US Declares Housing A National Emergency!?! (This Won't End Well)
Summary
Government Intervention in Housing: The podcast criticizes the government's decision to declare housing a national emergency, drawing parallels to past interventions that led to negative outcomes like the Global Financial Crisis (GFC).
Historical Context: The discussion references the Bush administration's efforts in 2004 to increase affordable housing and expand home ownership, which are seen as contributing factors to the GFC.
Political Motivations: The podcast suggests that government actions in the housing market are often politically motivated, aimed at buying votes rather than solving underlying issues.
Market Dynamics: Emphasis is placed on the free market's ability to address housing affordability through increased supply, contrasting with government interventions that often exacerbate problems.
Regulatory Impact: The podcast highlights the significant cost of regulations on housing prices, suggesting that reducing these could help increase supply and lower prices.
Financial Engineering Risks: There is a warning against creating the illusion of affordability through financial engineering, which can lead to housing bubbles and eventual market crashes.
Free Market Advocacy: The speaker advocates for free market solutions, arguing that less government involvement would lead to more affordable housing.
Transcript
Hello fellow Robo Capitals. Hope you're well. So, I've got great news for everybody. The government wants to get even more involved in the housing market. Isn't that amazing? In fact, I think we've seen this movie before, didn't we? I think in the early 2000s. And if my memory serves me well, that ended badly, to say the least. But now, thank goodness the government is at it again. Oh, you just can't make this stuff up, can you? All right, let's do a screen share. Josh is still busy swiping on Tinder, so I'll have to do this myself today. And let's go over to this screen. Let's start off by going back in time. For those younger viewers who may be watching right now and thinking that it's just a fantastic idea for the government to declare housing a national emergency because that means the government's going to get involved and they're going to solve the problem. They're going to bring prices down because boy oh boy, the free market sure can't do it. [Laughter] Ah, for the youngans that are watching, let's go over to this. Here we go. Now, I'm going to go ahead and zoom in. So, hopefully you guys can see this. And this is directly from the White House. Now, is this from Donald Trump? No, no, no, no, no. This is from Bush, George W. Bush. And this goes back to 2004. Okay, let's see what they were trying to do back in 2004. Oh, would you look at that? Increasing affordable housing and expanding home ownership. What a great idea. Who could argue with that? They start off by saying, "We live in times of change and our dynamic economy can create great opportunities for Americans or for America's families to realize their dreams." Well, yeah. The GFC, I mean, everyone realized their dream in the GFC when they got the old rug pole because of government getting involved in the housing market. Let's keep going. During this time of change, President Bush believes the government should help families to have security, dignity, and independence that comes along with owning their piece of the American dream. And yes, we've got to get these low and uh and and the the what am I trying to say? We've got basically what their premise was is we've got to get the middle class and the lower income groups into houses. We we've got to make them take as much savings as they possibly can and put it to a house so it can bump up the prices so then we do the rug pull and they lose absolutely everything because that will really benefit the poor and middle class that that let me go ahead and interpret that for you. But of course, they didn't know what they were. They should have realized, but at the time, let's give them the benefit of the doubt, assuming they're not malicious, and they didn't realize that this effort to just buy votes, which is exactly what this was, leads to, let's just say, some unintended consequences, right? There there might be a couple unintended consequences of the government trying to push people into homes that n might not be able to afford it and trying to bring the cost of home ownership down instead of increasing the supply of home ownership. But we're going to go into a few things that I think they should be doing to address this issue. Let's get back to the article here or this post from the White House. President Bush has a bold agenda for promoting an ownership society. And by the way, it's always it's the same thing. No matter who the president is, whether it's George Bush or Donald Trump, the the propagandists out there, and we're going to get to one guy by the name of Scott Bent here who's I mean, I don't want to I don't want to make this uh really knocking the Trump administration, but my goodness gracious, he is like the propagandist number one out there. Well, maybe Letic. Boy, oh boy. I tell you what, Scott Descent is taking that ball and running with it. And if you don't believe me, just wait till we go over to this article here in just a moment. But it's still the same thing. It It's always like, "Oh, our king and emperor, oh, is having mercy on the plebs by just helping us and doing something that the free market just can't do." And what is the free market at the end of the day? What is it? Is there is there some sort of free like abstract free market entity thing that just helps us like the government? No. The free market is you and I. We are the free market. The the the free market is us. It's the entrepreneurs. It's the business owners. It's the average Joe and Jane. We are the free market. So basically what they're saying right here is you're too stupid to fix this problem by yourself. So we, the mighty, all- knowing government and king, president, and emperor, we're going to come in and fix the problem just because we're so merciful. [Laughter] We're so merciful on all of our constituents. It It's just It's the same BS over and over and over and over again. And it's like Ron Paul says, every single time the government comes out with a program or a task force, something like this, the the results will almost always be the opposite of the intention. And this is a perfect example. We know exactly how this played out. Did this help the poor and middle class? No. It devastated the poor and middle class. And it's always just trying to give praise to the king, right? His bold agenda for promoting. And yet they're the ones, the central planners. They're the ones that create the problem. And then we look to them to solve the problem they created. So they're it's it's a great role to have, right? It's a great gig if you can get it. You can be the arsonist and the firefighter. And you just when you're the arsonist, you buy votes and people want to vote vote for you. And when you're the firefighter, well, people also want to vote for you. They never ever ever attach the two and connect the dots that they're one and the same for heaven's sakes. So now, let's go over to this Zero Hedge article. Let make sure our screen shares working. Oh, Josh is off of Tinder. Okay, good. He can handle it from here. So, now let's go over to Zero Hedge and see. Look at this. It's like 2004 2.0. The exact same. It's almost like they took the 2004 playbook. It's almost like they just read that post that we just went over from the Bush administration, from the White House, and said, "Wow, great idea." I mean, sure, this caused the GFC and that big housing crisis thing, and sure, it decimated the poor middle class, but I mean, that's not really relevant. This is a great way to buy votes because coming into the midterm elections, we can be seen as the guy on the