1 00:00:16,600 --> 00:00:19,320 Speaker 1: And we are back with another edition of the Federalist 2 00:00:19,399 --> 00:00:23,120 Radio Hour. I'm Matt Kittle, senior Elections correspondent at the 3 00:00:23,120 --> 00:00:27,920 Federalist and your experienced Shirpa on today's quest for Knowledge. 4 00:00:28,359 --> 00:00:31,160 As always, you can email the show at radio at 5 00:00:31,199 --> 00:00:35,320 the Federalist dot com, follow us on ex at FDR LST. 6 00:00:35,880 --> 00:00:38,759 Make sure to subscribe wherever you download your podcast, and 7 00:00:38,880 --> 00:00:42,159 of course to the premium version of our website as well. 8 00:00:42,560 --> 00:00:47,520 Our guest today is Phil Kirpin, principle at Unleash Prosperity. 9 00:00:48,039 --> 00:00:51,759 Phil joins us to discuss what arguably is the number 10 00:00:51,799 --> 00:00:57,799 one economic issue in America today, the prohibitedly high cost 11 00:00:57,960 --> 00:01:01,880 of owning a home for two many Americans. Phil, thank 12 00:01:01,880 --> 00:01:04,519 you so much for joining us on this extremely timely 13 00:01:04,519 --> 00:01:05,400 and urgent topic. 14 00:01:06,159 --> 00:01:08,319 Speaker 2: Hey, my pleasure, Matt, Thanks for having me you bet. 15 00:01:08,599 --> 00:01:12,000 Speaker 1: Phil, by the way, is also a nationally syndicated columnist. 16 00:01:12,040 --> 00:01:14,640 You can read him in a lot of different places 17 00:01:14,680 --> 00:01:17,640 these days. I believe you're still chairman of the Internet 18 00:01:17,680 --> 00:01:19,280 to Freedom Coalition. Is that correct? 19 00:01:20,920 --> 00:01:23,040 Speaker 2: Yeah? I mean we haven't done much with that particular 20 00:01:23,120 --> 00:01:25,040 vehicle in a while, but I would say yes, I 21 00:01:25,040 --> 00:01:26,040 think it still exists. 22 00:01:26,319 --> 00:01:29,680 Speaker 1: Yes, and the author of the Grade twenty eleven book 23 00:01:30,040 --> 00:01:33,040 Democracy Denied. In fact, if we get a chance to 24 00:01:33,359 --> 00:01:36,079 on this edition to the Federalist Radio Hour, we'll talk 25 00:01:36,120 --> 00:01:39,079 a little bit about that, what Phil was writing about 26 00:01:39,120 --> 00:01:42,959 at the time, and what the leftists are saying today 27 00:01:43,200 --> 00:01:47,840 about democracy being denied. I think it's an interesting perspective 28 00:01:48,680 --> 00:01:54,359 these many years later. Let's begin here. Treasury Secretary Scott 29 00:01:54,719 --> 00:02:01,799 Best argued the biggest hindrance for housing is mortgage rates. 30 00:02:02,079 --> 00:02:04,920 If the FED brings down mortgage rates, then they can 31 00:02:05,079 --> 00:02:09,840 end this housing recession. And what we have are some 32 00:02:09,919 --> 00:02:13,360 really troubling numbers. Households in their thirties have an ownership 33 00:02:13,439 --> 00:02:17,599 rate just forty two percent. That's more than twenty percent lower, 34 00:02:17,639 --> 00:02:20,719 a twenty points lower than the national average. And now 35 00:02:20,719 --> 00:02:23,599 the median age of all home buyers is a record 36 00:02:23,639 --> 00:02:27,280 breaking fifty nine, and the age of a first time 37 00:02:27,319 --> 00:02:31,639 buyer is forty, up from twenty nine in nineteen eighty one. 38 00:02:32,560 --> 00:02:35,400 This has a lot of moving parts to it. But Phil, 39 00:02:35,919 --> 00:02:39,599 do you agree with the Treasury Secretary? 40 00:02:40,280 --> 00:02:43,319 Speaker 2: Well, I'm not sure you can lay the blame squarely 41 00:02:43,400 --> 00:02:45,840 on the Fed. One of the things we've seen in 42 00:02:45,879 --> 00:02:47,520 the last couple of years is that even when the 43 00:02:47,520 --> 00:02:50,199 FED cuts the short term rates that they control the 44 00:02:50,240 --> 00:02:53,639 overnight rate, the long term rates don't necessarily go down, 45 00:02:53,680 --> 00:02:56,680 and in fact, they've gone up with most of the 46 00:02:56,680 --> 00:02:59,639 FED cuts because the long term rates are really keyed 47 00:02:59,719 --> 00:03:03,039 to inflation expectations. And one of the challenges that we've 48 00:03:03,080 --> 00:03:07,120 got is, you know, there's no fiscal discipline at all. 49 00:03:07,479 --> 00:03:11,639 And the reason we had, you know, the reason we 50 00:03:11,680 --> 00:03:14,400 had the huge inflation episode that we did under Biden 51 00:03:14,400 --> 00:03:17,680 in particular, is we spent an extra six trillion dollars 52 00:03:17,680 --> 00:03:19,759 on COVID and we didn't really come back down from 53 00:03:19,800 --> 00:03:23,599 that or not fully. And so you know, if you 54 00:03:24,000 --> 00:03:27,639 juice the economy in the short term with lower interest rates, 55 00:03:27,680 --> 00:03:29,919 but you don't have any fiscal discipline, and the longer 56 00:03:30,039 --> 00:03:33,199 term inflation expectations might actually go up rather than down, 57 00:03:33,639 --> 00:03:35,960 and long term rates might therefore go up rather than down. 58 00:03:36,000 --> 00:03:38,800 So it's more complicated, in my opinion than just you 59 00:03:38,840 --> 00:03:42,439 can blame the FED. I think the principal blame should 60 00:03:42,439 --> 00:03:45,879 be placed on Congress for getting no control on spending. 61 00:03:46,000 --> 00:03:48,560 And so I don't necessarily agree with that aspect of 62 00:03:48,560 --> 00:03:52,000 what the Secretary said, but I do think he's right 63 00:03:52,120 --> 00:03:56,520 that when you've got you've got a huge percentage of 64 00:03:56,599 --> 00:03:59,199 people who are in homes with interest rates that are 65 00:03:59,280 --> 00:04:03,080 much lower than the current prevailing rates. That makes people 66 00:04:03,159 --> 00:04:05,199 very unlikely to sell, and that's why one of the 67 00:04:05,199 --> 00:04:08,120 reasons you have so little inventory, because if you've got 68 00:04:08,120 --> 00:04:10,000 to sell your house where you've got a two or 69 00:04:10,000 --> 00:04:13,159 three percent interest rate and buy a house at six 70 00:04:13,199 --> 00:04:15,919 percent plus, you can't afford to buy a house at 71 00:04:15,919 --> 00:04:18,079 the same price that you're selling yours for, most likely 72 00:04:18,120 --> 00:04:20,720 because the monthly payment's going to be so much higher. 73 00:04:20,720 --> 00:04:23,959 And so they've talked about maybe doing some form of 74 00:04:24,040 --> 00:04:27,480 portability or assumability, or doing something so that the rate 75 00:04:27,680 --> 00:04:31,519 persists after you have a sale. It'll be interesting to 76 00:04:31,519 --> 00:04:33,240 see if they can, you know, can figure out a 77 00:04:33,240 --> 00:04:35,959 way to make that workable, because otherwise we're not really 78 00:04:35,959 --> 00:04:38,160 going to see the market on freeze unless we see 79 00:04:38,480 --> 00:04:40,519 rates come down a lot. But I don't think it's 80 00:04:40,560 --> 00:04:42,759 as simple as the FED cuts and the mortgage rates 81 00:04:42,800 --> 00:04:44,639 go down. I don't think we're likely to see rates 82 00:04:44,639 --> 00:04:46,720 as low as what a lot of people have right 83 00:04:46,759 --> 00:04:48,720 now anytime in the near future. 84 00:04:49,000 --> 00:04:51,319 Speaker 1: Yeah, I agree with you one hundred percent. I think 85 00:04:51,319 --> 00:04:54,839 this is a multi headed Gorgan, a monster of a 86 00:04:54,920 --> 00:04:57,759 problem that has been building for for many, many years. 