Trump and NYC mayor Zohran Mamdani will fail. Here’s why.
Talk Is Cheap
Greg Ip has an interesting article on the Wall Street Journal. He says Everyone Is Talking About the ‘Affordability Crisis.’ It Can’t Be Solved.
I agree with much of what Ip says, but he misses the two key reasons. Do you know what they are? First here are some snips.
President Trump has been looking for someone to blame for all the “affordability crisis” chatter that is dragging on his presidency.
On Friday, he came face to face with him in the Oval Office.
While the affordability crisis might not be a Democratic “con job,” as Trump once claimed, it certainly dominates the vibes, and no one embodies the vibes better than Zohran Mamdani, who was elected mayor of New York City this month.
Mamdani, like the Democratic candidates for governor in New Jersey and Virginia, campaigned single-mindedly on affordability. He was still at it Friday. Asked, with Trump at his side, about the Middle East or whether Trump is a fascist, Mamdani kept returning to the “affordability agenda” and the “cost of living crisis.”
But getting elected on vibes is one thing; solving them is another. And that’s the problem with the affordability crisis. What started as a serious but short-lived spike in inflation from 2021 to 2023 has evolved into something broader and more amorphous. Like the climate crisis or the crisis of democratic legitimacy, the affordability crisis has become an umbrella term for countless loosely connected phenomena.
Like those other crises, this one defies definition and thus resolution.
Strictly speaking, affordability means having the resources to pay for goods and services at current prices. By that standard, the simplest metric is real (i.e., after-inflation) incomes. Real incomes fell behind when inflation shot up, then recovered as inflation receded and wages caught up. Real personal income was up 2.3% in the year through August, and real hourly wages climbed 0.8% in the year through September, both in line with the 19-year average.
Clearly, the affordability crisis can’t be captured by such macroeconomic measures. It is an amalgam of microeconomic irritants that vary by individual, time and place.
Because there is always something going up in price or someone whose incomes are suffering, affordability is an especially potent issue for political challengers such as Trump and Mamdani, who have a gift for zeroing in on whatever is most salient to voters.
Trump relentlessly bashed President Joe Biden and Vice President Kamala Harris, the Democratic nominee last year, over the price of groceries and gasoline. That some of it wasn’t true (“Bacon is up five times!”) didn’t matter. The attacks resonated.
There is nothing any elected official can do to “solve” the affordability crisis reliably. As Biden learned, people don’t want lower inflation (i.e., prices to rise more slowly); they want prices to fall. Trump promised they would. Overall prices haven’t fallen and almost certainly won’t. For prices merely to stop rising for a year (i.e., an inflation rate of zero), would probably require a deep recession. Overall prices haven’t fallen materially since the Great Depression.
Individual actions such as reduced regulation on energy production and infrastructure and capping certain drug prices will help at the margin, but tariffs do the opposite (as Trump seems to have acknowledged by rolling some back).
Housing is especially hard to solve. It has become much more expensive since the pandemic. From 2008 through 2021, mortgage rates were abnormally low, a product of very low inflation and aggressive Federal Reserve policies, which boosted home prices. Mortgage rates have since returned to pre-2008 norms, but housing prices haven’t yet adjusted downward, so monthly payments remain high, especially for first-time buyers.
New York has long been an expensive and difficult place to build housing, and while Mamdani has ideas to boost supply, some, such as a rent freeze, will likely discourage supply and vacancies.
Like Trump, Mamdani will find it easier to campaign on affordability than to solve it.
No Political Will
No one will fix the problem for two reasons.
- Politician don’t understand inflation.
- No politician would have the political will, even if they did understand.
Trump’s tariffs make matters worse and so will Mamdani’s rent controls. Both pander to extreme ends of populist nonsense.
If you want to fix inflation, you first have to understand it and measure it properly.
Then you have to get elected and get Congress to go along.
Fixing inflation requires a concerted effort to stop cheapening the dollar. This needs to start with doing something about massive deficit spending. Who has the political will?
Real Incomes
Ip discusses real (inflation-adjusted) incomes. He says “Real personal income was up 2.3% in the year through August, and real hourly wages climbed 0.8% in the year through September, both in line with the 19-year average”
Quite frankly, that’s nonsense. Ip does not properly understand real inflation.
As reported by the BLS and BEA, real income is up.
However, BLS measures of real income do not include home owners’ insurance, or property taxes. And the BLS weights for food are wrong. For good measure, the BLS ignores tips on dining out.
Properly weighted and measured, real incomes are still in the midst of a big dive.
I agree with Ip that “Affordability is an amalgam of microeconomic irritants that vary by individual, time and place.” Everyone has their own personal measure of inflation.
But in aggregate, people are very upset that real incomes are falling, not that prices are up 3 percent as measured. If real incomes were up 6 percent, complaints would largely go away.
Understand Inflation
Inflation stems from cheapening the purchasing power of money. Yet, the Fed defines “price stability” as 2 percent annual inflation.
No one in their right mind would define stability that way. But it is the widely-accepted central bank definition.
As noted, the Fed does not measure inflation properly. If and when the Fed gets its ridiculous measure down to two percent, the Fed will declare success.
However, consumers won’t feel success until two things happen: Real incomes really increase for the median person (properly factoring in food and shelter), and the median person can actually afford to buy the median-priced home on a median income.
