WEBVTT 1 00:00:10.439 --> 00:00:10.560 Well. 2 00:00:10.640 --> 00:00:13.960 Joining us now is David Bnson. He is the manager 3 00:00:14.000 --> 00:00:18.000 of a eight billion with a B dollar wealth man fund. 4 00:00:18.719 --> 00:00:22.399 He's also a prolific writer. He is a contributing writer 5 00:00:22.480 --> 00:00:25.039 for National Review. He serves on the National Review Institute Board. 6 00:00:25.440 --> 00:00:29.480 He's named on of America's top financial advisors by Barons, Forbes, 7 00:00:29.600 --> 00:00:33.520 and The Financial Times. He's also regularly on Fox News 8 00:00:33.560 --> 00:00:37.399 and Fox Business, as well as a contributor to World Magazine. 9 00:00:37.479 --> 00:00:39.880 And I wanted to talk to David about several issues. 10 00:00:39.920 --> 00:00:44.119 First of all, his expertise, of course, is in economics, 11 00:00:44.159 --> 00:00:48.479 but he also is a published Christian author. He has 12 00:00:48.520 --> 00:00:52.759 some perspectives on the meaning of life and how to 13 00:00:52.799 --> 00:00:56.439 find life's meaning in your work and other things. It's 14 00:00:56.439 --> 00:00:58.479 all we want to touch on that as well. He 15 00:00:58.520 --> 00:01:01.159 had to rebuttal to a piece that was done on 16 00:01:01.200 --> 00:01:05.519 the Atlantic talking about the isolation that has been has 17 00:01:05.560 --> 00:01:08.439 become characteristic of our society. So joining us now is 18 00:01:08.519 --> 00:01:10.560 David Bonson. Thank you for so much for joining us. 19 00:01:10.599 --> 00:01:13.200 David, Well, thank you so much for having me pleasure 20 00:01:13.239 --> 00:01:13.680 to be with you. 21 00:01:14.400 --> 00:01:16.599 Let's thank you. Let's talk a little bit about this 22 00:01:16.719 --> 00:01:20.920 piece from the Atlantic. I thought it was pretty amazing 23 00:01:21.200 --> 00:01:25.319 and It began with an anecdote is mostly stories do. 24 00:01:25.519 --> 00:01:27.040 This is a guy he's in a restaurant, I think 25 00:01:27.040 --> 00:01:29.599 it was North Carolina, and he says he's sitting there 26 00:01:29.599 --> 00:01:31.439 and he's seeing one person after the other coming in 27 00:01:31.519 --> 00:01:34.040 the restaurant, grabbing a paper bag and going out, and 28 00:01:34.040 --> 00:01:36.920 there's not really any interaction, you know, there's not a 29 00:01:36.920 --> 00:01:39.319 group of people coming in and having a meal at 30 00:01:39.359 --> 00:01:41.640 a table. They're not even really interacting with the people 31 00:01:41.680 --> 00:01:44.640 behind the counter. And he wrings his hand and says, 32 00:01:45.680 --> 00:01:47.319 this is awful, and this is what is happening to 33 00:01:47.359 --> 00:01:49.599 American society. And he said he talked to them and 34 00:01:49.680 --> 00:01:53.599 it was very bustling place before the pandemic, and yet 35 00:01:53.680 --> 00:01:56.799 he believed that it was some kind of a problem 36 00:01:56.879 --> 00:01:59.879 of capitalism. Is what did he say? The problem was? 37 00:02:00.000 --> 00:02:00.719 How do we get to this? 38 00:02:01.680 --> 00:02:04.400 Yeah? And what the author ends up doing is concluding 39 00:02:04.439 --> 00:02:06.760 that it wasn't a problem of markets, so it was 40 00:02:06.879 --> 00:02:11.439 rather markets adjusting to what the problem was with the culture, 41 00:02:12.039 --> 00:02:18.120 that the that the society moving towards increased alienation, a 42 00:02:18.319 --> 00:02:25.039 decreased value on community, on being together. And and of 43 00:02:25.039 --> 00:02:28.080 course that was an opening anecdote to what was a 44 00:02:28.120 --> 00:02:31.400 really longer piece. I did a whole podcast at my 45 00:02:32.039 --> 00:02:36.840 National Review Capital Record podcast about the broader subject of 46 00:02:37.360 --> 00:02:43.080 how do we reverse this trend of greater alienation and 47 00:02:43.319 --> 00:02:46.800 isolation in society. And one of the points I make 48 00:02:47.000 --> 00:02:49.639 is that Mark this restaurant is not going to go 49 00:02:49.680 --> 00:02:52.400 out of business just because people don't want to go 50 00:02:52.439 --> 00:02:55.560 out to eat together anymore. So they're going to shift 51 00:02:55.719 --> 00:03:00.120 to door deliveries and door dash and to go order 52 00:03:00.199 --> 00:03:02.919 and some