Mortgage Policy: Extensive critique of proposed 50-year mortgages, highlighting higher lifetime interest costs, weak equity build, and elevated default/foreclosure risk versus 30-year loans.
GSE Exposure: Discussion centers on the need for greater federal backstops via Fannie Mae (FNMA) and Freddie Mac (FMCC), implying more bailouts and moral hazard to sustain ultra-long fixed loans.
Housing Affordability: Core problem framed as supply-side constraints (zoning, environmental rules, NIMBYism), arguing financial engineering won’t fix affordability without more construction.
Homebuilding: Emphasis that demand-boosting policies without new supply will inflate home prices, underscoring the relevance of the Homebuilding sub-industry and local regulatory reform.
Interest Rates: Debate on Fed policy and the possibility of rate cuts amid limited data; fixed 50-year products seen as misaligned with rate risk and macro uncertainty.
Trade Tariffs: Tariffs discussed as an inflation/deficit lever and political tool, with legal risk from potential Supreme Court rulings and proposals to recycle tariff revenue into consumer checks.
Credit Standards: Concern over scrapping minimum credit score requirements at GSEs mirrors pre-2008 practices, increasing systemic risk within Thrifts & Mortgage Finance.
Market Outlook: Overall skeptical stance on policy gimmicks; focus on structural fixes (deregulation, supply growth) rather than extending debt maturities to engineer affordability.
Transcript
[music] Welcome back to the power and market podcast. I'm Ryan McMin, an editor at chief at the Mises Institute. And joining me today are two of our contributing editors as usual. We've got th Bishop and we have Connor O'Keefe. And uh we've got some great uh sort of uh political financial news to talk about today. I think you're going to think it's it's fun because it's such a terrible idea that we're going to have terrible idea coming out of the Trump administration that we're going to have some fun really tearing it to shreds I think as much as we can. But first, just wanted to mention an upcoming event we have, right? Our, you know, it's we're almost at the holiday time, so we don't have any big events coming up during that, but early next year, we've got something coming, right, uh, Tho. >> Absolutely. Feb February 21st, we're going to be in Oklahoma City. I don't think I've ever been to Oklahoma City. So, we will have a great great line. I'm very excited for this one. Um, we're going to be joined by Dr. Keith Smith, a Power and Market podcast listener. uh Caitlyn Long who is doing incredible things in the crypto orbit um trying you know fighting uh the Fed and various administrations on the regulatory side of that you know real real entrepreneur in that regard uh Perand of Oklahoma City University um or Oklahoma State University I should should say uh Timothy Terrell and our own Ryan McMon how can you turn that down be our first event for 2026 I'll be in February and a reminder that uh if you want to see the cutting edge of libertarian National Economics Research. We will be in Auburn for our research conferences come March. You can find more about these events in our ever growing schedule for 2026 at mises.org/events. And be prepared. It's going to be year end. We're going to be doing membership drives, fundraisers. We've got a very nice premium this year, a minibook by Ryan McMon himself on the history and strategy for Liberty. So, very excited for that. Expect to see more in your email, in your uh your podcast feeds. seeing it on the website. So, get ready for that as we get to the end of 2025. >> And if you're not already getting anything from us in your inbox, you can always sign up for that. You can also pick and choose, right? Do I want to get like article updates, you know, tell me when there's new articles at mises.org? Do I want to just hear about events? You can basically make your your email recipient status with us tailor made to what you want. Just go to mises.org and click on subscribe. That's mises.org. og and then up at the top click on subscribe. So >> Ryan's Ryan's looking to slide into your inbox right there. [laughter] >> So So let's talk about Trump's idea this uh this week for the 50-year mortgage. This is a new idea that came down and uh both Connor and I wrote columns on this because we were struck by um the shortcomings of the idea. So, Connor, can you just introduce us to just basically what were the events that that led us to this new announcement uh about a 50-year mortgage and where it's coming from? >> Yeah. So, it started as a lot of things do in the Trump administration with a random social media post from the president. Um there there was reporting I believe from Politico that uh said the idea actually came from Bill Py, somebody we've mentioned a few times on the show before. [laughter] >> My buddy. >> That's right. Apparently, there was some kind of event um or something on I think it was Saturday night and PY just showed up to this event with a poster board and on the poster board was this graphic of Trump and FDR and on the top it said something like great American presidents and then above FDR was the the text said 30-year mortgages and over Trump's head it said 50-year mortgages. And about 10 minutes later, Trump posted that exact graphic and caused what was basically a firestorm on the like right-wing social media, you could say. Um, that's how I saw it. I was actually kind of struck by how little attention it seemed to get from the more like establishment press. There was not, it took a while for like the Wall Street Journal editorial board uh to comment on this, but a lot of MAGA people notably were um let's just say not happy about it after there there's a lot of angles as to why. First of all, FDR being a great president, that's something I think all of us would disagree with there. But then just the whole idea that um this is the path forward when it comes to like addressing the the housing crisis and the housing affordability crisis. Um, it's just crazy as as we'll get into. But I think a lot of people were picking up on the fact that this this happened less than a week after the elections, which we talked about last week. And the the big takeaway from a lot of people, ourselves included, was that the affordability crisis was kind of the the the the thing that the winning campaigns really committed to uh, you know, speaking in favor of addressing. And so, uh, we were wondering if the Trump administration was going to um was going to see that and start acting accordingly. and and housing affordability, especially with younger Americans, is like a major issue, especially on the right. So, it's no surprise that they have an interest in going about this. But, um, as as we can get into, I don't know if, uh, 50-year mortgages are the way to do that. >> Well, I I was impressed by how much push back he got against it in social media, which demonstrates that I guess people are paying attention when it comes to the mortgage issue. Right now, a lot of people, they have mortgages and they're paying attention to what they're paying on them. And it seemed to be something that people knew a lot about and in a good way. And so, people kind of recognized instinctively that it wasn't a great idea. And [laughter] and in spite of what Trump was saying because shortly after he offered this idea, now first of all, let's not just like overlook that whole comparing himself to FDR thing. Can we make let's make sure and drive that home. This man is comparing himself to FDR and thinks and is and is appealing to conservatives with this. That's that's bizarre. So, it looks like you have something to add. >> He's appealing to great. No, no. I He's the thing is FDR didn't even create the 30-year mortgage, [laughter] >> right? The 30-year mortgage came like I mean, I get I get that he he created some of the infrastructure, whatever. >> I mean, the GS. >> Yeah. Yeah. So, like I mean, I get that there are plants that their seeds plant, but I had to check that. I was like, "Wait, wait. I I But yeah, the 50 year the 30 the 30-year mortgage actually came after FDR. Neither here." That just one little [laughter] >> I mean, yeah, you could, right? I mean, because of Fanny and Freddy as were New Deal things and all of that. >> He tilled the soil, but technically, you know, just [laughter] >> it's it's just remarkable that this is the place that he has decided to make himself as the model. Um, hey, hey guys, I'm just like FDR. I'm creating my own New Deal, and conservatives are are falling all over themselves to praise him on. Now, of course, there are fewer and fewer Trump supporters every day, uh, because of these antics. But the real diehard ones, they they just seem to think, "Oh, it's great. It'll be like FDR. It's awesome." Um, yay, freedom. One of the most freedomhating presidents in American history. But that's what we're praising now. And as I note in my article, FDR was the one who gave us the the whole concept of too big to fail. Now, he created this corporate centered economy where the government ends up bailing everybody out. Now, it took decades for a lot of that to come to fruition, but all the seeds were sewn uh by by FDR. And the fact we have all of these administrative agencies, we have all these quasi uh quote unquote private organizations that ended up being owned by the federal government like Fanny and Freddy. This was all FDR's work. So if you love the banker system, if you love the financialization of the economy, if you love too big to fail, if you love bailouts for for billionaires, FDR is your guy. And I guess Donald Trump is your guy, too. Well, I I do think that's why some of the push back is there is I do think there's a deeper skepticism of financial markets of that aspect of it, right? A lot of focus on, you know, yeah, we're creating a whole new generation that is going to never be able to pay off these levels of of debt there. And so, I do think that is kind of, you know, there this was a bad week for Trump beyond this, right? I mean, you talking about, oh yeah, we'll continue to bring in hundreds of thousands of Chinese students on on for colleges. We're we're going to we're doubling down on H-1V visas. we don't have talent, enough people to fill these jobs, right? So like this this was a number of things that were getting like his his biggest supporters little little freaked out here. Um but it is good to see the immediate push back on this. I'm not particularly s again like this this is hitting the the you know one of the big rails of politics right and that's that's one of the biggest aftershocks of the mid of the offyear elections last year is how quickly the entire conversations focus on these affordability issues. you know, it has now moved away from the immigration front, though obviously that's still a major thing, but it's directly to these. And I think that's one of the reasons why you had PY pull out this, you know, this this this wild card and ends up in a truth social post is because they're just trying to figure out how to stem the bleeding right now. And and what's funny is that, and this is goes to how inept, how incompetent DC is. Fast forward a little bit to, you know, 13 years ago, the one thing that every Republican agreed upon is that Fanny and Freddy have to go. Like that was the one consensus item after '08, right? I I remember sitting in staff meetings with the financial services committee. Everything was how do we get away from these quasi p you public private Fanny May Freddy Mack monstrosities that created this? And here we are 2025 and [laughter] and we're going to make them bigger and better than ever. Like that's that's how quickly like the inability to do any sort of reform is itself part of these meta a meta narrative of this particular proposal. I don't think this surprises any of us, but it is worth recognizing that again like Fanny May, Freddy Mack, this entire aspect of the housing market was the uni universally agreed upon principle back in 2010, 2011, 2012 and is completely out the window right now. >> Well, and let's tie these two issues together, right? Is if you are going to expand the 30-year to a 50-year mortgage, this is going to require plenty of intervention and ongoing support from Fanny and Freddy. the way that 30-year mortgages work, it's not a free market creature. Now, it could work, of course, banks could offer 30-year mortgages if they want. Um, there wouldn't be nearly as much liquidity to do that as there is presently, and interest rates would probably be significantly higher for for such a long-term risk. And so, how how do we have this 30-year fixed thing, right? cuz you can imagine how high the risk is when the the when the mortgage payment is fixed, right? It's one thing you you could easily have 30-year mortgages with variable interest rates, right? Because that could adjust over time and match new realities of interest rates because interest rates can swing wildly over a 30-year time period. But when you're fixing it in, you need some sort of backs stop from the federal government. And that's why you didn't have a whole lot of 30-year mortgages appear before the creation of Fanny and Freddy. So what you've got are these organizations, these corporate what prior to 229 2009 were fully private government guaranteed rich guys make make money on uh the well rich guys buy up the stock of Fanny and Freddy make money on it. They were sort of private but everybody knew that they were going to get bailed out if there was ever a serious crisis. So they were you know it's like the very definition of like corporate monopoly backed by government. And one of my favorite anecdotes, this is not particularly relevant, but I find it amusing, so hopefully