands”.  Really?  People creating new technologies that benefit all of mankind and create a massive increase in wealth for investors and employees alike is the cause of “concentrations of wealth in fewer hands”? How does the average person having access to computing power and communications technology for nearly pennies impoverish them?

The article continues, “But a 26-year-old MIT graduate student, Matthew Rognlie, is making waves for an alternative theory of inequality: the problem is housing.”

Rognlie has noticed that housing has gotten more expensive over the years but completely misses the point as to why.  The main reason is due to central bank money printing.  Secondary reasons include things like government regulation and interference via things like Fannie Mae and Freddie Mac (that are bankrupt yet again) that dramatically increase the cost of housing.

Rognlie’s idea of reducing government regulation on housing is actually a good thing.  The government should have no role in regulating housing nor any other market.  In fact, government is an unnecessary evil and shouldn’t exist at all if what we want is a free world.

But, his entire theory is predicated on the idea that somehow ownership of housing is what causes income inequality.  They state, “Land/housing is really one of the only investments that give wealthy people a long-term leg up.” According to The Economist, this should lead governments to rethink policy related to income inequality.

Yes, we wouldn’t want anyone to get a leg-up, would we?  God forbid someone should get ahead and make a better life for themselves!  Their gains must be limited or taken away by force (taxes) to redistribute to others!

So, to summarize, in his view, people who find ways to increase their wealth should be stifled.  And, in his view, the main way people are getting ahead now is owning houses so that must be rectified by violence (laws/regulation) and theft.

He has taken a symptom (rising housing prices) of a problem (central bank money printing and government regulation) and through his socialist lense sees it as something that is need of fixing via governmental means. But when you try to fix a symptom you never fix a problem.

The true problem is that central banks are a bane of humankind’s existence and do nothing but make the rich richer and the poor poorer.

Neither Rognlie nor Picketty seem to even notice the problem at all.  And, both of their solutions to problems caused by the government and central banks is to bring in more government and to let the central banks continue to destroy the economy.

Just like with all centrally planned (aka communist) economic ideas his paper is filled with all sorts of equations.

And just like all central planned ideas the answer to all these computations is more government intervention into the economy. The public, ignorant of economics, goes along with it because of the fancy mathematics models which, time and time again, don’t fit reality.

Government cannot improve an economy via any intervention and central banks can never improve an economy by printing money and manipulating interest rates away from their natural market levels.  Any action by government or central banks in the economy can only hinder the economy as a whole.

One day, future historians will look back and make note of this very fact.  Sadly, in the meantime, we have to live through these market manipulators trying to tinker with the economy to make things “fair” which will only result in a worsened economic situation for everyone and only serve to make the rich richer and the poor poorer.

Thomas Picketty and Matthew Rognlie should actually produce something of value in order to create more wealth for mankind as opposed to drawing up fallacious charts and equations in order to bring in more violent (government) schemes which can only make things worse as a whole.

The only answer for the most equitable situation for all is to remove the massive boot of government and central banks off of the worldwide economy and let free markets improve the lives of all as much as possible.

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