of the other things. So the business of 53 00:03:02.960 --> 00:03:07.039 the restaurant might find a market mechanism that maintains some 54 00:03:07.159 --> 00:03:13.039 cash flow, but the societal issue that undergirds it is 55 00:03:13.120 --> 00:03:17.240 really the challenge. And I want to make the argument 56 00:03:17.319 --> 00:03:20.840 that markets are not causing the problem, they're responding to 57 00:03:20.879 --> 00:03:26.120 the problem. We don't blame markets when thousands of people 58 00:03:26.199 --> 00:03:29.759 go out together for big, successful concert events. We don't 59 00:03:29.759 --> 00:03:32.680 give markets the credit for that. But that's an example 60 00:03:32.719 --> 00:03:38.039 of markets accommodating a societal trend for the togetherness of 61 00:03:38.120 --> 00:03:41.919 what was the successful Taylor Swift concert tour a couple 62 00:03:41.960 --> 00:03:46.039 of years ago. The point I think you're bringing up, David, 63 00:03:46.080 --> 00:03:51.599 is that there was a societal trend taking place before 64 00:03:51.680 --> 00:03:58.120 COVID of people valuing community and togetherness less and COVID 65 00:03:58.159 --> 00:04:01.280 exacerbated it, and it's a trend that we ought to 66 00:04:01.319 --> 00:04:02.520 be very concerned about. 67 00:04:02.759 --> 00:04:05.319 I absolutely agree, and of course my listeners know that 68 00:04:05.400 --> 00:04:09.680 I was a pandemic skeptic before, during, and especially after. 69 00:04:10.039 --> 00:04:12.360 I mean, the people were pushing this on and say, well, 70 00:04:12.400 --> 00:04:14.159 we did our best, we just did the wrong thing. 71 00:04:14.639 --> 00:04:16.759 And that was, as you point out, it was a 72 00:04:16.800 --> 00:04:19.000 trend that had been happening for quite some time, and 73 00:04:19.079 --> 00:04:23.399 it was actually war gaming and simulations that they had 74 00:04:23.439 --> 00:04:26.160 done since two months before nine to eleven to lock 75 00:04:26.240 --> 00:04:29.120 everybody down and to keep everybody locked down until you 76 00:04:29.199 --> 00:04:33.160 got their special formula. So I was skeptical of that 77 00:04:33.319 --> 00:04:35.680 all along, and I've seen the ways that this has 78 00:04:35.759 --> 00:04:38.879 been used and how it has advanced a lot of 79 00:04:38.920 --> 00:04:42.439 the let's say, the agenda, because when you look at 80 00:04:42.480 --> 00:04:45.040 that as well as some things like universal basic income 81 00:04:45.079 --> 00:04:47.519 and compare that to the stimulus checks, seems to me 82 00:04:47.680 --> 00:04:49.639 like there was a lot that was going on with 83 00:04:49.680 --> 00:04:52.839 that that was pushing us down this very bad path 84 00:04:53.399 --> 00:04:56.920 of isolation and dependency on the government. And it doesn't 85 00:04:56.959 --> 00:05:00.480 surprise me to see the Atlantic take the approach that 86 00:05:00.519 --> 00:05:04.560 when the government gas lit enforced a lockdown in isolation 87 00:05:05.120 --> 00:05:08.000 that they would then blame people who responded to that 88 00:05:08.079 --> 00:05:10.000 as businesses trying to stay alive. 89 00:05:11.720 --> 00:05:18.439 Well, I believe that pandemic response is unforgivable, outrageous. I 90 00:05:18.480 --> 00:05:22.040 think there were some people who were better intentioned than others. 91 00:05:22.120 --> 00:05:24.959 That all of it still, you know, I don't judge 92 00:05:24.959 --> 00:05:28.439 a policy by its intentions. You judge it by its results. 93 00:05:28.639 --> 00:05:33.800 And it was bad results. But the lockdowns and pandemic 94 00:05:33.839 --> 00:05:36.680 issue ended a long time ago. And one of the 95 00:05:36.720 --> 00:05:39.279 things Derek points out in the Atlantic article he wrote 96 00:05:39.319 --> 00:05:44.639 a year ago is that the worst year at twenty 97 00:05:44.720 --> 00:05:48.160 twenty one was very bad for this. Then twenty two 98 00:05:48.319 --> 00:05:50.560 was bad, and then it got worse than twenty three. 