Over the past year, President Trump has taken unprecedented actions to assert federal control over our economy and undermine the constitutional system on which that economy depends. In response, many leaders in the private sector—as well as in philanthropy, media, law and academia—have responded not with criticism, but with acquiescence and accommodation.
This is a serious loss for our economy and society.
I recognize that some in the business community believe Mr. Trump’s actions, on balance, promote free-market conservatism. To them, I pose this question. Imagine if, a decade ago, I told you a future president would do the following within the span of a year: create domestic instability with campaigns of political retribution; issue sweeping pardons for allies who break the law; adopt a foreign-policy doctrine favoring military action for the explicit purpose of seizing other nations’ resources, threatening not only adversaries but North Atlantic Treaty Organization allies; attack the legal immigration system and universities; and undermine the rule of law on which our rights and property depend.
Further, he would demand government ownership stakes in large American companies; take a share of export proceeds in exchange for lifting export controls; cancel public investment already approved by Congress; unilaterally raise tariffs, often for reasons that have nothing to do with the economy; demand private companies hire or fire executives for political reasons; sow distrust in government economic data; attempt to fire a member of the Federal Reserve Board without due process; and threaten his critics, including business leaders, with retribution, including financial penalties and criminal prosecution.
A large majority of business leaders, not long ago, would have agreed that this hypothetical future president would pose a grave threat to our country’s prosperity and our way of life.
Such a president is no longer hypothetical. In my experience, many leaders harbor deep concerns about Mr. Trump’s lawlessness, weaponization of the government, and interference in markets. They refrain from public criticism not because they find nothing to criticize but because they’re intimidated.
“The middle class is shrinking” might be the assertion of the decade. Progressives and populists alike use it to justify nearly all government interventions, from tariffs to minimum-wage hikes to massive spending to income redistribution. But before we accept its validity, we should ask a simple question: shrinking how?
Is the number of Americans considered part of the middle class diminishing? Or the amount of wealth they can realistically build? Or the value of what they can buy?
A new study by economists Stephen Rose and Scott Winship usefully reframes the debate. Most studies define the middle class relative to the national median, which makes the dividing line between haves and have-nots rise automatically as the country gets richer. Rose and Winship instead use a benchmark of fixed purchasing power, so that if real incomes (those adjusted for inflation) rise, more people are shown moving into—or beyond—the middle class in a meaningful sense.
Under this approach, the “core” of the middle class does indeed shrink modestly. But crucially, the middle class shrinks because people are moving up the income ladder, not because they’re falling down. Since 1979, the share of Americans in the upper-middle class has roughly tripled—from about 10 percent to 31 percent—while shares of those considered lower middle class or poor fell substantially.
Much of the political rhetoric, such as former President Joe Biden’s warning of a “hollowed-out” middle class, implicitly suggests downward mobility and national immiseration—a story difficult to square with data showing an overwhelmingly upward directional movement.
What commentators have so far left unsaid is just how beneficial the small amount of institutional investment is for the American housing market. It’s not just not a big problem; it’s not a problem at all, but rather something to be welcomed.
Institutional investors help make the housing market more liquid and less cyclical. They upgrade the quality of the housing stock, typically at lower cost than smaller renovation outfits. They make desirable neighborhoods accessible for households that could not afford to buy in those neighborhoods. Increasingly, they are directly increasing housing supply.
Institutional investors first started to take interest in single-family houses in 2012, at the bottom of the last housing cycle. They are less capital-constrained than smaller investors, let alone most owner-occupiers. As a result, they are better able to use cash reserves to identify good deals and the market and buy them at prices that make sense over the long run. The ability of institutional investors to support the housing market after a financial crisis will help prevent future liquidity problems in the mortgage finance sector from spiraling into a housing crash.
Michelle Tandler tweets: (HT Tyler Cowen)
The more I dig into this NYC rent control situation, the more alarmed I become.
This is what I’m seeing:
+ 2.4 million rent-controlled apartments in a city with a massive housing shortage and 1.4% vacancy rate.
