Latest / Words & Numbers / Episode 496: The Home Crisis: Here We Go Again

Transcript

Episode 496: The Home Crisis: Here We Go Again · Words & Numbers

0:00
Today I'm words and numbers, body cams.
0:02
Phasing out. Juries, gun control, and.
0:05
Another look at the housing. Market all this and more.
0:08
Coming up next on words and numbers, a civil original
0:11
production. Check us out at civil.com.
0:14
That's C ivl.com. Hi, I'm James.
0:17
And I'm Anthony. And this is words and numbers.
0:24
Ants, it's new and exciting in your world this week.
0:27
An interesting article in the Wall Street Journal talking
0:31
about the UK government. They're making moves to expand
0:36
judge only trials, which in effect means doing away with
0:43
jury trials. Not entirely, but reducing the
0:45
number of jury trials and going to a system wherein the judge
0:48
just makes a ruling. The argument for this apparently
0:52
is just a question of efficiency, that the jury trials
0:56
are slow, they're expensive, and they contribute to backlogs.
1:01
To which I mean, without getting into anything else, my initial
1:04
reaction is well quit making so many things illegal and you
1:07
won't have this problem. My Nonetheless, my initial
1:12
reaction is good. Something that puts a man's
1:16
freedom on the line should be expensive and onerous.
1:19
Right. Yeah.
1:21
But more than that, the the jury trial is the final bulwark
1:26
against tyranny. It's the last place where you've
1:30
been accused and convicted of a crime that the people, the
1:37
government says is a crime and the people say is complete
1:40
nonsense. This is the last opportunity for
1:43
those jurors to say, Nope, not guilty.
1:46
Now, of course, in this country we call that jury nullification.
1:49
And it's the judges, for for obvious reasons, don't care for
1:54
it. But it is possible.
1:56
A jury can just, regardless of anything else, say not guilty.
1:59
And there's nothing anyone can do about it.
2:02
And thus OJ Simpson walked free. But let's maybe compare this a
2:07
little more to the United States, because I would argue,
2:11
as would our good friend Clark Neely, who's been on many times
2:15
saying exactly this, that we don't really have jury trials
2:18
here anymore either. Oh no, no, it's something
2:22
ridiculous. Like 99% of people who are
2:27
accused of crimes end up opting not for a jury trial because
2:34
the, the, the prosecution does what's called charge stacking,
2:39
right? So you've done, you've done
2:40
something that's relatively minor and they throw on a whole
2:44
bunch of other things. So you're facing 50 years in
2:46
jail if if you are if you're found guilty in front of a jury.
2:51
Or you could just plead guilty to get six months in jail and
2:57
waive your right to a jury trial.
2:59
Yeah, just sign this paper and everything will go away.
3:02
Yeah. And how how the Supreme Court
3:05
hasn't slapped somebody down for this, I do not understand.
3:09
Yeah, well, Supreme Court's a bunch, bunch of lawyers, and in
3:12
many cases from the prosecutorial side, right, Not a
3:15
lot of defence attorneys end up at the Supreme Court.
3:19
So I think that's something interesting that Clark has been
3:22
working on, looking at the pedigrees of judges and it's a
3:29
huge majority of them come up through the prosecutorial ranks,
3:33
not through the ranks of defendants.
3:35
And so of course in the in their heads, psychologically, they're
3:39
they're geared to look at the guy in front of them and presume
3:43
that he's guilty. Now of course, that's not what
3:45
the law says, but what I'm talking about what what happened
3:47
psychologically, even subconsciously.
3:50
Yeah, no. And and, and look, the police
3:54
will detectives will tell you everybody's guilty.
3:58
And that makes me flinch. But but then I'll also tell you,
4:03
you know, it's a very strange thing.
4:04
When I became Dean over at the American University of Iraq and
4:08
I was in charge of all academic and non academic discipline on
4:11
the entire campus. Everybody was guilty.
4:15
Really. Even I thought so.
4:17
And I'm so prone to thinking in other ways than that, that it's,
4:22
it's ridiculous. But I I came to that belief
4:25
within weeks anyway. Is it?
4:27
Is it a problem that when you say everybody's guilty, they're
4:30
guilty of things that are, that are serious?
4:34
Or is it simply that we have cast our legal net so wide and
4:38
made so many things illegal that probably shouldn't be, that of
4:44
course everybody is guilty? I think it's both those things.
4:48
I think there's a number of people out when, when you say
4:50
everybody's guilty, the detective doesn't mean every
4:53
single person that he encounters on the street.