shining horse or on the the with the shining armor coming in on the white horse. We're coming in to save the day. So, vote for us because we care about you, plebs. We care about all the plebs out there and uh we want to Yeah, we want to see um home ownership. Yeah, that's right. More home ownership. And we're going to declare a national emergency on housing. By the way, maybe you guys see it differently, but every single time going back as far as I can remember that the government declares an an emergency, a national emer Well, this is a national emergency. Well, this is a national emergency. Every single time they do that, A, do they solve the problem? No. Do they make the problem worse? Yes. and B or then C, whenever we have a whenever they declare something a national emergency, do we end up with more government or less government? You know what's amazing is they never declare a national emergency on the size of government. That's what I'm all about. If we're going to declare a national emergency, let's declare a national emergency on government spending. Let's declare a national emergency on government power. that that's what I'm all in favor for. But you're never going to see that, right? Because they want to be the arsonist and they want to be the firefighter. But actually, let me zoom in here so you guys can see this. And this isn't a a Democrat Republican thing, by the way. It's just this is how the political game is played. Doesn't matter whether you're the blue team, the red team. Everyone always says that Trump is like an outsider and he's so different. Um I totally agree he's an outsider, but the only way that he is different from every other politician is he just takes what they did that worked well and does it 10 times more. So if if they if it worked well for Obama to increase the size of government, well then Trump will just take what he did and increase the size of government even more. That's he's he's like a politician on steroids. He's like a turbocharged politician, but he is an outsider. I'll give him that for sure. But here we go. Treasure. And and and by the way, let's read this and see if it sounds maybe a little familiar from what we saw in the White House in 2004 that basically led to or one of the main contributing factors to the GFC. Okay. Treasury Secretary Scott descent told the Washington Examiner on Labor Day, the Trump administration may declare a national housing emergency in coming months to address the affordability crisis. Just just to make sure we're all on the same page here. The affordability crisis. Let's go back to 2004 and increasing affordable housing. History doesn't repeat, but boy oh boy, it sure does rhyme. Getting back to the Zero Hedge article, Bent comments came just ahead of an expected interest rate cut. Okay. underscoring the administration's urgent effort to address affordability. Will this address affordability? So, you're trying to bring down interest rates. Does that mean that mortgage rates will come down? I don't know what happened the last time the Fed dropped rates. Mortgage rates went up. Why? Because the 10-year went up by 10 by 100 basis points. So, let let's not forget that this in of itself is propaganda. We don't know what the curve is going to do. Just because the Fed drops the front end doesn't mean the the long end comes down. It could very easily go up the scent joint. And by the way, are we really going to increase affordability if we drop interest rates? So, let's just assume for a moment that the 10-year Treasury does come down by 200 basis points and mortgages get cheaper. Is that somehow going to bring down prices? I I don't think so. I I would argue that will increase prices because now you got a lot more demand and you're not addressing the massive elephant in the room which is supply. And you might be saying, "Oh, George, but that's what Trump's doing. He's going to increase supply. He's going to increase supply." Look, you can't increase supply from a federal level. And and and the only thing that you can do to increase supply is decrease government. Decrease government. So unless this national housing emergency is actual a a national expansion of government power emergency, then it's only going to exacerbate the problem. Let's keep going here. And here's where I guess he went to some restaurant for lunch or something on Labor Day. And this is I mean this just makes me nauseous that this type of just it's so fake. I mean it is even if you love Trump, even if you're like mega mega mega mega mega, you love Scott Descent. I I mean this has got to make you just kind of do that thing where you vomit a little bit in your mouth and then try to swallow it. It's just so fake. On this Here's his tweet. On this Labor Day, it was a pleasure to visit restaurants in Virginia and DC to thank the hardworking men and women serving our communities. I'll bet you Scott Bent woke up and just was so excited to go talk to the average Joe and Jane. He was just so excited to go out and shake hands with the plebs. I mean, come on. Come on. And here's where it just goes from just cheesy to like vomit inducing. Thanks to President Trump's one big beautiful Yes. Like everything in our life that is good, we owe to Donald Trump or everything that we have in our life, every single ounce of freedom, our the house, the roof over our head, our ability to drive a car, our ability to put food on the table. It's not a result of what we have done. Absolutely not. It's a result of the president. President Obama, Biden, Trump, Bush, it doesn't matter. It's it it's not a result of the plebs. Of course not. It's not a result of the average Joe and Jane working their ass off. No, no, no, no, no. Every It's like these propagandistas and and again, it's it's blue team, red team, it's all of them. This is just the standard operating procedure here. It's like what they do. It it's almost like when you're saying grace at the table and you're giving thanks to God or to Jesus or or whomever whoever you're praying to and giving thanks to. What we've done or what they try to do is replace Jesus and God with whoever is the president. I mean, that's the way they talk. Look at this. Thanks to President Trump's one big beautiful bill, they'll see no tax on tips, no tax on overtimes, so they can keep more of their I don't know where it goes from here, but then it gets even more vomit inducing. Their famous omelets are amazing. And thanks to POTUS, thanks to Donald Trump, eggs are more than 50% cheaper today. Come on. Come on. And we're giving Donald Trump the credit for making eggs cheaper. I mean, this is in this is just I tell you what, I I have to do these videos after lunch because if I did them before lunch, I it would totally ruin my appetite. Eggs are more than 50% cheaper today thanks to Donald Trump. Like he's out there at a chicken farm. like like oh geez like he's the one out there producing more eggs to bring down the prices. I isn't this the guy that's like I don't even want to go off on a tangent here. So then he goes on to say that here we may we may declare a national housing emergency and obviously this is just to get votes for the midterms. It's like, "Oh, though that that Epstein thing, h yeah, just let's stop talking about that. That's not a big deal. That was all fake news." Well, even though I did a 180 on that, just let's just ignore that because we're going to declare a national emergency on housing. Everyone knows they can't afford a house. So, we're somehow magically going to bring down prices while at the same time keeping prices the exact same so the people that actually own houses don't take a hit. That's the way they always present it to you. like we're we're we're not going to actually bring down the price of houses because we wouldn't do want to do that because that'll lose votes. So, what we're going to do is we're somehow going to raise the price of houses while increasing the