Peter Thiel began predicting that young Americans would turn to socialism as far back as 2010, so he is not at all surprised by the popularity of Mamdani et al. Why did he predict this?
If you graduated in 1970 with no student debt, compare that to the millennial experience: too many people go to college, they don’t learn anything, and they end up with incredibly burdensome debt. Student debt is a version of this generational conflict that I’ve talked about for a long time.
The rupture of the generational compact isn’t limited to student debt, either. I think you can reduce 80 percent of culture wars to questions of economics—like a libertarian or a Marxist would—and then you can reduce maybe 80 percent of economic questions to questions of real estate.
So Peter Thiel and I agree on some important points: that financing college with debt is a terrible idea, because it leads to young people trying to start their lives in a deep hole, and that one of main reasons we have to do that is that too many people go to college. I also agree that we have a long-term problem with taxing young people to fund the retirements and health care of the elderly, what he calls "generational conflict."
About housing costs, I am not so sure. It is certainly true that housing prices in New York City and Silicon Valley are very high. But is there any conceivable program that would change that? NYC has built a ton of housing over the past 25 years, but it is not enough, and I am not convinced that we could ever do enough. Hong Kong is wall to wall high rise apartment buildings, but housing there is still far more expensive than in the average Chinese village. When tons of people want to live in a place, the cost of housing goes up.
If there is a long-run solution to high housing costs, it is enabling people to live good lives in cheaper places. Housing is cheap in Akron and Omaha. So long as 50 million people want to live in NYC and the Bay Area, many of them are just out of luck.
That being said, we could be doing quite a bit to make housing more affordable: zoning reforms, ratcheting back building codes, etc. We could also bring down utility costs by just building a ton more solar power, and requiring utilities to set-up their systems to better accomodate dispersed solar power (like rooftop units).
But if the complaint is, "I want an affordable two-bedroom apartment in Brooklyn," I don't know the solution.
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So Peter Thiel and I agree on some important points: that financing college with debt is a terrible idea, because it leads to young people trying to start their lives in a deep hole, and that one of main reasons we have to do that is that too many people go to college.
Canada, Ireland, Singapore, Denmark, Norway, Australia, and France all have larger percentages of the population who have obtained tertiary education degrees. But somehow, they don't have student debt problems?
Other countries are technically below us in percentage, but not by much - Saudi Arabia, South Korea, Japan, Switzerland, New Zealand, and Finland are all just a couple percentages lower than us. And somehow, they don't have student debt problems?
Many other peer countries you might not expect on first brush are quite a bit lower than us - Spain, Belgium, the Netherlands, Germany, Sweden, Poland, Austria, Greece... but one needs to remember that in virtually all the above countries, it is MUCH easier to make a decent living without a college degree.
Also, there's one glaring difference between the American system and essentially all these other systems - our college system is very heavily privatized compared to our peers. Other countries view the point of schools to be educating the populace; we largely view the point of schools to be making profit. It's the exact same issue as with our healthcare system - we prefer a handful of private companies and individuals making money to achieving better outcomes for society.
We insist on a market solution to a vital societal issue that everybody else has learned is better solved through government management. And then we're shocked and confounded when we suffer market failures - the kind everybody else already discovered such a system is prone to, and deemed unacceptably destructive to the fabric of society. But we refuse to learn or change.
American Exceptionalism at work once again.
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