87 00:04:57,759 --> 00:05:02,360 But just to remain on the FED chair Jerome Powell 88 00:05:02,399 --> 00:05:04,920 right now, could he in your estimation, could he have 89 00:05:05,000 --> 00:05:09,759 acted faster as the President has said throughout this year. 90 00:05:11,240 --> 00:05:14,639 Speaker 2: Well, I think FED policy has been has been pretty 91 00:05:14,720 --> 00:05:17,160 terrible under Jerome Powell. You know, even if you judge 92 00:05:17,199 --> 00:05:20,800 him by his own measure of inflation within a symmetric 93 00:05:20,920 --> 00:05:25,959 range around two percent on the PCE, he's actually accomplished 94 00:05:25,959 --> 00:05:29,079 that one time out of his I think seventy nine 95 00:05:29,639 --> 00:05:32,480 twelve month periods since he's been in. So if you start, 96 00:05:32,560 --> 00:05:34,160 you know, after he'd been in for twelve months, you 97 00:05:34,600 --> 00:05:37,319 don't have to blame him for what came before. He's 98 00:05:37,360 --> 00:05:39,759 only hit his own target once and on a rolling 99 00:05:39,759 --> 00:05:42,839 twelve month period. So he's batting I think zero thirty 100 00:05:42,959 --> 00:05:46,279 something like that on his own metric, on his own standard, 101 00:05:46,319 --> 00:05:49,839 he's failed completely. So I think they've done a pretty 102 00:05:49,879 --> 00:05:53,959 poor job of sort of explaining and establishing the basis 103 00:05:54,040 --> 00:05:56,279 on which they're making policy and then sticking to it. 104 00:05:56,360 --> 00:06:01,240 Now I'm not sure that I'm not sure that monetary 105 00:06:01,240 --> 00:06:03,480 policy could have achieved what his goal was in light 106 00:06:03,519 --> 00:06:05,879 of what was happening on the fiscal side. But I 107 00:06:05,879 --> 00:06:08,079 think you can really only judge someone by the standards 108 00:06:08,079 --> 00:06:10,560 they established for themselves, and you know, by that standard, 109 00:06:10,800 --> 00:06:14,839 he's really failed. Now, the question of what FED policy 110 00:06:14,839 --> 00:06:17,800 should be, you know, that's tricky. I mean, I'm not 111 00:06:18,079 --> 00:06:20,199 someone who thinks that the job of the Federal Reserve 112 00:06:20,519 --> 00:06:22,800 is to you know, save us all from ourselves and 113 00:06:22,839 --> 00:06:25,680 smooth out the business cycle and micro manage the economy 114 00:06:25,759 --> 00:06:27,639 or any of that. I'm more sort of the Milton 115 00:06:27,639 --> 00:06:32,279 Friedman school that they should just have a known predictable 116 00:06:32,720 --> 00:06:35,680 rate of growth of money supply and otherwise leave everything alone. 117 00:06:35,759 --> 00:06:38,000 And you know, I think Milton said you could replace 118 00:06:38,000 --> 00:06:40,040 the FED with a computer. That sounds pretty good to me. 119 00:06:40,519 --> 00:06:43,399 So I'm not you know, I'm not likely to ever 120 00:06:43,439 --> 00:06:46,839 give any FED chair high grades just because you know, 121 00:06:46,879 --> 00:06:50,240 the way they operate the thing is, there's so much 122 00:06:50,319 --> 00:06:52,319 arbitrary iness in it compared to the way I think 123 00:06:52,319 --> 00:06:53,120 it should be done. 124 00:06:53,439 --> 00:06:55,319 Speaker 1: I'll be careful now. You know, there are some AI 125 00:06:55,480 --> 00:06:58,040 folks out there who are really pinning all of their 126 00:06:58,040 --> 00:07:00,199 hopes on that technology. They might just take you up 127 00:07:00,199 --> 00:07:02,920 on that. In Milton Friedman's offer, to have. 128 00:07:03,519 --> 00:07:05,759 Speaker 2: Yeah, he said that it should be replaced by a computer, 129 00:07:05,959 --> 00:07:08,639 you know, fifty years ago when computer's continue. 130 00:07:08,360 --> 00:07:12,360 Speaker 1: Yeah right now, yeah, on a Texas instrument computer back then, 131 00:07:12,439 --> 00:07:16,319 of course, or certainly long before we had our smartphones. 132 00:07:16,480 --> 00:07:19,000 Now you noted before. And I think this is a 133 00:07:19,120 --> 00:07:24,759 huge point. Congress once again abdicating its responsibility. But then again, Phil, 134 00:07:24,800 --> 00:07:26,720 what is new. I mean, if you want to look 135 00:07:26,720 --> 00:07:30,600 at all kinds of problems in America, Congress has a 136 00:07:30,600 --> 00:07:33,680 big share of the blame for that. It's because over 137 00:07:33,920 --> 00:07:39,360 many years in the Leviathan that is this you know, 138 00:07:40,000 --> 00:07:45,920 bureaucracy state, this administrative state, it has abdicated its responsibility 139 00:07:45,959 --> 00:07:48,800 at every turn and allowed to Yeah. 140 00:07:49,279 --> 00:07:50,639 Speaker 2: Here's the thing, here's the thing. 141 00:07:50,879 --> 00:07:51,560 Speaker 1: Yeah, you can. 142 00:07:51,680 --> 00:07:54,000 Speaker 2: You can pass the Fed to Reserve Act and say, oh, 143 00:07:54,079 --> 00:07:56,759 now the Fed is in charge of, you know, maintaining 144 00:07:56,800 --> 00:07:58,720 the value of the dollar or whatever. Okay, you can 145 00:07:58,759 --> 00:08:02,120 do that. But if you spend so much money that 146 00:08:02,160 --> 00:08:05,079 you run a two trillion dollar deficit every year and 147 00:08:05,319 --> 00:08:08,800 there isn't enough real demand for that debt from the 148 00:08:08,800 --> 00:08:10,600 rest of the world, and the FED ends up buying 149 00:08:10,639 --> 00:08:12,920 it and monetizing it, and the price of everything goes 150 00:08:13,000 --> 00:08:16,279 up as a consequence. I mean, yeah, you can say, oh, 151 00:08:16,279 --> 00:08:17,920 it wasn't us, it was the FED, but you know, 152 00:08:18,199 --> 00:08:20,639 you're still responsible in my judgment. And you know the 153 00:08:21,879 --> 00:08:24,639 whole episode that we had under COVID, and it should 154 00:08:24,680 --> 00:08:27,959 be such an object lesson for the American people because 155 00:08:28,160 --> 00:08:30,680 we spent an extra six trillion dollars or so above 156 00:08:30,759 --> 00:08:34,799 the already bloated federal budget and you know, pandemic response measures, 157 00:08:35,200 --> 00:08:38,320 and about ninety percent of that was just printed money 158 00:08:38,320 --> 00:08:40,039 from the Fed. It just went on the FED balance 159 00:08:40,080 --> 00:08:42,039 sheet and they printed the money, and we all saw 160 00:08:42,080 --> 00:08:44,559 the consequence. The price of everything up went up twenty 161 00:08:44,600 --> 00:08:47,759 percent or more. And so you would hope that people 162 00:08:47,799 --> 00:08:50,240 could connect those dots and say, wait a second, if 163 00:08:50,240 --> 00:08:51,879 we want things to be more affordable, we need to 164 00:08:51,879 --> 00:08:55,279 cut federal spending. We can't just have these massive deficits 165 00:08:55,279 --> 00:08:57,759 that are financed essentially by money printing. And you would 166 00:08:57,799 --> 00:09:00,320 hope they would blame Congress, that they wouldn't just blame 167 00:09:00,399 --> 00:09:02,720 the FED, and we'd get some spending cuts. But it's 168 00:09:02,720 --> 00:09:04,600 hard to be optimistic, Matt when you do you have 169 00:09:04,639 --> 00:09:06,480 a spending fight like the one we're in right now, 170 00:09:06,799 --> 00:09:09,360 where the Republicans say, oh, we want to extend current 171 00:09:09,399 --> 00:09:12,159 spending levels that the you know that Biden said in 172 00:09:12,200 --> 00:09:15,279 his budget, and the Democrats say, oh my god, that's horrible. 173 00:09:15,279 --> 00:09:17,159 Everyone's going to starve and die. We need to shut 174 00:09:17,159 --> 00:09:19,480 down the government unless we can get a one point 175 00:09:19,480 --> 00:09:23,039 five trillion dollars spending increase on top of the Biden levels. 176 00:09:23,039 --> 00:09:25,039 And so like, you know, people are celebrating the oh 177 00:09:25,080 --> 00:09:26,919 the Democrats cave. Then we got a c R and 178 00:09:26,960 --> 00:09:29,480 it's like, okay, but that was at a very high 179 00:09:29,559 --> 00:09:32,159 spending level. And the fact that the day was between 180 00:09:32,159 --> 00:09:34,919 continuing where we were and raising it as opposed to 181 00:09:35,080 --> 00:09:37,279 cutting it is not a very good sign. Yeah. 182 00:09:37,320 --> 00:09:39,200 Speaker 1: I was going to say, what did do we learn 183 00:09:39,320 --> 00:09:43,679 as Americans? Because ultimately, you know, we can blame Congress too, 184 00:09:43,919 --> 00:09:46,360 but we're the people who keep putting these people in 185 00:09:46,480 --> 00:09:53,799 power like that, I say, we you know, I've tried 186 00:09:53,840 --> 00:09:57,200 to elect viscal conservatives. I lived in Wisconsin for a 187 00:09:57,320 --> 00:10:02,120 very long time. I tried to elect conservatives in Madison, Wisconsin, 188 00:10:02,279 --> 00:10:06,039 which was a quixotic, fools error. It was never going 189 00:10:06,080 --> 00:10:08,879 to happen, you know, and the United States as some 190 00:10:08,919 --> 00:10:10,360 of that as well. But you're right, we just went 191 00:10:10,399 --> 00:10:15,039 through this battle where the argument what the Democrats the 192 00:10:15,120 --> 00:10:19,039 hill they were dying on was we need to extend 193 00:10:19,399 --> 00:10:24,600 indefinitely the hundreds and hundreds of billions of dollars for 194 00:10:24,679 --> 00:10:29,799 subsidies for people who are earning middle to high middle 195 00:10:29,879 --> 00:10:35,240 class wages so that they can get Obama Care subsidies 196 00:10:35,279 --> 00:10:42,200 and a healthcare system that has failed miserably. So when 197 00:10:42,240 --> 00:10:44,720 are people going to wake up to this? Eventually? When 198 00:10:44,960 --> 00:10:47,279 we have to put a foreclosed sign on the country. 