99 00:05:50.720 --> 00:05:53.879 No one was locked down by twenty twenty three. So 100 00:05:54.000 --> 00:05:57.399 what you see is this sort of craving of people 101 00:05:57.519 --> 00:06:02.639 dining alone. Robert Putnam's book Bowling Alone was written in 102 00:06:02.680 --> 00:06:06.600 the year two thousand. Okay, that was twenty five years ago. 103 00:06:06.720 --> 00:06:10.639 That was well before the pandemic. The death of community 104 00:06:10.800 --> 00:06:15.639 is a post modern and secular problem, not merely a 105 00:06:15.680 --> 00:06:21.199 byproduct of the very bad COVID policies. And I believe 106 00:06:21.399 --> 00:06:27.879 that societies that don't value mediating institutions like and family 107 00:06:28.720 --> 00:06:31.439 end up being very lonely societies. 108 00:06:31.759 --> 00:06:33.399 Oh, I agree. Yeah, it was a trend that was 109 00:06:33.399 --> 00:06:38.000 already in place, and this accelerated it intensified it significantly, 110 00:06:38.079 --> 00:06:40.319 I think, and we're living with that. I guess that 111 00:06:40.399 --> 00:06:43.279 was one of the thing I was most surprised about 112 00:06:43.639 --> 00:06:47.480 was how rapidly this accelerated trends like that that we 113 00:06:47.480 --> 00:06:51.199 already saw in place and kind of solidified them. You know, 114 00:06:51.279 --> 00:06:56.360 and my son's generation, almost everybody meets their spouse or 115 00:06:56.399 --> 00:07:00.279 whatever that they know have met them online. Initially, there 116 00:07:00.360 --> 00:07:02.439 used to be places where you could actually go and 117 00:07:03.920 --> 00:07:06.920 have a human to human interaction with somebody rather than 118 00:07:07.519 --> 00:07:10.959 primarily being online. And it is such a strange thing 119 00:07:11.040 --> 00:07:14.079 to see that, and it really is that kind of isolation. 120 00:07:14.600 --> 00:07:17.319 And many have bragged about that being the design. You know, 121 00:07:17.480 --> 00:07:19.959 they won't to have like a ready player one environment. 122 00:07:20.000 --> 00:07:22.680 We're all just set there in our virtual world, you know, 123 00:07:23.079 --> 00:07:26.279 communicating with people on the outside rather than having any 124 00:07:26.399 --> 00:07:27.959 kind of in person communication. 125 00:07:29.759 --> 00:07:34.439 That's exactly right. Dining is but one example all sorts 126 00:07:34.480 --> 00:07:38.480 of various community activities. You know. We can talk about 127 00:07:38.480 --> 00:07:41.959 the role that COVID played in exacerbating it. But nothing 128 00:07:42.040 --> 00:07:49.040 is exacerbated quicker than screens than electronics, And I think 129 00:07:49.040 --> 00:07:51.360 there's a very healthy way in which one can use 130 00:07:51.480 --> 00:07:55.519 electronics for productive use. There's plenty of benefits that come 131 00:07:55.560 --> 00:07:58.399 from it. For people staying in touch. It's an easier 132 00:07:58.439 --> 00:08:01.360 way to send your law lost aunt and uncle on 133 00:08:01.399 --> 00:08:04.600 the other side of the country family photos. There's no 134 00:08:04.680 --> 00:08:07.680 reason to be ludite or a tech fobe about things. 135 00:08:07.959 --> 00:08:12.360 But to the extent that people have replaced human interaction 136 00:08:13.720 --> 00:08:16.319 with screen time, it is entirely unhealthy. 137 00:08:16.600 --> 00:08:20.079 Well, it's one of those things where because it makes 138 00:08:20.120 --> 00:08:23.639 it easier and available to not actually be in person, 139 00:08:23.680 --> 00:08:27.199 and it takes some of the discomfort of some of 140 00:08:27.240 --> 00:08:29.199 the aspects that you would have in meeting with somebody 141 00:08:29.240 --> 00:08:31.319 in person, takes a little bit of that out. It 142 00:08:31.399 --> 00:08:33.919 is kind of seductive in that regard, and I think 143 00:08:33.960 --> 00:08:35.559 we were going to see a lot more of that 144 00:08:36.120 --> 00:08:38.639 as AI intrudes more and more into our lives. But 145 00:08:38.720 --> 00:08:40.399 let's talk a little bit about the solution. Because you 146 00:08:40.440 --> 00:08:45.679 wrote a whole book really about a perspective of life, 147 00:08:46.000 --> 00:08:49.320 full time work and the meaning of life. Give us 148 00:08:49.720 --> 00:08:51.120 a little bit of an overview of that. 149 00:08:52.480 --> 00:08:58.159 Well, I try to make the argument from creational theology 150 00:08:58.320 --> 00:09:01.600 from the very beginning of the world is to what 151 00:09:01.679 --> 00:09:05.720 God told us as to why he created us, that 152 00:09:06.039 --> 00:09:10.440 our endeavors here