our audiences will will as well, is that you when they were bailing out Fannime and Freddy Mack back in the day, you know who was like one of the largest international holders of Fanny and Freddy debt. >> No, >> it was Russia while they were having their conflict with with Georgia at the time. So like we were condemning like you were freaking out about Putin and invading George and all sort of stuff while we were bailing out one their their investments in Fenny May and Freddy at the same time. Again, this isn't surprising, but I just find it interesting [laughter] as an entertaining anecdote of how wonderful our federal government operates. >> I imagine there's many such cases. >> Many such cases, >> right? >> And so Fanny and Freddy, they exist to purchase uh mortgage securities uh on the secondary market. And so this keeps liquidity moving into the mortgage market. And then on top of that, you've got stuff like FHA, which just directly ensures a lot of these mortgages. And so that's why you ended up with this big 30-year fixed market. It is not like just something that arose on its own. It depends on implied government bailouts and easy money to keep interest rates low. And it's all about federal intervention. >> And so of course a lot of people on the left argue, well this this is evidence that we need uh federal intervention uh to to have high home ownership rates. The reality of course it was already very much moving in the direction of higher home ownership rates uh after World War II. It wasn't uh it would have continued to rise and you wouldn't have had the bailout too big to fail culture that we have now. Um and of course people would have invested in other things. And this was a point uh that has been made uh many times about the US mortgage system is that we're the only ones that really do that. There are plenty of other countries that have home ownership levels of similar levels, home ownership rates of similar levels that don't have this huge intricate web of federal guarantees and and federal intervention to push up home ownership. There's a certain obsession in America with getting the home ownership rate high and it's it's now basically been taken over by the federal government in terms over I believe the last time I checked uh the vast majority of home loans are in some way uh inshed in federal government programs whether it's FHA whether it's those those get funneled into uh mortgage back securities that are then owned by either the Fed um they're bought by Fanny Freddy I I I mean that the whole thing is is highly federalized and other countries just simply don't have to do that. Uh and they've got plenty of home ownership too. So if you're going to switch to 50-year mortgages, you can only imagine then what the risk levels are. This just magnifies the same stuff that you had to address with more federal intervention for the 30-year mortgage. You can expect even more bailouts. And and the big reason that this that this calls for even more bailouts, even more federal intervention is the fact that when you start to get to 50-year mortgages, home ownership is is a matter of ownership and name only for most people when you think about it, right? Because a lot even now people talk about home ownership and then when you oh I own my home and then when you when you look at the numbers, they have like basically no equity in the property. All they're doing is making monthly payments to a bank and then saying they own the home. Now, of course, if you stayed in the same location for a while, you actually have paid a significant amount of the principal. Yeah, you own a significant stake in that property and you could probably call yourself the homeowner. But I looked at the numbers, right? I was just using the common, right? Anybody can do this. You just use calculator.net's loan amortization uh calculator. Like everybody uses this. And if you run the numbers through that, it you could start to see the big differences, right, between a 30-year and a 50-year. Uh first of all, we should be clear that if you get a 50-year, you're only saving about 350 bucks a month compared to what you're paying for the 30-year. Now, that might seem significant uh for a lot of people, but when but here's the flip side is even though you're not saving that much, it's really hard to justify when you look at how much equity you're gaining with the 50 years. So, you're paying a little bit less with the 50-year, but you are getting almost no equity in the first heck 20 years even of making payments on that. So after the first five years, you have paid about less than $10,000 of the principal down. Meaning that if your neighborhood, your part of the country has either a stagnant home market or a declining home market, and of course to lose $10,000 on an asking price during a recession or just generally a stagnant home market, that's nothing. That happens all the time. So, if you've got a 50-year mortgage because you're paying so little in principle, you are far more likely to end up underwater after 5 years, even 10 years, if the if the asking price has to go down even a little bit. So, if you end up unemployed, you need to move for a job or whatever reason, and you need to sell that house, you're probably going to lose money on it. And then if there's a case of a real recession and you can't find another job and you really got to sell it, but nobody wants to buy it at at the price you need to sell it at in order to avoid losing money. Well, now you're just going to end up foreclosing. So, it has a lot a 50-year mortgage has a whole lot in common with what we saw back during the old housing bubble, which was pick your payment loans and interestonly loans. We saw these a lot back in those days. Um sometimes you these were these were originating with what we called the ninja loans, right? The no income no job applications for mortgages or you just said what your income was and they believed it and then you could just pick your payment. So we had a lot of that going on and then consequently nobody had any equity in their homes, they mail the keys to the lender or they just walk away from the house. You are inviting 100% that sort of thing with a 50-year mortgage. And then just a lot of the populist uh blowback I saw from people saying right the Trump this is the last thing we need. They were pointing out that the reality was going to be right since mo since on average most people are moving after eight years of living in a house they're not actually acrewing any uh equity. So if they move and then they start another 50-year mortgage all they're ever really doing is paying rent to the bank without ever acquiring any real equity. So, I was surprised at just how many people saw through the ruse and recognized just how bad an idea it was. Um, and uh, so I guess it's it's already a unpopular idea. It's only been a few days and he's already being trashed by this by a lot of his own what are now former followers in many cases. >> Well, I think that's take another swing at PY. That's my curious [laughter] >> the fighting. Um, I think they're pivoting now. It looks like Pi is trying to say uh it's portable mortgages now I think is what they're going to try to switch to which I think is more that seems more reasonable to me mainly because the 50-year mortgage is just so crazy but at the same this what you were saying a few minutes ago still stands if it needs government backing to exist this is not actually a valuable financial product at the end of the day so I'm still skeptical about all that and I guess what I tried to write about in my article my kind of angle on this was that this isn't really addressing the actual housing affordability crisis that yes, like the whole financial system has blown up and we have this huge bubble, all this financialization. It's a complete mess. But at the end of the day, like the thing that often goes unsaid is that we have an artificial housing shortage in this country. And what's kind of difficult about that and making that like a national political issue is a lot of that is happening on the the local level with with municipalities as well. I talked a bit about um zoning laws uh that you know which libertarians are always chirping about but like that's a major a major factor here but then environmental regulations any kind of regulation on construction um that like nimism all you have all of these things that um are creating an artificial shortage and as long as that artificial shortage is there like there always will be a housing affordability crisis um to some degree and I guess what annoys me about this whole 50-year mortgage thing is they just completely ignore all that. They're going to leave all that in place, go kind of mess around on the financial side of it. And so it's like it's not just that it's a bad idea, but it's like that your attention is in the exact wrong place. And and I I guess like yes, like it is kind of difficult to I think it is difficult to get like a national movement going about what is at the end of the day mostly a local issue, but at the same time like Trump is the leader of the Republican party now. Republicans are going all the way down to the local level. If he started talking about this like or you know his team, the people around him if they really started pushing this then like we could actually potentially see some meaningful uh reform on that front. Also just to to quickly point it out if like I I kind of gloss over it was a short article but if anybody's interested in like this actual issue like why housing is actual expens why housing is actually expensive. Ryan um did I think three great interviews with Chris Calton earlier this year um on Radio Rothbart. I think the first one was focusing on homelessness which is obviously related to all this um but then two other ones getting specifically into that and he he cites a lot of books. Um I think that this is like this needs to be a major uh a major issue for any kind of movement that wants like meaningful improvements in this country. But we have to actually understand the the real cause of the problem. And just like, you know, firing off posts late at night about, you know, these speculative uh financial products are it's just it's not only is it stupid, it's just it's missing this huge opportunity. >> Well, it's even worse than that because what what you having is increased demand for housing without new supply. >> And so you're going to end up having an increase of the underlying cost of the house. >> Yeah. And so we're actually going to make houses even more affordable, even even better than that. And don't tell me if you if this doesn't sound like a a deja vu all over again. But the same week, um I get our good friend Bill Py. Um I I I want to blame him for this. I think this is comes from him, but they're talking about getting rid of um of of scrapping minimum credit score requirements, which I think are 620 right now. Um at Fanny May, one of the GSC's part of this as well. like we're we're going straight to the 90s here to to to boost, you know, housing demand, focusing on making it easier to finance, but all that will do is further soak up supply, making making the the prices go up, and so the underlying cost of the housing on top of all these issues that come creating new supply are just going to go up. >> Well, it's also just the latest admission that the economy is worse than they're willing to admit. Oh, we have to lower credit scores now in order to have people qualifying for loans. Why are your credit scores low? Well, because I'm missing payments. Because my income isn't enough to cover my expenses and now I'm delinquent on stuff or I haven't paid my bills lately. That's why you need to start incorporating lower credit scores into home purchases. That's what we were doing in 2004, 2005, 2006. We kept lowering the necessary requirements for purchasing a home. That's how you end up with a housing bubble. So I mean I'm sure PY probably portrays it as like some sign of economic strength or something, but of course it's it's exactly the opposite. >> Yeah. Well, I mean [sighs] looking at this, I just want to [laughter] first of all, let me state guys, I said offline that uh Trump had also suggested 15-year auto loans. I looked that up. Uh as far as I can tell, it's it's fake news. Uh this was repeated many times in social media but I have not been able to track down a reliable source as to [laughter] it seemed plausible right given what we know. >> If he sees the reports he may he may run it. [laughter] >> Bill Py comes in with the poster board. >> Well yeah I could see PY pushing that. Um but uh that's uh that's not necessarily something that has actually happened yet but I could see it happening. Um but right the whole idea here that PY is just trying to push is this idea that it's it's more affordable and Trump it I think it was getting blowback even before he did that TV interview shortly after um with Laura Ingram if I remember correctly. Uh he went up and he did an interview with her and she says so what about this 30-year mortgage and he he must have gotten push back because he just starts saying it's no big deal. It's not even a big deal. you'll just you'll just have lower payments than with a 30-year, which of course, as we just examined a minute ago, is not true because you're paying huge amounts of interest. Um, and so I guess suppose on a monthly basis you have lower payments slightly by a few hundred bucks. Uh, but of course the amount you pay over time is vastly huger. And so he's just kind of waving all that off and saying it's barely a change. It's barely any big deal. And then he kind of like stumbled and said, "Oh, you know, so people have 40-year mortgages now and then they'll have 