+ A huge % of these tenants are wealthy, white boomers using the units as pieds-a-terres while they spend their weekends and summers elsewhere.
+ Meanwhile, the government is using rent control to purposely drive down the value of multifamily housing, so that it can be purchased in a fire sale by the government.
+ The small-time landlords with big rent rolls of “stabilized” units are going under. Their portfolios end up in the arms of PE and foreign money (how are Progressives okay with this?) The banks will get hit by this too.
+ Because there is such a reduction in supply (~40% of units are price-controlled), leftover supply is ~33% more expensive
+ Because NYC gov is not friendly towards landlords, there is a lack of development –> even less supply
+ Rich and homeowners overwhelmingly support these laws b/c it drives up the value of their condos & co-ops (less supply –> higher prices for condos)
+ Big PE companies like these policies b/c they can buy buildings in fire sales and wait for rent control reform (5-10 years out)
+ Meanwhile – ~2.4 million units are rotting and won’t be brought up to code as tenants leave b/c the numbers don’t pencil –> 50k “ghost apartments” padlocked off market now, maybe 100k soon
+ Gen Z and the working class continue to vote for these policies, hoping they will be among the lucky few to win the lottery ticket of a rent-controlled apartment
+ Meanwhile, boomers hang onto their units and pass them to their children, family members, etc.
–> NYC’s housing stock is rotting slowly, going offline, and becoming more expensive
Isn’t this what the Constitution is for? To protect property owners and citizens from the tyranny of the majority?
This is clearly a taking. It’s clearly buying votes.
I’m floored this is happening, and nobody is talking about it because it’s “politically incorrect” to critique rent control.
**Rent control is the reason housing in NYC is so expensive, and it’s the reason there is a shortage.**
Boomers really pulled a fast one on this. Well done, Boomers.
Charlie [Cooke] insists that if the United States purchased Greenland, “unlike its current owners, who seem to treat it like some sort of zoo, we would follow up our acquisition by doing what Americans have always done: building, drilling, extracting, expanding, and making ourselves rich, powerful, and generally more useful than everyone else in the world.”
Oh please. The U.S. government hardly allows any commercial development of the vast, resource-rich public lands we already possess! Only 3.5 percent of federal land is currently leased for oil and gas extraction. Companies have been trying to drill in Alaska’s Arctic National Wildlife Refuge (ANWR) for 45 years, a place that almost nobody has ever seen and that Alaskans themselves resoundingly wish to exploit. You can plausibly argue that President Trump would permit the carving up of Greenland’s untouched wilderness, the powerful conservation lobby be damned, but could you say the same of a President Gavin Newsom?
Dr. Jeffrey Singer applauds the Trump administration’s proposal to put more drugs over the counter.
Artificial intelligence may present many expanded opportunities for advancement in many fields. But it can also present expanded opportunities for deceptive and dangerous frauds. Here I can speak from personal experience, as a target of such frauds.
AI has created imitations of my voice, to accompany photographs of me, saying things in various parts of the internet. These include both things I have never said and things the direct opposite of what I have said.
Under current rules and practices, people can do such things anonymously. Even after the fraud has been discovered and shut down, the same anonymous people can do the same thing elsewhere on the internet.
…..
Tragically, the AI impersonation fraud is part of a much larger and much longer lasting undermining of the very concept of truth. At one extreme are those intellectuals who speak loftily of “my truth,” as if it were private property, exempt from challenge by facts or logic. But a privately owned truth is irrelevant to communication between people.
More important are whole institutions—including education and the news media—whose basic reason for existing is to convey truth, but who cannot resist the temptation to seek power instead.
If there are no serious consequences for either individuals or institutions that create frauds—whether by AI or by silencing other viewpoints—we will have no basis for settling our inevitable differences other than violence.
And once violence takes over, it may not matter what issues set it off, as violence and counter-violence take on a life of their own. At that point, the issue is no longer which vision will win, but whether we shall survive as a free society, or survive at all.
Levin Inches is correct that this ad reads as though it was issued by the Elizabeth Warren campaign: (HT Scott Lincicome)