4:57
He means everybody investigates, Everybody who's in a in a case,
5:03
right? Everybody who's a suspect,
5:05
they're all guilty. And the more you dig, the more
5:07
you realize that that's actually right, because who do they deal
5:11
with on a daily basis? They deal with a pack of dirt
5:13
bags, right? And when you deal with dirt
5:17
bags, you get dirt bag behavior. Well, that's, you know, that's
5:21
interesting. I, I hate to give ammunition to
5:23
the other side of this argument, but you know, you and I as, as
5:27
professors, we, we could tell immediately if a student has
5:32
plagiarized or cheated on a test.
5:35
Just seconds. You know it.
5:36
And if you ask me for objective evidence, I mean, sometimes
5:39
there is, many times there isn't, but I know it.
5:42
I know it because of my experience with thousands upon
5:46
thousands of students in similar situations.
5:48
Yeah, that's right. But you know, we're going to
5:50
kind of stick with this theme a little bit on the thing I wanted
5:52
to talk about this week. And I'll just stipulate right up
5:57
front that I have never liked police officers as a group.
6:04
I, I like this one. I like that one.
6:07
But I am profoundly distrustful of police officers.
6:12
And I'm sure it has a lot to do with the many, many, many, many,
6:16
many times I had to deal with them as a younger Harrigan where
6:21
I was, in fact, the the guilty dirtbag.
6:24
But we'll leave that for another episode on another day.
6:29
Actually, some of my worst encounters, I was not guilty at
6:33
all, right? And and that that sticks with
6:36
you when you have that kind of interaction.
6:38
And nobody was happier than I was when this body Cam movement
6:44
got rolling and all, the, all the cops were going to be
6:48
wearing body cams everywhere. So now we could finally see the
6:55
bullshit that they were up to on a daily basis.
6:58
And come to find out, I have to be objective here.
7:01
That's not what we found. We did not find that.
7:05
We found a group of people who, while perhaps not trying quite
7:11
hard enough, were trying pretty hard to be professional public
7:15
servants. And I got.
7:16
To give them credit for it, right The the entire body Cam
7:20
movement gave me a new sympathy for police officers because now
7:26
I used to only see the terrible things they did.
7:30
Actually, I'd, I'd only see the remnants of the terrible things
7:33
they did. But now I see the terrible
7:35
things that they're forced to endure, right?
7:38
The the people who just treat them so poorly.
7:42
You know, it doesn't take much to just hand over a license and
7:47
a registration and an insurance card and then at the end say,
7:51
well, are we done here? You, you can behave that way.
7:55
And boy, you see people who just don't and, and, and then, then
8:01
we got ice and boy, I, I don't like them for exactly the same
8:06
reasons. I didn't like the police and I
8:09
didn't like them even more because there seems to be
8:12
exactly no oversight on them whatsoever.
8:16
They're getting body cams. Hallelujah.
8:19
Now I can see everybody who's misbehaving now they they tell
8:25
me it's going to take robably 6 or 6 months at least to get a
8:30
good roll out on these things. But just knowing that they're
8:34
coming makes me feel a lot better.
8:37
I'm Anthony Davies, Co host of Words and Numbers.
8:40
James Harrigan and I are proud to be on Civil's Network because
8:43
we believe in their unifying principle of human respect,
8:45
which is the idea that our well-being as humans is
8:48
diminished when we employ coercion and that conversely,
8:51
our happiness and prosperity are maximized when we cooperate.
8:54
If you believe in our mission, join civil.com.
8:57
That's civl.com. Anyway, aunt, that that brings
9:01
us to the foolishness of the week, which doesn't make me feel
9:05
better at all. Do do you remember when Donald
9:10
Trump nominated Jeanine Pirro to be US Attorney for the District
9:16
of Columbia? You might the the the name is
9:21
perhaps throwing you. Do you remember when he
9:23
nominated an imbecile who worked on Fox News who used to crank
9:29
about law and order all the time?
9:32
Right, it's all coming. Back as attorneys are coming
9:34
back. Yeah.
9:35
It's all no US attorney for the District of Columbia.
9:39
Excuse me? You're just you're thinking of
9:41
Pam Bondi, who looks like she came straight from central
9:45
casting at Fox News. Jeanine Pirro doesn't.
9:49
She actually has dark hair of all things.
9:51
But the evidence of plastic surgery is right up front
9:56
anyway. Usually no pick on people for
9:59
plastic surgery, but she's so detestable I'd pick on her for
10:03
the color of the shirt that she chose.
10:05
This. Morning.
10:05
Tell us. Tell us why she's detestable.