affordability of houses. That's where you get into that corner that creates the environment where we have a GFC and the poor middle class just gets completely completely wrecked because the only way to make housing more affordable in a way that's sustainable is to increase supply so you decrease prices. That's it. There's no magic secret sauce. And if and if you try to do it any other way, it's going to lead to big big big problems, big big unintended consequences. And if you don't believe me, just ask 2008. Here's another quote from Bent. We're trying to figure out what we can do. And what we don't want I guess what we don't want to do is step into the business of states, counties, and municipal governments. And then he said, I think everything is on the table. And again, this is just this politic uh this politician propaganda double speak where they're they're lying so much that they contradict themsel not just from paragraph to paragraph or from day to day, but from sentence to sentence. literally from sentence to sentence. Like he's saying, "Okay, we got to figure something out." Now, what we don't want to do is we don't want to step on the toes of the states, counties, and municipal governments. But everything is on the table. So, if you don't want to do something, then by definition, everything is not on the table. Oh, but don't let facts get in the way of a good narrative. Let's see. The Treasury Secretary did not elaborate on the specific actions Trump could take, but we know what actions he's going to take because he can't do something that brings down home prices because then you're going to lose votes because who are the people with the homes? Who are the people with the home equity? Well, those are the old people. And guess what? Those are the people that vote. So, if you do something where there's a direct tie to bringing home prices down to the administration, well, you're going to lose votes. And we know damn well that Trump's not going to do that. So, again, you're left in this danger zone, in the no bueno zone, where your only option, because you can't bring down home prices by adding supply because that would actually be a solution. The only thing you can do is make it more affordable through financial engineering. And then you just make the bubble bigger and bigger and bigger until it completely blows up and then housing prices crash and then the poor and middle class lose all their equity. In other words, they lose all the savings they put in to buy the house to begin with because they bought into this narrative. America first rebuilding the middle class. Okay. So then this is just uh Zero Hedges editorial on this. So let's go over to I'm I'm obviously very critical of this, but let's go over to some things they could do, right? in instead of declaring an emergency and increasing the size of government, some things they could do. And I've heard a lot of people on social media say, "Oh, well, they're just going to basically extort the Democratic states to doing things that will magically I mean, there's a lot of mental gymnastics required there, but will magically just increase the supply." Like, they're going to get tough on crime and that will somehow increase supply. Um, okay. I don't really buy into that. Great. Let's let's decrease crime. But I don't know that that's really going to benefit. I don't know that that's going to keep prices the same while adding uh while making prices more affordable. I I I don't see that happening. But let's go over to some things they could do. We can start with a big big problem and that's regulations. So instead of increasing the size of government, instead of increasing the power of government by declaring something a national emergency, what we could do, call me crazy, is just let the free market work. But see, governments will never do that. They'll never do that, including the Trump administration. Why? Because if you let the free market work, how is it going to make housing more affordable? It's going to do it by increasing supply. The problem is if you increase supply, what are you going to do to prices? You're going to come down. And what happens to all the boomer constituents, the voters, then they get pissed and they vote for the other guy that says that they're riding in on that white horse, the night and shining armor. They're riding in and saying, "Oh, that stupid other guy, well, he's trying to bring down prices." Absolutely not. We're going to keep your housing price the same. We're going to keep we're not going to impact your net worth because you deserve it. You've earned that home equity. This is the game, guys. This is the game. And this is why it never ever ever gets better. And this is why it always leads to a disaster because the real solution is right there in front of us. But the politicians will, including Donald Trump, will never ever ever ever do it because that would bring down the price. And again, that takes out the voters. So here you go. This is a study that was done 20121. So it's even worse now by the way. A state that was done for regarding the amount of regulation and the cost of regulation for a new home in the United States. All right. And so this is just the the the out-of- pocket cost. So, let's just think about all the homes that weren't built as a result of not only these costs, but the time and effort and energy that it goes into actually dealing with all this bureaucracy, all of this red tape. Not just at the state level, but at the federal level as well. On a dollar basis, apply to the current average roughly $400,000 for a new home. Regulation accounts for 93,000 almost 100 grand. So 25% of the price you pay for your house is regulation. Now that's great for people that own a house because that makes them richer on paper. But again, the the solution there is to get rid of all, not all, but maybe a lot. I would get rid of all, but a lot of those regulations to bring this number down, which would immediately that that's not even bringing down the price of labor. That's not even bring down the price of lumber or materials, drywall, windows, nothing. All you're doing is just bringing down the cost of the actual regulation itself by reducing those regulation. So of this 41,000 is attributed to regulation during development. 52,000 during regulation during construction. Uh so development I guess would be the land and construction would be the actual building in dollar terms. Okay. So, and by the way, I think they go into multif family as well. And multifamily, it's like 40%. I mean, it's completely completely bananas. And again, I want to I want to make sure I'm clear when you're thinking about this. Don't just think about it in terms of the cost to a builder adding to the cost of a house. Think about this in terms of all the supply that we would have that we don't have right now. You see, because I know so many builder I mean Kenny Maroy is one of my best buddies and he is you guys know who Kenny Maroy is. He manages almost $2 billion in multif family and a lot of those properties he's built himself from the ground up. So look, if there was a profit opportunity out there for Kenny, you don't think he'd be building right now? Of course he would. He he'd he'd be building non-stop, adding to supply. But why doesn't he do that? One of the main reasons is because of regulation. But again, you see, you get rid of the regulation, increases supply, Kenny's going to make a ton of money, but all the people that own homes, their net worth is going to decrease. So, it always goes back to financial engineering. That's the punchline here. And you guys, and just for those who of you who are saying, "Oh, well, this is all about state and local level and Trump's going to come in and try to basically punk them into, you know, increasing the supply." No, he's not because then that impacts the whole reason he's doing it as to buy votes. But let's look at