When Shelter Becomes a Speculative Asset, Society Unravels

Does anyone really believe that the renunciation of massive, sustained stimulus of speculation in housing would leave housing valuations unchanged because valuations are solely the result of "shortages"?

Let's begin by stipulating that speculation (i.e. gambling) is part of human nature. The role of regulations and policy is to limit the damage that gambling inevitably inflicts when "sure things" cliff-dive into losses.

In other words, where the speculative frenzy and money flows matters. When the South Sea Bubble expanded circa 1713-1720, this flood tide of speculative capital did not distort the cost of shelter and bread in England; it was limited to a purely financial marketplace of shares in the company. When the bubble imploded in 1720, the losses fell mostly on wealthy investors like Isaac Newton.

The same can be said of the speculative mania of the dot-com era: the bubble and collapse were limited to the tech sector and those participating in the sector and the speculative frenzy. The cost of rent and bread did not double due to the speculative bubble's inflation or bursting.

In contrast, when speculation floods into shelter / housing, it fatally distorts the cost of housing non-speculators must pay. I say fatally because shelter, along with food, energy and water (the FEW resources), are essential to life. These are not discretionary things we can decide not to have. When the price of essentials soars due to speculation that only rewards the speculators at the expense of non-speculators, the fuse of social disorder is lit.

Anyone who believes policies that encourage the wealthy to hoard housing to the point that the bottom 80% (or the bottom 95% in some areas) cannot afford to buy a home are just peachy is overdosing Delusionol. The social consequences are severe and uncontainable once the worm turns.

Exhibit #1 in Shelter Becoming a Speculative Asset is a modest house in the San Francisco Bay Area that sold for $135,000 in mid-1996. By modest I mean small, old, and on a small lot in a neighborhood of other small lots and homes. (A screenshot of the Zillow history is below.)

Today the home's value is estimated to be about ten times higher: $1.35 million. Let's do some basic math to understand just how distorted this market has become.

The median household income in 1996 was about $39,000. For a house costing $135,000, this represents 3.5 ratio of income to housing, well within the traditional ratio of 4 to 1 (4 X income = cost of the home).

Median household income has almost doubled to $75,000, roughly in line with inflation according to the Bureau of Labor Statistics. According to the BLS, the house that cost $135,000 in July 1996 would now cost $264,000 when adjusted for inflation, and the $39,000 median income would be $76,000.

Let's say the house appreciated above the rate of inflation to $300,000 today. That's still within the 4 to 1 ratio of income to house cost (4 X $75,000 = $300,000.) So even though the house rose 2.2X in cost, it would still be affordable to a median household.

At a value of $1.35 million, a household would need to make $337,500 annually--an income that is in the top 5% of households--to buy the house today. In other words, an income that is 4.5 times the median household income is the minimum needed to buy this modest house.

The house is now worth 4.5 times what it would have been worth if it had appreciated well above inflation.





The conventional argument holds that this four-fold increase in housing costs is due solely to a shortage of housing. Let's consider some data before concluding this is the only dynamic in play.

Chart #1: Case Shiller housing index: this chart shows two massive housing bubbles in the past 20 years.



Chart #2: Federal Reserve's purchases of mortgage backed securities (MBS) to goose the housing market. The "housing shortage" argument claims the unprecedented Fed purchases of trillions of dollars of MBS is not correlated to the housing bubble, but this claim makes no sense: dropping mortgage rates to unprecedented lows while soaking up trillions of dollars in securitized mortgages was like injecting speculative crack cocaine into the housing market. Gosh, how did we survive without the Fed buying $2.5 trillion in mortgages?



Chart #3: the current housing bubble compared to the 2000-2006 housing bubble: today's bubble is even more extreme than housing bubble #1.



Chart #4: housing per capita (per person) has reached a new high: if there's such a severe shortage of housing, how can the housing per capita be at an all-time high? Population rose 4 million in the past 4 years while 5 million housing units were added--plus a pig-in-a-python of housing in the pipeline.



Chart #5: household net worth is $50 trillion above trend, the direct result of massive monetary and fiscal stimulus. Tens of trillions of dollars were borrowed into existence and pumped into so-called risk assets--assets such as housing that the wealthy buy for speculative appreciation.



Chart #6: total debt--private and public--soared from $20 trillion in 1996 to $95 trillion now. Is it merely coincidental that this is $55 trillion above the trendline of inflation, which would have placed total debt at $40 trillion today?