199 00:10:48,159 --> 00:10:50,480 Speaker 2: Yeah, that's a pretty interesting one. They actually started asking 200 00:10:50,519 --> 00:10:51,960 for a lot more than that, you know, when I 201 00:10:52,000 --> 00:10:54,480 say one point five trillion. They also wanted to repeal 202 00:10:54,480 --> 00:10:56,320 a bunch of things to the one big beautiful bill 203 00:10:56,360 --> 00:10:59,480 and get rid of income eligibility checks and medicaids they 204 00:10:59,480 --> 00:11:01,279 can put it eagles back on the rolls, and they 205 00:11:01,320 --> 00:11:03,279 had a whole sort of waundry list. But yeah, by 206 00:11:03,279 --> 00:11:06,120 the end of it, they were really obsessed with this 207 00:11:06,200 --> 00:11:10,720 idea of making the COVID credits, the timber enhanced subsidies 208 00:11:10,720 --> 00:11:13,879 in Obamacare either permanent or I think by the end 209 00:11:13,879 --> 00:11:16,240 Schumer would have taken a one year extension or something 210 00:11:16,320 --> 00:11:18,679 like that, and they ended up not even getting that. 211 00:11:18,720 --> 00:11:21,679 But it wasn't interesting. It wasn't interesting thing for them 212 00:11:21,679 --> 00:11:24,759 to really focus and key in on, right, because they 213 00:11:24,799 --> 00:11:28,039 created this Obamacare program, and they of course said that 214 00:11:28,039 --> 00:11:30,559 it would be wonderful affordable care for everyone. The Patient 215 00:11:30,600 --> 00:11:33,279 Protection and Affordable Care Act one of the most hilariously 216 00:11:33,320 --> 00:11:38,519 misnamed pieces of legislation in American history, and it was 217 00:11:38,519 --> 00:11:41,440 failing pretty spectacularly. And the reasons it was failing had 218 00:11:41,480 --> 00:11:44,200 nothing to do with COVID, But they use the excuse 219 00:11:44,279 --> 00:11:47,960 of COVID to say, well, we need to throw more 220 00:11:48,000 --> 00:11:51,279 subsidies on top. The original subsidy structure went up to 221 00:11:51,320 --> 00:11:53,799 four hundred percent of the federal poverty level at the top, 222 00:11:53,840 --> 00:11:56,240 and then it had a cap and at the bottom, 223 00:11:56,240 --> 00:11:58,600 people who were very poor one hundred and fifty percent 224 00:11:58,639 --> 00:12:00,639 of federal poverty or below, they only had to pay 225 00:12:00,639 --> 00:12:03,240 two percent of their income towards premiums, and then taxpayers 226 00:12:03,240 --> 00:12:05,559 picked up the rest. What they did during COVID is 227 00:12:05,600 --> 00:12:06,840 they said, you know what, we're going to get rid 228 00:12:06,879 --> 00:12:08,639 of this income limit at the top. We're going to 229 00:12:08,720 --> 00:12:11,000 go unlimited. So no matter how much money you make, 230 00:12:11,320 --> 00:12:13,720 you only pay eight and a half percent maximum of 231 00:12:13,720 --> 00:12:17,240 your income towards premiums. Then taxpayers will pick up the rest. 232 00:12:17,279 --> 00:12:19,440 And so they extended subsidies all the way up to 233 00:12:19,480 --> 00:12:21,960 people making you know, two hundred thousand dollars or so, 234 00:12:22,360 --> 00:12:24,519 maybe a little more in some very high cost areas, 235 00:12:25,080 --> 00:12:27,159 and at the bottom they got rid of the two percent. 236 00:12:27,240 --> 00:12:29,720 They say, we're going to make it zero. Well, you know, 237 00:12:29,759 --> 00:12:32,279 when you make it zero, you get millions of people 238 00:12:32,320 --> 00:12:34,200 signed up who don't value it, who don't want it, 239 00:12:34,200 --> 00:12:36,960 who might not even exist if it's just unscrupulous brokers 240 00:12:37,000 --> 00:12:39,559 signing them up to get commissions. And so we've seen 241 00:12:39,600 --> 00:12:42,360 millions and millions of people put on these roles who 242 00:12:42,440 --> 00:12:45,480 file no claims, and you know, some of them maybe 243 00:12:45,480 --> 00:12:47,960 they just didn't get any healthcare that year. But you know, 244 00:12:48,039 --> 00:12:50,440 this is not traditional insurance where if you don't get sick, 245 00:12:50,480 --> 00:12:52,240 you're not going to use it. This is you know, 246 00:12:52,279 --> 00:12:54,600 annual physicals. There's a whole list of things that they 247 00:12:54,799 --> 00:12:58,080 kick in before deductible. So it's very unusual for there 248 00:12:58,080 --> 00:12:59,759 to be no claims. And yet we've got millions of 249 00:12:59,759 --> 00:13:01,840 people with no claim So the fraud R eight went 250 00:13:02,399 --> 00:13:04,960 off the chart essentially, which you would expect with zero 251 00:13:05,720 --> 00:13:08,759 premium payments at the low end and so Republicans have 252 00:13:08,840 --> 00:13:11,639 basically said, you know, we want this to expire or 253 00:13:11,679 --> 00:13:13,600 at least to be reformed. We don't think there should 254 00:13:13,639 --> 00:13:15,720 be zero income cap at the top, we don't think 255 00:13:15,720 --> 00:13:18,639 there should be zero premium payments at the bottom. And 256 00:13:18,840 --> 00:13:23,720 Democrats acted like this was you know, that everyone was 257 00:13:23,759 --> 00:13:26,240 going to die, essentially, which is their favorite go to move. 258 00:13:26,279 --> 00:13:29,120 They went crazy, the media went crazy, and I actually 259 00:13:29,159 --> 00:13:32,320 think they miscalculated. I think they misplayed their hand because 260 00:13:32,559 --> 00:13:34,960 this is the kind of thing that Republicans in Congress 261 00:13:35,000 --> 00:13:37,080 typically just cave on at the end of the year 262 00:13:37,120 --> 00:13:40,440 and they as an annual ritual, and now they focus 263 00:13:40,519 --> 00:13:42,360 so much attention on it. I think we've actually been 264 00:13:42,360 --> 00:13:44,600 able to educate a lot of the Republican members to 265 00:13:44,600 --> 00:13:46,519 the point where they won't just say yes, and they 266 00:13:46,600 --> 00:13:49,759 either won't extend it or it'll be substantially reformed if 267 00:13:49,799 --> 00:13:52,159 it does get extended. So I'm actually much more optimistic 268 00:13:52,240 --> 00:13:55,279 now on the Obamacare issue than I was before the shutdown. 269 00:13:59,200 --> 00:14:01,919 Speaker 3: New York's Knew Day or zor on Mom Donnie claims 270 00:14:01,919 --> 00:14:05,639 the taxation isn't theft, what capitalism is The Watch Dout 271 00:14:05,679 --> 00:14:08,639 on Wall Street podcast with Chris Markowski every day, Chris 272 00:14:08,639 --> 00:14:11,440 helps unpack the connection between politics and the economy and 273 00:14:11,480 --> 00:14:14,120 how it affects your wallet. Does Mom Donnie think every 274 00:14:14,200 --> 00:14:17,279 business owner is stealing from their workers and he's supposed 275 00:14:17,320 --> 00:14:20,039 to lead the business capital of the world. Whether it's 276 00:14:20,039 --> 00:14:22,240 happening in DC or down on Wall Street, it's affecting 277 00:14:22,279 --> 00:14:22,919 you financially. 278 00:14:23,000 --> 00:14:23,519 Speaker 1: Be informed. 279 00:14:23,600 --> 00:14:25,440 Speaker 3: Check out the Watch Dot on Wall Street podcast with 280 00:14:25,519 --> 00:14:28,759 Chris Markowski on Apple, Spotify, or wherever you get your podcasts. 281 00:14:31,200 --> 00:14:34,559 Speaker 1: Yeah, I have to tell you, I was pleasantly surprised 282 00:14:35,279 --> 00:14:39,200 that the Republicans all rode this out, and we saw 283 00:14:39,240 --> 00:14:43,360 a little movement towards some defection early on, but that 284 00:14:43,679 --> 00:14:46,679 went away pretty quickly. And even as this became the 285 00:14:46,720 --> 00:14:50,360 longest shutdown in America and history, they stood by that 286 00:14:50,840 --> 00:14:53,919 they're going to need that strength moving forward, because you know, 287 00:14:54,000 --> 00:14:56,000 the Democrats are going to stop on this and to 288 00:14:56,000 --> 00:14:58,960 put a finer point on this aspect of the conversation 289 00:15:00,120 --> 00:15:04,360 about costs that is impacting everything, including this housing crisis 290 00:15:04,399 --> 00:15:10,039 that we're living under, and that is Obama Care as 291 00:15:10,039 --> 00:15:13,000 it has now now it's been known for some time, 292 00:15:13,879 --> 00:15:19,120 was wasn't it meant to be a disaster? Didn't Obama 293 00:15:19,240 --> 00:15:22,960 himself even get caught saying that so that they could 294 00:15:23,000 --> 00:15:25,879 just go to full on socialized medicine. 