this. Moreover, several federal agencies including the Department of That's not education, although they should go as well. Uh I don't know what department that is. You guys can let me know in the chat. FEMA and the EPA, which is the Environmental Protection Agency, actively participate in the development of national model codes, which ultimately form the basis for the local administration codes. So again, the first thing that we can do if we really want to tackle this and make housing more affordable is to get rid of all of this federal stuff. federal stuff and let the benefits trickle down to the states, but that's going to increase supply. That's going to bring down prices. Oh, you know, let me go back to the Zero Hedge article because I forgot one thing that Bent said that I thought was very telling. Let's say the Treasury Secretary did not elaborate, we already talked about that, on specific actions Trump could take, but he did mention officials within the administration are analyzing ways to standardize local building and zoning codes and decrease closing costs. So again, decreasing closing costs, that that's that's just going to bump up prices. This is this is insanity. Uh, and then standardizing local building code. They're not going to do that. Why? Because they're going to lose voters if they do. Because again, what just to make sure we're on the same page, you're adding the voters by bringing down the home prices, but you're losing even more voters by bringing down those home prices, having it affect their net worth, the owners of the homes right now. But here's the key. Listen to this. He added that the possibility of considering some tariff exemptions for housing materials will be considered. Well, wouldn't you know, huh? You mean to tell me, Scott Bent, that the Chinese aren't paying the tariffs on lumber? Whoa, whoa, whoa, whoa, whoa. Time out here. I thought that the foreigners were paying all the tariffs. If the foreigners were paying all the tariffs and those costs aren't passing through to the American consumer, then why on earth would we need to tariff or have an exemption for tariffs on housing materials? Weird. Another contradiction. How rare from a political official. All right, let's get back to this. So here we go through. Let me zoom in again for you guys. Costs. I mean this is just insane. All regular. Okay. Yeah. So here they go through just a cost breakdown of of just the regulation that we were discussing before. And again, this isn't all state and local. A lot of this is federal and it just trickles down to the state and local due to agencies like the Environmental Protection Agency. And they have all of these things. You know, I've built homes in the United States from scratch, as most of you know, and and I've also built properties or buildings or apartments here in Colombia. And it is night and day difference. Night and day. Now are the building is the building quality here at the level of the United States? Not really. Truth be told. But does it matter? No. Are buildings just falling down everywhere? No. No. No. No. It's just it's it's all of the crazy minutia that at the end of the day really doesn't move the needle, but it just makes the bureaucrats feel better. Like the the busy bodies in the government, it makes them feel like they're actually doing something to save the environment, right? That's what the majority of this nonsense and this red tape is all about. But it doesn't end there. It doesn't end there. Another thing that we could do, and maybe one of the easiest things we could do, is just get rid of the government subsidies when it comes to mortgages. Let's go over to a chart of uh 30 year mortgage. We'll just do the rates just because um I don't I just need a chart as a visual. So, this is just uh well, let's just go to one that's a little more up to-date. We'll just go to the Fed. Okay. So, this is a 30-year fixed rate mortgage. Now, most Americans don't realize this is not, I repeat, this is not a product of the free market. Absolutely not. Not even close. Why? There is no bank in their right mind that would do a 30year fixed rate mortgage. So, what you're doing is you're trying to figure out what inflation is going to be over the next 30 years. No way. that that's impossible to model. They couldn't even figure that out in 2020, what the inflation rate was going to be in the next year. You think that they can figure out what the inflation rate and somehow model that into the risk management that they're going to do that for 30 years? Absolutely not. Why do you think that if you go to a non Fanny Freddy bank that's gonna actually keep that on their balance sheet, that paper, why do you think that it's only an adjustable rate mortgage and like the maximum time you can get uh fixed on that adjustable rate is like what five years? You guys would probably know because five years a bank can model that. 30 years, no chance. Absolutely no chance. So, the point here is this 30-year fixed rate mortgage that we know and love in the United States is totally a product of the government, meaning that it requires a government subsidy in order for it to exist. And if you don't believe me, just go ahead and try to find a 30-year fixed rate mortgage in Canada or Australia, the UK. mysteriously they don't exist there. Is it because we have more free market capitalism? No. Because we have less free market capitalism in terms of mortgages. And then what you can do is get rid of HUD and get rid of the FHA and get rid of all this crazy government basically the subsidies in order to get the payment down which jacks the prices high and creates all these bubbles for heaven's sakes. Right? So, what you do back in the good old days, very few people probably remember this, but back in the good old days, you would have to put 20% down, okay? Or even more than that. In Colombia, by the way, you got to put down like 40%. Down. And the interest rates like 15% on a mortgage. And it's adjustable rate. No way they're doing fix no way they're doing fixed rate mortgages here. That's for sure. But you see what happens when the government gets involved and they try to make housing more affordable by just bringing down the uh mortgage payment or just by by artificially reducing the interest rate by getting the government involved with subsidies or by lowering the down payment. So then what you're doing is you're bringing people to the housing market that really can't afford to be there in the first place and they're the ones that get completely wrecked. They're the ones that get destroyed. But this issue, this problem, it's not hard to solve. It's just again the main problem here is the solution requires bringing more supply online, which is going to bring down prices. And the politicians don't want to do that, especially Donald Trump. So what they inevitably do is they create the illusion of affordability through financial engineering that creates the bubbles that end like the GFC. So that's what this is all about. And they do it entirely entirely just to buy votes because Scott Bent isn't a I mean he's a smart dude. He's a real smart guy and he lived through the financial crisis. He knows what caused the problem. He knows damn well that this was one of the main contributing factors and yet he's doing the exact same thing. Is it because he just loves the plebs and he loves the gal that as the the fresh omelets? No, absolutely not. It's because he knows this is Donald Trump's or the Republicans best bet to win the midterms and he's sacrificing the poor and middle class just to get votes. That's the bottom line here. All right, guys. Enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free markets. Free markets. And you know what the definition of a free market is? It's when the government isn't involved. And why do we want free markets? Because it would actually make housing more affordable. See you in the next video.