Chart #7: net worth of the top 1% households, which soared from 23% of all net worth to 32%: this 9% gain in the percentage of all household net worth represents a gain of $14 trillion above and beyond the $28.7 trillion in gains registered by the 23% they owned in 1990.

1990 total net worth: $21 trillion, 23% = $4.8 trillion; 2023 total net worth: $146 trillion, 23% = $33.5 trillion; $33.5 trillion - $4.8 trillion = $28.7 trillion.



This unprecedented bubble in housing valuations is due not to shortages but to decades of massive financial stimulus that incentivized speculative capital to flood into housing as a low-risk way to skim stupendous gains for creating zero gains in productivity. If you doubt this, then run this scenario and tell us what happens:

The Fed dumps its entire portfolio of mortgage backed securities and stipulates it will never buy any again. It also renounces all the other stimulus gimmicks that incentivized expansions of debt and speculation.

Does anyone really believe that the renunciation of massive, sustained stimulus of speculation in housing would leave housing valuations unchanged because valuations are solely the result of "shortages"? If so, there's a little shack under the Brooklyn Bridge I'll let you have for a couple of million. I'm sure the Airbnb rent will mint you millions.

---

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

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When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

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A Time Capsule from the 1930s: What's Different Now

If we compare health and endurance, well-being, security, general attitudes, family and community ties and values, we would conclude that it is we who are impoverished.

We're taking care of my 92-year old mother-in-law here at home. She has the usual aches and pains and infirmities of advanced age but her mind and memory are still sharp. Her memories of her childhood are like a time capsule from the 1930s.

My mom-in-law has always lived in the same general community here in Hawaii. She's never lived more than about 10 miles from the house where she was born (long since torn down) in 1931. Listening to her memories (and asking for more details) is to be transported back to the 1930s, an era of widespread poverty unrelated to the Great Depression. Many people were poor before the Depression. They were working hard but their incomes were low.

Prior to the tourist boom initiated by statehood and affordable airfare, Hawaii's economy was classically colonial: large plantations owned by a handful of wealthy families and/or corporations (known as The Big Five) employed thousands of laborers to raise and harvest sugar cane and pineapple. Pearl Harbor, Hickam air base and Schofield Barracks were large military bases on Oahu. Travel between islands was expensive (ferries) and each island was largely self-sufficient.

Even taking a bus for the 12-mile ride to the island's sole city was a rare luxury, an excursion that occurred a few times a year.

Plantation workers were not yet unionized in the 1930s, and wages were around $20 a month for backbreaking field labor--work performed by both men and women. Typical of first and second-generation immigrant communities of the time, families were generally large. Six or seven children was common and nine or ten children per family was not uncommon. Many families lived in modest plantation-provided camps of two bedroom houses.

Gardens were not a hobby, they were an essential source of food to feed a table of hungry kids and adults. Candy, snacks, sodas, etc. were treats rserved for special occasions and holidays. Kids usually went barefoot because shoes were outside the household's limited budget.

Staples were bought at the company store (or one of the few privately owned groceries) on credit and paid off when the plantation paid wages.

Credit issued by banks was unknown. Neighborhoods (kumiai) might pool a few dollars from each family every year and offer the sum to the highest secret bidder or by lottery. Those households that scraped up enough to open a small business often worked 12 hours a day, 7 days a week (or equivalent: 14 hours 6 days a week).

Neighbors helped with births and deaths.

Since no one could even dream of owning a car, transport was limited. Children and adults walked or biked miles to school or work. Many sole proprietors made a living delivering vegetables, meat and fish around the neighborhoods. (This distribution system is still present in rural France where my brother and sister-in-law lived for many years). Each vendor would arrive on a set day / time and housewives could gather to buy from the proprietor's jitney or truck. Children could eye the few candies longingly, and if they were lucky, a few pennies would be given to them to buy a candy.

Locally baked bread was delivered by boys. Milk was delivered by small local dairies.

Nostalgia is a powerful force, but I don't think we can dismiss the general happiness of my Mom-in-law's childhood as airbrushed impoverishment. The poverty seems obvious to us now, but at the time it was normal life. Everyone was in the same general socio-economic class. The plantation manager lived in a mansion with servants, but those with wealth were few and far between. In other words, wealth and income inequality was extreme but the class structure was flat: the 99% had very similar incomes and opportunities--both were limited.