50." And she pointed out, "Well, actually, it's 30-year mortgage." He's like, "Well, some people have 40." Which is true, but none of them are federally insured and they're very rare. Uh, so I I don't even think he knows what what's going on in the mortgage market, which I mean that's kind of I would say describes a lot of the Trump administration in current days is I don't think he knows what's going on with stuff. One thing he doesn't know is what the unemployment rate is, for example. He doesn't know what the CPI inflation rate is, for example, because all those uh research activities have been halted. And of course, we criticize government money and all that or government research and all these numbers that come out, but when you're the federal government and you're insisting you should be making policy based on these numbers, maybe we should have something to work with in terms of uh what's actually going on with employment. And I think what we'll probably find is that that employment is really quite bad in the last couple of months. And that seems to be what all the private stuff coming out is pointing to. And we talked about this a little bit uh in previous weeks was once you start looking at the the private sector reporting on jobs, it's it's very negative uh or it's just very very small in historical terms. So looking at that and then also some private firms have tried to report on what they would estimate the CPI is probably going to be and the one report I saw said, oh well it's ticked up slightly to 3.1%. So meanwhile, we got Trump out there saying, you know, inflation's over. It's solved. And why isn't Jerome Powell, who he blamed for having to in during his interview with Ingram, he's like, we have to have 50-year mortgages because we have a terrible guy at the Fed who is raising interest rates. Having 50-year mortgages doesn't doesn't solve the interest rate issue at all. And as though just pointed out, it doesn't make the underlying price more affordable either. It just creates without addressing the supply issue just creates more demand for the same houses. And so you're not going to see home ownership rates increase. This something in my article that I wrote on this topic, by the way, I I uh linked to a old Heritage Foundation article, old, you know, it's from like seven or eight years ago. Uh but nothing's changed since then in terms of its analysis is that in spite of all of these decades of of more and more liberalizing the requirements for purchasing a house. Home ownership rate actually hasn't changed in decades. All they do is increase the risk constantly in terms of too big to fail in terms of promised bailouts and the home ownership rates gone nowhere. All that's happened is that the people who actually have managed to get into the market just keep getting older and no young people can buy homes. That's what that's where the real change is in the marketplace. So 50-year mortgage would do nothing. It would not actually even if you did manage to get younger people into home ownership, it would again be home ownership and name only. They wouldn't have any equity because they would only be able to slide in barely getting the 50-year mortgage rate with what, like a 5% down payment maybe. And then they've got no equity when they finally need to sell. And young people sell their homes more often. They don't live as long in one place. So, they're going to just be bouncing from one 50-year mortgage to another. Welcome to paying rent. I mean, that's that's basically what it is. So, that's that's that's Trump's big idea for the week. And all based on what? While claiming that inflation's going down, claiming that employment's great. He he has no idea. Doesn't know how mortgage works, doesn't know what employment situation is. All of this, it just seems to be making up stuff that he thinks maybe could get some people excited in the short term. And uh it's it doesn't look great. But I I think what what other ideas are out there like that's the problem right now is that you know for all the energy and all the all the institutions have been built and all that sort of stuff right around the you know the current manifestation of of MAGA conservatism so much of the focus was on immigration so much the focus was on taking back universities so much of it was on various you know cultural war related issues so much of it was this this and this but when it comes to the economy you know the the big idea the big new idea was tariffs right and then a little bit of Doge and the Doge didn't go anywhere right but there hasn't been any sort serious robust uh new thinking, right, of of how to actually deal with kitchen table affordability issues. And I mean, we see this play out particularly right now with, you know, again, you know, as we've mentioned several episodes now, is that, you know, the entire government shutdown, which we didn't even fail to to recognize that, hey, at least the government's open again, right? Haha. Um, you know, but but the catalyst for that, right, is oh yeah, we've got this whole Obamacare thing that we've been propping up with with duct tape bubble gum and a whole lot of money. Um, it's not working. Uh, how do we fix it? Oh, well, go. They're they're they're brainstorming some ideas now. Just just just just wait. Just wait. It's like we've been sitting around for, you know, this was back in 2016. We ran on replacing Obamacare. They had no ideas, right? We had we had one decent idea that got killed. I've already ranted about that. But there's no solutions when it comes to economic issues. There is not some sort of ready-made mill of of new bold policy plans. And so, Republican party right now, Trump and etc., right? It's not as if there is some sort of wonkish, you know, Senate movement right now for for something different that just hasn't caught Trump's eye. I think that's one of the reasons why the 50-year plan was appealing is, you know, PY, you know, like a I got I got to fix for this. We're just going to go bigger on here. What else you got? And that's the current state of of, you know, Republican politics at the national level right now. And and this is going to play out. It's going to be a never- ending cycle right now because affordability number one political issue right now. No solution because you can't cut spending. Heaven forbid. Can't do that. So what else you got? We we just passed the budget that brings that that solidifies Biden era spending. So we can't touch that thing. What else have we got? >> Spend more money. >> That's what uh Tom Woods opened up Misesu this year where they talk about that about how like a lot of people in these sort of new right circles have just dismissed economics. Um and this is the consequence of that. They don't there's no coherent MAGA economic vision and so they don't really have anywhere to go with it. And then it puts Trump in this difficult position like that was a bit another big part of that Ingram interview was that he's he called it the greatest economy that we've ever had. He he basically has had to completely adopt Biden's terribly failed strategy of just denying people's economic pain. And we just saw how terribly that worked out for the previous administration. And Trump's just doing the same thing. But he kind of has to because, you know, there's just no actual interest in like in ma making meaningful changes. He It's just Yeah, like you said, um continuing Biden's budget. I think Dave Smith put out a tweet that it's essentially like a second uh Biden term but with a closed border. And I don't I I'm thinking about um I think I might write an article about this next week. But um I feel like in a lot of ways Trump is the rights Obama in that Obama back in 2008 like the the amount of excitement that I I was in middle school I was not paying any attention to this stuff but looking back at it it's clear that you know coming out of like the Occupy uh Wall Street protest like the the amount of excitement and optimism that a lot of you know young college students and young progressives had when Obama won like that was palpable and I think kind of similar to where MAGA was uh a year ago when when Trump uh won again. But then, you know, and like what what did Obama run on? He basically ran on like uh cracking down on corporations, especially the big banks and ending George W. Bush's wars. And he did neither of those things. He, you know, ushered in like a historic period of easy money um for Wall Street. And then, you know, yeah, he switched like foreign policy wise from these overt o overt um nation building exercises to more like covert uh regime change in Syria and Libya. But like he he was extremely hawkish. And I think like so there's parallels there to where we are with Trump where like whether he was like never um genuinely trying to make changes or he has been co-opted, it kind of makes the difference. He's in a similar position right now. And I think if you look back at um the left and Obama, the the major mistake that they made is they just rallied around him anyway and they refused to condemn him. And then coming out of his presidency with like when uh Sanders went up against um Clinton, Sanders kind of embodying that old Occupy Wall Street left like he he was just he didn't have anything really to run on because he he refused to trash the previous administration. And then of course he rolled over and submitted when the establishment Democrats completely cheated him. And I I think that from my perspective the the big peril for Trump supporters right now is that they don't is that they continue to fall in line and they don't criticize Trump because if they don't criticize Trump then the only sort of pressure he's going to be getting is from the people that want him to compromise. I think that's sort of how why we're here. It is nice as you said Ryan like there he has been getting some push back at least on the mortgage thing. He's been getting some push back on the Epstein stuff. So like it exists there. It seems like Mag is in a better position than the um Obama supporters were. But I think this is sort of the big dynamic going forward in terms of is Trump actually going to make any changes or or is he just going to be another Obama? >> Well, and to your point uh you know Trump had some nasty words this week for Marjorie Taylor Green. >> Right. I I can't think of anybody in Congress who better embodies like the Magazite guys, right? Marjorie Taylor Green and he attacked her like, "Oh, you know, she's she's c she's she's cuddling with the left and she's got her own act going on and for for for what?" Because Marjorie Taylor Green's calling out Republican leadership not having these plans, you know, that that I'm worried about my district in North Georgia like with with all the consequences of that sort of stuff. Things are not getting cheaper. This is a major problem. We ran to fix this. We've got no idea of what we're doing. Speaker Johnson's a joke, right? And and I think that's where most you know MAGA folks are right now. Anna Paulina Luna, Lauren Boowbert, right? They joined with Thomas Massie to discharge Epstein files, right? Another one of those things. That's one of those, you know, kind of key zeitgeist issues for MAGA, right? And so like it's the it's the members of Congress that are the most authentic MAGA, if you will. you use whatever term you want that are becoming right now very interestingly the most disruptive aspects of the Republican coalition and doing things that Speaker Johnson and the Trump administration are for whatever reason not wanting to do and I think that aspect of it I think that's a very fascinating point that you're you're making there Connor and I think that's one of the interesting components is that again MAGA in both in in terms of what we're seeing on you know public discourse and whatever but also even within kind of that core faction is is this perhaps you know, one of the silver linings, one of our our common themes is that you the Trumpers are better than Trump. I think that we're even kind of seeing that even within, you know, the snake den of the US Congress right now. Well, I mean, is it just me, though? Well, we're we're less than a year into this administration. It feels like it feels more like year three to me than the ve very very beginning, right? Year three, after you've lost the midterms, everyone in the administration is demoralized, starts looking for other jobs, you're out of ideas, right? This is true at the governor level as well, right? I I won my second term. We're more than halfway through. It's time to just coast to the end. That's how the Trump administration feels to me already, like 10 months in. And that's that seems to me like bad thing that like that there's nothing more to expect. We've got Trump out there actively lobbying against the the Epstein files thing actively trying to cover that up. And we got him out there like you said though talking about this is the greatest economy in the history of the universe. Besson was on you know the the talk shows last week saying we're in a golden age and then Trump went and repeated that was clearly a talking point for the administration goes up and makes just makes a speech and says we're in the golden age. America's never been stronger. No normal person under the age of 60 thinks we're in the middle of a golden age. The economic situation is very unfortunate for a lot of people. People are falling behind in their payments. Delinquency rates are high and we've got to listen to this guy tell us how amazing and great everything is. And if you disagree, just stop complaining. Uh that's their strategy. I I can't imagine where they go from here in terms of the midterm election, but I guess it's just back to your question