US Declares Housing A National Emergency!?! (This Won't End Well)
Summary
Transcript
Hello fellow Robo Capitals. Hope you're well. So, I've got great news for everybody. The government wants to get even more involved in the housing market. Isn't that amazing? In fact, I think we've seen this movie before, didn't we? I think in the early 2000s. And if my memory serves me well, that ended badly, to say the least. But now, thank goodness the government is at it again. Oh, you just can't make this stuff up, can you? All right, let's do a screen share. Josh is still busy swiping on Tinder, so I'll have to do this myself today. And let's go over to this screen. Let's start off by going back in time. For those younger viewers who may be watching right now and thinking that it's just a fantastic idea for the government to declare housing a national emergency because that means the government's going to get involved and they're going to solve the problem. They're going to bring prices down because boy oh boy, the free market sure can't do it. [Laughter] Ah, for the youngans that are watching, let's go over to this. Here we go. Now, I'm going to go ahead and zoom in. So, hopefully you guys can see this. And this is directly from the White House. Now, is this from Donald Trump? No, no, no, no, no. This is from Bush, George W. Bush. And this goes back to 2004. Okay, let's see what they were trying to do back in 2004. Oh, would you look at that? Increasing affordable housing and expanding home ownership. What a great idea. Who could argue with that? They start off by saying, "We live in times of change and our dynamic economy can create great opportunities for Americans or for America's families to realize their dreams." Well, yeah. The GFC, I mean, everyone realized their dream in the GFC when they got the old rug pole because of government getting involved in the housing market. Let's keep going. During this time of change, President Bush believes the government should help families to have security, dignity, and independence that comes along with owning their piece of the American dream. And yes, we've got to get these low and uh and and the the what am I trying to say? We've got basically what their premise was is we've got to get the middle class and the lower income groups into houses. We we've got to make them take as much savings as they possibly can and put it to a house so it can bump up the prices so then we do the rug pull and they lose absolutely everything because that will really benefit the poor and middle class that that let me go ahead and interpret that for you. But of course, they didn't know what they were. They should have realized, but at the time, let's give them the benefit of the doubt, assuming they're not malicious, and they didn't realize that this effort to just buy votes, which is exactly what this was, leads to, let's just say, some unintended consequences, right? There there might be a couple unintended consequences of the government trying to push people into homes that n might not be able to afford it and trying to bring the cost of home ownership down instead of increasing the supply of home ownership. But we're going to go into a few things that I think they should be doing to address this issue. Let's get back to the article here or this post from the White House. President Bush has a bold agenda for promoting an ownership society. And by the way, it's always it's the same thing. No matter who the president is, whether it's George Bush or Donald Trump, the the propagandists out there, and we're going to get to one guy by the name of Scott Bent here who's I mean, I don't want to I don't want to make this uh really knocking the Trump administration, but my goodness gracious, he is like the propagandist number one out there. Well, maybe Letic. Boy, oh boy. I tell you what, Scott Descent is taking that ball and running with it. And if you don't believe me, just wait till we go over to this article here in just a moment. But it's still the same thing. It It's always like, "Oh, our king and emperor, oh, is having mercy on the plebs by just helping us and doing something that the free market just can't do." And what is the free market at the end of the day? What is it? Is there is there some sort of free like abstract free market entity thing that just helps us like the government? No. The free market is you and I. We are the free market. The the the free market is us. It's the entrepreneurs. It's the business owners. It's the average Joe and Jane. We are the free market. So basically what they're saying right here is you're too stupid to fix this problem by yourself. So we, the mighty, all- knowing government and king, president, and emperor, we're going to come in and fix the problem just because we're so merciful. [Laughter] We're so merciful on all of our constituents. It It's just It's the same BS over and over and over and over again. And it's like Ron Paul says, every single time the government comes out with a program or a task force, something like this, the the results will almost always be the opposite of the intention. And this is a perfect example. We know exactly how this played out. Did this help the poor and middle class? No. It devastated the poor and middle class. And it's always just trying to give praise to the king, right? His bold agenda for promoting. And yet they're the ones, the central planners. They're the ones that create the problem. And then we look to them to solve the problem they created. So they're it's it's a great role to have, right? It's a great gig if you can get it. You can be the arsonist and the firefighter. And you just when you're the arsonist, you buy votes and people want to vote vote for you. And when you're the firefighter, well, people also want to vote for you. They never ever ever attach the two and connect the dots that they're one and the same for heaven's sakes. So now, let's go over to this Zero Hedge article. Let make sure our screen shares working. Oh, Josh is off of Tinder. Okay, good. He can handle it from here. So, now let's go over to Zero Hedge and see. Look at this. It's like 2004 2.0. The exact same. It's almost like they took the 2004 playbook. It's almost like they just read that post that we just went over from the Bush administration, from the White House, and said, "Wow, great idea." I mean, sure, this caused the GFC and that big housing crisis thing, and sure, it decimated the poor middle class, but I mean, that's not really relevant. This is a great way to buy votes because coming into the midterm elections, we can be seen as the guy on the shining horse or on the the with the shining armor coming in on the white horse. We're coming in to save the day. So, vote for us because we care about you, plebs. We care about all the plebs out there and uh we want to Yeah, we want to see um home ownership. Yeah, that's right. More home ownership. And we're going to declare a national emergency on housing. By the way, maybe you guys see it differently, but every single time going back as far as I can remember that the government declares an an emergency, a national emer Well, this is a national emergency. Well, this is a national emergency. Every single time they do that, A, do they solve the problem? No. Do they make the problem worse? Yes. and B or then C, whenever we have a whenever they declare something a national emergency, do we end up with more government or less government? You know what's amazing is they never declare a national emergency on the size of government. That's what I'm all about. If we're going to declare a