Employment was stable, community ties and values were strong without anyone even noticing, and everyone had enough to eat (though not as much as they might have wanted, of course).

This secure plantation structure of work and community was still firmly in place in 1969-1970 when I lived on the pineapple plantation of Lanai (and picked pineapple with my high school classmates in the summer), and so I was fortunate to experience it first-hand. My Lanai classmates speak fondly and with a sense of loss when they recall their youth. Life was secure and protected, and with unionization of the workforce, the wages sufficient enough for frugal households to save enough to send their children to college off-island.

I can personally attest that fond memories of 1970s plantation life are not distorted by nostalgia. These memories are accurate recollections of a far more secure, safe and nourishing place and time.

Compared to today, the typical 1930s diet was locally grown / raised and therefore rich in micro-nutrients. Grains such as rice and flour came from afar, but other than canned fish and similar goods, food was local and fresh. Little if any was wasted.

People typically worked physically demanding jobs that burned a lot of calories.

There are many people 90+ years of age in our neighborhood. My Mom-in-law's brother--like many of the men in this age bracket, he was a World War II veteran of the famed 442nd unit--died last year at 96, despite smoking a half-pack of cigarettes daily until the end. A neighbor/friend just passed away at 99 (he was also a 442nd veteran). Our neighbor (cared for by her daughter and son-in-law, just like us) just turned 100. These people are generally healthy and active until the end of their lives.

If we look for causal factors in their advanced age and generally good health, we cannot ignore the high-quality, near-zero-processed foods diets of their youth and their strong foundations in community ties and values.

If we compare the financial and material wealth most enjoy today with the limited income and assets of the pre-war era, we would conclude they lived in extreme poverty and their lives must have been wretched as a consequence.

But if we compare health and endurance, well-being, security, general attitudes, family and community ties and values, we would conclude that it is we who are impoverished and it was their lives that were rich in these essentials of human life.

The world has changed since the 1930s, of course. Materially, our wealth and options of what to do with our lives are off the charts compared to the 1930s. But if we look at health, security, well-being, community ties, social cohesion and civic virtue, our era seems insecure, disordered and deranging.

The irony is that those who have grown weary of our divisive, rage-inducing socio-economic system yearn for all that's been lost in the rise to material wealth and opportunities to spend that wealth. Those who grasp the emptiness of spectacle and material wealth and who have the means to do so are seeking the few enclaves that still have a few shreds of community and social cohesion left.

These enclaves then get listed on "best small towns in America" or "best places in the world to retire" and the resulting influx of wealthy outsiders destroys the last remaining shreds of what everyone came for.

I recently harvested some of our homegrown green tomatoes, and my Mom-in-law gave me a handwritten recipe for Fried Green Tomatoes from her collection. The first ingredient was "two tablespoons of bacon drippings." Um, okay, if we were all working 10-hour days hauling 80-pound loads of sugar cane on our backs, no problem, but we're a household of three seniors, 69, 70 and 92. I think we'll substitute two teaspoons of olive oil for the bacon drippings...

---

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

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The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free


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Six Reasons Why Corporate Profits Will Fall 50%

Should stock valuations track this same decline in profits, it's entirely reasonable to expect the stock market to lose 2/3 of its valuation premium.

All Six of the reasons corporate profits will decline by half are common sense:

1. Reversion to the mean: profits that are double the historical average as a percentage of Gross Domestic Product (GDP) are highly likely not to be a sustainable New Normal. The far more likely track is a reversion to the historical average, which is about 50% below corporate profits' current 12% of GDP. Permanently elevated plateaus of stock valuations and corporate profits are both compelling chimera. (see chart below)

2. The Boost phase of Globalization has ended. The era of hyper-globalization is clearly visible on the charts of corporate profits and corporate profits as a percentage of GDP: right after China was accepted into the WTO in 2001, US corporate profits skyrocketed in both nominal dollars and as a percentage of the US economy (GDP).

Globalization's boost phase that sent corporate profits into orbit has rounded the S-Curve and is now in the stagnation / decline phase. (see chart below)

The reasons why hyper-globalization rocketed corporate profits to unprecedented heights are both well-known and terribly inconvenient to the happy story that globalization will magically generate unprecedented profits forever.

