All finance institutions have been nudged to a posture where mortgage finance is unavailable to the bottom half of the economic distribution.One reason housing is such a disconcerting factor, is that mortgage finance is practically a cultural determinant for access in general equilibrium conditions. But instead of addressing the need for economic access on more practical terms, policy makers and central bankers are drifting even further, from economic and monetary representation for all citizens. How do governments and policy makers live with arbitrary central banker assessments, given the fact government budget projections rely on long term nominal income stability as well? Progressives and conservatives alike, have become more inclined to rationalize limits to growth. Possibly the only difference, is that progressives are more disturbed by a desire to return to a gold standard, given the implications such a standard holds for services formation.
Regular readers already know how I feel about arbitrary limits to growth. After all, did policy makers ever inquire of their their citizens, whether they believe this to be a logical response? Still, growth needs to be redefined, so that time value can forge a stronger alignment with other forms of resource capacity. Human capital in aggregate, would greatly benefit from a stabilization process. For starters, time value can be utilized not only as asymmetric income, but also as a basic commodity good on symmetric terms. How might this occur?
An equilibrium corporation would "process" time value as a "raw commodity", allowing participants to contribute time value for housing and services formation which normally tend to lie beyond the reach of moderate incomes. This form of corporate structure would generate greater velocity for time based product transactions, which also translate into asset gains. Human capital is today's low hanging fruit, which - astonishingly - has yet to be picked. As Adam Smith once noted:
The most advantageous employment of any capital to the country to which it belongs, is that which maintains the greatest quantity of productive labor, and increases the most annual produce of the land and labor of that country.Time value as a basic commodity good, makes it possible to generate more labor force participation and non tradable sector wealth, without the high bar that is required for both in general equilibrium conditions. Each rise in the minimum wage can mean further labor market restrictions for all concerned - restrictions which continue to be papered over with Phillips Curve musings.
However, there's good reason why higher minimum wages still win the day: neither public or private interests have sufficient incentive to change the consumption requirements which can be a struggle for those with limited income. What point freeing up labor capacity, if doing so only leaves these groups of workers dependent on others with higher income? Economic freedom can be hard to find, if freedoms to produce and define consumption are left out of the equation.
Indeed, production reform for small configurations of non tradable sector activity, is the only way that an equilibrium corporation could compensate time value solely as a basic commodity good. Otherwise, without the ability to define alternative equilibrium, few individuals would be willing to assist assist these groups in their new endeavor, because any long term gains would be negligible at best.
Even though time value serves as a beginning point for the process, it eventually provides a stable base by which one can explore income potential. From this secure point, it would be possible to pursue the greater risks of economic freedom without becoming overwhelmed. All of this takes place from a vantage point which need not disturb the resource capacity of asymmetric wealth. Perhaps think of symmetric wealth as a "new colony", i.e. a new market which doesn't detract from the wealth of the old. Of those earlier "new colonies", Adam Smith wrote:
The new market, without drawing any thing from the old one, would create, if one may say so, a new product for its own supply; and that new product would constitute a new capital for carrying on the new employment, which, in the same manner, would draw nothing from the old one.