So, good luck with that. Meanwhile, the Fed, Trump, and Zohran Mamdani all pander to their constituencies with platitudes and promises.
Key Related Posts
August 11, 2025: Is Homeowners Insurance Understated in the CPI? Shop Around!
Our Insurance went up by $2,000. Then another $2,000. Here’s our story.
Neither homeowners’ insurance, nor property taxes are in the CPI.
August 12, 2025: Where Do You Spend Money on Food? How Screwed Up Are the BLS Weights?
Does the BLS match your budget?
Real income is not up. Those two posts explain why. In addition, real incomes are dropping for anyone who buys their own health insurance.
But if you are looking for political pandering at its finest, please see Trump Has Great Meeting With “Rational” New York City Mayor
OT but very nice Mish images just posted
Zion Narrows Neon Images: A Week of Spectacular Autumn Color
https://mishmoments.com/2025/11/23/zion-narrows-neon-images-a-week-of-spectacular-autumn-color/
Mish – Those are spectacular pictures and bring back memories of a Narrows Hike my wife and I took in 2018. You are lucky to live close to one of the top National Parks in the Country. Thanks for sharing.
You should get into the doll house area. Or take a multi day raft trip down cataract canyon.
Good timing and location to catch that crack of sunlight in the last photo. It’s like a sunbolt in place of a lightning bolt.
What affordability crisis?
I can afford everything I can pay for.
/sarc
In local LA news this weekend, activists were pushing for a $30 minimum wage target.
They are economic geniuses in LA. That’s how the city got $1 billion in debt. Being run by economic wizards.
The socialists are out in full force screaming that “the wealthy destroyed affordability.”
That if you tax the rich, your life will magically get cheaper.
Skipping the affordability crisis (which is a symptom) and moving to causation…
At some point in the last two decades, we switched from a production economy to a speculation economy (IMHO, the result of Fed-induced inflation). Homes became unaffordable when people (and companies) speculated on price increases. EG. The dramatic price increase from 2022 to 2024 appears as ‘inflation’ yet in my view–it was the result of speculation.
I suspect it is easier to tame speculation than inflation. A few changes in the tax code, for example might have been enough to stop it in its tracks. That is, treat speculation like gambling–no deductions for losses, and higher taxes for short-term gains. However, now that prices are high, we have to deal with inherent stickiness.
#1 Chairman Jerome Powell: “there was a time when monetary policy aggregates were important determinants of inflation and that has not been the case for a long time”
#2 “Inflation is not a problem for this time as near as I can figure. Right now, M2 [money supply] does not really have important implications. It is something we have to unlearn.”
#3 “the correlation between different aggregates [like] M2 and inflation is just very, very low”.
What you have running the FED is a person that knows little about what he’s doing.
The growth of the money stock and the resulting inflation was textbook. Nothing’s changed in 100 years.
“At the Dec. 27–29, 1971, American Economic Association meetings, Milton Friedman (1972) presented a revision of his prior work on the lag in effect of monetary policy (e.g. Friedman 1961). His new conclusion was that ‘monetary changes take much longer to affect prices than to affect output’ ”
Inflation is always simply a mismatch between supply and demand. If monetary policy puts money in the hands of people who want to spend it on things that have inadequate supply, you will get inflation. On the other hand, if supply can be increased to match demand, and there is adequate competition, you won’t get inflation. The Chinese manufacturing juggernaut over the last few decades allowed supply to increase at a pace that it could absorb increased monetary supply without inflation. COVID19 destroyed supply at the same time increased monetary supply was increasing demand, so you got inflation. Powell is playing from a playbook that is accurate for the last few decades because of China. It doesn’t mean it will continue that way in the future.
M*Vt = P*T in American Yale Professor Irving Fisher’s truistic “equation of exchange”. M = our means-of-payment money supply (isolating money intended for spending, from that money held as savings). Money has no significant impact on prices unless it is being exchanged. To sell 100 bushels of wheat (T) at $4 a bushel (P) requires the exchange of $400 (M) once, or $200 (Vt) twice, etc. Or a dollar bill which turns over 5 times can do the same “work” as one five-dollar bill that turns over only once.
The real impact of monetary demand on the prices of goods and services requires the analysis of “monetary flows”, and the only valid velocity figure in calculating monetary flows is Vt. Milton Friedman’s income velocity, Vi, is a contrived figure (Vi = Nominal GDP/M). It is a “residual calculation – not a real physical observable and measureable statistic.” The product of M*Vi is obviously N-gDp.
The spending/emission of credit is only part of it.
Since Reagan the economy has been progressively financialized.
The financialization bezzel has driven a wedge between prices and income, and the outsourcing impedes possibilities to increase production.
Steven Miller said that 40% of the rent-controlled apartments in New York are occupied by people not born in the USA. Well, bring in even more, and apartment will start trading in the precious metal markets.
The pangs of the GFC originated with the DIDMCA of March 31st 1980. “The Act created the legal basis for the addition commercial banks to the 14,000 we already had, and in the process, the abolition of intermediary financial institutions.
The intermediary financial institutions effected were the nation’s savings and loan associations, mutual savings banks, and credit unions. Trust companies and stock savings banks had been commercial banks for many years.