on Earth matter, that work is not 153 00:09:10.679 --> 00:09:15.200 just something we do for transactional benefit to help feed 154 00:09:15.320 --> 00:09:18.399 us or sustain us, but that it is a venue 155 00:09:18.559 --> 00:09:22.399 for creative and productive outlet. That in producing goods and 156 00:09:22.440 --> 00:09:27.000 services enhance quality of life, we can enable our dreams 157 00:09:27.039 --> 00:09:30.519 to come true, our passions are we can develop our 158 00:09:30.600 --> 00:09:33.879 skills in ways that bring tremendous meaning and joy to 159 00:09:33.960 --> 00:09:38.639 our lives. This is a productive, proactive view of human 160 00:09:38.679 --> 00:09:46.200 agency versus a reactive and I think very sedentary one 161 00:09:46.200 --> 00:09:49.120 where people are sitting still waiting for things to happen 162 00:09:49.159 --> 00:09:53.519 to them. Yes, and and and one allows for humans 163 00:09:53.559 --> 00:09:57.519 to experience great joy and meaning and dignity. And it 164 00:09:57.600 --> 00:10:03.519 reflects the created intent and character of our creator. And 165 00:10:03.600 --> 00:10:08.639 one is depressing, One leads to isolation, One leads to 166 00:10:09.360 --> 00:10:14.600 this societal malady that we're dealing with now. Work is 167 00:10:14.720 --> 00:10:17.159 not the source of our problems. It is the. 168 00:10:17.120 --> 00:10:21.120 Solution, absolutely, And it's one more aspect here where we 169 00:10:21.159 --> 00:10:24.159 can see the wisdom of God, the wisdom of the 170 00:10:24.200 --> 00:10:26.320 Bible in the sense that this is what we were 171 00:10:26.360 --> 00:10:28.559 designed for, and we know that that is a very 172 00:10:28.559 --> 00:10:31.440 effectious a matter of fact, just recently we had doctor 173 00:10:31.480 --> 00:10:34.200 Oz out there saying we need to keep people working 174 00:10:34.279 --> 00:10:37.960 longer and retiring later. So the cynics came in and said, see, 175 00:10:38.000 --> 00:10:40.799 he just doesn't want us to have a nice life, 176 00:10:41.279 --> 00:10:43.360 you know, And yet he was pointing out that study 177 00:10:43.399 --> 00:10:46.240 after study have shown that if you have a fulfilling job. 178 00:10:46.240 --> 00:10:48.480 As a matter of fact, people who are doing work 179 00:10:48.480 --> 00:10:52.320 that is not menial or reproduct typically naturally work for 180 00:10:52.360 --> 00:10:55.639 a longer period of time until health makes it impossible 181 00:10:55.679 --> 00:10:57.919 for them to do that. But if it's something like 182 00:10:58.000 --> 00:11:00.440 some kind of an intellectual pursuit or something like that 183 00:11:00.440 --> 00:11:02.639 that's a part of their work or some kind of 184 00:11:02.639 --> 00:11:05.720 creative process, they typically do work longer. And I'm thinking 185 00:11:05.759 --> 00:11:10.080 of the many conductors that I've seen who continue conducting 186 00:11:10.080 --> 00:11:13.320 the symphony works are in the eighties and nineties, and 187 00:11:13.320 --> 00:11:15.720 it keeps them young and alive. It's not just waving 188 00:11:15.759 --> 00:11:18.360 their arms around, you know, getting that kind of exercise, 189 00:11:18.720 --> 00:11:22.320 but it's something that engages their spirit and their intellect. 190 00:11:22.759 --> 00:11:25.399 And so there is a truth to that, because there 191 00:11:25.440 --> 00:11:28.039 is a truth to what God said. He designed us 192 00:11:28.519 --> 00:11:31.759 to work. He designed us to tend the garden. Work 193 00:11:31.799 --> 00:11:35.960 has become more difficult because after the Fall, God cursed 194 00:11:36.080 --> 00:11:40.559 that work, and it has now been deliberately made more difficult. 