The primary drivers were global labor and environmental arbitrage, a.k.a. exploit cheap labor in sweatshops and dump all the toxic waste of industrialization in developing nations with lax environmental standards and enforcement. As the chart below shows, wages in China are no longer low, and China has begun improving its environmental standards.

3. Quality and durability have been gutted and there's no more profit to pluck from buying lower-quality components and inputs, as the cheapest, lowest-quality components and inputs have already been standardized.

Hyper-globalization provided the ideal cover for the systemic collapse of quality and durability. This corporate institutionalization of planned obsolescence, abysmal quality and shrinkflation all boosted profits enormously, but there's nothing left at the bottom of the barrel; corporations have licked the profitable slop of planned obsolescence, abysmal quality and shrinkflation clean.

The super-efficient global supply chains are also breaking under the strain of geopolitical and national security priorities, and the difficulties of replacing existing supply chains, which depend on cheap energy and transport and a massive infrastructure to serve trade that non-industrialized developing nations cannot duplicate.

4. Hyper-financialization has also entered the decay-collapse phase. Hyper-financialization drove corporate profits in two ways:

A. As borrowing costs dropped to unprecedented lows, corporations could borrow vast sums at near-zero rates to scoop up other companies with positive cash flow, gut the quality and staff and scoop up the resulting cost reductions as profits.

B. Consumers could borrow vast sums at low rates to buy products that they would not have been able to afford at historically average interest rates. For example, with 1.9% (or even zero) financing, new autos and trucks became more affordable. With demand strong, corporations could keep prices high and reap the gains of stronger sales.

Now that zero-interest rate policy (ZIRP) has ended its disruptive reign, the tailwinds of zero rates have reversed into the headwinds of structurally higher rates.

5. The asymmetric distribution of the economy's output favoring corporations at the expense of labor is finally shifting. After 45 years of capital skimming $50 trillion from labor, rising rates of disability, unfavorable demographics, systemic healthcare inflation and social dynamics are pushing labor costs higher.

6. Debt saturation. Corporate profits soared from $800 billion annually to $3.5 trillion in 2022 on the tailwinds of public and private debt skyrocketing from $30 trillion in 2000 to $95 trillion today. With the era of zero cost of debt over, we've entered an era of debt saturation: households, government and enterprises can no longer afford to take on more debt without triggering unintended consequences or slashing discretionary spending to service the higher costs of new and existing debts.

Since growth depends on the ceaseless expansion of debt and the discretionary spending it enables, growth reverses along with discretionary spending. Corporations will find it impossible to keep prices at nosebleed levels as consumer demand plummets while costs remain sticky.

Rather than being the New Normal, corporations skimming 11% of GDP as profits was a one-time outlier resulting from the one-time boost of hyper-financialization, hyper-globalization and ZIRP. US GDP is around $26 trillion according to the Bureau of Economic Analysis (BEA). Corporate profits sagged a bit to $3.2 trillion in Q1 2023, roughly 12.3% of GDP.

Should profits decline to 5% of GDP ($1.3 trillion), this would be in the middle of the historic range. In a real recession, they could dip to 3% of GDP ($800 billion). At 5% of GDP ($1.3 trillion), corporations would still be making money but not at rates that would justify today's absurdly overvalued stock valuations.

The $2 trillion haircut equates to a 2/3 decline. Should stock valuations track this same decline in profits, it's entirely reasonable to expect the stock market to lose 2/3 of its valuation premium--a premium based not on anything remotely sustainable, but on a one-off of hyper-financialization, hyper-globalization and zero interest rates.

There's nothing wrong with a 5% of GDP run-rate for coporate profits. That's still a very healthy return. It's only a disaster in a highly distorted funhouse whose players have lost touch with reality.

---

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

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The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free


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The Peculiar Power of Denial

We'd rather risk societal collapse than face the sacrifices and challenges of revolutionizing our unsustainably neofeudal economy and broken gears of governance.

Denial is scale-invariant and universal--we've all experienced in some way or another. By scale-invariant, we mean the individual, household, enterprise, city, state and empire all experience denial.

Denial has several signature characteristics:

1. The more profound and consequential the issue, the more stubborn our denial. When a minor cut reddens, we don't go into denial that it's infected, we simply treat it with greater care. But when the unmistakable signs of heart disease appear, we find ways to deny the reality because it's too upsetting and frightening. We want very desperately to think it will go away on its own and we'll be fine, and nothing in our life will change.