10:09
She is threatening jail time for lawful gun owners who traveled
10:15
to DC with. Firearms.
10:18
I saw that, but then wasn't there a huge outcry and she
10:22
walked it back. I haven't seen it walked back.
10:25
There has been a pretty large outcry and, and look, we, we've
10:29
had some pretty, you and I are, are well on the record as being
10:34
staunch advocates of the Second Amendment as opposed to damn
10:39
near everybody else apparently, including Republicans and
10:43
Democrats alike. But there's a wisdom in the
10:47
Second Amendment and it doesn't create a right for you to carry
10:51
a firearm. It affirms your right to carry a
10:54
firearm. You already have that right.
10:58
And it stems from the right of self-defense.
11:00
You have an absolute right to defend yourself if you're being
11:06
attacked, and if a gun is going to make that easier, so be it.
11:12
I I don't want my daughters, who probably weigh half of what I
11:18
do, fighting against a grown man.
11:21
That may work in the Marvel Universe, but it doesn't work
11:24
here in the real world. I want them to be armed and I
11:28
want them to be supremely dangerous as as such.
11:33
You said something that I think is beautiful that I, I want to
11:37
underline is not just to say you set, set it in with regard to
11:41
the Second Amendment. It's not just the Second
11:43
Amendment, it's all of all the Bill of Rights.
11:46
That that the. Constitution does not bestow the
11:50
right, it protects it. You already have it.
11:54
You have. Constitution is saying you have
11:56
that right. In fact, look at the wording.
11:57
It doesn't say citizens of the United States should be allowed
12:02
to carry arms. It says Congress shall make no
12:05
law infringing. The Constitution assumes you
12:08
already have the right. But that's, that's right.
12:11
And, and look, we've, we've gotten some Supreme Court
12:14
rulings over the last bunch of years that have gone a long way
12:19
towards restoring that right. That's been eroded over the
12:23
years, but I think what we really need right now is a
12:27
Supreme Court ruling that says simply you have the right to
12:31
keep and bear arms, period. No one can infringe upon that
12:39
right. Period.
12:42
Yeah, Now I'm. I'm not a lunatic.
12:46
Maybe I am. I'm not a lunatic in this way
12:49
because there are some places where perhaps it's not a
12:54
particularly good idea for people to be carrying firearms.
12:58
I know I have to go through a metal detector to go into court.
13:02
Maybe I don't want armed defendants in court.
13:05
Maybe that's just kind of silly, right?
13:08
So I, I think you can have some minimal common sense exceptions.
13:16
I think if you're in a mental hospital, you have no business
13:19
having a weapon on you. I'm pretty sure if they let you
13:23
out of a mental hospital, you still may have no business
13:26
owning a weapon. That's another story for another
13:28
day. The old saying is that hard
13:31
cases make bad law. So you don't.
13:34
You leave the hard cases off to the side and ask what's the
13:38
sensible thing? And the sensible thing to me
13:42
would be for the Supreme Court of the United States in the
13:45
unanimous opinion to restate the Second Amendment, thereby
13:49
removing licensure requirements everywhere, because a license is
13:56
by definition an infringement, because whoever offers the
14:01
license can in fact decline to give you a license.
14:06
And. What you're what you're saying
14:07
may not be that crazy. Just look at what's happened
14:11
over the past 20 years. 20 years ago it was some, I don't think
14:17
there were any constitutional carry states.
14:20
There were, I forget what the numbers were, but it seems to to
14:24
have gone down half and half of states that were gun friendly
14:27
states that weren't and that just kept expanding and
14:30
expanding. And now you got a whole bunch of
14:31
states that simply they have no laws about guns.
14:34
They just point to the Second Amendment.
14:37
Yeah, that's what we have here in that's what we have here in
14:40
Arizona. And I can tell you that all
14:44
almost universe, this is true. I don't feel like I'm in any
14:49
danger, but if I did, I might be able to take care of it.
14:56
I'm just saying, right. Yeah.
14:59
And I have the right to self-defense and it's not
15:02
infringed by the state. I'm, I'm hoping that our
15:07
brothers and sisters on the left are, are watching carefully this
15:11
whole business with ICE. And I'm not making a comment on
15:14
the recent shooting. I'm just saying in general,
15:17
we're moving toward a space where we have what are called
15:23
police under the federal government, but actually acting
15:28
as in a military capacity. This is what the Second
15:33
Amendment was written. For and we should, we should go
15:36
back a step because we shouldn't even have federal, a federal
15:41
police force. Right.
15:43
Yes, right. However you want to construe
15:45
that, that's not in the Constitution, it's not there.