195 00:11:40.639 --> 00:11:44.440 And yet there are ways that we can still find 196 00:11:44.480 --> 00:11:47.480 our purpose in it, even if it is tainted by 197 00:11:47.559 --> 00:11:48.480 the curse of sin. 198 00:11:49.679 --> 00:11:52.960 And I will say what I think is a little 199 00:11:52.960 --> 00:11:57.600 bit more biblically precise language. In Genesis three, we don't 200 00:11:57.639 --> 00:12:02.759 generally talk about children as being cursed that there's pains 201 00:12:02.799 --> 00:12:06.960 of childbirth now, but that verse came before the in 202 00:12:07.039 --> 00:12:10.000 Genesis chapter three, the curse to the woman was the 203 00:12:10.039 --> 00:12:13.960 pains of childbirth. It was not the children. And the 204 00:12:14.000 --> 00:12:17.279 curse the curse to the man was not work. It 205 00:12:17.320 --> 00:12:19.480 was the sweat of the brow. It was the thorns 206 00:12:19.519 --> 00:12:24.240 and thistles. You're right that we're with thea in work. 207 00:12:24.320 --> 00:12:30.840 Now, hang us, I guess David, you're breaking up there 208 00:12:30.840 --> 00:12:34.279 a little bit. We can we can pull this back here. 209 00:12:35.799 --> 00:12:36.559 I'm not sure why. 210 00:12:36.799 --> 00:12:40.440 Yeah, was it breaking up when you heard atlant or 211 00:12:40.519 --> 00:12:44.200 was it just on my end? It was okay, it's 212 00:12:44.200 --> 00:12:46.159 okay now, Yeah, it was just it was cutting out. 213 00:12:46.200 --> 00:12:48.919 So we didn't get the last of that, So let's let's. 214 00:12:48.720 --> 00:12:51.320 Pick let me pick it up from the sentence before. 215 00:12:51.080 --> 00:12:52.360 We'll edit that together. Yeah. 216 00:12:53.279 --> 00:12:56.360 I think that the man that that that we talked 217 00:12:56.360 --> 00:12:59.879 about thorns and thistles, that it is a curse that 218 00:13:00.159 --> 00:13:03.600 now is going to be accompanying work, but that the 219 00:13:03.720 --> 00:13:08.360 underlying work itself remains a blessing, just like children remain 220 00:13:08.399 --> 00:13:11.759 a blessing. Sin polluted a lot of things, but in 221 00:13:11.799 --> 00:13:15.879 God's redemptive plan to restore all of us to an 222 00:13:16.080 --> 00:13:20.720 edenic condition, I believe that we air to believe that 223 00:13:20.799 --> 00:13:26.600 work itself was cursed. Work and family both predated the fall, 224 00:13:27.519 --> 00:13:31.639 and that perspective I think is important theologically. 225 00:13:31.879 --> 00:13:35.679 Yes, exactly right. Yeah, it is work is harder for 226 00:13:35.759 --> 00:13:39.000 us now, but even hard work like that, difficult work 227 00:13:39.120 --> 00:13:42.200 has its reward, you know, just like the pain of childbirth. 228 00:13:42.200 --> 00:13:44.279 And yet there is a reward of the children as well, 229 00:13:44.679 --> 00:13:47.879 And so both of those things are there. The process 230 00:13:47.960 --> 00:13:50.159 is painful, but the reward that we were built for 231 00:13:50.600 --> 00:13:53.399 is still fundamentally there is that. The basis, then, of 232 00:13:53.559 --> 00:13:56.720 a thesis of your book, Full Time Work and the 233 00:13:56.720 --> 00:13:57.679 Meaning of Life. 234 00:13:58.120 --> 00:14:01.320 It is that there is not fifty percent of people 235 00:14:01.320 --> 00:14:03.679 who are made to work and fifty percent who were 236 00:14:03.720 --> 00:14:07.759 made to consume that because all of us were made 237 00:14:07.799 --> 00:14:11.159 in the image of God, and he did this, by 238 00:14:11.200 --> 00:14:14.279 the way, because he loves us, not because he hates us. 239 00:14:15.159 --> 00:14:19.759 That we all have a ability to work. Some have 240 00:14:20.120 --> 00:14:26.440 different skills and interests and abilities and backgrounds and whatnot, 241 00:14:26.840 --> 00:14:29.720 but that there is no one God made not in 242 00:14:29.759 --> 00:14:33.080 his image. And if part of being an image bearer 243 00:14:33.080 --> 00:14:38.240 of God is the creative, productive, innovative capacity that he has, 244 00:14:38.799 --> 00:14:42.120 then this means that what I'm speaking to doesn't apply 245 00:14:42.240 --> 00:14:46.360 to just Elon Musk and Jeff Bezos. It applies to 246 00:14:46.600 --> 00:14:50.759 all of us in some capacity to go and wake 247 00:14:50.879 --> 00:14:54.799 up every day with the blessing of being able to 248 00:14:54.879 --> 00:14:58.200 be productive the four letter word we call work. 249 00:14:58.679 --> 00:15:01.679 I agree with that that's great, and we shall. I 250 00:15:01.679 --> 00:15:04.039 think we would all be better off if we had 251 00:15:04.080 --> 00:15:07.240 that perspective. Let's talk about what many of us work for, 252 00:15:07.399 --> 00:15:09.799 and that is a roof over our heads. And you 253 00:15:09.879 --> 00:15:12.679 talked about the root of the housing problem, and a 254 00:15:12.759 --> 00:15:16.480 recent article that you had. Trump's got one