national emergency, let's declare a national emergency on government spending. Let's declare a national emergency on government power. that that's what I'm all in favor for. But you're never going to see that, right? Because they want to be the arsonist and they want to be the firefighter. But actually, let me zoom in here so you guys can see this. And this isn't a a Democrat Republican thing, by the way. It's just this is how the political game is played. Doesn't matter whether you're the blue team, the red team. Everyone always says that Trump is like an outsider and he's so different. Um I totally agree he's an outsider, but the only way that he is different from every other politician is he just takes what they did that worked well and does it 10 times more. So if if they if it worked well for Obama to increase the size of government, well then Trump will just take what he did and increase the size of government even more. That's he's he's like a politician on steroids. He's like a turbocharged politician, but he is an outsider. I'll give him that for sure. But here we go. Treasure. And and and by the way, let's read this and see if it sounds maybe a little familiar from what we saw in the White House in 2004 that basically led to or one of the main contributing factors to the GFC. Okay. Treasury Secretary Scott descent told the Washington Examiner on Labor Day, the Trump administration may declare a national housing emergency in coming months to address the affordability crisis. Just just to make sure we're all on the same page here. The affordability crisis. Let's go back to 2004 and increasing affordable housing. History doesn't repeat, but boy oh boy, it sure does rhyme. Getting back to the Zero Hedge article, Bent comments came just ahead of an expected interest rate cut. Okay. underscoring the administration's urgent effort to address affordability. Will this address affordability? So, you're trying to bring down interest rates. Does that mean that mortgage rates will come down? I don't know what happened the last time the Fed dropped rates. Mortgage rates went up. Why? Because the 10-year went up by 10 by 100 basis points. So, let let's not forget that this in of itself is propaganda. We don't know what the curve is going to do. Just because the Fed drops the front end doesn't mean the the long end comes down. It could very easily go up the scent joint. And by the way, are we really going to increase affordability if we drop interest rates? So, let's just assume for a moment that the 10-year Treasury does come down by 200 basis points and mortgages get cheaper. Is that somehow going to bring down prices? I I don't think so. I I would argue that will increase prices because now you got a lot more demand and you're not addressing the massive elephant in the room which is supply. And you might be saying, "Oh, George, but that's what Trump's doing. He's going to increase supply. He's going to increase supply." Look, you can't increase supply from a federal level. And and and the only thing that you can do to increase supply is decrease government. Decrease government. So unless this national housing emergency is actual a a national expansion of government power emergency, then it's only going to exacerbate the problem. Let's keep going here. And here's where I guess he went to some restaurant for lunch or something on Labor Day. And this is I mean this just makes me nauseous that this type of just it's so fake. I mean it is even if you love Trump, even if you're like mega mega mega mega mega, you love Scott Descent. I I mean this has got to make you just kind of do that thing where you vomit a little bit in your mouth and then try to swallow it. It's just so fake. On this Here's his tweet. On this Labor Day, it was a pleasure to visit restaurants in Virginia and DC to thank the hardworking men and women serving our communities. I'll bet you Scott Bent woke up and just was so excited to go talk to the average Joe and Jane. He was just so excited to go out and shake hands with the plebs. I mean, come on. Come on. And here's where it just goes from just cheesy to like vomit inducing. Thanks to President Trump's one big beautiful Yes. Like everything in our life that is good, we owe to Donald Trump or everything that we have in our life, every single ounce of freedom, our the house, the roof over our head, our ability to drive a car, our ability to put food on the table. It's not a result of what we have done. Absolutely not. It's a result of the president. President Obama, Biden, Trump, Bush, it doesn't matter. It's it it's not a result of the plebs. Of course not. It's not a result of the average Joe and Jane working their ass off. No, no, no, no, no. Every It's like these propagandistas and and again, it's it's blue team, red team, it's all of them. This is just the standard operating procedure here. It's like what they do. It it's almost like when you're saying grace at the table and you're giving thanks to God or to Jesus or or whomever whoever you're praying to and giving thanks to. What we've done or what they try to do is replace Jesus and God with whoever is the president. I mean, that's the way they talk. Look at this. Thanks to President Trump's one big beautiful bill, they'll see no tax on tips, no tax on overtimes, so they can keep more of their I don't know where it goes from here, but then it gets even more vomit inducing. Their famous omelets are amazing. And thanks to POTUS, thanks to Donald Trump, eggs are more than 50% cheaper today. Come on. Come on. And we're giving Donald Trump the credit for making eggs cheaper. I mean, this is in this is just I tell you what, I I have to do these videos after lunch because if I did them before lunch, I it would totally ruin my appetite. Eggs are more than 50% cheaper today thanks to Donald Trump. Like he's out there at a chicken farm. like like oh geez like he's the one out there producing more eggs to bring down the prices. I isn't this the guy that's like I don't even want to go off on a tangent here. So then he goes on to say that here we may we may declare a national housing emergency and obviously this is just to get votes for the midterms. It's like, "Oh, though that that Epstein thing, h yeah, just let's stop talking about that. That's not a big deal. That was all fake news." Well, even though I did a 180 on that, just let's just ignore that because we're going to declare a national emergency on housing. Everyone knows they can't afford a house. So, we're somehow magically going to bring down prices while at the same time keeping prices the exact same so the people that actually own houses don't take a hit. That's the way they always present it to you. like we're we're we're not going to actually bring down the price of houses because we wouldn't do want to do that because that'll lose votes. So, what we're going to do is we're somehow going to raise the price of houses while increasing the affordability of houses. That's where you get into that corner that creates the environment where we have a GFC and the poor middle class just gets completely completely wrecked because the only way to make housing more affordable in a way that's sustainable is to increase supply so you decrease prices. That's it. There's no magic secret sauce. And if and if you try to do it any other way, it's going to lead to big big big problems, big big unintended consequences. And if you don't believe me, just ask 2008. Here's another quote from Bent. We're trying to figure out what we can do. And what we don't want I guess what we don't want to do is step into the