15:49
So there we are. I hope Judge Piro has to eat a
15:56
big giant bowl of her own making and we'll, we'll just leave it
16:00
at that and and move on to something that probably makes
16:07
people even angrier. We're back to housing prices
16:09
again, but we're back to housing prices for a good reason.
16:13
We've been hitting this a lot lately and it it, it wasn't my
16:17
intention for us to go back and do it again because we've done
16:21
it a lot in the last couple of months.
16:24
But I found this article today and I found it on msnandmsn.com.
16:30
It's been picked up at a number of different places.
16:32
You can find it, It's by a woman named Julie Z Weil.
16:36
WEIL. And the title, if you want to go
16:40
look it up, is Why Nobody Really Knows the Scale of the US
16:43
Housing Crisis, which flies in the face of everything we've
16:46
been telling people for the last two months, because we claim to
16:50
know the scale of the problem of the US housing crisis.
16:54
Anyway, there's, there's one paragraph that, I mean, it just
16:58
grabbed me. And unfortunately, it, it, it's
17:03
not her first paragraph. And the little editor inside of
17:05
me wanted to go yell at her. But I'm going to read you the
17:08
1st 2 paragraphs and then you can, you can take it from there.
17:12
America faces a serious housing shortage, one that Moody's
17:17
estimates would take more than two million new homes to
17:21
resolve. But, and that's first paragraph
17:24
second. But over at Goldman Sachs,
17:27
analysts put the number at 3,000,000.
17:30
Zillow's estimate tops 4 million, while Brookings
17:34
projects 5 million and McKenzie says 8 million.
17:38
Meanwhile, congressional Republicans insist the shortfall
17:42
is closer to 20 million. So we've got a bit of a variance
17:47
here at between 2 and 20 million houses, which seems absurd on
17:52
its face. Yeah.
17:55
The 20 million I could probably just discount out of hand.
18:00
That's yeah. That's politicians, right?
18:02
They're politicians. What are you going to do?
18:03
Yeah. But it's worth, I'm just as
18:05
you're talking there, I'm just looking it up.
18:07
There are roughly 150 million houses in the US I'm sorry, let
18:14
me back off on that. Housing units.
18:17
So a housing unit, if you have a duplex, that's two of them.
18:21
But basically think of a housing unit is where you would, you
18:24
know, large enough to put a family.
18:26
But does that include does that include all high rise
18:29
apartments? I believe so, yes.
18:32
So that it is actual. Units.
18:34
It's actual units, yeah. And so at 150 million, if you're
18:41
a 2 million shortage, that's 1%. I mean, 2 million sounds like a
18:46
big number, but it's a 1% of the market.
18:49
That's not a big deal. 22 million is a large number and 1%
18:55
is probably not a big deal. I'm, I'm not, I'm not as
19:02
immediately convinced as you are, right?
19:06
I it could be a pretty big deal because it puts all manner of
19:11
upward pressure on cost. Well, it it does.
19:17
And that's, that's where I've, I've been scratching my head for
19:20
a long time because people keep saying that price of housing is
19:24
going up. And when I quote the numbers to
19:27
them, they tell me I'm just out of touch.
19:29
But here again, I've got in front of me median sales of
19:33
houses, median price as a fraction of median household
19:38
income. So it's the middle house as a
19:41
fraction of the middle guy's income.
19:44
And it is today that ratio is 5, which is the same that it was
19:52
from, actually, it's a bit less than it was from 2014 through
19:56
2018. As of, let's see, 20/22.
20:00
It was up at almost 6. But I don't think that's the big
20:03
deal. I think, and I've said this
20:05
before, I think what's going on is people are comparing today to
20:10
the height of COVID when we were getting all the free checks and
20:14
there was the moratorium on rent that you didn't have to pay your
20:17
student loans. And they're saying their lives
20:19
are worse now than they were then.
20:21
Well, lo and behold, back in 2020.
20:25
The medium price of a home was 4.8 times the median household
20:31
income, right? So then it shoots up to almost 6
20:34
and it's down to five and sit 5. And people are saying, but I
20:37
remember when it was 4.8 wake up, that was that was completely
20:42
an artificial economy. And people don't think in those
20:46
terms. They don't think 4.5 times my
20:49
income. They, they look at the cost and
20:54
in order to buy a house, you're going to need a pretty solid
20:57
down payment. If you're paying an inflated
21:01
rent, which most people have to, it's going to be very hard to
21:06
save a down payment because most of your money disappears into
21:09
your rent. And as a matter of fact, and
21:12
we've talked about this before, for perfectly good reasons, rent
21:17
is often higher than a mortgage payment because you don't take
21:22
into account, you don't take into account all the repairs
21:25
that the owner, who is somebody else now but would be you under
21:29
the mortgage, has to make. But people know that they can't
21:34
afford the down payment. And even if they could, interest
21:38
rates are very high compared to what they were not too terribly
21:43
long ago. Look, I bought, I know you're
21:45
making a face at me. I, I understand.