Commercial banks, DFIs, as contrasted to intermediaries, NBFIs, are credit and money creating institutions. The intermediaries are credit transmitters.
Consequently if this act is not revised so that the Fed can get a direct grip on the volume of legal reserves of all of these institutions, then this country will experience a truly disastrous inflation.”
By mid-1995 (a deliberate and misguided policy change by Alan Greenspan in order to jump start the economy after the July 1990 –Mar 1991 recession), legal, fractional, reserves (not prudential), ceased to be binding – as increasing levels of vault cash/larger ATM networks, retail deposit sweep programs (c. 1994), fewer applicable deposit classifications (including allocating “low-reserve tranche” & “reservable liabilities exemption amounts” c. 1982) & lower reserve ratios (requirements dropping by 40 percent c. 1990-91), & reserve simplification procedures (c. 2012), & reversion back to lagged reserve requirements on July 30, 1998, combined to remove reserve, & reserve ratio, restrictions. Legal reserves were dropped by 40 percent.
This was the direct cause of the GFC, the boom/bust in real-estate.
The money stock can never be properly managed by any attempt to control the cost of credit. And the only tool, credit control device, at the disposal of the monetary authority in a free capitalistic system through which the volume of money can be properly controlled is legal reserves. Powell eliminated legal reserves in March 2020.
As I said: The FED will obviously, sometime in the future, lose control of the money stock.
May 8, 2020. 10:38 AMLink
Daddy pig can’t even tie his own shoes.
Milton Friedman argued that inflation is always and everywhere a monetary phenomenon, meaning it is caused by the growth of the money supply exceeding the growth of economic output. He believed that only governments can create inflation by printing too much money to finance spending.
During Covid Biden and the Democrats Dumped money into the individual accounts of Americans. Imports from China put 100 cargo ships at anchor outside LA. inflation started ripping with low Fed interest rates added 50% to the cost of housing in two years.
Milton Friedman was a very smart man, well-liked and respected. But he was one dimensionally confused. All 14 trillion dollars of savings/investment accounts held in the commercial banking system are unused and unspent, lost to both consumption and investment, indeed to any type of payment or expenditure. See Dr. Philip George’s “The Riddle of Money Finally Solved”
Lending by the banks is inflationary (increases the volume and turnover of new money). Lending by the nonbanks is noninflationary (results in the turnover of existing money, existing savings, a velocity relationship).
If savings are not expeditiously activated, then a dampening effect is generated (causing secular stagnation). And all bank-held savings are frozen. Where do you think velocity went with the deregulation of interest rates by the ABA?
The 1966 Interest Rate Adjustment Act is the template for correction. You drain reserves while driving the banks out of the savings business (which paradoxically, doesn’t reduce the size of the payment’s system). It doesn’t reduce AD. It increases the supply of loan funds lowering long-term interest rates.
Big surprise when inflation took off when the money hit the individual rather than the banks—The Fed thought inflation was transitory but guess what the debasement of the dollar is permanent —stupid is as stupid does Milton is right
The distributed lag effect of monetary flows, the volume and velocity of money, the proxy for inflation, was textbook. We hit an all-time high in the rate of change, in November 2020.
Velocity: Money’s Second Dimension – By. Bryon Higgins
“Money has a ‘second dimension’’, namely, velocity . . .. ” Arthur F. Burns in Congressional Testimony.
“Quantity leads and velocity follows” Cit. Dying of Money -By Jens O. Parson
Prices are purely a function of competition. There has been massive consolidation of industry in the USA over the last few decades, giving corporations significant pricing power and profit margins. At the same time, the pricing power of labor has been eliminated through the destruction of labor unions. This is something we’ve all been voting for so just shut up about it already or go vote for Bernie Sanders. Folks think the financial and real estate markets are in a bubble. They’re not. They are a reflection of a more important bubble: the availability of cash and credit to the investing class. That availability is a direct result of monopoly pricing power, crushed labor unions and massive tax cuts. Who have you been voting for that wants to do anything about any of these things? That’s what I thought. On the upside, I made far more in the markets over the last 3 years than I ever did working. So thanks for your votes. Oh, and I was just joking about voting for Sanders. He would send you all to Siberia and take away your guns!
crushed labor unions? you mean like in long beach?
Like Robert Prechter said about the federal budget deficit- “Anybody can fix it, but they won’t”. I’d just add, you have to know what to do, and most, like 80% of people in the position to do something don’t know. Tell them how and they’d say “Oh we can’t do THAT!”
The government created the affordability problem when it shut down the economy and flooded the system with free money. When I heard that news, I began buying gold etfs (up 3 or 4 times), at least I now have a brace against inflation. The government created the problem and now it will solve it?
Only the federal reserve can solve stagflation, by raising rates to nosebleed levels and massively reducing its balance sheet. A miserable recession will do the trick!
It was done twice. After the “Great Recession” of 2008 and the COVID pandemic. The final result: An unaffordable housing market.
What?
The K shape recovery makes this almost impossible to discuss. All I hear from the talking heads is that the stock market is doing great, the stock market is up up up up.
The stock market doesn’t pay your groceries.
Most people are not invested in the stock market and if they are, it’s for long-term retirement goals which don’t help you buy the groceries this week.
