“Federal Reserve Chair Jerome Powellsaid Sunday the Department of Justice has served the central bank with subpoenas and threatened it with a criminal indictment over his testimony this summer about the Fed’s building renovations.
The move represents an unprecedented escalation in President Donald Trump’s battle with the Fed, an independent agency he has repeatedly attacked for not cutting its key interest rate as quickly as Trump prefers. The subpoena relates to his testimony before the Senate Banking Committee in June, Powell said, regarding the Fed’s $2.5 billion renovation of two office buildings, a project that Trump criticized as excessive.
Powell on Sunday cast off what has up to this point been a restrained approach to Trump’s criticisms and personal insults, which he has mostly ignored. Instead, Powell issued a video statement in which he bluntly characterized the threat of criminal charges as simple “pretexts” to undermine the Fed’s independence when it comes to setting interest rates.
“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation,” Powell said.”
“Large institutional investors have gone from buying effectively zero single-family homes before the Great Recession to being responsible for a small but non-negligible percentage of home purchasers in recent years.
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any real federal effort to squeeze institutional investors out of the single-family housing market is bound to make shelter more expensive and less plentiful.
For all the political attention paid to larger institutional investors, they make up a small percentage of home purchasers and own an even smaller share of the country’s single-family homes.
According to The Wall Street Journal’s parsing of the data, investors were responsible for about 25 percent of single-family home purchases in the first quarter of 2024. That is up from 20 percent in 2016, and the increase is almost totally driven by larger investors who own upward of 100 homes.
Over the past few years, companies owning 1,000 or more homes have accounted for only about 1 percent of all single-family purchases, but in 2024, their purchases appear to have dropped to effectively zero.
Purchases by entities that own more than 10 homes have ranged from 2 percent to 6 percent in recent years. That means that the 20 percent or so of homes being bought by investors are predominantly being sold to smaller landlords who own 10 or fewer homes.
And the bulk of home sales (some 75–80 percent) continue to be owner-occupiers.
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An owner-occupier doesn’t need to argue with a landlord about replacing an old appliance. They don’t need to worry about a tenant not paying rent, damaging the property, or moving and leaving them with a vacancy to fill.
As such, owner-occupiers are willing to pay a higher purchase price for a home. Landlords who do have to absorb all the risks and costs of their business demand a higher offsetting yield from owning a home, says Erdmann, which means demanding a lower purchase price.
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The only growth in home production to be squeezed is from expanding build-to-rent construction. While politicians are interpreting this activity as homes taken from homeowners, they are, in fact new supply that would go away under any ban on institutional investors.”
The US is in its weakest position compared to China. The US’s global trade war makes it less able to threaten China with a coalition of countries working together to counter it economically, and the US’s trade war with China revealed America’s severe weaknesses, which is why the US keeps backing down when the bilateral trade war reaches extremes. China was starting to understand and respond to a more coalitional strategy when that got blown up with a change of president.
The uncertainty of Trump’s tariffs have hurt small businesses and people who buy from them. If people can’t be sure how much something will cost, sometimes they just hold off on that economic activity.
Chinese electric vehicle maker BYD makes everything in-house, which makes it more efficient. China also has much cheaper labor than the US, and heavy governmental subsidies.
Economist Luigi Zingales was on Fox News for something other than the estate tax, but they asked him about it and he said he was for it. He was never invited on Fox News again.
Frank Luntz was hired by the Republican Party and groups funded by super wealthy people to fight the estate tax. He renamed it the death tax so people wouldn’t think of it as a tax that mostly affected the super wealthy.
The problem with the super wealthy and taxes isn’t tax rates, it’s that much of their income is not taxed at all. It isn’t counted as income. Before the fall of Communism, the American super wealthy actually paid taxes, but without the threat of Communism, there wasn’t the pressure to show that capitalism will work for everyone. Many changes, and a lack of reform to catch up with gaming the system, has resulted in the estate tax being a joke and the super wealthy paying very little tax compared to their lifetime income.
High income people pay taxes, but the super wealthy don’t officially have much income. Of course, they do have income, but it doesn’t count and is often never taxed.
Thailand built its huge tourism industry on US military bases and US military R and R during the Vietnam war. Young US military men spent far more than other tourists. Thailand was then able to turn this war-time tourism industry into a permanent industry.
Ghost job posting is when companies post fake jobs for information, fraudulently posting a non-existent job where people who need work waste time applying for a fake job.
Private electricity companies are supposed to have their prices managed by governments because they form natural monopolies, but they make tons of money because they capture the government and screw over the electricity user.
Taiwanese chip manufacturer TSMC is building a subsidized plant in Arizona, but is having trouble dealing with: thousands of pages of regulation, unions who want Americans to get the jobs, cultural clashes, and homeowners who don’t want plants nearby.
This event shows that the US can be a tough place to do business. We should consider reform.