21:47
I bought a house in 2005. I paid 5.61% on the mortgage,
21:53
right by by 2022 standards, that was extraordinarily high.
22:00
By 1981 standards, extraordinarily low.
22:05
These things are fluid and they move around.
22:07
But the the real question is what can people hope to afford
22:10
that? That's always the underlying
22:12
question. Look.
22:13
The the question of affordability is not just the
22:16
price, it's also the mortgage payment, the mortgage rate,
22:20
granted, but now I'm looking here at mortgage mortgage
22:25
payments as a fraction of after tax income.
22:30
Today it's about the this is the average 6%.
22:35
This is lower than it's been at any point since 2005, except for
22:42
COVID. COVID, right?
22:44
I think you know. In, in, in defense of people who
22:49
would come against these numbers.
22:50
This is the debt service payment as a percentage of disposable
22:54
income. So this is people who already
22:56
own homes. It's not people who are out
23:00
there looking and they can't find an affordable one.
23:02
They're not showing up on this number.
23:04
These numbers wishing and hoping that's right, right.
23:06
And, and, and you know the interesting question, the one
23:09
that I don't hear asked nearly as often as it should be, and it
23:13
should be the first question asked.
23:15
Actually, I hear a lot of recriminations.
23:18
People our age say things like, well, maybe you should lay off
23:22
the avocado toast and, and bullshit like this, OK?
23:29
Young people claim that they cannot afford a house, and I
23:34
think this means a couple of things.
23:36
It means they probably can't come up with a down payment and
23:39
it means even if they could, they probably can't manage the
23:44
mortgage payment and the upkeep in the maintenance and all of
23:47
that. What are they spending their
23:50
money on? Where is the money going that in
23:54
previous generations would have been squirreled away and left
23:57
for a house? Because there has to be, because
24:01
people now are not poorer than people were 40 years ago.
24:07
But they right they but they claim they can't afford anything
24:11
a a place to live. So where's the money going?
24:14
Do you have any idea? Because I really don't.
24:17
I don't I have some anecdotes. That's the best I can do.
24:21
I actually have an well, it's the same anecdote that comes
24:25
from several sources and that is that that people people tend to
24:30
eat out more now than they ever did before.
24:34
And I saw. Four nights a week someplace a
24:36
couple of days ago. Yeah.
24:38
And I can, I can speak from experience here.
24:43
When I was in, I had my first founded my first company when I
24:48
was in college and for a blessed while had a very high income and
24:58
would go out eating every night. I could afford it and I didn't
25:03
think anything of it because it was, you know, some few bucks
25:05
here, a few bucks there, whatever it is.
25:07
It was only later that I went back and did the math and
25:13
realized I was spending like 10 times on food what I would have
25:18
had I gone to the grocery store and brought the thing in and and
25:21
cooked it. And you don't realize it because
25:23
it's a little bit here, a little bit there over time so that it's
25:27
possible. I'm not saying that is the case,
25:29
but it's possible that's that's the case.
25:31
But while you're talking here, I've just done something.
25:34
I've gone to Zillow and here I am.
25:36
I'm in Fairfax County, Virginia, which is probably one of the
25:40
more expensive counties. Yeah, these counties in the
25:44
United States? Yep, top. 10 and I'm on Zillow
25:47
and I asked for homes for sale under $150,000 and I've got 1
25:53
here for 80,001 here for 100. The stand alone houses actually
25:57
looks pretty nice. The $100,000 one is 3 bedrooms,
26:01
2 baths, 1700 square feet. There's a condo here for 135.
26:07
Here's a condo for 150. Here's a two-bedroom 2 bath for
26:10
75,000 that looks like it might be a condo.
26:14
And so I look, there's not a ton of these, but I'm surprised
26:19
there are any given what people are saying about housing prices.
26:23
Well, I'm, I'm surprised there are any, given what the land
26:26
there typically costs. Oh, yeah, I could, yeah.
26:29
Land. I could virtually guarantee you
26:31
that if you walked into those houses, you would understand
26:34
immediately why they were so inexpensive.
26:37
That's that's possible. So I'm just look at this one
26:39
here. It's $100,000.