2. The strength of our denial flows from the tacit understanding that if we let even a tiny bit of doubt break through our dam of denial, the whole foundation will give way. The power of denial originates in the impermeability of the barrier blocking warning signs that all is not well. If the enterprise, relationship, policy, investment, etc. is no longer sustainable or viable, we must shut out all doubt and evidence because even a rivulet of doubt and evidence will quickly erode the dam of our denial and collapse our sense of security, control and predictability.

And so we hold fast to the idea that these chest pains are merely indigestion, and inflation is already receding. We fiddle with data ("ex-food, fuel, used cars, shelter, healthcare, childcare, hospitality and dining out, inflation is trending down!") to conjure up an alternative reality in which everything is fine, under control, progress and growth are still positive and unstoppable, and so on.

When challenged, we become defensive and angry, as if our security and identity are under attack. Since we've tied our identity and security to fixed, rigid standards, should those standards erode and decay, we deny the erosion because we feel our own security, identity and sense of control are giving way and might collapse. To avert this disaster, we shore up our dam of denial, making sure no shred of doubt or evidence gets through to threaten us.

This strategy is terribly misguided, of course, because denying reality doesn't make the threat go away, it magnifies the risk of collapse. Denial can be summarized as the stubborn inability to tell the truth because our fear of losing control as the foundations of our life crumble beneath us is so great that we're compelled to cling to denial and fantasy: debt doesn't matter, the government can print as much money as it needs, we'll just renovate all those empty office towers into housing, and so on.

Reality is only a threat if we've forsaken flexibility, adaptability, problem-solving, and the willingness to make sacrifices and accept failure--what I call Self-Reliance. The appeal of denial is uniquely powerful because it offers us a means to cling to our security, identity and sense of control without having to actually do anything.

Just as we'd rather risk expiring from a heart attack than face the sacrifices and challenges of revolutionizing our diet and fitness, we'd rather risk societal collapse than face the sacrifices and challenges of revolutionizing our unsustainably neofeudal economy and broken gears of governance.

And so all those who've benefited from the Bubble Economy look down on the decaying city center from their comfortable, smartly-appreciating homes and cling to the absurd fantasy that the rot won't reach them--indeed, the rot can't possibly reach us, it will stay safely far away and we'll be safe here in our enclave.

This is remarkably reminiscent of the wealthy Romans just before the collapse, complaining to each other in correspondence about the annoyances of decay seeping into their comfortable estates. They too reassured themselves that Rome was eternal, everything would right itself without any sacrifice on their part.

Their correspondence ended abruptly when the Imperial courier service ceased to function. The "Barbarians" (i.e. non-Italian residents of the Empire) who assumed power did not have the wherewithal to gather the taxes needed to support the immense Imperial infrastructure that made life comfortable for the landed wealthy, and so it went away.

So no worries, our neofeudal system, broken governance and all, is eternal and will fix itself without any sacrifices on our part. Maybe those chest pains are just indigestion. Let's just ignore them, they'll probably go away on their own.

Alternatively, we can relinquish fantasies and fear and accept that it's adapt or expire and we'll have to handle the adapting ourselves. This is the path of Self-Reliance, and if we're willing to take it, the path is wide open.

---

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

Read the first chapter for free (PDF)

Read excerpts of all three chapters

Podcast with Richard Bonugli: Self Reliance in the 21st Century (43 min)


My recent books:

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free


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How to Select a Town the Rich Won't Gentrify and Ruin

Let's review how to select a town that the rich won't ruin via gentrification / swarming in en masse and driving out locals who have to work for a living.

Yesterday I discussed how those enriched by two decades of Federal Reserve-inflated bubbles make housing unaffordable for the bottom 90% by gentrifying previously affordable neighborhoods and towns. Once the truly wealthy have snapped up all the most desirable properties in the most desirable enclaves, the merely millionaires start snapping up nearby properties, fueling a bidding war that soon pushes valuations out of reach of the working populace.

As I discussed in STVR/Airbnb Has Destroyed America's Resort Towns (8/30/23), the net result is the workforce of the gentrified town can no longer afford to buy or rent shelter near their work place. This forces them to commute long distances or give up and move away, leaving the town short of people to actually do the work of keeping the town operating.