though. Where what other ideas have they got? Doesn't seem to be anything. >> Well, even if they had some like their one big thing, right? This is why it was the big beautiful bill, right? Was and and and that that was the entire from a from a legislative point of view, that was the entire gamble. We're going to attach everything we come we can in this. This is going to be the magic elixir. we we we have to pass it by July 4th so that so that the ramifications are felt in time for the midterms next year. We're going to manage around the edges when it comes to congressional maps and things like that, right? And and and and you know, maybe there are some some there's some aspects of that that might play out and make make a meaningful difference to to certain groups of people that are hurting right now. For example, there's no tax on tips. Um you know, that's that's obviously going to play a a a role for service industry workers, which a major thing. And you know, kudos for that. But but I but but I I owning from the get-go the economy and praising it so early on like if if the entire narrative had been from the get-go, look how much Biden had screwed this up. We got a big job. You know, he he should have leaned into low expectations early because it was always predictable that the economy that he inherited like this is the first thing we said after Trump was elected, right? that the economy that Trump inherited in 2025 is much worse than the economy inherited in 2027 or 2017 or that economy wasn't great, but it was much better than you got this time around. There's so many foundational problems here. And instead of leaning into that narrative and blaming the the the last four years, uh, which, you know, would have been, you know, political theatrical theater on its own right, but whatever. That would have been another narrative standing point, you go straight to, ah, this is great. Continuing to to to to fail to see the the indications here. And and what else do you have? You're not going to get a 60 vote legislative agenda change if you had if you were to find a magic bullet that's gonna fix healthcare, right? You can't even do that. Um how much executive power, you know, how much how much can the agencies do at this point? And yeah, I mean it's it's it's it's a the only thing that they've got going for him is do you trust the other side? Right. Right. that the Democrats are, you know, that's that's one of the most fascinating aspects of just the political uh, you know, horse, you know, horse racing sort of a component to it is that even as Trump's numbers go down, the Democrat numbers don't get any better. Um, you know, midterms were all driven by enthusiasm or whatever, right? You can't really take those those elections as some sort of national referendum at this point, but the Democrats are not particularly benefiting because they don't trust them either. So, I mean, again, I mean, it's it's it's nice that people are kind of seeing the system for the way that very along the lines of the way that we kind of kind of view it, but [laughter] it's it's it's going to make for a very interesting uh you another uh you another calendar year. >> I almost wonder if uh the Democrats winning in some of these elections last week might maybe not a benefit for Trump, but it may have been worse if if the Democrats uh did poorly because now it's going to be clear that like they don't have answers either. Like when Zohan Mam Donni comes in, he's not going to fix New York. The economy is not going to get more affordable for the average New Yorkers. I think and it's like Trump could use that and point to and be like, "Look, they don't have anything either." Of course, it'd be he'd be coming from a stronger position. If he had coherent things to push himself, I think a major strategic mistake would be if he uh started trying to go after Mumani and like doing whatever he can to meddle and uh make Mumani fail because then he's just handing the Democrats an excuse. Oh, you know, it wasn't Mumani's insane economic policies. It was the fact that Trump came in and meddled that uh that explains the bad the bad results. >> Well, and we kind of touched on it in a recent episode, but like I I think the biggest tell of, you know, for all this, you know, and this is the thing, right? Like it's it's easy to kind of get worked up and get we already seen the backtrack a little bit on the 50-year thing. It it is admittedly easy to get wrapped up in some of the ideas that are thrown out there. Way Trump says things and they'll say something here and then it never happens, right? For both good and bad, right? You know, it happens all the time. Um what the biggest tell is how does the administration respond to the inevitable Supreme Court ruling on tariffs? If the Supreme Court does what is being projected as them doing right, that they are going to strike down major parts of the tariff platform with with a few exceptions here and there, do they double down or do they complain about it and do nothing? And I think that if you're looking at what what's the easiest way to to to change some of this stuff is just getting rid of that burden. >> And so I think the biggest tell on what the administration actually sees is how much do they complain versus how much do they do following the aftermath of that. And I think that's going to be a very interesting um experiment to watch play out. >> Yeah, I think uh priorities may mean a lot with an administration, right? There's only so many hours in the day. The the executive himself can only spend so much time doing things, can only spend so much time cajoling others to follow his lead and to help him out. And so you need to pick just really two or three things that your administration is going to really really focus on. And from what I've seen over the years, the most successful executives tend to be those people who who really focus on a few things. And Trump, none of the priorities are things that actually help ordinary people at this point. You you're not seeing him spending any time on say deregulation anymore. Uh very little going on there. There was like a little tiny bit that went on with Doge and that was great. That was fine. That's all over now. It seems he's not talking about it. Not talking about taxes, right? Aside from just a little bit about like taxes on tips and things like that. Not talking about deregulating. Not talking about really anything more to lessen the power of administrative agencies, which I loved all that talk during Doge. I loved when Doge was doing a thing. Even I knew Doge wasn't going to really cut a trillion dollars, but I thought maybe they could really help chip away at a lot of the power of these administrative agencies. Great. USA ID is gone. But I mean, is that going to help you when you're unemployed? Not particularly. It It'll help the Republicans win some races in the future and maybe that would be a good thing compared to the even more commie Democrats. Fine. Great. But when you've got a president out there who's all he's really talking about is we need to import more Chinese workers because American workers are too stupid to uh do the jobs necessary. Oh, also colleges and universities will go out of business if I don't import more foreigners for them. Now look, look, I I am by no means a hardliner about uh immigration in terms of closing the borders. I think a poorest border is a good thing, right? If you have family members or associates, actual employees that the private sector wants to deal with. Uh, I preferred not a uh highly intervention uh highly interventionist regime being involved in that stuff, but lecturing people about how it's a good thing to import more foreigners explicitly to fill your job. That's basically what Trump is saying now because Americans can't handle it. I um that that doesn't strike me as great politics. It's like he's just just throwing out stuff. I can't believe he said that. also to keep open these these progressive socialist uh like ideological factories that are the university system like >> right now it's our job now it's federal government's job to keep colleges in business what a weird >> yeah the indoctrination indoctrination centers that why is it that hard to say indoctrination goodness gracious English >> yeah so that's what he's saying now oh I need to import these people as basically corporate welfare for colleges >> okay I don't remember voting for that as a Trump voter I think many people might say uh and the the United States probably has way too many colleges and universities anyway. So, and you know how we'll know is how many are still in business after demand starts to go down. The money will flow to the better ones and the the loser ones will will disappear. Fine. Great. I don't see why keeping them open is a service to America. But but that's what Trump is telling us now. He's telling us that uh oh no Epstein files for you. But yeah, more immigrants uh to take your jobs because you're stupid and lazy. And also we need to make sure that we give more funding to the communist political science professors at uh you know po dunk central Illinois college or whatever. And so that's that's that's where this administration is right now. The all the the EPA ruining your life can't bother to be mentioning it. uh other administration other administrative agencies destroying you. You know, I got other priorities. I'm trying to raise tariffs here, folks. So, I I just it's it's bizarre to me that there's uh even much left in terms of support for this administration. Anything outside of just gee, thank goodness it's not Kamala. That's it. That's all you got. >> Which which I think does matter. Like like that's one my one of my push backs to the Dave Smith thing is like different people are being prosecuted than they would have been if Kamala is like I I'll take Comey being prosecuted a lot more than like you know Catholic homeschoolers. So like that that you know but it's unfortunate but like that's kind of the situation we're in is like who has the guns trained at them and that's kind of the biggest deciding factor on on the on the clown show of everything else going on right now. Uh the one person who I think might be having a good week though is is Steve's our good friend Steve Merin because do you think the chances of of the Fed dropping rates you for all the for all the the the serious talk that we talked about way way back three weeks ago? [laughter] I have a feeling that we're probably going to get get a get a rate cut in December just as Bren wanted. So So he's probably the one guy that's probably enjoying this week. >> Well, now that we have so little data, I don't know what the Fed is thinking now. I actually looked up, right, has Powell said anything on this lately? Has the FOMC said anything? They've been really quite silent for the last couple of weeks. Maybe just because I don't know, they don't have jobs data to work with. Um, you'll remember at the last meeting Powell at the last FOMC meeting, Powell made a big deal about how, oh, don't assume we're going to lower rates next time. Uh, but if the job situation continues to worsen, what are they going to do? I don't know. >> And and so yeah, I I mean, I'll be very interested to see. I guess we're not going to see job data until what early December and so we'll just be kind of guessing based on uh what the Feds say until then. So I guess we'll know more then. Also, I don't know if this is affected by the shutdown, but I've been looking for the the latest Treasury report as well because I don't know how big the deficit was for November uh in terms of tax revenue. If tax revenue is going down, that's going to be a very interesting thing to look at. once tax revenue goes down, you know, you're in a terrible economic situation. So, I, you know, there there isn't any recent data that I've seen. Maybe they'll put that out with the um with the shutdown over. So, we may know more soon. >> Well, it is interesting on that uh two two points that came to mind there. Um Bessett was once again uh bragging about the the tariff revenue um earlier this week and in doing so he even acknowled he he was trying to make the argument that increased tariff tariff revenue is going to in uh is going to be a positive impact on inflation because the deficit is a major component of inflation the economy which is good to see acknowledged but like [laughter] but but then you keep buy but but but our spending hasn't gone down at all and so like if you recognize that government spend spending fuels inflation maybe the solution isn't just increase tariff revenue Maybe it's actually, you know, trying to cut that. Neither here nor there. But of course, you also had the other big idea, which was $20,000 uh Trump checks out of tariff revenue, but only to people making under $100,000, which, you know, g given the modern economy, you know, is is not what it used to be. And so, you just expect the no nowhere else worse to be than that that group right there, like like the 100 105,000 and just enough to to be significantly impacted by the inflationary consequence of what's going on right now. but not enough to get your STEMI. So like again, this is great. Great spot for the middle class. >> Well, it's interesting churn that's going there because you need the $2,000 just to cover the inflation that came from the previous stimulus check. So now you got a new stimulus checks. You better save it because you're going to need it to cover the inflation like 18 months from now. So see how that goes. All right. Well, we'll go ahead and wrap it up with for this episode of uh Power and Market podcast. Thank you everyone for [music] joining me out there. We'll be back uh next time with more. So, we'll see you then.