business of states, counties, and municipal governments. And then he said, I think everything is on the table. And again, this is just this politic uh this politician propaganda double speak where they're they're lying so much that they contradict themsel not just from paragraph to paragraph or from day to day, but from sentence to sentence. literally from sentence to sentence. Like he's saying, "Okay, we got to figure something out." Now, what we don't want to do is we don't want to step on the toes of the states, counties, and municipal governments. But everything is on the table. So, if you don't want to do something, then by definition, everything is not on the table. Oh, but don't let facts get in the way of a good narrative. Let's see. The Treasury Secretary did not elaborate on the specific actions Trump could take, but we know what actions he's going to take because he can't do something that brings down home prices because then you're going to lose votes because who are the people with the homes? Who are the people with the home equity? Well, those are the old people. And guess what? Those are the people that vote. So, if you do something where there's a direct tie to bringing home prices down to the administration, well, you're going to lose votes. And we know damn well that Trump's not going to do that. So, again, you're left in this danger zone, in the no bueno zone, where your only option, because you can't bring down home prices by adding supply because that would actually be a solution. The only thing you can do is make it more affordable through financial engineering. And then you just make the bubble bigger and bigger and bigger until it completely blows up and then housing prices crash and then the poor and middle class lose all their equity. In other words, they lose all the savings they put in to buy the house to begin with because they bought into this narrative. America first rebuilding the middle class. Okay. So then this is just uh Zero Hedges editorial on this. So let's go over to I'm I'm obviously very critical of this, but let's go over to some things they could do, right? in instead of declaring an emergency and increasing the size of government, some things they could do. And I've heard a lot of people on social media say, "Oh, well, they're just going to basically extort the Democratic states to doing things that will magically I mean, there's a lot of mental gymnastics required there, but will magically just increase the supply." Like, they're going to get tough on crime and that will somehow increase supply. Um, okay. I don't really buy into that. Great. Let's let's decrease crime. But I don't know that that's really going to benefit. I don't know that that's going to keep prices the same while adding uh while making prices more affordable. I I I don't see that happening. But let's go over to some things they could do. We can start with a big big problem and that's regulations. So instead of increasing the size of government, instead of increasing the power of government by declaring something a national emergency, what we could do, call me crazy, is just let the free market work. But see, governments will never do that. They'll never do that, including the Trump administration. Why? Because if you let the free market work, how is it going to make housing more affordable? It's going to do it by increasing supply. The problem is if you increase supply, what are you going to do to prices? You're going to come down. And what happens to all the boomer constituents, the voters, then they get pissed and they vote for the other guy that says that they're riding in on that white horse, the night and shining armor. They're riding in and saying, "Oh, that stupid other guy, well, he's trying to bring down prices." Absolutely not. We're going to keep your housing price the same. We're going to keep we're not going to impact your net worth because you deserve it. You've earned that home equity. This is the game, guys. This is the game. And this is why it never ever ever gets better. And this is why it always leads to a disaster because the real solution is right there in front of us. But the politicians will, including Donald Trump, will never ever ever ever do it because that would bring down the price. And again, that takes out the voters. So here you go. This is a study that was done 20121. So it's even worse now by the way. A state that was done for regarding the amount of regulation and the cost of regulation for a new home in the United States. All right. And so this is just the the the out-of- pocket cost. So, let's just think about all the homes that weren't built as a result of not only these costs, but the time and effort and energy that it goes into actually dealing with all this bureaucracy, all of this red tape. Not just at the state level, but at the federal level as well. On a dollar basis, apply to the current average roughly $400,000 for a new home. Regulation accounts for 93,000 almost 100 grand. So 25% of the price you pay for your house is regulation. Now that's great for people that own a house because that makes them richer on paper. But again, the the solution there is to get rid of all, not all, but maybe a lot. I would get rid of all, but a lot of those regulations to bring this number down, which would immediately that that's not even bringing down the price of labor. That's not even bring down the price of lumber or materials, drywall, windows, nothing. All you're doing is just bringing down the cost of the actual regulation itself by reducing those regulation. So of this 41,000 is attributed to regulation during development. 52,000 during regulation during construction. Uh so development I guess would be the land and construction would be the actual building in dollar terms. Okay. So, and by the way, I think they go into multif family as well. And multifamily, it's like 40%. I mean, it's completely completely bananas. And again, I want to I want to make sure I'm clear when you're thinking about this. Don't just think about it in terms of the cost to a builder adding to the cost of a house. Think about this in terms of all the supply that we would have that we don't have right now. You see, because I know so many builder I mean Kenny Maroy is one of my best buddies and he is you guys know who Kenny Maroy is. He manages almost $2 billion in multif family and a lot of those properties he's built himself from the ground up. So look, if there was a profit opportunity out there for Kenny, you don't think he'd be building right now? Of course he would. He he'd he'd be building non-stop, adding to supply. But why doesn't he do that? One of the main reasons is because of regulation. But again, you see, you get rid of the regulation, increases supply, Kenny's going to make a ton of money, but all the people that own homes, their net worth is going to decrease. So, it always goes back to financial engineering. That's the punchline here. And you guys, and just for those who of you who are saying, "Oh, well, this is all about state and local level and Trump's going to come in and try to basically punk them into, you know, increasing the supply." No, he's not because then that impacts the whole reason he's doing it as to buy votes. But let's look at this. Moreover, several federal agencies including the Department of That's not education, although they should go as well. Uh I don't know what department that is. You guys can let me know in the chat. FEMA and the EPA, which is the Environmental Protection Agency, actively participate in the development of national model