26:41
It looks, look, it's a it's what from my childhood would be a
26:45
middle class home. Looks like it has new siding,
26:48
looks like a new roof on it. But you know, look, it's not
26:52
something as palatial as my parents lived in by the time I
26:56
was old enough to leave the house, but it's a starter home.
27:00
James and I are delighted to be working with Civil.
27:02
For years, we've been pushing people to think about how we can
27:05
make the world a better place. Civil's mission of upgrading
27:08
society fits exactly with what James and I have been talking
27:11
about for years. Civil helps us by allowing us to
27:13
do what we do best, which is researching topics that are
27:16
important and communicating these to our listeners in ways
27:19
that we hope they will find enjoyable.
27:21
To see Civil's extensive list of content, including our podcast
27:24
Words and Numbers in our lecture series Words and Numbers Live,
27:27
visit civil.com. That's Civ dot com.
27:32
It goes without saying that if we built and, and look, we, if
27:37
we built it, it makes it sound like you, you know, the
27:41
government's going to go build a bunch of houses if the market
27:46
provided a number of houses to the degree that some of these
27:51
investment houses are calling for, right.
27:54
So 3458 million new housing units, the price would
28:00
absolutely come down on all the other houses.
28:04
Yeah, no, there's no question about that.
28:08
Even even if we only built 3,000,000 new houses, the
28:11
pressure in the pressures in the market would reverberate for
28:15
years. Yeah, it it would.
28:18
However, at the end, we'd actually end up paying more for
28:22
the houses than if we didn't do that because the we'd have to
28:25
raise people's taxes to come up with the money to pay for the
28:29
houses. It ends up being more expensive
28:32
than just leave the thing alone. But more than that, I'd ask the
28:35
question rather than the turning to the government and saying go
28:38
build some houses, I turned to the government and say what are
28:40
you doing? What are you currently doing
28:43
this pushing the prices up? I'm not suggesting for a minute
28:46
that that we should that My point is, is that when I say we
28:50
need to build more houses, what we're really saying is people
28:54
out there need to see the incentive and build the houses.
28:59
And if they're not, they're not seeing the incentive.
29:03
I see. Right, right.
29:05
Yes. Right.
29:06
If, if we really needed 8 million new homes, why isn't
29:11
somebody already out there saying, hey, I got an idea,
29:14
let's build 8 million new homes. Yep.
29:17
And there's a bunch of reasons for that, right?
29:19
And almost every area that you can go to has rules against
29:26
building new things in the in their midst.
29:29
Nimbyism. Not in my backyard.
29:32
And look, I live in a place like that.
29:35
I don't want anybody else building a house in my
29:37
neighborhood. Why not?
29:39
It will devalue mine, right? And I, I have no use for that.
29:44
I, I paid a fair amount and I don't want to take a loss on it
29:48
because some Jackass wanted to shoehorn one in on a piece of
29:52
property that's not really big enough for a house.
29:55
And yet when you take that attitude, and that's very common
29:59
human attitude. And when you take that attitude
30:02
and just kind of blanketed over the entire country, nothing gets
30:06
done, right. Where are they?
30:09
Yes, in my backyard, people, they are nowhere to be found and
30:15
it's not something. It there there's another
30:17
alternative which is building apartment buildings.
30:21
Except we so many states have made it just ridiculous for for
30:28
renters, not renters. The guy who owns the building,
30:32
the landlord. Because the states have given
30:35
the renters so many rights, they end up having more rights than
30:38
the landlord has, and he's the guy who owns the building.
30:42
Yeah, if if you literally can't evict someone for non payment,
30:47
why would you be in that business in the first place?
30:50
Right, right. Right.
30:52
It it's like owning a liquor store but not being able to stop
30:55
people from just grabbing a bottle of wine and walking out.
30:59
It's exactly the same thing. And well, yeah.
31:02
Well, funnily enough, California tried that.
31:06
It was a couple years ago. You and I talked about it.
31:09
They passed some law saying that or wasn't a law, but it was some
31:13
directive that the police were not to inter, not to interfere
31:17
for shoplifting under whatever it was, $600.00 or something.
31:21
Because the police have a scanner with them so they could
31:23
tell whatever they right and so. And So what happened?
31:25
People just started shoplifting all over the place.
31:28
Well, if only someone could have predicted that, then I leave it
31:31
to this. Well, do you remember kind of
31:34
going off topic the, the one of the creative responses that a
31:41
vendor had was to mark everything for sale in his shot.
31:45
It was shop is like a, you know, A5 and dime type thing, you
31:49
know, a mini mark type thing. Mark, everything up, $600.