Trump’s 50 Year Mortgage Mistake
Summary
Transcript
[music] Welcome back to the power and market podcast. I'm Ryan McMin, an editor at chief at the Mises Institute. And joining me today are two of our contributing editors as usual. We've got th Bishop and we have Connor O'Keefe. And uh we've got some great uh sort of uh political financial news to talk about today. I think you're going to think it's it's fun because it's such a terrible idea that we're going to have terrible idea coming out of the Trump administration that we're going to have some fun really tearing it to shreds I think as much as we can. But first, just wanted to mention an upcoming event we have, right? Our, you know, it's we're almost at the holiday time, so we don't have any big events coming up during that, but early next year, we've got something coming, right, uh, Tho. >> Absolutely. Feb February 21st, we're going to be in Oklahoma City. I don't think I've ever been to Oklahoma City. So, we will have a great great line. I'm very excited for this one. Um, we're going to be joined by Dr. Keith Smith, a Power and Market podcast listener. uh Caitlyn Long who is doing incredible things in the crypto orbit um trying you know fighting uh the Fed and various administrations on the regulatory side of that you know real real entrepreneur in that regard uh Perand of Oklahoma City University um or Oklahoma State University I should should say uh Timothy Terrell and our own Ryan McMon how can you turn that down be our first event for 2026 I'll be in February and a reminder that uh if you want to see the cutting edge of libertarian National Economics Research. We will be in Auburn for our research conferences come March. You can find more about these events in our ever growing schedule for 2026 at mises.org/events. And be prepared. It's going to be year end. We're going to be doing membership drives, fundraisers. We've got a very nice premium this year, a minibook by Ryan McMon himself on the history and strategy for Liberty. So, very excited for that. Expect to see more in your email, in your uh your podcast feeds. seeing it on the website. So, get ready for that as we get to the end of 2025. >> And if you're not already getting anything from us in your inbox, you can always sign up for that. You can also pick and choose, right? Do I want to get like article updates, you know, tell me when there's new articles at mises.org? Do I want to just hear about events? You can basically make your your email recipient status with us tailor made to what you want. Just go to mises.org and click on subscribe. That's mises.org. og and then up at the top click on subscribe. So >> Ryan's Ryan's looking to slide into your inbox right there. [laughter] >> So So let's talk about Trump's idea this uh this week for the 50-year mortgage. This is a new idea that came down and uh both Connor and I wrote columns on this because we were struck by um the shortcomings of the idea. So, Connor, can you just introduce us to just basically what were the events that that led us to this new announcement uh about a 50-year mortgage and where it's coming from? >> Yeah. So, it started as a lot of things do in the Trump administration with a random social media post from the president. Um there there was reporting I believe from Politico that uh said the idea actually came from Bill Py, somebody we've mentioned a few times on the show before. [laughter] >> My buddy. >> That's right. Apparently, there was some kind of event um or something on I think it was Saturday night and PY just showed up to this event with a poster board and on the poster board was this graphic of Trump and FDR and on the top it said something like great American presidents and then above FDR was the the text said 30-year mortgages and over Trump's head it said 50-year mortgages. And about 10 minutes later, Trump posted that exact graphic and caused what was basically a firestorm on the like right-wing social media, you could say. Um, that's how I saw it. I was actually kind of struck by how little attention it seemed to get from the more like establishment press. There was not, it took a while for like the Wall Street Journal editorial board uh to comment on this, but a lot of MAGA people notably were um let's just say not happy about it after there there's a lot of angles as to why. First of all, FDR being a great president, that's something I think all of us would disagree with there. But then just the whole idea that um this is the path forward when it comes to like addressing the the housing crisis and the housing affordability crisis. Um, it's just crazy as as we'll get into. But I think a lot of people were picking up on the fact that this this happened less than a week after the elections, which we talked about last week. And the the big takeaway from a lot of people, ourselves included, was that the affordability crisis was kind of the the the the thing that the winning campaigns really committed to uh, you know, speaking in favor of addressing. And so, uh, we were wondering if the Trump administration was going to um was going to see that and start acting accordingly. and and housing affordability, especially with younger Americans, is like a major issue, especially on the right. So, it's no surprise that they have an interest in going about this. But, um, as as we can get into, I don't know if, uh, 50-year mortgages are the way to do that. >> Well, I I was impressed by how much push back he got against it in social media, which demonstrates that I guess people are paying attention when it comes to the mortgage issue. Right now, a lot of people, they have mortgages and they're paying attention to what they're paying on them. And it seemed to be something that people knew a lot about and in a good way. And so, people kind of recognized instinctively that it wasn't a great idea. And [laughter] and in spite of what Trump was saying because shortly after he offered this idea, now first of all, let's not just like overlook that whole comparing himself to FDR thing. Can we make let's make sure and drive that home. This man is comparing himself to FDR and thinks and is and is appealing to conservatives with this. That's that's bizarre. So, it looks like you have something to add. >> He's appealing to great. No, no. I He's the thing is FDR didn't even create the 30-year mortgage, [laughter] >> right? The 30-year mortgage came like I mean, I get I get that he he created some of the infrastructure, whatever. >> I mean, the GS. >> Yeah. Yeah. So, like I mean, I get that there are plants that their seeds plant, but I had to check that. I was like, "Wait, wait. I I But yeah, the 50 year the 30 the 30-year mortgage actually came after FDR. Neither here." That just one little [laughter] >> I mean, yeah, you could, right? I mean, because of Fanny and Freddy as were New Deal things and all of that. >> He tilled the soil, but technically, you know, just [laughter] >> it's it's just remarkable that this is the place that he has decided to make himself as the model. Um, hey, hey guys, I'm just like FDR. I'm creating my own New Deal, and conservatives are are falling all over themselves to praise him on. Now, of course, there are fewer and fewer Trump supporters every day, uh, because of these antics. But the real diehard ones, they they just seem to think, "Oh, it's great. It'll be like FDR. It's awesome." Um, yay, freedom. One of the most freedomhating presidents in American history. But that's what we're praising now. And as I note in my article, FDR was the one who gave us the the whole concept of too big to fail. Now, he created this corporate centered economy where the government ends up bailing everybody out. Now, it took decades for a lot of that to come to fruition, but all the seeds were sewn uh by by FDR. And the fact we have all of these administrative agencies, we have all these quasi uh quote unquote private organizations that ended up being owned by the federal government like Fanny and Freddy. This was all FDR's work. So if you love the banker system, if you love the financialization of the economy, if you love too big to fail, if you love bailouts for for billionaires, FDR is your guy. And I guess Donald Trump is your guy, too. Well, I I do think that's why some of the push back is there is I do think there's a deeper skepticism of financial markets of that aspect of it, right? A lot of focus on, you know, yeah, we're creating a whole new generation that is going to never be able to pay off these levels of of debt there. And so, I do think that is kind of, you know, there this was a bad week for Trump beyond this, right? I mean, you talking about, oh yeah, we'll continue to bring in hundreds of thousands of Chinese students on on for colleges. We're we're going to we're doubling down on H-1V visas. we don't have talent, enough people to fill these jobs, right? So like this this was a number of things that were getting like his his biggest supporters little little freaked out here. Um but it is good to see the immediate push back on this. I'm not particularly s again like this this is hitting the the you know one of the big rails of politics right and that's that's one of the biggest aftershocks of the mid of the offyear elections last year is how quickly the entire conversations focus on these affordability issues. you know, it has now moved away from the immigration front, though obviously that's still a major thing, but it's directly to these. And I think that's one of the reasons why you had PY pull out this, you know, this this this wild card and ends up in a truth social post is because they're just trying to figure out how to stem the bleeding right now. And and what's funny is that, and this is goes to how inept, how incompetent DC is. Fast forward a little bit to, you know, 13 years ago, the one thing that every Republican agreed upon is that Fanny and Freddy have to go. Like that was the one consensus item after '08, right? I I remember sitting in staff meetings with the financial services committee. Everything was how do we get away from these quasi p you public private Fanny May Freddy Mack monstrosities that created this? And here we are 2025 and [laughter] and we're going to make them bigger and better than ever. Like that's that's how quickly like the inability to do any sort of reform is itself part of these meta a meta narrative of this particular proposal. I don't think this surprises any of us, but it is worth recognizing that again like Fanny May, Freddy Mack, this entire aspect of the housing market was the uni universally agreed upon principle back in 2010, 2011, 2012 and is completely out the window right now. >> Well, and let's tie these two issues together, right? Is if you are going to expand the 30-year to a 50-year mortgage, this is going to require plenty of intervention and ongoing support from Fanny and Freddy. the way that 30-year mortgages work, it's not a free market creature. Now, it could work, of course, banks could offer 30-year mortgages if they want. Um, there wouldn't be nearly as much liquidity to do that as there is presently, and interest rates would probably be significantly higher for for such a long-term risk. And so, how how do we have this 30-year fixed thing, right? cuz you can imagine how high the risk is when the the when the mortgage payment is fixed, right? It's one thing you you could easily have 30-year mortgages with variable interest rates, right? Because that could adjust over time and match new realities of interest rates because interest rates can swing wildly over a 30-year time period. But when you're fixing it in, you need some sort of backs stop from the federal government. And that's why you didn't have a whole lot of 30-year mortgages appear before the creation of Fanny and Freddy. So what you've got are these organizations, these corporate what prior to 229 2009 were fully private government guaranteed rich guys make make money on uh the well rich guys buy up the stock of Fanny and Freddy make money on it. They were sort of private but everybody knew that they were going to get bailed out if there was ever a serious crisis. So they were you know it's like the very definition of like corporate monopoly backed by government. And one of my favorite anecdotes, this is not particularly relevant, but I find it amusing, so hopefully our audiences will will as well, is that you when they were bailing out Fannime and Freddy Mack back in the day, you know who was like one of the largest international holders of Fanny and Freddy debt. >> No, >> it was Russia while they were having their conflict with with Georgia at the time. So like we were condemning like you were freaking out about Putin and invading George and all sort of stuff while we were bailing out one their their investments in Fenny May and Freddy at the same time. Again, this isn't surprising, but I just find it interesting [laughter] as an entertaining anecdote of how wonderful our federal government operates. >> I imagine there's many such cases. >> Many such cases, >> right? >> And so Fanny and Freddy, they exist to purchase uh mortgage securities uh on the secondary market. And so this keeps liquidity moving into the mortgage market. And then on top of that, you've got stuff like FHA, which just directly ensures a lot of these mortgages. And so that's why you ended up with this big 30-year fixed market. It is not like just something