Let's review how to select a town that the rich won't ruin via gentrification / swarming in en masse and driving out locals who have to work for a living. Let's start by dividing the wealthy seeking a nice place to live where we can park some of our excess capital into four very different classes:

1. The most desirable class of wealthy residents is old money, families with deep roots in the town who quietly fund needed improvements and services with their wealth and who are protective of what makes the town a nice place to live. They have the clout to protect the town from the entitled vultures seeking to make a quick buck off gentrification and low-quality development.

Recent arrivals (within the past 20 years) can qualify if they follow the same script of quietly donating large sums to local needs and quietly working to keep out the vultures of gentrification. This class of wealth isn't interested in scooping up all the land for their own mini-empire; they own enough for their own comfort but are not trying to own the whole area like the wealthiest, greediest vultures.

2. The second most desirable class is the entrepreneurial wealthy, those who earned their capital via hard work, thrift and building enterprises that add value--in other words, the opposite of the entitled wealthy whose money is the unearned spawn of Fed-inflated bubbles.

The entrepreneurial wealthy are less likely to be toxically entitled, more likely to be down to earth and more likely to invest for the long-term in local businesses that provide employment and services.

3. The least desirable class is the entitled bubble-wealthy who are cluelessly self-absorbed and demanding. They expect locals to be uncomplaining servants / serfs who will do whatever the entitled wealthy want done for low wages. They arrive with bloated self-importance and a toxic sense of entitlement, as if everything they want should be available to them wherever they are on the planet. They are ignorant of local history and culture and have little interest in fitting in and zero interest in contributing any real work to the community.

4. The most destructive class is the vulture-developer class who want to swoop in, build a bunch of low-quality strip malls and shoddy houses for the entitled bubble-wealthy that overburden the town's limited infrastructure of roads, water service, etc., ruining it for residents new and established alike.

Somewhat tongue in cheek, here is a list of attributes you want to look for to avoid, as they're magnets for the entitled bubble-wealthy and the the vulture-developer class:

The click-bait articles touting "the 25 best towns in America" serve one useful function: cross those towns off your list, as they've already been ruined by the influx of entitled, self-absorbed outsiders.

A more valuable use of time is to research what the entitled wealthy are looking for, and avoid those towns and small cities that check all the boxes the wealthy consider "must-haves."

This includes a nearby highly rated hospital, as the wealthy are anxious to access the same high-quality care they're entitled to, should anything untoward happen to their precious bodily fluids.

High-end healthy cuisine is also a must. If haute cuisine isn't available, there must be tony cafes and bistros offering fish tacos, fresh fusion-inspired sandwiches made with artisan bread and similar light fare, vegan and vegetarian options and an acceptable selection of wines, craft beers and other beverages.

The town must have a decent bakery and butcher, and a farmer's market, of course, as the wealthy are too busy day-trading, logging onto conference calls or jetting off for their next vacation-business meeting to actually grow any real food themselves.

A handful of cutsy shops for browsing is also essential, as is some live entertainment venue.

A cafe that grinds its own coffee and stocks luxury beans for grinding at home is also a must, a place expensive enough that locals will stay away, so the wealthy newcomers can gather to complain about the scarcity of quality "help" locally, as they're accustomed to hiring undocumented immigrants for scandalously low rates of pay.

The police or sheriff's department must be responsive to their calls, of course, as they're entitled to special consideration due to the taxes they pay (as if locals don't pay taxes, too...).

An absolute must is a nearby major airport, as the wealthy are always jetting around and it's terribly inconvenient to have to drive a tediously long way to a commercial airport.

Competent tradespeople, mechanics and techies are high on the priority list, as it's extremely annoying not to have someone who can fix the pool pump in summer, trim the hedges just so, maintain the fast Internet connection and do all that bothersome work keeping the short-term vacation rentals spiffy.

Fast Internet service is of course a must; spotty Starlink service will nix a locale immediately.

If you want to find some place the entitled wealthy are unlikely to ruin because they won't move there--or if you want to get there before the hordes of entitled but-not-quite-rich-enough-to-buy-an-elite-enclave arrive--find a town that lacks some or all of these essentials, a place the wealthy will turn up their noses to, a town with the few things you care about but not enough to spark the interest of the entitled wealthy.

A town with minimal tourism is a good start, as the wealthy are drawn to unspoiled rural idylls that they can "improve" (i.e. destroy) with their entitled demands for a neofeudal arrangement of locals serving their whims without complaint for low pay.

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