I think those reserved few who are able to use their stock portfolio to borrow money and escape much of the typical income streams benefit. I know I can’t use my stock portfolio as collateral for anything but I don’t know how they do it
I suggest radical change to reduce wasteful spending and give people more freedom.
First, eliminate all foreign military bases and half the remaining domestic MIC budget. That would free several million workers (grossly underappreciated) to *productive* industry raising livestock, farming, renovating/building housing, medicine, nursing, policing, research, etc.
Second, rewrite many of our laws. As a former coder, I see too much complexity in our laws given their purpose. We lose too much energy to inefficiency. We need “a rewrite”, so that we accomplish much more with much less effort.
Here’s what I would do…
Institute a UBI and a separate UBHI earmarked solely for medical savings/spending. Fund it by taxing wealth using an exponential function. No oligarchs! No dynastic wealth.
Possibly tax computational power, since the machines themselves are increasingly *the* economic contributor. Advances in technology explain the dramatic increase over the past decades in the ratio between incomes of executives versus line workers. CEO’s IQ’s did not rise from 120 to 12,000. CEO weekly work hours did not rise from 70 to 7,000. The economy activity comes from the machines — “mercatus ex machina”.
(And the power of the machines stems from millennia of human invention, most recently during the past 80 years when the government spent public funds on not just fundamental research but even items essentially ready for commercialization.)
Eliminate:
– income taxes (but retain simplified reporting of financial information, because you still need the information to tax wealth),
– minimum wage laws
– rent control and housing subsidies
– college loans
– medicaire/Medicaid
– social security
The UBI/UBHI decentralizes purchasing decisions formerly centralized by an army of bureaucrats. That restores pricing discipline (restoring competition in markets) in markets where we’ve otherwise seen enormous price increases. It frees those people to do something more useful, if they want or need to.
Freeing up half our government workforce would reduce the tax burden on everyone else. Delegating purchasing decisions to people gives everyone more freedom to choose.
Eliminate the Fed.
End gerrymandering.
….
There’s a lot to fix.
Two Words:
NO & RECESSION (BIG ONE)
And even then, a recession isn’t going to fix the structural issues associated with healthcare costs.
The least expensive ACA plan that is a PPO is now $2900/month for a family of 4. $7500 deductible and $15k max out of pocket. That isn’t affordable for anyone but the rich and working wealthy.
What do we do Mish?
https://www.youtube.com/watch?v=QYHwgQLvjqs
Spot on, Mish. My friends, and some of the sharpest mind in my team, look at me as if I have two heads when I say:
The FED’s GOAL is to achieve “inflation” being higher by 20% MORE in 10 years!Inflation is a measurement of the RATE OF CHANGE, but STILL: 20% is evil. NO MATTER WHAT YOUR DEFINITION IS OF “INFLATION.”Guys, how are those budgets that you created 10 years ago holding up?
They all want to buy POLITICAL narratives. POLITICAL NARRATIVES are defined as being concocted bullshit to keep US “dumbed down.”
I may have LIKED TRUMP on TV but when he put on his Politics Hat and decided that he wanted the ego boost of being the “leader of the Free world” (ANOTHER POLITICAL NARRATIVE BY LINE), that was it for me.
Let’s ponder what those $2,000 stimmie checks would do to our economy! WHY IS HE FOLDING LIKE A CHEAP TENT?
Because he not only does not MEAN what he says, he also seemingly is playing stupid with some of this bullshit he says on the Economy, such as “Big Beautiful” and so on. It is nauseatingly NOT creative and morally corrupt.
STILL, I have pals who totally buy off on Trump’s MAGA bullshit. He just bad mouthed a Senator for being MAGA!
Marjorie reflects the very thinking that he now denounces her for.
IS ANYONE listening to this bullshit and beginning to wonder WTF Trump is doing ??? – – because he does not know what that is?
What you’re seeing is unrestrained and untreated dementia.
Dementia without limits!
Is anyone NOT listening? That’s the real problem, anyone who isn’t listening.
Well guess it should start with getting big money and lobbyist out of politics. Then balance the budget. Actually make polices which help the people.
Trump does not intend to do anything that his MAGA narratives say. CLICK THEM OFF. How many of those ten goals have any credence with ACTION from that fat talking head?
You can’t get big money out of politics. The Citizens United decision by the Supreme Court assures that. Conservatives fought for decades to get conservative justices installed, and they were paid back with Citizens United, essentially a coup d’etat by the big shareholder class.
Yup.
reduce the size and scope of government and the big money and lobbyists would have nothing to buy.
The system will self correct as it did 1929, 2000, and 2007 (and many other times from peak equity valuation.) The anomaly for the period between 2009 to 2025 – as compared to the long 1948 to 2025 average of 3.18% annual GDP growth and an annual average of 2.9% deficit to GDP spending – is that an annual average of 6.5% deficit to GDP spending has produced an annual average of only 2.4 % GDP growth – a pushing on a string economy.
This time is different. Consumer sentiment on 3 Sept 1929 (while not quantified – the Michigan index didn’t start until 1952) was very high. On 28/29 Oct 2025, consumer sentiment was at its near all time recorded low. What is it that determines the timing of equity peak valuation? What – a remaining sufficient population of governmental, corporate and consumer credit expanders willing and able to go into further debt -given ongoing ADL’s (activities of daily living), job and wage expectations (and in the new AI environment – watch out entry level college workers), payments on accumulated debt, and expectations of asset future valuations. Because equities are the most tax-advantaged asset in the asset-debt macroeconomic system, the system allows equity valuation growth to the maximum (fractal) time extent.