295 00:15:26,720 --> 00:15:28,360 Speaker 2: Yeah, I mean, I think there was a lot of that, 296 00:15:28,360 --> 00:15:30,320 that sort of let's, you know, we'll give the private 297 00:15:30,519 --> 00:15:33,879 system one last chance, and you know, we'll regulate it 298 00:15:34,159 --> 00:15:36,240 so that it can't succeed, and it's one last chance. 299 00:15:36,320 --> 00:15:38,000 I think there's an element of that. I think there 300 00:15:38,039 --> 00:15:40,960 was certainly some ideologues who wanted that, but I also think, 301 00:15:41,799 --> 00:15:46,159 you know, there's never one consistent rationale behind a public policy. 302 00:15:46,200 --> 00:15:48,000 And I also think there was just a huge amount 303 00:15:48,399 --> 00:15:51,000 of rent seeking from the insurance industry, and the insurance 304 00:15:51,039 --> 00:15:54,399 companies have you know, they've had an unbelievable boom. I 305 00:15:54,399 --> 00:15:57,159 think United Health went from something like, you know, less 306 00:15:57,159 --> 00:15:59,960 than twenty percent of their revenue being from government program 307 00:16:00,200 --> 00:16:02,879 over eighty percent. So they sort of flipped eighty twenty 308 00:16:02,919 --> 00:16:05,720 one way to eighty twenty the other way. And that's 309 00:16:05,720 --> 00:16:08,000 pretty typical I think for these big insurance companies, and 310 00:16:08,039 --> 00:16:09,879 their stocks have gone to the moon, and so I 311 00:16:09,879 --> 00:16:11,799 think there's a lot of corporate rent seeking. But there 312 00:16:11,840 --> 00:16:16,960 also are the ideologues that sort of I think anticipated 313 00:16:16,960 --> 00:16:18,600 that it would fail and we're okay with that. So 314 00:16:18,679 --> 00:16:20,399 I think he had a mixture, He had a mixture 315 00:16:20,399 --> 00:16:24,679 of motivations. But you know, the thing that's the thing 316 00:16:24,720 --> 00:16:27,759 that's really interesting to me is we're actually seeing more 317 00:16:27,799 --> 00:16:31,039 interest now from Republicans and actually doing something positive on 318 00:16:31,080 --> 00:16:33,840 healthcare than we've seen in a long time. And I'm actually, 319 00:16:34,399 --> 00:16:36,960 I don't want to say optimistic, because I'd stayed pretty 320 00:16:36,960 --> 00:16:39,960 cynical about these things, but I think there's a there's 321 00:16:40,000 --> 00:16:44,200 there's a reasonable chance that we see some positive structural 322 00:16:44,240 --> 00:16:48,440 reforms in healthcare in a market oriented direction and approach choice, 323 00:16:48,440 --> 00:16:50,720 pro competition kind of direction, in a way that we 324 00:16:50,799 --> 00:16:54,000 might not have seen if the Democrats hadn't elevated the 325 00:16:54,039 --> 00:16:56,639 issue with you know, sort of their own bad ideas 326 00:16:56,639 --> 00:16:59,039 as the only solution being throwing more money at it. 327 00:16:59,080 --> 00:17:01,840 And the President and now a number of key senators 328 00:17:01,840 --> 00:17:04,240 have said, wait a second, let's take a bunch of 329 00:17:04,240 --> 00:17:06,440 the subsidy money that right now is going directly to 330 00:17:06,519 --> 00:17:10,079 insurance companies. Let's instead put it into people's hsas that 331 00:17:10,119 --> 00:17:11,960 they can own and control and use not just to 332 00:17:11,960 --> 00:17:14,960 buy insurance products, but to buy health care care itself, 333 00:17:15,039 --> 00:17:17,799 To go to a primary care doctor, to buy products 334 00:17:17,839 --> 00:17:19,880 at the pharmacy that are qualified and so on and 335 00:17:19,920 --> 00:17:22,440 so forth. And I think if we go in that direction, 336 00:17:22,920 --> 00:17:25,440 we're finally going to get some real downward cost movement 337 00:17:25,519 --> 00:17:28,480 because we're going to have people having an interest in 338 00:17:28,519 --> 00:17:30,839 spending less because they'll get to keep the rest of 339 00:17:30,839 --> 00:17:32,680 the money they don't spend. And if we compare that 340 00:17:32,720 --> 00:17:35,359 with some insurance reforms to bring back you know, real 341 00:17:35,400 --> 00:17:39,480 traditional insurance products, real traditional major medical type indemnity plans 342 00:17:39,519 --> 00:17:41,319 where you know you're not going to use it for 343 00:17:41,359 --> 00:17:43,480 your day to day expenses. You've got the account to 344 00:17:43,480 --> 00:17:45,720 pay for that directly, but you know if you do have, 345 00:17:45,799 --> 00:17:49,039 God forbid, a hospitalization or surgery or an emergency room 346 00:17:49,079 --> 00:17:51,960 type situation, you would have coverage for that. And I think, 347 00:17:52,000 --> 00:17:54,000 you know that kind of approach, if we make it 348 00:17:54,079 --> 00:17:56,079 legal again, and if we subsidize it for the lower 349 00:17:56,160 --> 00:17:57,960 income people who need it, I think it would be 350 00:17:58,079 --> 00:18:00,559 very very popular and it would put down were'd pressure 351 00:18:00,599 --> 00:18:02,640 on price in a way that we haven't seen with 352 00:18:02,720 --> 00:18:05,920 these With the consolidation trend in healthcare, I mean, to me, 353 00:18:06,079 --> 00:18:08,640 the worst thing that's happened in healthcare since Obamacare is 354 00:18:08,680 --> 00:18:12,559 not even just the cost issue. Although it's related to it. 355 00:18:12,559 --> 00:18:15,920 It's the disappearance of real choice and competition. Everyone getting 356 00:18:15,960 --> 00:18:19,400 gobbled up, all the physicians practices getting gobbled up by 357 00:18:19,519 --> 00:18:24,200 hospital systems and insurance companies and other corporate entities has 358 00:18:24,319 --> 00:18:26,640 just made it much. You know, you don't have the 359 00:18:26,680 --> 00:18:28,680 relationship you did with your doctor anymore in a lot 360 00:18:28,720 --> 00:18:31,160 of cases. I mean, we went in twenty twelve. I 361 00:18:31,319 --> 00:18:32,960 just looked this up the other day. I don't have 362 00:18:33,039 --> 00:18:34,720 the exact numbers at the top of my head, but 363 00:18:34,759 --> 00:18:37,759 in twenty twelve, before Obamacare, I think it was it 364 00:18:37,799 --> 00:18:41,240 was fifteen or sixteen percent of physicians practices that were 365 00:18:41,240 --> 00:18:45,000 corporate owned, and now it's sixty percent, and it's rising very, 366 00:18:45,160 --> 00:18:47,920 very quickly because we've destroyed the business model of being 367 00:18:47,960 --> 00:18:51,279 private practice physicians in this country. I think if Republicans 368 00:18:51,279 --> 00:18:53,240 came out and explained, this is how we're going to 369 00:18:53,279 --> 00:18:55,480 reverse that trend. This is how we're going to fix 370 00:18:55,519 --> 00:18:58,119 the payment policies that pay more if a hospital buys 371 00:18:58,160 --> 00:19:00,880 your physicians practice. This is going to fist fix the 372 00:19:00,960 --> 00:19:04,519 regulatory policies that have driven this consolidation. I mean, that 373 00:19:04,519 --> 00:19:06,839 would be just they would be I think they would 374 00:19:06,880 --> 00:19:08,960 be rewarded politically. And I also think we'd get better 375 00:19:09,039 --> 00:19:10,960 quality care at lower cost if we did that. 376 00:19:11,240 --> 00:19:13,680 Speaker 1: Well, that's what people voted for in twenty twenty four, 377 00:19:13,799 --> 00:19:20,400 solutions and particularly solutions to this economic malaise under Biden inflation. 378 00:19:20,720 --> 00:19:25,640 And you're absolutely right. Maybe the two most silly names 379 00:19:25,920 --> 00:19:31,160 for legislation would be the Affordable Care Act and then 380 00:19:31,880 --> 00:19:33,880 the Inflation Reduction Act. 381 00:19:35,079 --> 00:19:37,160 Speaker 2: Of course had the two year extension of the COVID 382 00:19:37,200 --> 00:19:38,640 enhanced Obamacare subsidies. 383 00:19:38,759 --> 00:19:39,960 Speaker 1: Of course it is only with three. 