31:52
So you want a can of Coke that costs, you know, whatever buck
31:55
50, that's going to be $601.50 and we'll give you a $600.00
32:00
discount when you show up at the cash register.
32:03
Why? Because if somebody steals it,
32:05
that crosses the $600.00 barrier.
32:08
It's pure genius. That would be enforced by
32:11
exactly 0 courts of law. Yeah, yeah, yeah.
32:15
Well, what? What can you do?
32:16
But. And there's one last variable, I
32:20
guess we would call it. I hate to call a human being a
32:22
variable, but man, I'm talking about is a human variable.
32:28
It is Donald J Trump who has weighed in on this.
32:34
And he, well, let me just read you his words because people
32:40
always accuse me of twisting his words and that he's a super
32:44
genius and I'm just a moron with the podcast.
32:47
So let me read the Super genius's words and then we could
32:50
all talk about them. There's a grammatical error by
32:53
word 2. Just throwing it out there.
32:58
People that own their homes, we're going to keep them
33:01
wealthy. We're going to keep those prices
33:04
up, Trump said during a recent Cabinet meeting.
33:08
We're not going to destroy the value of their homes so that
33:11
someone who didn't work very hard can buy a home.
33:14
So now apparently, it's government policy to keep home
33:19
prices high. Uh huh.
33:21
Which would mean the only way anybody could ever afford to buy
33:26
a house is if interest rates tank and you can go back and get
33:32
a 2 1/2 percent mortgage again, which is exactly what he's been
33:36
pushing for. So I think you can kind of see
33:41
that third dimensions worth of chess that he's playing here.
33:45
It's not terribly confusing. Come to find out he wants low
33:48
interest rates so people can't afford to buy houses that are in
33:52
fact very expensive. But but look at what's happened
33:56
here. We've got the Federal Reserve
33:58
that for over a decade has been setting the interest rate.
34:03
The interest rate is a price. You should leave it to the free
34:06
market. Nobody should be setting it.
34:08
But what happens? We get so used to that.
34:11
It's just a thing. Well, of course the feds going
34:13
to set the interest rate. So the next thing is, well, why
34:15
can't we set housing prices as well?
34:18
If you're going to do that, let's set the price of cars, the
34:20
land that they both sit on. And before you know it, you're
34:23
you're to the Soviet Politburo, where you have agencies set up
34:28
to decide what the prices of things are going to be.
34:32
And we all know how well that worked.
34:34
Or at least, at least, we should all know how well that worked.
34:40
But given a recent election in New York City, it's obvious we
34:44
don't. The thing that I think people
34:47
don't appreciate is that prices are are metrics.
34:52
They're not levers. They reflect the values of
34:56
things. If you try and treat them as
34:59
levers, we're going to set it to something.
35:01
Not only are you not going to achieve what you're looking for
35:04
because the thing isn't a lever, it's a metric.
35:07
But now you've broken the metric, so it's no longer
35:09
telling you anything. So it's like, you know, you want
35:12
to, you want to go faster, so you break the plastic on your
35:17
speedometer and push the little needle.
35:19
Well, that's not going to make you go faster.
35:21
All you've done is you've broken your speedometer, so now you
35:23
have no idea how fast you're going.
35:25
That's what a thrice is. There's a couple of things here,
35:27
Anthony of the the Fed exists for two stated purposes, to
35:31
control inflation and to control unemployment.
35:34
The market would be more efficient at controlling each of
35:37
those things, no question. Leave it to the market.
35:41
If if you, the government, are doing a crappy, crappy job, the
35:47
market will reflect that and then you will have to alter your
35:50
behavior. Having an intervening
35:53
institution that you can dress up your mistakes in does nobody
35:58
really any good at all. So I don't want to audit, I
36:02
don't want to audit the Fed and I want to end it.
36:05
Yeah, I. Just want to get rid of it, but
36:08
but there's another step here. If mortgages are important, and
36:15
they are, then I think whoever writes the mortgage should
36:21
maintain the risk of that mortgage throughout the life of
36:23
the loan. I.
36:25
Agree with that. You want good lending?
36:28
Leave people on the hook. Why would you be against this?
36:32
But in favor of having colleges cosign on student loans, The
36:38
same thing. Oh well, I think the The thing
36:42
is this in both cases we currently have a problem.