Equity valuation growth in the next 33 year cycle will be spectacular.
Your making arguments using the very lies (BLS, the bureau of LABOR LIES and STATS) that they want us to believe in the first place.
Even the “Inflation numbers” are concocted bullshit. Year over year. Remember, they remove components that are “inflationary” such as food and fuel.
The GD was the first non-correcting recession/depression.
It’s fixable, but the wealthy won’t like it.
Limit non-owner-occupied dwellings to 6 per investor. No LLCs or Corps. Put the landlord business back into the hands of the small investors.
Remove the properties from the giant corporations by the government buying them at 20% under the current market value. Reclaim the $1.5 trillion in tax reductions for the wealthy to fund it.
Then, sell the properties to owner-occupants for 10% under market value. The cost of sale will take the other 10%. Buyers would need to qualify for the payments/taxes/insurance.
Locally, charge more in property tax for non-owner-occupied properties than for owner-occupied properties. It used to be this way.
The government screwed up when they let industrial/giant corps buy all the properties without setting up an exit strategy.
Limit vacation rentals to 5% of properties in any given city or town. These can become long-term rentals or be sold.
Get rid of collusion/price-fixing such as RealPage.
Yes, BLACKROCK. “BlackRock is the world’s largest asset manager with $12.5 trillion in assets under management as of 2025…”
From a simple GOOG search. TRILLIONS!
“Locally, charge more in property tax for non-owner-occupied properties than for owner-occupied properties. It used to be this way.”
And what do you think that’s going to do to rent prices?
I would agree that something needs to be done about corporate ownership of rentals. They have a vested interest in keeping the cost of home ownership high, so only they can afford to own the properties.
It will lower rent prices, because cap rates will no longer pencil out, and the landlords will sell the properties. I don’t think you realize how much of the housing stock landlords own. Renters can’t just “pay more”. Rents are set by what the market can bear, not by aspirational price dreaming of the landlord.
Housing and other asset affordability returns when the asset bubbles pop. Government can do little about prices except raise them by blowing out many trillions in stimulus dollars, as did Presidents Trump and Biden. Modern Monetary Theory (MMT) in action!
They’ve been successfully holding bubbles in stasis, or inflating them further for at least 3 but really 5+ years now with the money printer. who knows when or if the music will ever stop but history says it does stop.
More likely to hyperinflate than pop with this government and Fed.
The social unrest is already reaching a fever pitch. If they keep printing the problems away, at the expense of the young, there will be hell to pay soon.
You want to lower asset prices, then drain reserves.
ME -flow5 (2/26/07; 14:34:35MT – usagold.com msg#: 152672)
Suckers Rally. If gold doesn’t fall, then there’s a new paradigm
And we know that Bernanke dismissed monetarism’s connection. As Dr. Richard G. Anderson (the world’s leading guru on bank reserves) wrote me:
“Spencer, this is an interesting idea. Since no one in the Fed tracks reserves…”
Bernanke contracted legal reserves for 29 contiguous months which directly caused the GFC.
At the end of the housing crisis, the banks were made whole on their defaulted mortgages by the Fed. The homeowners lost their homes and all of their equity.
The banks sold off the foreclosed homes in tranches via sweetheart deals to real estate management companies set up by banking insiders to manage the rental of those homes.
This has taken a significant percentage of homes off of the market and set the model for other companies with public funding to buy up even more of the former privately held homes. Housing stock is further diminished via the VRBO markets removing inventory.
Real estate remains a great investment for those with access to capital.
>>>
There are ways to fix both issues. But it won’t happen. Money talks, and everyone else walks.
So true. This could have been fixed by both parties but it’s too late now and nothing on tap to stop it. So don’t expect either party to fix housing. That’s a big part of the problem.
“ Can Trump or Anyone Possibly Fix the US Affordability Crisis?”
Nope.
One should never expect any politician or government to make your life better. It’s the job of each individual to do what is necessary to make their life better.
I am constantly amazed at how many folks will vote for a politician because he/she “promised” to improve their lives. This just tells me that those folks are lazy and stupid.
Forget politics. Focus your time on improving your life instead.
If the problem could have been fixed by now, it would have been.
Everyone will need to wait for the AI takeover when everything becomes free.
Certainly not Trump, he’s too concerned about his own ego and image to care about anyone. Certainly not republicans, they know health insurance cost is about to explode and they are clueless what to do (link below). Certainly not democrats who pretend to be for the “little guy” then do nothing but support the status quo with a few token measures here and there.
https://www.politico.com/news/2025/11/23/republicans-obamacare-affordable-care-subsidies-trump-00665346
But what is truely remarkable is that this “affordability” problem is self-made and largely localized to the United States. Why is it I can get dozens of medical tests for a few hundred dollars or less outside the US but within the US those exact same tests costs tens of thousands of dollars?