idea of 255 00:15:16.519 --> 00:15:19.039 how he thinks he actually He's got several. He came 256 00:15:19.120 --> 00:15:24.039 up a fifty year mortgage Life and Venture Mint to 257 00:15:24.080 --> 00:15:26.440 the mortgage company that was one of them, of course, 258 00:15:27.080 --> 00:15:31.440 manipulating interest rates. And now he's got the idea of 259 00:15:31.600 --> 00:15:35.159 prohibition of institutional investors. And you take issue with that. 260 00:15:35.200 --> 00:15:37.840 Tell us why you think that is the wrong approach 261 00:15:37.879 --> 00:15:39.639 to it, and what the real root of the housing 262 00:15:39.679 --> 00:15:40.279 problem is. 263 00:15:41.120 --> 00:15:43.519 Well, I take issue with almost all of them, although 264 00:15:43.559 --> 00:15:48.720 that one might be among the worst. We have a 265 00:15:48.759 --> 00:15:53.960 tremendous problem of inadequate supply. Housing is too expensive because 266 00:15:53.960 --> 00:15:57.600 we need more of it. And this is basic economics. 267 00:15:58.039 --> 00:16:02.480 When supply stays level but the demand curve moves up, 268 00:16:03.000 --> 00:16:06.000 then you get higher prices, and so you need an 269 00:16:06.039 --> 00:16:10.519 equilibrium between supply and demand in order to avoid prices 270 00:16:10.720 --> 00:16:14.679 going higher, let alone higher than the rate of inflation itself. 271 00:16:15.320 --> 00:16:19.399 House prices have outpaced wage growth and job growth and 272 00:16:19.480 --> 00:16:23.200 economic growth for some time, and that is unsustainable and 273 00:16:23.240 --> 00:16:30.000 it creates an affordability price problem. Vice President Kamala Harris, 274 00:16:30.039 --> 00:16:32.639 when she was running for president, said we'll all address 275 00:16:32.679 --> 00:16:39.480 the affordability issue by giving every American twenty five thousand dollars. 276 00:16:40.000 --> 00:16:43.200 President Trump has said, or every American wants to buy 277 00:16:43.200 --> 00:16:46.200 a first time home. President Trump said, I'm going to 278 00:16:47.399 --> 00:16:51.960 address it by having Fanny and Freddy buy a ton 279 00:16:52.200 --> 00:16:56.039 of mortgage bonds, so it creates more supply of mortgage 280 00:16:56.039 --> 00:17:02.039 financing and pushes interest rates down. Both things feed demand 281 00:17:02.840 --> 00:17:07.559 but do nothing about supply. And when he talks about supply, 282 00:17:07.880 --> 00:17:11.039 he says, the institutional people that have come in and 283 00:17:11.119 --> 00:17:16.279 built new homes and bought homes have now made it 284 00:17:16.359 --> 00:17:21.240 more unaffordable. The reality is, first of all, the largest 285 00:17:21.279 --> 00:17:25.960 institutional holder owns about sixty thousand homes, thirty thousand that 286 00:17:26.039 --> 00:17:28.960 they own to sell, thirty thousand they owned a rent. 287 00:17:29.480 --> 00:17:35.279 This is in a nation with ninety million homes. Some 288 00:17:35.359 --> 00:17:39.839 of the cities with the worst home price appreciation meaning 289 00:17:39.880 --> 00:17:44.920 the lowest, have the highest level of institutional ownership. Some 290 00:17:45.000 --> 00:17:48.839 of the cities that have the highest home price appreciation 291 00:17:49.279 --> 00:17:55.359 and the biggest unaffordability problem have no institutional ownership. So 292 00:17:55.559 --> 00:17:59.599 there's no real empirical evidence that this is a factor 293 00:17:59.680 --> 00:18:03.880 at all. But what it does do is tell Americans 294 00:18:03.920 --> 00:18:06.640 who they're allowed to buy and sell their home to 295 00:18:06.759 --> 00:18:11.400 and from. Yeah, exactly, it's just outrageous, and so it's 296 00:18:11.400 --> 00:18:14.519 not only not addressing the problem, but it is a 297 00:18:14.559 --> 00:18:18.319 solution that is outside of market principles that most of 298 00:18:18.400 --> 00:18:20.960 us on the right have believed in for a long time. 299 00:18:21.279 --> 00:18:24.519 That's right, And you point out your article American Enterprise 300 00:18:24.559 --> 00:18:27.119 Institute going through and looking at the data behind it, 301 00:18:27.359 --> 00:18:31.160 that eighty percent of all institutionally owned homes exist in 302 00:18:31.319 --> 00:18:36.240 just five percent of US counties. So again, that's not 303 00:18:36.319 --> 00:18:39.799 the systemic issue for prices because they're seeing this everywhere. 