Comment by notepad0x90
2 days ago
Renting should be viewed is a negative in society. Imagine if car dealerships moved to a rental model instead of ownership..oh wait, they sort of already are, they just call it "financing", they make no money from cash buys because of that economic perversion.
Rent income is not wages, that's the critical part you're mistaken. Income and wages are not the same thing. Rent income is as much wages as Elon Musk selling stocks is to him, or a bank making income on interest payments. Renting is a business, it's income is business revenue, not wages.
There is this terrible view that landlords are "just like you and me, hard working regular people" - not that it's false, but so are the people that own mom & pops shops, or a local subway franchise, they're all business owners making business profits, not wages.
Business practices that harm the public should be regulated and curtailed. With taxis for example, the medallion system was used to limit the number of Taxis in operation. Similarly, not only should an individual be limited to (directly or via an ownership/shareholder interest in a company -- even with them or their family) a reasonable number of properties, but the number of rental properties in an area should itself be limited. Property owners can either sell houses, or sell condos and make income via condo (regulated) condo fees.
Food, shelter, health-care/medicine should be heavily regulated, if private parties take part as intermediaries between individuals and their food, shelter, health-care, they should expect lots of red-tape and limits. Ideally, the government itself would be driving these markets directly by building and selling properties, hospitals, pharmacies, grocery stores, etc.. that's not socialism or communism. That's just common-sense capitalism, everyone, especially the richest make more money this way. not only that their money will spend better this way.
The kind of capitalism we have now is a short-sighted parasitical money-grab. The kind where if fully realized, you'll build your own mansions and sky scrapers but you'd be complaining about the slums and crime nearby, how you can't get good help, skilled labor, and spend a ton of money on bribes instead of paying a fraction of that in taxes.
In theory, reaganism and trickle-down economics could have worked. A rising tide does indeed lift all boats. But in reality, it's more of the "scorpion and the frog" story. In this case, landlords can own a reasonable number of decent homes and make decent income, and then diversify the money in other markets. But currently, it's a race to become the biggest slumlord or until the markets collapse again.
> they make no money from cash buys because of that economic perversion.
This is completely false. This might be surprising to learn, but for normal car dealerships (not buy-here, pay-here or used car dealerships) a huge amount of their compensation rides on receiving holdback payments from manufacturers, as well as per-unit bonuses that often have cliffs.
Cash buyers paying invoice price are welcomed (if they aren't too big of a headache) because they push a dealership over or at least closer to the next sales-volume bonus cliff.
Holdback alone is worth more than any realistic origination fee.
What I heard is that they make no profit. I'm sure they'll make revenue, but if they simply sold all cars at the cash price, they will be losing money, especially dealerships. But if you're certain they do make profit, not just revenue, then you sound like you know more about the industry than myself, so I'll concede that point.
The dealership customarily earns 2-3%+ in quarterly holdback payments from the manufacturer. They sell you a $100k car at invoice, later that quarter they're getting a $3000 payment - this is pure profit, the deal was long-since done and they didn't take a loss at time of sale.
Dealerships are also earning miscellaneous per-car bonuses which are also profit, which go up based on overall volume: if they sell 50 cars, they get $200/car, if they sell 100 units this might jump to $500/car - just a random example.
If a car is in high-demand or really uncommon (in reality, not sales-speak, and a customer has no other options), they can afford to not sell a car at invoice - but this is an exceptional circumstance.
it would seem so, at least in the west perhaps... but i wonder what the cause is; is it culture? or just organic growth is becoming harder and harder?
It's the nature of a capitalist society. Perverse incentives are everywhere and our primary measurement of success is wealth. We richly reward grifters and cheaters and folks with integrity often fall behind. The decades of perverse incentives have created a perverse society that no amount of "golden rule" theory taught in kindergarten can stand up against.
I commented elsewhere in more detail, but it is in my opinion caused by a lack of national pride. If I was a billionaire, how would I feel about other Americans living the way they do? Would i be apathetic or would I feel ashamed as an American? Even paying taxes used to be considered a patriotic act a few decades ago.