Why is an x-ray $20 almost anywhere outside the US but $200+ inside the US? I was in South America earlier this year and I had amazing beef ribeye 16 oz steaks for less than $10 at a restaurant but in the US it’s $75? Even a grocery store steak in the US is more expensive than one cooked at a restaurant!
No, I don’t think anyone is going to fix this mess anytime soon which is why I’m bailing out and moving to where I’m treated best with a higher quality of life and better affordability. I actually think things will get exponentially worse by 2030 as more and more people retire, get sick, or outright decide to leave like I have.
Eventually things will get sorted out, I predict 2036 or beyond for some level of normalization but who knows, it could get worse yet still.
Got to eliminate waste in federal and local governments and health care, for starters. Then examine and reform education system.
How do you eliminate waste in health care? I know people who forego tests due to cost.
Or do we eliminate waste in health insurance? Companies already use AI and foreign workers who are cheaper.
Curious, what’s your destination, has it been arrived upon already?
The pictures are amazing.
Just curious, Paul Volker beat back inflation but it utilized crushing rate increases – no free money there! Is that the only time tested method to end inflation or have there been other strategies that actually worked?
Higher taxes; single payer; bigger government; socialism; free trade; globalism; smaller military.
That’s B.S. Volcker directly caused 2 back-to-back recessions.
This is a great topic, lots of interesting responses.
Yes bring back no such philosophy as To Big To Fail. Let the economy crash and clean itself out without the can kicking intervention extending the pain over extended years. Global Great Depression. There will be a Lot of Pain so doubtful the political will is there. Biden torpedoed the dollar as the reserve currency stealing national assets and doubtful we will be getting that status back so a lower standard of living going forward. Should be anti trust lawsuits against the medical industry which has grown to encompass a fifth of the economy.
We need real anti-trust against monopolies in this country. Every important industry in this country has just three to five meaningful competitors, unlike the 20+ that would exist under Capitalism. The government will make sure a complete government failure occurs, in preference to a return to something resembling actual Capitalism. In 1908, there were 30 car manufacturers in the United States. That kind of competition hasn’t existed in this country in any major industry for well over fifty years.
PS Here is a more complete list of the hundreds of car companies that existed back when Capitalism existed in the USA:
https://en.wikipedia.org/wiki/List_of_defunct_automobile_manufacturers_of_the_United_States
I agree Mish, the problem won’t be fixed. Politicians don’t want to understand or even talk about “Inflation” It doesn’t even come close to there intended “Narrative” They would love to have some sort of control, to be able to have the numbers reflect what they would like… Well ok they have that, but mostly in theory, for now anyway…
My outlook on “Political Will” is much the same as “Negotiations” So “You Must Have” your least desired, but Acceptable “Folding Point” which You Must Not Break, or you then may Lose Credibility, on top of Negotiations moving forward. You also don’t want much more of what you’re set up expecting. This is what your strategy is laid out for, so everything needs to stay within that boundary to work out properly (One Issue Trump and Others Have IMO).
Trump’s “Mouth Moving” makes matters worse at times, but so do a lot of other Politicians. Fortunately Trump is intelligent and an extremely sharp “Forward Thinker” and that allows Him to go places Temporarily, for distinct Purposes, and Allows Him to get the “Outcome” He Planned All Along, at times. This was not one of them it appears, but it would typically be wise, to Never Count Trump out of anything. His Lifetime of Accomplishments and Achievements speaks for itself…
IF “Trump is intelligent and an extremely sharp ‘Forward Thinker’” it applies only to furthering his own selfish aims, not the USA’s. He cares not for the USA beyond how it can enrich his bank accounts and fluff his ego.
We can stop being the pitifully unconscious slaves to private banking’s monopoly paradigm concept of Debt ONLY…the same as people were slaves to the Roman Catholic church before the Reformation ended Catholicism’s monopoly paradigm of Salvation Via Roman Catholic Sacraments ONLY. The word ONLY designates it as a monopoly concept.
Inflation causes depression.
5 decades of rampant inflation has changed the entire concept of the American Dream.
Inflationism must pay to maintain the non-inflationist losers in order to have any social stability at all. Of course, this is paid by further inflation, their only liquid asset.
This hybrid feudal economy is politically challenging to say the least.
I would posit that investment based on actual human needs is wisdom for the future.
If you think inflation causes depression, wait until the country experiences deflation. Happiest time of my life: Carter and inflation: it was great. Then he hired Volcker, and the dumb people hired Reagan.
50% Discount/Rebate policy at retail sale = $100 worth of groceries and every other regular consumer item for $50 and yet merchant gets full $100. $500k house is reduced to $250k by house builder and 50% of your monthly mortgage payment on the $250k loan is paid by the central bank.
Monetary and economic paradigm change. ‘Nuf said…unless of course you refuse to look at the temporal universe realities that single policy creates.
Oh, by the way even the banks benefit because the 50% retail discounts quadruple the market for housing…and with a reasonable universal dividend expands it even more because virtually everyone is creditable.
Now I understand where you’re coming from on Ukraine. Crazy Land.
Of course, the Wall Street Journal would say “There is nothing any elected official can do to “solve” the affordability crisis reliably.”
That’s because the Wall Street Journal assumes that there is no real role for government, i.e. this is a private sector matter.
The problem we face is ideological, not real because this is a classic private sector market FAILURE. Rupert Murdoch’s Wall Street Journal would never acknowledge this.