that arose on its own. It depends on implied government bailouts and easy money to keep interest rates low. And it's all about federal intervention. >> And so of course a lot of people on the left argue, well this this is evidence that we need uh federal intervention uh to to have high home ownership rates. The reality of course it was already very much moving in the direction of higher home ownership rates uh after World War II. It wasn't uh it would have continued to rise and you wouldn't have had the bailout too big to fail culture that we have now. Um and of course people would have invested in other things. And this was a point uh that has been made uh many times about the US mortgage system is that we're the only ones that really do that. There are plenty of other countries that have home ownership levels of similar levels, home ownership rates of similar levels that don't have this huge intricate web of federal guarantees and and federal intervention to push up home ownership. There's a certain obsession in America with getting the home ownership rate high and it's it's now basically been taken over by the federal government in terms over I believe the last time I checked uh the vast majority of home loans are in some way uh inshed in federal government programs whether it's FHA whether it's those those get funneled into uh mortgage back securities that are then owned by either the Fed um they're bought by Fanny Freddy I I I mean that the whole thing is is highly federalized and other countries just simply don't have to do that. Uh and they've got plenty of home ownership too. So if you're going to switch to 50-year mortgages, you can only imagine then what the risk levels are. This just magnifies the same stuff that you had to address with more federal intervention for the 30-year mortgage. You can expect even more bailouts. And and the big reason that this that this calls for even more bailouts, even more federal intervention is the fact that when you start to get to 50-year mortgages, home ownership is is a matter of ownership and name only for most people when you think about it, right? Because a lot even now people talk about home ownership and then when you oh I own my home and then when you when you look at the numbers, they have like basically no equity in the property. All they're doing is making monthly payments to a bank and then saying they own the home. Now, of course, if you stayed in the same location for a while, you actually have paid a significant amount of the principal. Yeah, you own a significant stake in that property and you could probably call yourself the homeowner. But I looked at the numbers, right? I was just using the common, right? Anybody can do this. You just use calculator.net's loan amortization uh calculator. Like everybody uses this. And if you run the numbers through that, it you could start to see the big differences, right, between a 30-year and a 50-year. Uh first of all, we should be clear that if you get a 50-year, you're only saving about 350 bucks a month compared to what you're paying for the 30-year. Now, that might seem significant uh for a lot of people, but when but here's the flip side is even though you're not saving that much, it's really hard to justify when you look at how much equity you're gaining with the 50 years. So, you're paying a little bit less with the 50-year, but you are getting almost no equity in the first heck 20 years even of making payments on that. So after the first five years, you have paid about less than $10,000 of the principal down. Meaning that if your neighborhood, your part of the country has either a stagnant home market or a declining home market, and of course to lose $10,000 on an asking price during a recession or just generally a stagnant home market, that's nothing. That happens all the time. So, if you've got a 50-year mortgage because you're paying so little in principle, you are far more likely to end up underwater after 5 years, even 10 years, if the if the asking price has to go down even a little bit. So, if you end up unemployed, you need to move for a job or whatever reason, and you need to sell that house, you're probably going to lose money on it. And then if there's a case of a real recession and you can't find another job and you really got to sell it, but nobody wants to buy it at at the price you need to sell it at in order to avoid losing money. Well, now you're just going to end up foreclosing. So, it has a lot a 50-year mortgage has a whole lot in common with what we saw back during the old housing bubble, which was pick your payment loans and interestonly loans. We saw these a lot back in those days. Um sometimes you these were these were originating with what we called the ninja loans, right? The no income no job applications for mortgages or you just said what your income was and they believed it and then you could just pick your payment. So we had a lot of that going on and then consequently nobody had any equity in their homes, they mail the keys to the lender or they just walk away from the house. You are inviting 100% that sort of thing with a 50-year mortgage. And then just a lot of the populist uh blowback I saw from people saying right the Trump this is the last thing we need. They were pointing out that the reality was going to be right since mo since on average most people are moving after eight years of living in a house they're not actually acrewing any uh equity. So if they move and then they start another 50-year mortgage all they're ever really doing is paying rent to the bank without ever acquiring any real equity. So, I was surprised at just how many people saw through the ruse and recognized just how bad an idea it was. Um, and uh, so I guess it's it's already a unpopular idea. It's only been a few days and he's already being trashed by this by a lot of his own what are now former followers in many cases. >> Well, I think that's take another swing at PY. That's my curious [laughter] >> the fighting. Um, I think they're pivoting now. It looks like Pi is trying to say uh it's portable mortgages now I think is what they're going to try to switch to which I think is more that seems more reasonable to me mainly because the 50-year mortgage is just so crazy but at the same this what you were saying a few minutes ago still stands if it needs government backing to exist this is not actually a valuable financial product at the end of the day so I'm still skeptical about all that and I guess what I tried to write about in my article my kind of angle on this was that this isn't really addressing the actual housing affordability crisis that yes, like the whole financial system has blown up and we have this huge bubble, all this financialization. It's a complete mess. But at the end of the day, like the thing that often goes unsaid is that we have an artificial housing shortage in this country. And what's kind of difficult about that and making that like a national political issue is a lot of that is happening on the the local level with with municipalities as well. I talked a bit about um zoning laws uh that you know which libertarians are always chirping about but like that's a major a major factor here but then environmental regulations any kind of regulation on construction um that like nimism all you have all of these things that um are creating an artificial shortage and as long as that artificial shortage is there like there always will be a housing affordability crisis um to some degree and I guess what annoys me about this whole 50-year mortgage thing is they just completely ignore all that. They're going to leave all that in place, go kind of mess around on the financial side of it. And so it's like it's not just that it's a bad idea, but it's like that your attention is in the exact wrong place. And and I I guess like yes, like it is kind of difficult to I think it is difficult to get like a national movement going about what is at the end of the day mostly a local issue, but at the same time like Trump is the leader of the Republican party now. Republicans are going all the way down to the local level. If he started talking about this like or you know his team, the people around him if they really started pushing this then like we could actually potentially see some meaningful uh reform on that front. Also just to to quickly point it out if like I I kind of gloss over it was a short article but if anybody's interested in like this actual issue like why housing is actual expens why housing is actually expensive. Ryan um did I think three great interviews with Chris Calton earlier this year um on Radio Rothbart. I think the first one was focusing on homelessness which is obviously related to all this um but then two other ones getting specifically into that and he he cites a lot of books. Um I think that this is like this needs to be a major uh a major issue for any kind of movement that wants like meaningful improvements in this country. But we have to actually understand the the real cause of the problem. And just like, you know, firing off posts late at night about, you know, these speculative uh financial products are it's just it's not only is it stupid, it's just it's missing this huge opportunity. >> Well, it's even worse than that because what what you having is increased demand for housing without new supply. >> And so you're going to end up having an increase of the underlying cost of the house. >> Yeah. And so we're actually going to make houses even more affordable, even even better than that. And don't tell me if you if this doesn't sound like a a deja vu all over again. But the same week, um I get our good friend Bill Py. Um I I I want to blame him for this. I think this is comes from him, but they're talking about getting rid of um of of scrapping minimum credit score requirements, which I think are 620 right now. Um at Fanny May, one of the GSC's part of this as well. like we're we're going straight to the 90s here to to to boost, you know, housing demand, focusing on making it easier to finance, but all that will do is further soak up supply, making making the the prices go up, and so the underlying cost of the housing on top of all these issues that come creating new supply are just going to go up. >> Well, it's also just the latest admission that the economy is worse than they're willing to admit. Oh, we have to lower credit scores now in order to have people qualifying for loans. Why are your credit scores low? Well, because I'm missing payments. Because my income isn't enough to cover my expenses and now I'm delinquent on stuff or I haven't paid my bills lately. That's why you need to start incorporating lower credit scores into home purchases. That's what we were doing in 2004, 2005, 2006. We kept lowering the necessary requirements for purchasing a home. That's how you end up with a housing bubble. So I mean I'm sure PY probably portrays it as like some sign of economic strength or something, but of course it's it's exactly the opposite. >> Yeah. Well, I mean [sighs] looking at this, I just want to [laughter] first of all, let me state guys, I said offline that uh Trump had also suggested 15-year auto loans. I looked that up. Uh as far as I can tell, it's it's fake news. Uh this was repeated many times in social media but I have not been able to track down a reliable source as to [laughter] it seemed plausible right given what we know. >> If he sees the reports he may he may run it. [laughter] >> Bill Py comes in with the poster board. >> Well yeah I could see PY pushing that. Um but uh that's uh that's not necessarily something that has actually happened yet but I could see it happening. Um but right the whole idea here that PY is just trying to push is this idea that it's it's more affordable and Trump it I think it was getting blowback even before he did that TV interview shortly after um with Laura Ingram if I remember correctly. Uh he went up and he did an interview with her and she says so what about this 30-year mortgage and he he must have gotten push back because he just starts saying it's no big deal. It's not even a big deal. you'll just you'll just have lower payments than with a 30-year, which of course, as we just examined a minute ago, is not true because you're paying huge amounts of interest. Um, and so I guess suppose on a monthly basis you have lower payments slightly by a few hundred bucks. Uh, but of course the amount you pay over time is vastly huger. And so he's just kind of waving all that off and saying it's barely a change. It's barely any big deal. And then he kind of like stumbled and said, "Oh, you know, so people have 40-year mortgages now and then they'll have 50." And she pointed out, "Well, actually, it's 30-year mortgage." He's like, "Well, some people have 40." Which is true, but none of them are federally insured and they're very rare. Uh, so I I don't even think he knows what what's going on in the mortgage market, which I mean that's kind of I would say describes a lot of the Trump administration in current days is I don't think he knows what's going on with stuff. One thing he doesn't know is what the unemployment rate is, for example. He doesn't know what the CPI inflation rate is, for example, because all those uh research activities have been halted. And of course, we criticize government money and all that or government research and all these numbers that