codes, which ultimately form the basis for the local administration codes. So again, the first thing that we can do if we really want to tackle this and make housing more affordable is to get rid of all of this federal stuff. federal stuff and let the benefits trickle down to the states, but that's going to increase supply. That's going to bring down prices. Oh, you know, let me go back to the Zero Hedge article because I forgot one thing that Bent said that I thought was very telling. Let's say the Treasury Secretary did not elaborate, we already talked about that, on specific actions Trump could take, but he did mention officials within the administration are analyzing ways to standardize local building and zoning codes and decrease closing costs. So again, decreasing closing costs, that that's that's just going to bump up prices. This is this is insanity. Uh, and then standardizing local building code. They're not going to do that. Why? Because they're going to lose voters if they do. Because again, what just to make sure we're on the same page, you're adding the voters by bringing down the home prices, but you're losing even more voters by bringing down those home prices, having it affect their net worth, the owners of the homes right now. But here's the key. Listen to this. He added that the possibility of considering some tariff exemptions for housing materials will be considered. Well, wouldn't you know, huh? You mean to tell me, Scott Bent, that the Chinese aren't paying the tariffs on lumber? Whoa, whoa, whoa, whoa, whoa. Time out here. I thought that the foreigners were paying all the tariffs. If the foreigners were paying all the tariffs and those costs aren't passing through to the American consumer, then why on earth would we need to tariff or have an exemption for tariffs on housing materials? Weird. Another contradiction. How rare from a political official. All right, let's get back to this. So here we go through. Let me zoom in again for you guys. Costs. I mean this is just insane. All regular. Okay. Yeah. So here they go through just a cost breakdown of of just the regulation that we were discussing before. And again, this isn't all state and local. A lot of this is federal and it just trickles down to the state and local due to agencies like the Environmental Protection Agency. And they have all of these things. You know, I've built homes in the United States from scratch, as most of you know, and and I've also built properties or buildings or apartments here in Colombia. And it is night and day difference. Night and day. Now are the building is the building quality here at the level of the United States? Not really. Truth be told. But does it matter? No. Are buildings just falling down everywhere? No. No. No. No. It's just it's it's all of the crazy minutia that at the end of the day really doesn't move the needle, but it just makes the bureaucrats feel better. Like the the busy bodies in the government, it makes them feel like they're actually doing something to save the environment, right? That's what the majority of this nonsense and this red tape is all about. But it doesn't end there. It doesn't end there. Another thing that we could do, and maybe one of the easiest things we could do, is just get rid of the government subsidies when it comes to mortgages. Let's go over to a chart of uh 30 year mortgage. We'll just do the rates just because um I don't I just need a chart as a visual. So, this is just uh well, let's just go to one that's a little more up to-date. We'll just go to the Fed. Okay. So, this is a 30-year fixed rate mortgage. Now, most Americans don't realize this is not, I repeat, this is not a product of the free market. Absolutely not. Not even close. Why? There is no bank in their right mind that would do a 30year fixed rate mortgage. So, what you're doing is you're trying to figure out what inflation is going to be over the next 30 years. No way. that that's impossible to model. They couldn't even figure that out in 2020, what the inflation rate was going to be in the next year. You think that they can figure out what the inflation rate and somehow model that into the risk management that they're going to do that for 30 years? Absolutely not. Why do you think that if you go to a non Fanny Freddy bank that's gonna actually keep that on their balance sheet, that paper, why do you think that it's only an adjustable rate mortgage and like the maximum time you can get uh fixed on that adjustable rate is like what five years? You guys would probably know because five years a bank can model that. 30 years, no chance. Absolutely no chance. So, the point here is this 30-year fixed rate mortgage that we know and love in the United States is totally a product of the government, meaning that it requires a government subsidy in order for it to exist. And if you don't believe me, just go ahead and try to find a 30-year fixed rate mortgage in Canada or Australia, the UK. mysteriously they don't exist there. Is it because we have more free market capitalism? No. Because we have less free market capitalism in terms of mortgages. And then what you can do is get rid of HUD and get rid of the FHA and get rid of all this crazy government basically the subsidies in order to get the payment down which jacks the prices high and creates all these bubbles for heaven's sakes. Right? So, what you do back in the good old days, very few people probably remember this, but back in the good old days, you would have to put 20% down, okay? Or even more than that. In Colombia, by the way, you got to put down like 40%. Down. And the interest rates like 15% on a mortgage. And it's adjustable rate. No way they're doing fix no way they're doing fixed rate mortgages here. That's for sure. But you see what happens when the government gets involved and they try to make housing more affordable by just bringing down the uh mortgage payment or just by by artificially reducing the interest rate by getting the government involved with subsidies or by lowering the down payment. So then what you're doing is you're bringing people to the housing market that really can't afford to be there in the first place and they're the ones that get completely wrecked. They're the ones that get destroyed. But this issue, this problem, it's not hard to solve. It's just again the main problem here is the solution requires bringing more supply online, which is going to bring down prices. And the politicians don't want to do that, especially Donald Trump. So what they inevitably do is they create the illusion of affordability through financial engineering that creates the bubbles that end like the GFC. So that's what this is all about. And they do it entirely entirely just to buy votes because Scott Bent isn't a I mean he's a smart dude. He's a real smart guy and he lived through the financial crisis. He knows what caused the problem. He knows damn well that this was one of the main contributing factors and yet he's doing the exact same thing. Is it because he just loves the plebs and he loves the gal that as the the fresh omelets? No, absolutely not. It's because he knows this is Donald Trump's or the Republicans best bet to win the midterms and he's sacrificing the poor and middle class just to get votes. That's the bottom line here. All right, guys. Enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free markets. Free markets. And you know what the definition of a free market is? It's when the government isn't involved. And why do we want free markets? Because it would actually make housing more affordable. See you in the next video.