304 00:18:40.119 --> 00:18:42.920 And he also point out that not a single country 305 00:18:42.920 --> 00:18:47.079 in America has even has ten percent institutional ownership share, 306 00:18:47.720 --> 00:18:51.880 so clearly, yeah, that's not the issue, clearly when you 307 00:18:51.920 --> 00:18:56.319 look at the numbers. But again, what he's talking about 308 00:18:56.359 --> 00:18:58.640 doing is, as you point out, is going to feed demand. 309 00:18:58.920 --> 00:19:01.960 I look at this in a sense like the car issue, 310 00:19:02.039 --> 00:19:04.279 you know, look at how unaffordable cars they've gotten. I 311 00:19:04.319 --> 00:19:08.799 talked about this week the electric vehicles and how they 312 00:19:08.799 --> 00:19:11.759 were bragging that this new type of electric vehicle would 313 00:19:11.759 --> 00:19:14.839 be priced at under sixty thousand dollars. I thought, how 314 00:19:14.880 --> 00:19:18.519 is that a selling feature that's so incredibly expensive. I 315 00:19:18.519 --> 00:19:21.279 went back and I looked at the average car price 316 00:19:21.559 --> 00:19:25.200 and adjusted it for inflation, and that's going from nineteen 317 00:19:25.279 --> 00:19:28.960 seventy four, so the last fifty years or so, that 318 00:19:29.119 --> 00:19:32.559 is double what it would be if you just adjusted 319 00:19:32.599 --> 00:19:35.640 for the inflation for the devaluation of the dollar, and 320 00:19:35.720 --> 00:19:37.640 so there's something else going on here. We know that 321 00:19:37.680 --> 00:19:41.400 the price of cars, it's not like it has a 322 00:19:41.440 --> 00:19:46.240 supply issue. It's really a pricing issue, because the car 323 00:19:46.279 --> 00:19:48.799 manufacturers would be more than happy to ramp this up. 324 00:19:49.480 --> 00:19:52.000 But it's all the regulations that are put onto the 325 00:19:52.039 --> 00:19:54.759 cars are making it very expensive. What about the regulations 326 00:19:55.279 --> 00:19:57.519 that make houses more expensive, because they've got a lot 327 00:19:57.519 --> 00:20:00.519 of mandated stuff with regulations. From that standpoint as well, 328 00:20:00.640 --> 00:20:04.240 how does that affect the supply side in your view, Well, it's. 329 00:20:04.079 --> 00:20:06.400 A huge issue. And it doesn't just affect the supply 330 00:20:06.519 --> 00:20:10.079 side in getting priced in. It affects the supply side 331 00:20:10.200 --> 00:20:13.759 in not getting new supply because some of these regulations 332 00:20:13.799 --> 00:20:19.279 are so expensive that they simply cannot build, and or 333 00:20:19.319 --> 00:20:22.839 they it takes so long to build that you end 334 00:20:22.920 --> 00:20:27.720 up not keeping up with growing demand. There's a few 335 00:20:27.799 --> 00:20:29.839 things that all played into this, and I'll do this 336 00:20:29.960 --> 00:20:34.440 very quickly for your listeners. But you had the financial crisis. 337 00:20:34.480 --> 00:20:38.279 There was a big glut of supply relative to demand, 338 00:20:38.319 --> 00:20:41.200 and when the bubble burst, it was very difficult to 339 00:20:41.200 --> 00:20:44.640 get capital investment into housing, and then they came into 340 00:20:44.720 --> 00:20:47.640 a lot of new regulations about the banks what they 341 00:20:47.640 --> 00:20:50.759 were and weren't allowed to do, and so there was 342 00:20:50.799 --> 00:20:53.640 so much excess inventory that had to be worked through 343 00:20:53.960 --> 00:20:56.920 as millions of Americans had bought homes they couldn't afford, 344 00:20:57.400 --> 00:20:59.680 so that was going to set everything back a few years. 