come out, but when you're the federal government and you're insisting you should be making policy based on these numbers, maybe we should have something to work with in terms of uh what's actually going on with employment. And I think what we'll probably find is that that employment is really quite bad in the last couple of months. And that seems to be what all the private stuff coming out is pointing to. And we talked about this a little bit uh in previous weeks was once you start looking at the the private sector reporting on jobs, it's it's very negative uh or it's just very very small in historical terms. So looking at that and then also some private firms have tried to report on what they would estimate the CPI is probably going to be and the one report I saw said, oh well it's ticked up slightly to 3.1%. So meanwhile, we got Trump out there saying, you know, inflation's over. It's solved. And why isn't Jerome Powell, who he blamed for having to in during his interview with Ingram, he's like, we have to have 50-year mortgages because we have a terrible guy at the Fed who is raising interest rates. Having 50-year mortgages doesn't doesn't solve the interest rate issue at all. And as though just pointed out, it doesn't make the underlying price more affordable either. It just creates without addressing the supply issue just creates more demand for the same houses. And so you're not going to see home ownership rates increase. This something in my article that I wrote on this topic, by the way, I I uh linked to a old Heritage Foundation article, old, you know, it's from like seven or eight years ago. Uh but nothing's changed since then in terms of its analysis is that in spite of all of these decades of of more and more liberalizing the requirements for purchasing a house. Home ownership rate actually hasn't changed in decades. All they do is increase the risk constantly in terms of too big to fail in terms of promised bailouts and the home ownership rates gone nowhere. All that's happened is that the people who actually have managed to get into the market just keep getting older and no young people can buy homes. That's what that's where the real change is in the marketplace. So 50-year mortgage would do nothing. It would not actually even if you did manage to get younger people into home ownership, it would again be home ownership and name only. They wouldn't have any equity because they would only be able to slide in barely getting the 50-year mortgage rate with what, like a 5% down payment maybe. And then they've got no equity when they finally need to sell. And young people sell their homes more often. They don't live as long in one place. So, they're going to just be bouncing from one 50-year mortgage to another. Welcome to paying rent. I mean, that's that's basically what it is. So, that's that's that's Trump's big idea for the week. And all based on what? While claiming that inflation's going down, claiming that employment's great. He he has no idea. Doesn't know how mortgage works, doesn't know what employment situation is. All of this, it just seems to be making up stuff that he thinks maybe could get some people excited in the short term. And uh it's it doesn't look great. But I I think what what other ideas are out there like that's the problem right now is that you know for all the energy and all the all the institutions have been built and all that sort of stuff right around the you know the current manifestation of of MAGA conservatism so much of the focus was on immigration so much the focus was on taking back universities so much of it was on various you know cultural war related issues so much of it was this this and this but when it comes to the economy you know the the big idea the big new idea was tariffs right and then a little bit of Doge and the Doge didn't go anywhere right but there hasn't been any sort serious robust uh new thinking, right, of of how to actually deal with kitchen table affordability issues. And I mean, we see this play out particularly right now with, you know, again, you know, as we've mentioned several episodes now, is that, you know, the entire government shutdown, which we didn't even fail to to recognize that, hey, at least the government's open again, right? Haha. Um, you know, but but the catalyst for that, right, is oh yeah, we've got this whole Obamacare thing that we've been propping up with with duct tape bubble gum and a whole lot of money. Um, it's not working. Uh, how do we fix it? Oh, well, go. They're they're they're brainstorming some ideas now. Just just just just wait. Just wait. It's like we've been sitting around for, you know, this was back in 2016. We ran on replacing Obamacare. They had no ideas, right? We had we had one decent idea that got killed. I've already ranted about that. But there's no solutions when it comes to economic issues. There is not some sort of ready-made mill of of new bold policy plans. And so, Republican party right now, Trump and etc., right? It's not as if there is some sort of wonkish, you know, Senate movement right now for for something different that just hasn't caught Trump's eye. I think that's one of the reasons why the 50-year plan was appealing is, you know, PY, you know, like a I got I got to fix for this. We're just going to go bigger on here. What else you got? And that's the current state of of, you know, Republican politics at the national level right now. And and this is going to play out. It's going to be a never- ending cycle right now because affordability number one political issue right now. No solution because you can't cut spending. Heaven forbid. Can't do that. So what else you got? We we just passed the budget that brings that that solidifies Biden era spending. So we can't touch that thing. What else have we got? >> Spend more money. >> That's what uh Tom Woods opened up Misesu this year where they talk about that about how like a lot of people in these sort of new right circles have just dismissed economics. Um and this is the consequence of that. They don't there's no coherent MAGA economic vision and so they don't really have anywhere to go with it. And then it puts Trump in this difficult position like that was a bit another big part of that Ingram interview was that he's he called it the greatest economy that we've ever had. He he basically has had to completely adopt Biden's terribly failed strategy of just denying people's economic pain. And we just saw how terribly that worked out for the previous administration. And Trump's just doing the same thing. But he kind of has to because, you know, there's just no actual interest in like in ma making meaningful changes. He It's just Yeah, like you said, um continuing Biden's budget. I think Dave Smith put out a tweet that it's essentially like a second uh Biden term but with a closed border. And I don't I I'm thinking about um I think I might write an article about this next week. But um I feel like in a lot of ways Trump is the rights Obama in that Obama back in 2008 like the the amount of excitement that I I was in middle school I was not paying any attention to this stuff but looking back at it it's clear that you know coming out of like the Occupy uh Wall Street protest like the the amount of excitement and optimism that a lot of you know young college students and young progressives had when Obama won like that was palpable and I think kind of similar to where MAGA was uh a year ago when when Trump uh won again. But then, you know, and like what what did Obama run on? He basically ran on like uh cracking down on corporations, especially the big banks and ending George W. Bush's wars. And he did neither of those things. He, you know, ushered in like a historic period of easy money um for Wall Street. And then, you know, yeah, he switched like foreign policy wise from these overt o overt um nation building exercises to more like covert uh regime change in Syria and Libya. But like he he was extremely hawkish. And I think like so there's parallels there to where we are with Trump where like whether he was like never um genuinely trying to make changes or he has been co-opted, it kind of makes the difference. He's in a similar position right now. And I think if you look back at um the left and Obama, the the major mistake that they made is they just rallied around him anyway and they refused to condemn him. And then coming out of his presidency with like when uh Sanders went up against um Clinton, Sanders kind of embodying that old Occupy Wall Street left like he he was just he didn't have anything really to run on because he he refused to trash the previous administration. And then of course he rolled over and submitted when the establishment Democrats completely cheated him. And I I think that from my perspective the the big peril for Trump supporters right now is that they don't is that they continue to fall in line and they don't criticize Trump because if they don't criticize Trump then the only sort of pressure he's going to be getting is from the people that want him to compromise. I think that's sort of how why we're here. It is nice as you said Ryan like there he has been getting some push back at least on the mortgage thing. He's been getting some push back on the Epstein stuff. So like it exists there. It seems like Mag is in a better position than the um Obama supporters were. But I think this is sort of the big dynamic going forward in terms of is Trump actually going to make any changes or or is he just going to be another Obama? >> Well, and to your point uh you know Trump had some nasty words this week for Marjorie Taylor Green. >> Right. I I can't think of anybody in Congress who better embodies like the Magazite guys, right? Marjorie Taylor Green and he attacked her like, "Oh, you know, she's she's c she's she's cuddling with the left and she's got her own act going on and for for for what?" Because Marjorie Taylor Green's calling out Republican leadership not having these plans, you know, that that I'm worried about my district in North Georgia like with with all the consequences of that sort of stuff. Things are not getting cheaper. This is a major problem. We ran to fix this. We've got no idea of what we're doing. Speaker Johnson's a joke, right? And and I think that's where most you know MAGA folks are right now. Anna Paulina Luna, Lauren Boowbert, right? They joined with Thomas Massie to discharge Epstein files, right? Another one of those things. That's one of those, you know, kind of key zeitgeist issues for MAGA, right? And so like it's the it's the members of Congress that are the most authentic MAGA, if you will. you use whatever term you want that are becoming right now very interestingly the most disruptive aspects of the Republican coalition and doing things that Speaker Johnson and the Trump administration are for whatever reason not wanting to do and I think that aspect of it I think that's a very fascinating point that you're you're making there Connor and I think that's one of the interesting components is that again MAGA in both in in terms of what we're seeing on you know public discourse and whatever but also even within kind of that core faction is is this perhaps you know, one of the silver linings, one of our our common themes is that you the Trumpers are better than Trump. I think that we're even kind of seeing that even within, you know, the snake den of the US Congress right now. Well, I mean, is it just me, though? Well, we're we're less than a year into this administration. It feels like it feels more like year three to me than the ve very very beginning, right? Year three, after you've lost the midterms, everyone in the administration is demoralized, starts looking for other jobs, you're out of ideas, right? This is true at the governor level as well, right? I I won my second term. We're more than halfway through. It's time to just coast to the end. That's how the Trump administration feels to me already, like 10 months in. And that's that seems to me like bad thing that like that there's nothing more to expect. We've got Trump out there actively lobbying against the the Epstein files thing actively trying to cover that up. And we got him out there like you said though talking about this is the greatest economy in the history of the universe. Besson was on you know the the talk shows last week saying we're in a golden age and then Trump went and repeated that was clearly a talking point for the administration goes up and makes just makes a speech and says we're in the golden age. America's never been stronger. No normal person under the age of 60 thinks we're in the middle of a golden age. The economic situation is very unfortunate for a lot of people. People are falling behind in their payments. Delinquency rates are high and we've got to listen to this guy tell us how amazing and great everything is. And if you disagree, just stop complaining. Uh that's their strategy. I I can't imagine where they go from here in terms of the midterm election, but I guess it's just back to your question though. Where what other ideas have they got? Doesn't seem to be anything. >> Well, even if they had some like their one big thing, right? This is why it was the big beautiful bill, right? Was and and and that that was the entire from a from a legislative point of view, that was the entire gamble. We're going to attach everything we come we can in this. This