The simple reason is this: markets need consumers with enough money to give private sector investors a return in the form of rents. After twenty years of asset inflation and wage stagnation, the very simple math is that rents that people can afford are not enough to yield any return. This is a classic market failure. So, if private investors can’t make the math work, who can?
The affordability housing problem has been ignored so long that now only the Federal government — i.e. elected officials — can address it at requisite speed and scale with requisite funds in the national interest. Only the leadership of the Federal Government, as at wartime, contracting with the private sector, can churn out standardized FEMA-like manufactured housing or multi-family dwellings like Liberty Ships during WW II. They could be situated on land acquired via eminent domain if necessary.
These would be GOGO structures — government owned, government operated at a low cost well below what the private sector can deliver due to scale economies.
Oh, and let’s be sure this housing is situated near affordable mass transit so these folks can get to work.
The ideological assumption of the neoliberals that government needs to get out of the way is why they can’t find a solution. The solution is right in front of our faces.
It’s called “socialism.” So be it.
And we’ll call it Cabrini Green. Dyn-O-Might!
Lol.
Ever heard about the Stalin experiment ? How can someone suggest socialism as the solution, when it is abundantly clear that it fails all the time ??
Your so-called “Stalin experiment” was dictatorship. There was no socialism to it. That’s what we’re toying with now. Right now. The only difference is the 6 seditionists would already be dead and Trump is too cowardly to actually do that. He dreams his senile dreams out loud about doing it.
Heres what Mamdani, Trump and all the rest of the Democrat and Republican politicians arent telling people about why housing costs are so high: The govt, through the Fed central bank, is still holding 2 trillion, that is two thousand billions of dollars, in mortgage backed securities, which is artificially pushing down mortgage rates. If the govt wasnt doing this, rates would have to rise for those securities to pay enough interest to attract buyers using real money, not printed money that the Fed uses to buy them, and higher mortgage rates would have the beneficial effect of being a deterrant to speculators that bidded up house prices so high because it was so cheap to borrow. This decreased demand can then lower prices to levels affordable levels, especially for people who have saved for a good down payment.
The Republicans and the Democrats both appointed the Fed officials who have held down rates with money printing QE, so voting for either of them is voting for too expensive housing prices that is causing a big drag on the economy by pushing inflation in wages and many services like insurance, property taxes, HOAs, that many complain about, leading to strikes and less money in peoples pockets for discretionary spending.
Yes, but lower prices is also “falling home values” which will reduce spending and deepen the recession (at best). It should be done, but people won’t like it.
I think the percentage that wouldnt like would be less than the people that would: it would benefit ordinary working people wanting to buy a house to live in and have lower property taxes, it would mean lower rents for millions, so boost their discretionary spending or saving, less inflation overall, decrease wealth disparity/K trajectory. I think the effect on the economy, aggregate prosperity would be substantially positive.
65.6% of Americans own their homes.
Homeowners are significantly more likely to vote, statistically.
Worth keeping in mind.
Bernanke, pg. 287 in his book “The Courage to Act”, “Lower long-term rates also tend to raise asset prices, including house and stock prices, which, by making people feel wealthier, tends to stimulate consumer spending” (aka the “wealth effect”).
“Housing is considered unaffordable if it costs more than 30% of an individual’s income”.
There has always been and there will always be an affordability crisis. Nothing to see here.
Worst take ever, housing was not only affordable but in many ways cheap as recently as 1996/1997 and again in 2011/2012.
Surely you can find a worse take than that in the history of humanity. I’d say your take that his is the worst take ever is actually worse than his take. QED
Actually Yes,
Trump claims he has shipped 2 million illegals back to Mexico. Another four years and he should have gotten rid of 9 million people? Supply/Demand…
Plus the baby boomers are dying like flies! Way faster than anticipated.
So, maybe Fauci did Gen Z a favor? Millennials simply got perma-screwed by the timing of the omnibubble.
Boomers are going to be passing a ton of property on to generations that can not afford the taxes and insurance… Families just sell it to liquidate it to pay down their debts and costs… All ships go down in a falling tide.
It’s not just the taxes and insurance, younger generations have no plans to have 2+ kids so they don’t need 3000 sq ft houses with 5 bedrooms in them.
As many here know, I plan on leaving next year so I asked my kids if they want to live in the house when gone and all said NO, it’s too big and costs too much to maintain. The larger the home the higher the heating/cooling cost, landscaping costs, fence repair and upkeep, larger appliances (e.g water heaters) to heat water for all the bathrooms, etc.
They would rather have a smaller affordable home than a larger one. Multiply that thinking x 30 or 40 million and you wonder what will happen to the housing…will they become dilapidated over time?
And finally, there’s a new disaster kid in town to take its place amongst hurricanes, floods and fires.
https://www.dailymail.co.uk/real-estate/article-15288455/hailstorm-insurance-nebraska-cozad-homes.html
Can someone remodel that house into a duplex?
Correct, but this is actually something I worry about. Heirs and trust-fund kids don’t make good citizens, they make entitles brats.
Well, that should benefit Gen Z right as they are ready to buy.
Perhaps when Trump declared covid a Hoax and tried to do nothing? Then was dragged kicking and screaming into accepting the help of our incredible medical establishment. Trump was the one doing the favor?