345 00:21:00.000 --> 00:21:01.680 Made a lot of sense why there wouldn't be a 346 00:21:01.680 --> 00:21:04.200 lot of people lining up to build new homes in 347 00:21:04.240 --> 00:21:08.839 the immediate aftermath of the financial crisis. But then combined 348 00:21:08.880 --> 00:21:14.359 with that, demographically at the time, we had millennials becoming 349 00:21:14.559 --> 00:21:19.519 adult age and normally would be buying a home starting 350 00:21:19.519 --> 00:21:23.359 a family. But they were getting married five years, ten 351 00:21:23.480 --> 00:21:28.599 years later than their parents did. They were having kids five, ten, 352 00:21:28.799 --> 00:21:33.279 twelve years later. So it put a big increase of 353 00:21:33.359 --> 00:21:38.680 demand on multifamily homes and a big decrease in demand 354 00:21:38.799 --> 00:21:42.039 on single family But then a few more years go by, 355 00:21:42.119 --> 00:21:44.119 it turns out they do want to get married, they 356 00:21:44.119 --> 00:21:46.160 do want of kids, even though they're now into their 357 00:21:46.200 --> 00:21:49.839 thirties instead of their twenties, and so that is what 358 00:21:49.920 --> 00:21:54.400 it is. But lo and behold. Now the housing crisis 359 00:21:54.440 --> 00:21:58.599 purge is long gone. A lot of millennials have gotten older. 360 00:21:58.839 --> 00:22:03.200 There's a huge demand for single family housing, but we 361 00:22:03.279 --> 00:22:07.240 haven't built any new homes in ten years. Then the 362 00:22:07.279 --> 00:22:12.000 COVID moment happens. Interest rates go to zero. There's tons 363 00:22:12.039 --> 00:22:15.839 of demand, low price financing. Everybody wants to move to 364 00:22:15.880 --> 00:22:19.799 a bigger home, and we don't have the supply. It 365 00:22:19.920 --> 00:22:23.119 pushes prices up. Now you have a ton of people 366 00:22:23.279 --> 00:22:26.480 own homes at very low interest rates and they don't 367 00:22:26.480 --> 00:22:28.680 want to sell. They think they've made a bunch of 368 00:22:28.680 --> 00:22:31.599 money on their home. But now all of the young 369 00:22:31.640 --> 00:22:34.240 people entering the workforce can't afford to buy a home. 370 00:22:35.000 --> 00:22:38.200 There's three or four things involved there. Some are more 371 00:22:38.279 --> 00:22:41.680 dominant than others, but I put all of them together 372 00:22:41.759 --> 00:22:44.720 to say it isn't a simplistic thing. People that want 373 00:22:44.720 --> 00:22:48.640 to blame Blackstone for the housing crisis, or blame Fanny 374 00:22:48.720 --> 00:22:52.359 Free for the unaffordability thing, or just blame the FED 375 00:22:52.480 --> 00:22:55.440 or whatever. There's a lot of different things going on here. 376 00:22:55.480 --> 00:22:59.880 But the fundamental solution is that you don't have enough supply. 377 00:23:00.519 --> 00:23:03.839 And where you do have states that didn't give in 378 00:23:03.960 --> 00:23:08.519 to SEKA and the environmental regulations and burden some permitting 379 00:23:08.640 --> 00:23:12.240 and zoning requirements. They were able to keep in front 380 00:23:12.240 --> 00:23:14.799 of it by building a lot of new supply. Now 381 00:23:14.839 --> 00:23:18.279 house price has got more expensive in Phoenix and Dallas 382 00:23:18.359 --> 00:23:22.680 and Charlotte and Miami and Nashville too, even though they 383 00:23:22.680 --> 00:23:27.039 were much better behaved states about building new supply. But 384 00:23:27.119 --> 00:23:31.880 that's because their demand was huge. And so thank god 385 00:23:32.000 --> 00:23:34.000 they built a lot of new supply because they had 386 00:23:34.000 --> 00:23:35.839 a lot of new demand because a lot of people 387 00:23:35.920 --> 00:23:39.160 left blue states to move to red states that were 388 00:23:39.200 --> 00:23:40.440 behaving themselves. 389 00:23:40.759 --> 00:23:44.440 Yeah. Yeah, we look at building code, you know, you 390 00:23:44.480 --> 00:23:47.200 look at building code and the massive expansion of regulations. 391 00:23:47.240 --> 00:23:50.759 There are much of that being driven by Washington, you know, 392 00:23:50.839 --> 00:23:53.400 pushing out regulations for people, you know, do this, do that. 393 00:23:53.720 --> 00:23:55.359 It's going to be greener if you do this. And 394 00:23:55.400 --> 00:23:58.000 so there's a lot of those types of things that 395 00:23:58.039 --> 00:23:59.640 are there. And when you talk about you brought up 396 00:24:00.119 --> 00:24:03.359 the concern about Blackstone, and people get Blackstone and Blackrock 397 00:24:03.559 --> 00:24:06.440 mixed up and you point that out. But I think 398 00:24:07.240 --> 00:24:12.079 that kind of plays into people's suspicion because Blackrock made 399 00:24:12.119 --> 00:24:15.599 so much money out of the derivatives market that created 400 00:24:15.599 --> 00:24:17.359 the real estate crash, that was at the heart of 401 00:24:17.400 --> 00:24:19.559