is going to be the magic elixir. we we we have to pass it by July 4th so that so that the ramifications are felt in time for the midterms next year. We're going to manage around the edges when it comes to congressional maps and things like that, right? And and and and you know, maybe there are some some there's some aspects of that that might play out and make make a meaningful difference to to certain groups of people that are hurting right now. For example, there's no tax on tips. Um you know, that's that's obviously going to play a a a role for service industry workers, which a major thing. And you know, kudos for that. But but I but but I I owning from the get-go the economy and praising it so early on like if if the entire narrative had been from the get-go, look how much Biden had screwed this up. We got a big job. You know, he he should have leaned into low expectations early because it was always predictable that the economy that he inherited like this is the first thing we said after Trump was elected, right? that the economy that Trump inherited in 2025 is much worse than the economy inherited in 2027 or 2017 or that economy wasn't great, but it was much better than you got this time around. There's so many foundational problems here. And instead of leaning into that narrative and blaming the the the last four years, uh, which, you know, would have been, you know, political theatrical theater on its own right, but whatever. That would have been another narrative standing point, you go straight to, ah, this is great. Continuing to to to to fail to see the the indications here. And and what else do you have? You're not going to get a 60 vote legislative agenda change if you had if you were to find a magic bullet that's gonna fix healthcare, right? You can't even do that. Um how much executive power, you know, how much how much can the agencies do at this point? And yeah, I mean it's it's it's it's a the only thing that they've got going for him is do you trust the other side? Right. Right. that the Democrats are, you know, that's that's one of the most fascinating aspects of just the political uh, you know, horse, you know, horse racing sort of a component to it is that even as Trump's numbers go down, the Democrat numbers don't get any better. Um, you know, midterms were all driven by enthusiasm or whatever, right? You can't really take those those elections as some sort of national referendum at this point, but the Democrats are not particularly benefiting because they don't trust them either. So, I mean, again, I mean, it's it's it's nice that people are kind of seeing the system for the way that very along the lines of the way that we kind of kind of view it, but [laughter] it's it's it's going to make for a very interesting uh you another uh you another calendar year. >> I almost wonder if uh the Democrats winning in some of these elections last week might maybe not a benefit for Trump, but it may have been worse if if the Democrats uh did poorly because now it's going to be clear that like they don't have answers either. Like when Zohan Mam Donni comes in, he's not going to fix New York. The economy is not going to get more affordable for the average New Yorkers. I think and it's like Trump could use that and point to and be like, "Look, they don't have anything either." Of course, it'd be he'd be coming from a stronger position. If he had coherent things to push himself, I think a major strategic mistake would be if he uh started trying to go after Mumani and like doing whatever he can to meddle and uh make Mumani fail because then he's just handing the Democrats an excuse. Oh, you know, it wasn't Mumani's insane economic policies. It was the fact that Trump came in and meddled that uh that explains the bad the bad results. >> Well, and we kind of touched on it in a recent episode, but like I I think the biggest tell of, you know, for all this, you know, and this is the thing, right? Like it's it's easy to kind of get worked up and get we already seen the backtrack a little bit on the 50-year thing. It it is admittedly easy to get wrapped up in some of the ideas that are thrown out there. Way Trump says things and they'll say something here and then it never happens, right? For both good and bad, right? You know, it happens all the time. Um what the biggest tell is how does the administration respond to the inevitable Supreme Court ruling on tariffs? If the Supreme Court does what is being projected as them doing right, that they are going to strike down major parts of the tariff platform with with a few exceptions here and there, do they double down or do they complain about it and do nothing? And I think that if you're looking at what what's the easiest way to to to change some of this stuff is just getting rid of that burden. >> And so I think the biggest tell on what the administration actually sees is how much do they complain versus how much do they do following the aftermath of that. And I think that's going to be a very interesting um experiment to watch play out. >> Yeah, I think uh priorities may mean a lot with an administration, right? There's only so many hours in the day. The the executive himself can only spend so much time doing things, can only spend so much time cajoling others to follow his lead and to help him out. And so you need to pick just really two or three things that your administration is going to really really focus on. And from what I've seen over the years, the most successful executives tend to be those people who who really focus on a few things. And Trump, none of the priorities are things that actually help ordinary people at this point. You you're not seeing him spending any time on say deregulation anymore. Uh very little going on there. There was like a little tiny bit that went on with Doge and that was great. That was fine. That's all over now. It seems he's not talking about it. Not talking about taxes, right? Aside from just a little bit about like taxes on tips and things like that. Not talking about deregulating. Not talking about really anything more to lessen the power of administrative agencies, which I loved all that talk during Doge. I loved when Doge was doing a thing. Even I knew Doge wasn't going to really cut a trillion dollars, but I thought maybe they could really help chip away at a lot of the power of these administrative agencies. Great. USA ID is gone. But I mean, is that going to help you when you're unemployed? Not particularly. It It'll help the Republicans win some races in the future and maybe that would be a good thing compared to the even more commie Democrats. Fine. Great. But when you've got a president out there who's all he's really talking about is we need to import more Chinese workers because American workers are too stupid to uh do the jobs necessary. Oh, also colleges and universities will go out of business if I don't import more foreigners for them. Now look, look, I I am by no means a hardliner about uh immigration in terms of closing the borders. I think a poorest border is a good thing, right? If you have family members or associates, actual employees that the private sector wants to deal with. Uh, I preferred not a uh highly intervention uh highly interventionist regime being involved in that stuff, but lecturing people about how it's a good thing to import more foreigners explicitly to fill your job. That's basically what Trump is saying now because Americans can't handle it. I um that that doesn't strike me as great politics. It's like he's just just throwing out stuff. I can't believe he said that. also to keep open these these progressive socialist uh like ideological factories that are the university system like >> right now it's our job now it's federal government's job to keep colleges in business what a weird >> yeah the indoctrination indoctrination centers that why is it that hard to say indoctrination goodness gracious English >> yeah so that's what he's saying now oh I need to import these people as basically corporate welfare for colleges >> okay I don't remember voting for that as a Trump voter I think many people might say uh and the the United States probably has way too many colleges and universities anyway. So, and you know how we'll know is how many are still in business after demand starts to go down. The money will flow to the better ones and the the loser ones will will disappear. Fine. Great. I don't see why keeping them open is a service to America. But but that's what Trump is telling us now. He's telling us that uh oh no Epstein files for you. But yeah, more immigrants uh to take your jobs because you're stupid and lazy. And also we need to make sure that we give more funding to the communist political science professors at uh you know po dunk central Illinois college or whatever. And so that's that's that's where this administration is right now. The all the the EPA ruining your life can't bother to be mentioning it. uh other administration other administrative agencies destroying you. You know, I got other priorities. I'm trying to raise tariffs here, folks. So, I I just it's it's bizarre to me that there's uh even much left in terms of support for this administration. Anything outside of just gee, thank goodness it's not Kamala. That's it. That's all you got. >> Which which I think does matter. Like like that's one my one of my push backs to the Dave Smith thing is like different people are being prosecuted than they would have been if Kamala is like I I'll take Comey being prosecuted a lot more than like you know Catholic homeschoolers. So like that that you know but it's unfortunate but like that's kind of the situation we're in is like who has the guns trained at them and that's kind of the biggest deciding factor on on the on the clown show of everything else going on right now. Uh the one person who I think might be having a good week though is is Steve's our good friend Steve Merin because do you think the chances of of the Fed dropping rates you for all the for all the the the serious talk that we talked about way way back three weeks ago? [laughter] I have a feeling that we're probably going to get get a get a rate cut in December just as Bren wanted. So So he's probably the one guy that's probably enjoying this week. >> Well, now that we have so little data, I don't know what the Fed is thinking now. I actually looked up, right, has Powell said anything on this lately? Has the FOMC said anything? They've been really quite silent for the last couple of weeks. Maybe just because I don't know, they don't have jobs data to work with. Um, you'll remember at the last meeting Powell at the last FOMC meeting, Powell made a big deal about how, oh, don't assume we're going to lower rates next time. Uh, but if the job situation continues to worsen, what are they going to do? I don't know. >> And and so yeah, I I mean, I'll be very interested to see. I guess we're not going to see job data until what early December and so we'll just be kind of guessing based on uh what the Feds say until then. So I guess we'll know more then. Also, I don't know if this is affected by the shutdown, but I've been looking for the the latest Treasury report as well because I don't know how big the deficit was for November uh in terms of tax revenue. If tax revenue is going down, that's going to be a very interesting thing to look at. once tax revenue goes down, you know, you're in a terrible economic situation. So, I, you know, there there isn't any recent data that I've seen. Maybe they'll put that out with the um with the shutdown over. So, we may know more soon. >> Well, it is interesting on that uh two two points that came to mind there. Um Bessett was once again uh bragging about the the tariff revenue um earlier this week and in doing so he even acknowled he he was trying to make the argument that increased tariff tariff revenue is going to in uh is going to be a positive impact on inflation because the deficit is a major component of inflation the economy which is good to see acknowledged but like [laughter] but but then you keep buy but but but our spending hasn't gone down at all and so like if you recognize that government spend spending fuels inflation maybe the solution isn't just increase tariff revenue Maybe it's actually, you know, trying to cut that. Neither here nor there. But of course, you also had the other big idea, which was $20,000 uh Trump checks out of tariff revenue, but only to people making under $100,000, which, you know, g given the modern economy, you know, is is not what it used to be. And so, you just expect the no nowhere else worse to be than that that group right there, like like the 100 105,000 and just enough to to be significantly impacted by the inflationary consequence of what's going on right now. but not enough to get your STEMI. So like again, this is great. Great spot for the middle class. >> Well, it's interesting churn that's going there because you need the $2,000 just to cover the inflation that came from the previous stimulus check. So now you got a new stimulus checks. You better save it because you're going to need it to cover the inflation like 18 months from now. So see how that goes. All right. Well, we'll go ahead and wrap it up with for this episode of uh Power and Market podcast. Thank you everyone for [music] joining me out there. We'll be back uh next time with more. So, we'll see you then.