384 00:19:40,000 --> 00:19:42,599 Speaker 2: And then we got loaded in there Inflation Reduction Act 385 00:19:42,640 --> 00:19:45,079 with all the green energy giveaways and everything else. And 386 00:19:45,119 --> 00:19:47,039 by the way, do you know the only reason they 387 00:19:47,119 --> 00:19:49,920 named it that is Joe Manchin, who had previously opposed 388 00:19:49,960 --> 00:19:52,279 the bill when it was called Build Back Better. He said, 389 00:19:52,319 --> 00:19:54,759 you know what, I'll vote for it. My main ask 390 00:19:54,880 --> 00:19:56,680 is that you changed the name so I can say 391 00:19:56,720 --> 00:19:59,799 I did something about it. It's like unbelievable. 392 00:20:00,319 --> 00:20:03,119 Speaker 1: Well, that says a lot about why Joe Mansion is 393 00:20:03,119 --> 00:20:07,319 no longer a Senator of West Virginia. Right now, our 394 00:20:07,359 --> 00:20:12,799 guest today is Phil Kirpin, principle at Unleash Prosperity, Phil, 395 00:20:12,880 --> 00:20:16,440 joining us to discuss what arguably is the number one 396 00:20:16,519 --> 00:20:20,519 economic issue in American America today. You know, the health 397 00:20:20,960 --> 00:20:24,000 insurance affordability issue certainly is in there, but it's all 398 00:20:24,039 --> 00:20:27,839 tied together with the prohibitively high cost of owning a 399 00:20:27,880 --> 00:20:34,720 home for way too many Americans. An interesting column that appeared, 400 00:20:34,880 --> 00:20:36,799 I think, first in the New York Post and then 401 00:20:37,119 --> 00:20:42,720 maybe the maybe Fox News picked it up. But the 402 00:20:42,720 --> 00:20:49,359 headline is this, we need a Marshall Plan for housing, 403 00:20:50,000 --> 00:20:54,319 a collection of broad initiatives to make homes more affordable 404 00:20:54,799 --> 00:21:01,200 and put the American dream back on track. The gentleman 405 00:21:01,240 --> 00:21:04,319 who wrote that is escaping me right now. I want 406 00:21:04,359 --> 00:21:07,440 to make sure I give credit where credit is due. 407 00:21:07,920 --> 00:21:10,400 I don't have that at my fingertips. But what do 408 00:21:10,440 --> 00:21:14,599 you think of this idea of all hands on deck basically, 409 00:21:14,640 --> 00:21:17,880 which was what the Marshall Plan was a very you know, 410 00:21:19,839 --> 00:21:25,119 manifold many parts to rebuilding Europe after World War Two. 411 00:21:25,599 --> 00:21:28,960 The same kind of thing of rebuilding, if you will, 412 00:21:29,079 --> 00:21:31,880 or starting from scratch from a broken system in the 413 00:21:31,920 --> 00:21:32,920 housing marketplace. 414 00:21:34,319 --> 00:21:35,799 Speaker 2: Yeah, I mean, look, the only thing that makes me 415 00:21:35,799 --> 00:21:39,480 a little bit nervous about that is that there's awful 416 00:21:39,480 --> 00:21:41,599 lot of government spending in the Marshall plan, and I 417 00:21:41,599 --> 00:21:43,799 don't think what we need is more subsidies. I think, 418 00:21:43,839 --> 00:21:45,960 you know the healthcare lessons that when you throw massive 419 00:21:46,000 --> 00:21:48,720 subsidies at something, and the education lesson for that matter, 420 00:21:49,079 --> 00:21:51,200 when you throw massive subsidies at something, you tend to 421 00:21:51,200 --> 00:21:53,839 make it more expensive, not less. And so you know, 422 00:21:53,880 --> 00:21:57,319 the challenge I think we have is that most of 423 00:21:57,359 --> 00:22:04,440 the bad housing policies are local. The single most significant 424 00:22:04,480 --> 00:22:08,000 factor in whether a housing market is overpriced. And Wendel Cox, 425 00:22:08,039 --> 00:22:10,480 who's the demographer that we work with it Unleash Prosperity, 426 00:22:10,519 --> 00:22:12,319 has written a lot on this. But the biggest factor 427 00:22:12,359 --> 00:22:15,119 is whether a city has an urban growth boundary. Because 428 00:22:15,160 --> 00:22:18,799 cities that have urban growth boundaries, you know, like all 429 00:22:18,799 --> 00:22:21,799 the major cities in California and Portland, Oregon, and you 430 00:22:21,839 --> 00:22:23,880 know a lot of other places. When you have an 431 00:22:23,960 --> 00:22:28,160 urban growth boundary, you create massive artificial scarcity because you 432 00:22:28,200 --> 00:22:32,519 can't build new housing supply past the boundary. And they say, oh, 433 00:22:32,559 --> 00:22:34,799 you know, the urbanists love these, by the way, because 434 00:22:34,839 --> 00:22:37,079 they say, oh, we're fighting sprawl and we want to 435 00:22:37,279 --> 00:22:40,319 have more high rise residential, more housing projects, and we 436 00:22:40,359 --> 00:22:42,759 don't want more places for single family homes. But what 437 00:22:42,839 --> 00:22:47,200 happens is when you put these boundaries on, the price 438 00:22:47,240 --> 00:22:50,279 of housing goes crazy, especially for single family homes, which 439 00:22:50,319 --> 00:22:52,920 is still what most people want. It goes haywire, it 440 00:22:52,960 --> 00:22:56,000 goes through the roof. You look at markets that don't 441 00:22:56,000 --> 00:22:58,920 have urban growth boundaries, that don't have restrictive zoning, that 442 00:22:59,000 --> 00:23:03,400 don't have permitting challenges, and the homes and those markets 443 00:23:03,440 --> 00:23:05,640 are still relatively affordable. And that's a lot of a 444 00:23:05,720 --> 00:23:07,480 lot of markets in the South are like that, and 445 00:23:07,519 --> 00:23:10,559 so it's not really a uniform national problem, and that 446 00:23:10,640 --> 00:23:12,160 makes it a little bit difficult to come up with 447 00:23:12,240 --> 00:23:16,160 uniform national solutions. Obviously, the interest rate factors are national, 448 00:23:16,160 --> 00:23:17,880 and some of the other things are national, but the 449 00:23:18,880 --> 00:23:23,079 restrictions that make it difficult to build supply to build 450 00:23:23,119 --> 00:23:26,480 new houses, those are very different in different places. And 451 00:23:26,680 --> 00:23:28,640 one of the things we're seeing is that the places 452 00:23:28,640 --> 00:23:31,119 where it's really bad, people are leaving. They're giving up, 453 00:23:31,160 --> 00:23:33,240 they're giving up on a lot of these blue jurisdictions 454 00:23:33,279 --> 00:23:36,440 and just voting with their feed and moving other places. 455 00:23:36,480 --> 00:23:38,519 And so, you know, that is that's been a major 456 00:23:38,559 --> 00:23:41,640 trend that accelerated during COVID. But I really think that 457 00:23:43,559 --> 00:23:46,200 you know, there's some cry there's some cracks now on 458 00:23:46,960 --> 00:23:49,680 the left wing with sort of the nimbi's being challenged 459 00:23:49,720 --> 00:23:53,640 by people who do want, you know, to allow more building. 460 00:23:53,759 --> 00:23:58,000 And we may see some changes, we may see some 461 00:23:58,079 --> 00:24:00,880 changes at the local level, but until we see changes 462 00:24:00,920 --> 00:24:03,319 to these major sort of urban planning policies, I'm not 463 00:24:03,319 --> 00:24:05,279 sure we're going to see a big difference. And I 464 00:24:05,319 --> 00:24:09,599 would hate to have federal taxpayer subsidies come in in 465 00:24:09,599 --> 00:24:13,319 an indiscriminate way and essentially subsidize the places that have 466 00:24:13,359 --> 00:24:15,599 the worst local policies, because that would just be an 467 00:24:15,680 --> 00:24:18,400 unfair subsidy from the places that have more rational policies 468 00:24:18,400 --> 00:24:21,200 to the places that are kind of hamstringing their ability 469 00:24:21,240 --> 00:24:22,279 to create housing supply. 470 00:24:22,640 --> 00:24:25,039 Speaker 1: Yeah, it'd be a continuation of the leftist policies that 471 00:24:25,079 --> 00:24:30,839 you mentioned before in blue cities like Portland and San Francisco, 472 00:24:31,000 --> 00:24:34,920 Los Angeles, places certainly in Colorado, and there's a long 473 00:24:34,960 --> 00:24:38,200 list of them. Howard Husick, by the way, from the 474 00:24:38,200 --> 00:24:42,920 American Enterprise Institute wrote the piece on his assertion as 475 00:24:42,920 --> 00:24:49,319 we need a Marshall plan for housing, including broad initiatives, 476 00:24:49,559 --> 00:24:52,519 some of the things I agree with. One of the 477 00:24:52,519 --> 00:24:56,119 things that he mentions is he's not a big fan 478 00:24:56,480 --> 00:25:02,119 of the presidents. I think maybe an idea that was 479 00:25:02,160 --> 00:25:04,440 thrown out there at least to get people talking a 480 00:25:04,559 --> 00:25:10,839 fifty year mortgage. I think that would be absolutely disastrous. 