36:46
We had the housing problem in 2008 because of what you're
36:49
describing. We have the student loan problem
36:51
now for a similar reason. It's not that the banks can sell
36:56
the loan to somebody else, it's that the government is buying
36:59
them. So it's putting taxpayer on the
37:02
hook for it. I mean, first, O OK, I could, I
37:05
could see my way to a 2 step process right by we accept what
37:09
you just said and get the government right the hell out of
37:11
the loan business. And then, and then, and only
37:15
then if there's still a problem, would I come up back with my
37:20
idea that whoever makes the loan should be on the hook for it.
37:24
Yeah, I think what you would find is as long as you got the
37:27
government out of the business, things would rectify because
37:31
you'd have a situation where the bank lends you money for a house
37:35
and the bank turns around and sells the mortgage.
37:37
And you could make the argument, well, the bank doesn't care if
37:40
you can repay the mortgage because it sold it.
37:42
Yeah, except that the guy who bought it cares, and he's going
37:46
to be doing the due diligence, which is going to force the bank
37:48
to do the due diligence because, again, can't sell the mortgage
37:51
without doing so. The problem we have is Fannie
37:54
Mae and Freddie Mac weren't doing the due diligence because
37:58
if they were caught holding the bag, they didn't have to pay for
38:01
it. The taxpayer did.
38:03
Yep, that's right. And notice what just happened,
38:06
Dan, I made an assertion. You said.
38:09
I don't think that's right. I said prove it.
38:13
You gave a pretty reasoned argument, which I accepted
38:16
immediately, that that's how disagreements are supposed to
38:20
work and I only. Say this.
38:23
It's how intelligent discourse happens all the time.
38:27
Well, and it also happened with you this time, Rick.
38:30
Yes, but anyway, see, not even intelligent enough to get the
38:34
joke. Anyway, I digress.
38:38
I say this because our good friends at Words and Numbers
38:42
backstage have been acting like a bunch of jackasses lately,
38:46
yelling at each other, saying horrible things to each other,
38:49
and I for one am getting good and God damn tired of it and
38:52
they need to stop. So let this be a template.
38:57
You can disagree and you can even admit, oh hey, maybe I was
39:03
wrong about that. Let me reconsider that.
39:07
Some of the happiest times of my life, Aunt, when I found out it
39:10
was that I was wrong about something.
39:12
Oh yeah. Absolutely.
39:13
Because it opened. Because it opened a brand new
39:16
door that I had never It opened a brand new door that I didn't
39:20
even know was a door. Yep, Yep.
39:23
And, and for smart people, the day you find out you're wrong
39:27
about something that you believed a long time is the day
39:31
you get to go off on an adventure in your own mind,
39:35
finding out all kinds of new stuff, which change your mind
39:39
about all kinds of other things. It's it's really great, but it
39:43
only really happens or it best happens.
39:46
It more most frequently happens dialectically, right when you're
39:51
having a conversation, a disagreement, an argument with
39:54
someone, right. But an argument isn't you're an
39:58
asshole that that's not your argument.
40:02
An argument is. I don't think you've considered
40:04
the following points. And I think it if you want a a
40:09
quick and dirty rule to go by, if you find yourself talking
40:14
about the other person instead of the topic, you're doing it
40:18
wrong. You're doing it so we can have a
40:19
disagreement. And the minute I say, well,
40:22
you're saying that because now I'm no longer talking about the
40:25
topic, I'm talking about you. I've gone off the rails.
40:28
And and if you are that person, you're the asshole.
40:34
I'm sorry, but that's how it is. So I would like more people to
40:39
come to words and numbers backstage to the Facebook group.
40:44
It's generally quite lovely. I'm thinking about doing a
40:47
cigars with James this very weekend on Saturday because you.
40:51
Know they love that thing. I love it too. the Super Bowl is
40:54
on Sunday and you know, not like I'm going to do it that day, but
41:00
Saturday is going to be a nerve racking day for me.
41:02
So maybe I'll spend it hanging out with the good people.
41:05
And if you'd like to come and you're not in the words numbers
41:10
backstage group and don't want to be, send me an e-mail at the
41:15
Words and numbers e-mail address that ain't keep.
41:17
Wordsandnumberspodcast@gmail.com. Yep, just like that.
41:22
You can send an e-mail and I'll send you a link just the same.
41:25
So on that happy note, Aunt, let's maybe make it a point to
41:29
be nice to each other on this. One of the holiest of all
41:33
weekends and I'll see you next time.
41:36
See you next time, James. If you like words and numbers,
41:38
check out civil.com/words and Numbers and join Civil to get
41:43
access to film shows and live events.
41:45
For those who are interested in upgrading civilization by
41:48
innovating beyond our legacy systems, get Civils apps on TV
41:52
and mobile. Learn more at civil.com.
41:54
That's civl.com.