‘Sometimes I’ll start a sentence and I don’t even know where it’s going. I just hope I find it along the way.’
White House Press Secretary Karine Jean-Pierre
The other day, Bloomberg broadcast another painful performance by White House Press Secretary Karine Jean-Pierre. Asked how the administration can square student loan forgiveness with its other fiscal goals, Ms Jean-Pierre gave a rambling, incoherent response.
The only complete sentence we could detect was this:
‘We do believe it will be fully paid because of the work this president has done with the economy.’
Of course, it makes no sense. The president has done no ‘work’ with the economy at all. He has only burdened it with more costs, regulations, and claptrap. Between the infrastructure, Ukraine aid, silicon chip, and ‘green’ energy boondoggles, the Biden Bunch added almost US$2 trillion in new spending. Debt forgiveness can only make inflation worse.
However, the real problem is not her; so many federal programs are inexplicable…except as schemes to rob the taxpayers.
How it ‘works’
Scam them…tax them…rip them off…herewith is a Dummies Guide for Ms Jean-Pierre; here’s how it works:
The long-suffering middle classes stand in line to give their support to politicians…and then get stabbed in the back by them. Not once…but over and over…
And after so many wounds, they still don’t understand how ‘the system’ works…how it’s designed to separate them from their money. A subsidy to the solar hustlers…‘cancelling’ student debt to buy votes…a huge gift to one group of thugs in the Eurasian heartland so they can kill another group of thugs — and all the money has to come, yes, from ‘The People’.
The salt of the earth…the common foot soldier and Girl Friday; they are ‘The People’. They think they’re in charge. They think the feds work for them. But their thoughts are as muddled and misshapen as Ms Jean-Pierre’s sentences.
Meanwhile, the feds…
…send their sons and daughters to fight in stupid, pointless wars — Iraq, Afghanistan, etc…
…use their money to back corrupt regimes overseas and incompetent bureaucracies at home…
…lure them into debt with ultra-low mortgage rates, student loans, and ‘Green’ subsidies…
…and then pass an ‘Inflation Reduction Act’ that actually forces them to pay even more for everything…
But wait…we’re not finished…
…hit them with the ‘inflation tax’…lower their real wages…then, increase house prices so they can’t afford a roof over their heads.
The Fed’s fiasco
The Fed lent money at such low rates that Wall Street firms were able to turn single family homes into an asset class. The builder made money. The realtor made money. The mortgage lender made money. And now a whole new intermediary was in the picture — making even more money off the middle class.
Families looking for a place to live often had to bid against billion-dollar corporations. Not surprisingly, the Wall Street firm won the auction; it was backed by the Fed’s money. And then if there were capital gains to be made, Wall Street made them, not homeowners.
Prices rose higher and higher, to the point where, in 2022 as in 2007, the typical family could no longer afford the typical house. And now…even the pros are pulling out of the single-family real estate market. And house prices are falling.
Here are the latest headlines from Bloomberg:
‘Blackstone Single-Family Landlord to Halt Home Purchases in 38 Cities’.
‘Home Partners of America to press pause beginning Sept. Company cites home price growth, market demand, regulations’.
Another ‘rug pull’ by the Fed? No, this time they are tearing out all the carpets and the kitchen sink too!
Those who decided to rent rather than buy aren’t doing so well, either. Rents are still rising. From CNN: ‘US rents hit a record high for the 17th month in a row’:
‘The national median rent hit a new record high of $1,879 a month in July, up 12.3% from a year ago, according to Realtor.com. While rents have been hitting new records for nearly a year and a half, there are some early signs that the market may be starting to cool off: July marked the sixth-straight month of moderating growth, retreating from a 17% year-over-year rent increase in January.’
What beautiful flimflam — press down on the brow of labour a crown of ultra-low interest rates so they have to stretch to buy a house…and then crucify them with falling house prices!
For The Daily Reckoning Australia