481 00:25:10,960 --> 00:25:16,920 But Husick says, well, at least he's getting the conversation rolling. 482 00:25:17,039 --> 00:25:20,200 What do you think of those kinds of things? A 483 00:25:20,279 --> 00:25:24,640 fifty year mortgage plan? To me, that is well, it's 484 00:25:24,680 --> 00:25:27,880 just more indentured servitude in America today. 485 00:25:28,960 --> 00:25:31,160 Speaker 2: Well, it's pretty it's pretty similar in practice to an 486 00:25:31,200 --> 00:25:33,480 interest only mortgage. You pay almost no principle for the 487 00:25:33,480 --> 00:25:35,960 first couple of decades under a fifty year schedule. And 488 00:25:36,519 --> 00:25:39,079 you know, there are pluses and minuses to that kind 489 00:25:39,079 --> 00:25:43,200 of arrangement if you have, you know, if you're trying 490 00:25:43,200 --> 00:25:44,839 to stretch a little bit to get into a home, 491 00:25:44,960 --> 00:25:47,319 or if you've got your prospects of your income increasing 492 00:25:47,359 --> 00:25:48,960 in the future. But it's a little low right now, 493 00:25:49,680 --> 00:25:52,319 it might make sense to use that kind of a product. 494 00:25:52,440 --> 00:25:54,200 But I mean, you're really not going to build much 495 00:25:54,240 --> 00:25:58,559 equity unless you make extra payments. And you know, I 496 00:25:58,920 --> 00:26:01,279 don't know so how many people are in a situation 497 00:26:01,279 --> 00:26:03,960 where it actually makes sense. I'm generally not against having 498 00:26:04,559 --> 00:26:06,920 you know, more of a variety of products available for 499 00:26:06,960 --> 00:26:08,440 people to choose from. But you know, one of the 500 00:26:08,519 --> 00:26:12,960 challenges with any kind of demand side approach to the 501 00:26:13,000 --> 00:26:17,160 housing situation is that, you know, let's say you bring 502 00:26:17,240 --> 00:26:19,799 in new new financial type products so that more people 503 00:26:19,880 --> 00:26:23,640 can afford to pay more for homes. Well, what you're 504 00:26:23,640 --> 00:26:24,799 going to do is you're going to you're going to 505 00:26:24,839 --> 00:26:27,319 create more upward pressure on price, and people who don't 506 00:26:27,359 --> 00:26:29,599 qualify or don't want to use those new products for 507 00:26:29,640 --> 00:26:32,880 whatever reason, they're not going to have more more difficulty 508 00:26:32,960 --> 00:26:35,440 getting into the housing market, especially if they're not in it. 509 00:26:35,519 --> 00:26:38,400 And so I'm not sure that that's the best solution, 510 00:26:38,599 --> 00:26:41,880 but I'm not necessarily opposed to having more, more different 511 00:26:41,880 --> 00:26:44,440 options available as long as people understand, you know, the 512 00:26:44,720 --> 00:26:46,519 plus and minuses when they're choosing them. 513 00:26:46,720 --> 00:26:49,799 Speaker 1: And it's a political reality to all of this, and 514 00:26:49,839 --> 00:26:53,359 the political reality is is staring conservatives in the face 515 00:26:53,519 --> 00:26:57,720 and the usual election cycle twenty twenty six midterms are 516 00:26:57,720 --> 00:27:04,400 coming up. As we were talking about before, people are disappointed, 517 00:27:04,440 --> 00:27:08,920 certainly with Congress for not achieving what they voted for, 518 00:27:08,960 --> 00:27:11,480 what a majority of people voted for. There have been 519 00:27:11,559 --> 00:27:14,720 some definitely some victories I think the big beautiful bill 520 00:27:14,759 --> 00:27:18,400 could be put in there. But you know, the housing 521 00:27:18,519 --> 00:27:22,000 crisis remains a huge issue. And when you're talking about 522 00:27:22,359 --> 00:27:28,000 people who are forty before they can afford a house, 523 00:27:28,720 --> 00:27:33,640 there is a restlessness clearly that's going on. I'm not 524 00:27:33,720 --> 00:27:38,000 saying that this is a restlessness that will create a 525 00:27:38,119 --> 00:27:42,319 national mom Dannie, but it certainly is a problem for 526 00:27:42,480 --> 00:27:48,880 free market conservative principles. Do you believe the housing crisis 527 00:27:48,920 --> 00:27:56,039 we're experiencing will contribute to a difficult time for Republicans 528 00:27:57,039 --> 00:28:02,759 in Congress in twenty twenty six if they don't immediately 529 00:28:02,799 --> 00:28:04,759 try to solve this thing or get on the road 530 00:28:04,880 --> 00:28:05,920 to solving this thing. 531 00:28:09,160 --> 00:28:10,640 Speaker 2: Yeah, I mean, look, I mean I think it's certainly 532 00:28:10,680 --> 00:28:12,640 a negative. It's always hard to sort of way how 533 00:28:12,880 --> 00:28:15,240 you know, everything kind of balances out, and at the 534 00:28:15,279 --> 00:28:17,079 end of the day, it's a binary choice. And if 535 00:28:17,119 --> 00:28:19,160 you give people, you know, if your best reason for 536 00:28:19,200 --> 00:28:21,720 people to vote for you is better than your opponent's reason, 537 00:28:21,759 --> 00:28:23,319 then you can have a lot of strikes against you 538 00:28:23,400 --> 00:28:25,519 and still win sometime. So yeah, I'm not sure how 539 00:28:25,559 --> 00:28:28,839 it all shakes out, but it certainly will be a 540 00:28:28,880 --> 00:28:32,039 strike against this president and Republicans if they don't accomplish 541 00:28:32,319 --> 00:28:35,319 some significant things on affordability in general and on housing 542 00:28:35,359 --> 00:28:38,359 in particular. And there are some places where we might 543 00:28:38,440 --> 00:28:41,039 see federal policies that really could make a big difference 544 00:28:41,079 --> 00:28:44,480 for supply. And so for instance, you know, around there 545 00:28:44,480 --> 00:28:47,440 are really two cities where there's significant federal land availed 546 00:28:47,480 --> 00:28:50,200 them around them that could be made available for housing. 547 00:28:50,200 --> 00:28:53,079 Those are Phoenix and Las Vegas. And the President has 548 00:28:53,079 --> 00:28:57,359 talked about doing that, making you know, essentially opening up 549 00:28:57,400 --> 00:29:00,200 federal lands to private development. So the more how and 550 00:29:00,200 --> 00:29:01,799 can be built there, that could be very helpful in 551 00:29:01,839 --> 00:29:04,000 those places. But you know, there are not a lot 552 00:29:04,039 --> 00:29:06,759 of silver boats when they talk about how nationally we're 553 00:29:06,759 --> 00:29:08,599 going to open up all of this land for housing. Well, 554 00:29:08,640 --> 00:29:11,279 I mean, other than those cities, there's not really cities 555 00:29:11,319 --> 00:29:13,200 that have a lot of federal land nearby. And so 556 00:29:13,519 --> 00:29:15,720 there are some places where there are some obvious things 557 00:29:15,720 --> 00:29:19,720 you can do, but in most places, as I said, 558 00:29:19,759 --> 00:29:22,440 the challenge is bad local policies and that's kind of 559 00:29:22,440 --> 00:29:25,359 difficult to get at as a national matter. It's going 560 00:29:25,440 --> 00:29:29,039 to be largely on, you know, on the politicians in 561 00:29:29,039 --> 00:29:31,359 those areas to have those those kind of local fights, 562 00:29:31,400 --> 00:29:34,119 and you know, I think in terms of messaging for reelection, 563 00:29:34,279 --> 00:29:36,279 I think these guys have got to make sure they've 564 00:29:36,279 --> 00:29:40,599 got you know, they've got messaging and talking points that 565 00:29:40,640 --> 00:29:43,359 are appropriate to the market and the challenges in their 566 00:29:43,359 --> 00:29:46,920 particular areas. And you know, in some places, you've got 567 00:29:47,000 --> 00:29:49,519 some Republican members of Congress from places where housing is 568 00:29:49,519 --> 00:29:51,839 still very affordable, so they might not be too worried 569 00:29:51,839 --> 00:29:54,640 about it. But obviously if you've got them in areas 570 00:29:54,680 --> 00:29:56,640 where this is a big problem, they've got to figure 571 00:29:56,640 --> 00:29:59,519 out some suite of at least talking points to blame 572 00:30:00,440 --> 00:30:03,799 you know, local policies, if not actual solutions, which would 573 00:30:03,839 --> 00:30:05,599 be even better if they could get some of these 574 00:30:05,599 --> 00:30:06,279 things done. 575 00:30:06,720 --> 00:30:10,200 Speaker 1: Final question for you on the housing crisis side of things. 