Trump, “It’s easy to treat Covid! Drink bleach” or as it evolved, take horsey pills…
Only 1.6 million died…
I’m guessing some of the crowd here wishes the vaccine has not been developed so more would have died. Interesting mix here Mish…
Right, as soon as the CDC did not forecast the future with 100% accuracy, suddenly their mostly right analysis was judged by their detractors as a condemnation of the entire government as criminals trying to kill us all.
Purebloods for the win!
Boomers thought they got screwed when interest rates were above 10% but they buckled down and earned their way into housing. Now they tend to re-finance their homes to pay for their lifestyle. Many Millennials seem to think everything should be handed to them. As always each generation has differing numbers of free loaders and complainers. I prefer to work hard enough to employ quite a few good people at good wages.
I dont think the younger generations want handouts, just let them have the same market conditions the boomers had, meaning the govt not pushing down long rates and flooding the economy with money.
“median person can actually afford to buy the median-priced home on a median income.” they already can…just not where they want to live. location.
But, generally speaking the act of moving itself makes them statistically not the median person anymore in the destination city.
I think you do not understand the meaning of medium, in context
Do you mean ‘median’?
Of course. Spell correction mutation.
Try driving over the median in the road, just like you did here with your maffs, see how that works out for you.
Every Country needs to STOP DESTROYING peoples tax income on these greedy wars and FEED YOUR COUNTRY FIRST. Governments need to FIX THE HEALTH CARE that’s been financially raided and detroyed by diverting money to the WARS and SILLY CLIMATE CHANGE hoax, EV grants, windmills that do NOTHING to change our climate and feed the starving hungry
Right on.
Climate change is not a hoax. That claim is totally stupid.
Only something cataclysmic will provide reset. Very grim. Expect political snakes to emerge from all sides full of promises both left and right.
Maybe they should look holistically and think about consulting people in the field. If you offer free money to first time home buyers (been done many times) … several things happen:
So that may be a bad idea. But we have lots of investors (from Mom and Pop to BlackRock) with many houses. If we want to “redistribute” these houses to folks who don’t have a house … there are ways of doing it without going communist. Start by incenting owners of multiple houses to sell. How do we incent it?
It is crucial not to do what Cuomo/Obama did where they gave these loans to folks who clearly did not have the where-with-all to succeed. I’m not a big fan of regulations … but some would be needed to make sure folks don’t abuse the system (likely more of a need to keep the seller’s honest than the buyers). This is not going to end the affordability situation … but it could put 5 or 10% of people who are close but no cigar … into a home of their own to start benefitting from the wealth tied to real estate.
Obama? Heck, he came in after the housing bust was in full meltdown,,, Are you thinking his predecessor Bush or the elimination of Glass Steagall under Clinton?
You can vindicate Obama and company, but the internet is forever: https://www.youtube.com/watch?v=Lr1M1T2Y314
This is hilarious. The Republican party wrote books about converting minorities to Republicans by signing them up for home ownership. They hypothesized home ownership would turn black and brown and yellow people into conservatives. And then they did it: gave them mortgages they had no shot at ever paying back. Long before oBaMa.
Funny, when someone wanted to vindicate Obama … I brought receipts showing him doing exactly what that person denied. So you are making an assertion … guess I’m looking for some receipts … or do I just trust you like I guess you think I should have trusted the first guy even though I knew he was wrong.
Nobody’s wasting time clicking on a random YouTube video. If you have an actual source, link to it. The fact remains that Obama entered office in January 2009 and the housing crash was completely baked into the pie at that point.
Seems to me that before we had President Obama … we had Senator Obama … and it was Senator Obama who wanted to give loans to minorities even if they didn’t qualify under normal circumstances. But maybe I’m wrong … maybe Barrack Obama came into existence in 2008 when he became president.
So you don’t even have to do research … you can see your heroes saying exactly what you deny they said and doing exactly what you deny they did … but you’re still sticking to your guns … facts be darned. Got it.
Mike, have you ever heard of Section 8 housing? Have you heard of Richard Nixon? We’ll allow you to plug that three prong into the socket, but please do it carefully.
When you’re done with that, and this is really exciting, try going to Google to fact check yourself “republican black homeownership program” and come join us in the “20th century plus”
So you either looked up the link I gave you (no research on your part) and realize that Cuomo, Clinton, and Obama all said we should give out loans to people who don’t qualify … and you’re not addressing that … or you’re not even viewing a few minutes of video I have shown which shows everything you deny is actually true … and you are doing a what-aboutism. Frankly, I’m not terribly interested in which lazy couse you took.
Yes, he could but that would blow a 30% hole in almost all boomer portfolios, so no, he’ll never do that. But the market will do it anyway, just more slowly.
uhhhmmm No
No
Another key reason they can’t solve inflation is home buyers who are willing and able to pay higher prices implicitly encourage home sellers to hold firm on prices or ask even higher prices when placing a home on the market.
The market always wins in the end. But when the government works overtime to prevent arms-length price discovery, the market seizes up and that’s where we are now.
Trump‘s affordability communication strategy is the same as Biden’s:
Trump lies and his minions repeat his lies without any further analysis.
Cults are dangerous!
Current score: four think cults are dangerous and four think cults are safe.