576 00:30:11,480 --> 00:30:15,279 You talked about regulations before. I think, you know, so 577 00:30:15,400 --> 00:30:20,119 many things fall into that. But how much has the 578 00:30:20,200 --> 00:30:27,720 extreme environmental policy that we see in California in particular 579 00:30:28,359 --> 00:30:32,200 many other Blue states, how much of that has had 580 00:30:32,240 --> 00:30:36,480 to deal with the limitations on housing stock in America today? 581 00:30:37,680 --> 00:30:39,759 Speaker 2: Well, I think a lot. You know, New York banned 582 00:30:40,000 --> 00:30:42,440 natural gas hook ups for new construction, and now I 583 00:30:42,480 --> 00:30:44,640 think they're maybe going to delay their ban because of 584 00:30:44,640 --> 00:30:47,559 the cost associated with putting an all electric everything is 585 00:30:47,599 --> 00:30:51,839 not cost competitive. We've got you know, we've got regular 586 00:30:52,119 --> 00:30:55,240 Even on the federal level, we had Biden's appliance regulations. 587 00:30:55,279 --> 00:30:57,160 You know, they drove up the cost of basically every 588 00:30:57,200 --> 00:30:59,440 appliance in your house by several hundred to one thousand 589 00:30:59,440 --> 00:31:01,319 dollars each. And if you've got that on your washing 590 00:31:01,400 --> 00:31:04,039 machine and you're dryer, and you're you know, and your 591 00:31:05,279 --> 00:31:08,319 stove and your refrigerator, it adds up. It adds up 592 00:31:08,319 --> 00:31:10,319 to enough to actually be material on the price of 593 00:31:10,319 --> 00:31:12,759 a home. When you talk about all of these regulations 594 00:31:12,799 --> 00:31:15,920 cumulative and so you know, those are all being dialed 595 00:31:15,920 --> 00:31:19,160 back now by the Department of Energy and by the EPA, 596 00:31:19,279 --> 00:31:22,039 and so the federal rules and regulations are being eased, 597 00:31:22,079 --> 00:31:25,240 but in a lot of places, the rules and regulations 598 00:31:25,240 --> 00:31:27,720 can be very expensive at the stay and local level. 599 00:31:27,799 --> 00:31:30,279 And it's not just the environmental rules in terms of 600 00:31:30,279 --> 00:31:34,319 applient standards and things like that, it's also permitting rules 601 00:31:34,359 --> 00:31:39,079 and regulations. I mean, there's an amazing rant. Bill Maher 602 00:31:39,160 --> 00:31:42,240 was on Chris Pratt's podcast, and he has this whole 603 00:31:42,319 --> 00:31:43,759 rant about how he was trying to put a new 604 00:31:43,839 --> 00:31:45,759 roof on his house in California, and they made him 605 00:31:45,799 --> 00:31:48,400 have like five inspections and he had to wait forever, 606 00:31:48,480 --> 00:31:50,640 and it cost them an additional you know whatever. It 607 00:31:50,759 --> 00:31:52,559 was on top of the normal cost of a roof. 608 00:31:52,599 --> 00:31:54,559 And he was just like, I'm not going to put 609 00:31:54,559 --> 00:31:55,839 a bad roof on because I don't want it to 610 00:31:55,880 --> 00:31:57,799 fall in on me. Like, we let me put the 611 00:31:57,839 --> 00:32:00,200 roof I want on my house. And I think you've 612 00:32:00,200 --> 00:32:04,160 got a lot of regulations and permitting restrictions of that 613 00:32:04,319 --> 00:32:07,359 sort where you know, each one might only be a 614 00:32:07,359 --> 00:32:09,640 couple hundred dollars or whatever it is, but the time 615 00:32:09,960 --> 00:32:12,359 that's associated with it, and the cumulative effect is that 616 00:32:12,400 --> 00:32:15,359 you make homes much more expensive than they would otherwise be. 617 00:32:15,480 --> 00:32:18,559 And of course, you know, we also have one significant 618 00:32:18,599 --> 00:32:21,759 Trump policy that's adding to construction costs, and that is 619 00:32:21,759 --> 00:32:25,200 his tariff policy, and particularly on lumber, that flows through 620 00:32:25,799 --> 00:32:28,559 into construction costs. And so you know, it would be 621 00:32:28,599 --> 00:32:31,359 good to get a suspension on some of the tariffs 622 00:32:31,400 --> 00:32:33,200 that are relevant to home building as well as part 623 00:32:33,240 --> 00:32:34,720 of this affordability push. 624 00:32:35,440 --> 00:32:39,799 Speaker 1: Well, and messaging is very important here. Republicans have had 625 00:32:39,839 --> 00:32:42,000 a difficult time doing that with a lot of different 626 00:32:42,079 --> 00:32:48,000 areas how much will messaging as we move into twenty 627 00:32:48,079 --> 00:32:51,480 twenty six. And what I mean by that is point 628 00:32:51,480 --> 00:32:55,559 to Gavin Newsome in California, point to Kathy Hokel in 629 00:32:55,599 --> 00:32:59,720 New York. These are the people who have made your 630 00:32:59,839 --> 00:33:03,519 life miserable. If you doubt that, ask the people in 631 00:33:03,599 --> 00:33:07,559 California and New York. But they always see there always 632 00:33:07,559 --> 00:33:11,400 seems to be a tepid response to those at tepid 633 00:33:11,480 --> 00:33:15,079 messaging to that, do you have hope that the Republicans 634 00:33:15,119 --> 00:33:17,039 will get their messaging straightened out as they head into 635 00:33:17,079 --> 00:33:17,680 twenty six? 636 00:33:19,759 --> 00:33:22,559 Speaker 2: I mean probably not know they're not you know, the 637 00:33:22,640 --> 00:33:25,960 Democrats have some very bad policies, but they're very good 638 00:33:25,960 --> 00:33:28,720 at politics nonetheless. And you know, one of the challenges 639 00:33:28,759 --> 00:33:31,480 we have is that a price control message is an 640 00:33:31,480 --> 00:33:34,440 easy message. And you can ask someone like mom Donemi 641 00:33:34,480 --> 00:33:36,839 who Mom Donnie who just says, you know, I'm going 642 00:33:36,920 --> 00:33:39,519 to lower rents by decree and people, okay, that sounds good. 643 00:33:39,759 --> 00:33:42,839 It's a much more difficult, complicated message to say, you know, 644 00:33:42,880 --> 00:33:46,599 we're going to pull back on some of the regulatory 645 00:33:46,680 --> 00:33:50,200 and permitting requirements and land use restrictions and allow more 646 00:33:50,240 --> 00:33:52,799 supply to be built. And you know, even you know, 647 00:33:52,920 --> 00:33:55,480 let's say low income housing set asides, which have been 648 00:33:55,480 --> 00:33:57,920 a disastrous failed policy in all these blue areas. When 649 00:33:57,920 --> 00:34:00,279 you tell developers you can't build anything unless you set 650 00:34:00,319 --> 00:34:04,240 aside some percentage of it for below market rate rent, 651 00:34:05,160 --> 00:34:07,359 you actually get a lot less housing built overall as 652 00:34:07,400 --> 00:34:10,320 a consequence of that, because now you make it harder, 653 00:34:10,360 --> 00:34:13,000 you reduce the return on capital, so less capital goes 654 00:34:13,000 --> 00:34:15,039 into housing, you get fewer projects. The ones that do 655 00:34:15,079 --> 00:34:17,480 get built have these set asides, but you get less 656 00:34:17,519 --> 00:34:20,000 additions to your housing stock overall. Now, if we go 657 00:34:20,119 --> 00:34:22,599 and we say, actually, we want to let them build 658 00:34:22,639 --> 00:34:25,639 ultra high luxury as many as they want, that's better 659 00:34:25,679 --> 00:34:27,840 because people move up and they vacate where they were, 660 00:34:27,880 --> 00:34:29,800 and then those people move up, and then the oldest 661 00:34:29,840 --> 00:34:32,280 part of the housing stock becomes the cheapest and available 662 00:34:32,320 --> 00:34:34,920 at the lowest rate for people. And this is how 663 00:34:34,920 --> 00:34:39,159 it's always worked historically. People say, you know, that is 664 00:34:39,239 --> 00:34:41,880 much harder to explain than just we're going to order 665 00:34:41,920 --> 00:34:44,079 lower rents. We're going to order developers to build low 666 00:34:44,119 --> 00:34:47,719 income units. And so the democratic message that doesn't work 667 00:34:48,440 --> 00:34:51,039 is actually simpler and easier to explain than the market 668 00:34:51,119 --> 00:34:55,280 driven message. The conservatives. Conservatives have even though our message 669 00:34:55,360 --> 00:34:57,840 actually works better in practice, and so we've always had 670 00:34:57,880 --> 00:34:59,400 this communication challenge. 671 00:35:00,960 --> 00:35:03,239 Speaker 1: Just a few minutes left, and I did want to 672 00:35:03,239 --> 00:35:06,840 reserve some time. It's hard to believe, but we almost 673 00:35:06,920 --> 00:35:10,320 fifteen years on the release of your book, Democracy Denied. 674 00:35:10,760 --> 00:35:13,840 Speaker 2: Yes, you've very antiquated at this point, but you know, 675 00:35:14,039 --> 00:35:17,400 occasionally they sell it for twenty cents at Amazon or something, 676 00:35:17,400 --> 00:35:19,159 so when they have it on some when they're just 677 00:35:19,159 --> 00:35:21,119 trying to dump it, I would still recommend that people 678 00:35:21,159 --> 00:35:23,400 get it because even though a lot of it was 679 00:35:23,519 --> 00:35:25,480 very time bound to what was going on by then, 680 00:35:25,480 --> 00:35:27,239 there are a couple of chapters in there that are 681 00:35:27,760 --> 00:35:30,639 still extremely relevant. In particular, I've been trying to get 682 00:35:30,880 --> 00:35:33,920 this bill called the Rains Act passed since since then, 683 00:35:33,960 --> 00:35:36,519 and you did get it done in Wisconsin, were six 684 00:35:36,559 --> 00:35:38,480 other states have done it on the state level. But 685 00:35:38,639 --> 00:35:41,320 this is the you know, such a simple idea, any 686 00:35:41,400 --> 00:35:44,280 major regulation, one that has a major effect on the economy, 687 00:35:44,679 --> 00:35:47,280 instead of agencies being able to impose it directly, they 688 00:35:47,280 --> 00:35:49,800 should have to send it to the people's elected representatives 689 00:35:49,800 --> 00:35:52,320 in Congress or in the state level at the legislature 690 00:35:52,320 --> 00:35:55,320 and have an affirmative vote of approval. Not because Congress 691 00:35:55,320 --> 00:35:57,880 is incapable of doing stupid things. We know better than 692 00:35:57,880 --> 00:36:00,920 to think that. But at least then the inertia and 693 00:36:01,000 --> 00:36:03,639 inability to get things done in Congress works in our favor, 694 00:36:03,679 --> 00:36:06,440 and it stops bad ideas and bad regulations instead of 695 00:36:06,440 --> 00:36:09,320 them just sitting on their hands while these things pile up. 696 00:36:09,360 --> 00:36:10,679 And you know, at least you'd be able to look 697 00:36:10,719 --> 00:36:12,599 up who voted for them and hold them accountable if 698 00:36:12,599 --> 00:36:15,400 we had a system like that. And so that's there's 699 00:36:15,400 --> 00:36:17,599 a whole chapter on that in there, which you know 700 00:36:17,679 --> 00:36:19,559 we're still you know, we almost got it in the 701 00:36:19,559 --> 00:36:22,440 big beautiful bill this year, and Jim Jordan got it 702 00:36:22,480 --> 00:36:24,360 in the House version coming out of committee, and then 703 00:36:24,400 --> 00:36:26,239 they took it out on the House floor because they 704 00:36:26,239 --> 00:36:28,800 were worried about Senate rules. And then Mike Lee tried 705 00:36:28,840 --> 00:36:31,400 three or four different versions and the Parliamentarian wouldn't let 706 00:36:31,440 --> 00:36:35,119 him do it because the reconciliation process is so convoluted. 707 00:36:35,559 --> 00:36:37,239 And so we were close, we were as close as 708 00:36:37,280 --> 00:36:39,440 we that we've ever been, but we weren't quite able 709 00:36:39,440 --> 00:36:41,639 to get it over the finish line. So we'll keep 710 00:36:42,199 --> 00:36:44,559 we'll work another fifteen years on that maybe someday we'll 711 00:36:44,559 --> 00:36:47,320 get it done. But it's super important because you know, 712 00:36:47,360 --> 00:36:50,679 we saw Trump reversed so many Obama regulations, then Biden 713 00:36:50,760 --> 00:36:52,480 came in, snapped his fingers, put them all back in 714 00:36:52,559 --> 00:36:55,960 and then some. And so Trump's accomplishing a lot on deregulation, 715 00:36:56,079 --> 00:36:57,880 but it's not going to be very permanent unless we 716 00:36:57,920 --> 00:37:00,679 get the Rains Act or something like it done. The 717 00:37:00,719 --> 00:37:02,639 next Democrat will just bring it all back again and 718 00:37:02,679 --> 00:37:05,079 then some. So that's I think very relevant from the book. 719 00:37:05,079 --> 00:37:07,039 And you know, the point, and that's kind of where 720 00:37:07,039 --> 00:37:08,840 the title of the book comes from, right is I 721 00:37:08,880 --> 00:37:10,920 was saying, it's an affront to democracy that all the 722 00:37:10,960 --> 00:37:13,599 power is held by these bureaucrats and regulators instead of 723 00:37:13,599 --> 00:37:16,360 our elected officials in Congress. And you know, I had 724 00:37:16,360 --> 00:37:21,519 no idea that the Democrats would refine, redefine democracy to 725 00:37:21,559 --> 00:37:24,800 mean just whatever they're in favor of, basically regress to 726 00:37:24,960 --> 00:37:28,119 process and so forth. And it's kind of interesting because 727 00:37:28,119 --> 00:37:31,599 now you know, now they're against whatever the president wants 728 00:37:31,639 --> 00:37:34,039 to do, they call it an affront to democracy. He 729 00:37:34,119 --> 00:37:37,159 was elected in an election, and so that word's been scrambled, 730 00:37:37,199 --> 00:37:39,000 But that was what I was referring to in that 731 00:37:39,039 --> 00:37:41,800 title was this problem of an unelected kind of permanent 732 00:37:42,239 --> 00:37:45,719 bureaucratic state making the decisions instead of our elected representatives. 733 00:37:45,880 --> 00:37:48,679 Speaker 1: No, I think it's a fantastic title for an era 734 00:37:48,840 --> 00:37:53,400 where democracy was definitely denied. And you know, it's all 735 00:37:53,519 --> 00:37:56,679 just a little bit of history repeating because as you mentioned, 736 00:37:56,760 --> 00:37:59,679 you have democrats going around crying and screaming in the 737 00:37:59,800 --> 00:38:03,159 nashing of teeth about how Trump is, you know, assaulting 738 00:38:03,280 --> 00:38:08,400 democracy as the same people shouting that are going around, 739 00:38:09,079 --> 00:38:12,840 you know, trying to put their political opponents in jail, 740 00:38:13,440 --> 00:38:17,199 remove them from the ballot, and and you know, indict 741 00:38:17,320 --> 00:38:20,760 them on bocus charges and all of this sort of stuff. 742 00:38:21,119 --> 00:38:24,880 At the same time, you had an Biden administration that 743 00:38:25,079 --> 00:38:29,559 was you know, cutting off communications from one half of 744 00:38:29,639 --> 00:38:33,239 the country, the Conservatives out there, and then you had 745 00:38:33,280 --> 00:38:38,000 a president through this auto pen scandal, who wasn't there, 746 00:38:38,400 --> 00:38:40,760 as you know, a lot of us knew anyway, we 747 00:38:40,840 --> 00:38:44,880 didn't need, you know, the the op ed from a 748 00:38:44,960 --> 00:38:48,000 Hollywood star to tell us that before the election. But 749 00:38:48,079 --> 00:38:51,960 it is interesting that there have been times where democracy 750 00:38:52,280 --> 00:38:57,239 has indeed been denied. But I think it's fascinating that 751 00:38:57,360 --> 00:39:00,559 democrats are saying that that is the era under Trump 752 00:39:00,679 --> 00:39:04,119 when they have done so much to deny democracy over 753 00:39:04,159 --> 00:39:04,679 the years. 754 00:39:06,199 --> 00:39:09,280 Speaker 2: Right, you know, it's interesting to them. To them, the 755 00:39:09,320 --> 00:39:12,840 affront of democracy is when the elected president fires people 756 00:39:12,880 --> 00:39:15,960 in the bureaucracy, whereas to me it was kind of 757 00:39:16,000 --> 00:39:17,599 the opposite. So what are you going to do? 758 00:39:18,079 --> 00:39:22,639 Speaker 1: Yeah? Absolutely, thanks to my guest today, Phil Kirpin, principal 759 00:39:22,719 --> 00:39:29,199 at Unleash Prosperity. Phil has joined us to talk about, 760 00:39:29,840 --> 00:39:32,000 you know, all of the things going on in the 761 00:39:32,039 --> 00:39:36,840 housing side of things and the absolute urgency of getting 762 00:39:36,880 --> 00:39:41,320 down to business and working to solve these problems. You've 763 00:39:41,320 --> 00:39:43,679 been listening to another edition of The Federalist Radio Hour. 764 00:39:43,880 --> 00:39:47,679 I'm Matt Kittle, Senior elections correspondent at the Federalist. We'll 765 00:39:47,719 --> 00:39:51,239 be back soon with more. Until then, stay lovers of freedom. 766 00:39:51,639 --> 00:39:52,840 I'm anxious for the fray