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Can America’s Middle Class Still Afford Homeownership In 2024

Can America’s Middle Class Still Afford Homeownership In 2024

Submitted by Sam Bourgi of CreditNews

The middle class today isn’t what it…



Can America's Middle Class Still Afford Homeownership In 2024

Submitted by Sam Bourgi of CreditNews

The middle class today isn’t what it was even as recently as just a few years ago. After the highest inflation breakout in nearly 50 years, many middle-class families have been priced out of the standard of living that most Americans took for granted not that long ago.

The raging effects of inflation aren’t limited to consumer goods and services but to asset prices as well. In recent years, a growing chorus of politicians and pundits appeared to conclude that homeownership—one of the pillars of the American Dream—is no longer within reach for regular Americans.

To put that theory to the test, Creditnews Research studied the relationship between income distribution and housing costs across the 100 most populous metropolitan areas in the United States.

What we discovered reveals the story of two Americas: one where middle-class families can still qualify for an average home and one where they’ve been priced out entirely.

The good news is there are still pockets of affordability across the country. The bad news is that affordable metros are declining rapidly.

Key findings

  • In 2024, the middle class can afford an average home in just 52 of the top 100 metro areas in the United States—a decline from 91 in 2019;

  • Those in the lower-middle class are priced out of 93 of the top 100 metro areas, up from just 33 in 2019;

  • The most affordable metros for middle-class families are mainly located in the Midwest, Rust Belt, and parts of Texas. The most affordable metros in 2024 are Youngstown, OH; Toledo, OH; McAllen, TX; Scranton, PA; and Wichita, KS;

  • The most unaffordable metros for the middle class are mainly concentrated in California and the Tri-State Area—they are San Jose, CA; San Francisco, CA; Los Angeles, CA; San Diego, CA; and Honolulu, HI;

  • The top five metros that, since Covid, have seen the largest increase in housing costs are all in California; they include San Jose, CA; San Diego, CA; Los Angeles, CA; San Francisco, CA; and Oxnard, CA.

  • Metros that are affordable for middle-class families are in rapid decline. 39 of the 100 most populous metros became unaffordable since Covid alone.

Housing affordability by income tier

There’s no single definition of the middle class, but one of the most go-to benchmarks is Pew Research’s household income percentile ranges for economic classes, which go as follows:

  • Lower-middle class: 20th - 40th percentile

  • Middle class: 40th - 60th percentile

  • Upper-middle class: 60th - 80th percentile

Based on these percentile ranges, America’s “middle class” households fall into three main income tiers:

  • Lower-middle class: $30,001—$58,020

  • Middle class: $58,021—$94,000

  • Upper-middle class: $94,001—$153,000

Affordability is another variable that carries many assumptions and could be approached in multiple ways.

For this particular study, Creditnews Research assessed affordability by calculating the minimum annual income households need to qualify for a mortgage on a typical home in each metro. A home is considered affordable if the monthly mortgage and housing payment doesn’t exceed 28% of a household’s gross income.

Although a middle-class income is essential to broadening one’s access to home financing, it’s not enough to close the gap in the country’s largest markets.

Based on the above criteria, middle-class households can afford an average home in just 52 out of the 100 top metros in 2024.

These 52 metros represent a diverse cross-section of America but are mainly located in the Midwest, Rust Belt, Appalachia, and parts of Texas.

For the lower-middle class, there are only seven affordable housing metros in the top 100—while the upper-middle class can afford homeownership in 87 of the top 100 metros.

As one might expect, the qualifying income and monthly housing costs vary dramatically by city.

In the most affordable cities across the Midwest and Rust Belt, a household income of below $70,000 is more than enough to qualify for a home. But that’s nowhere near enough along the Pacific Coast, Northeast, the Tri-State Area, and even parts of Florida.

In total, 41 out of the 100 metros in the study require a gross annual income of at least $100,000 to qualify for an average home. Most of these areas are accessible to the upper-middle class. But not all. Thirteen metros require a household income of more than $155,000.

The average monthly housing cost across the 100 metros amounts to $2,180, but again, there’s a huge variance between the lower and upper end of the range.

In the most affordable city, homebuyers can expect to pay a mere $942 a month for their mortgage and related costs. On the flip side, the most expensive metro could set you back an eye-popping $9,931.

Two Americas

Today’s housing market is really a tale of two Americas.

The Midwest and parts of the South continue to offer affordable options even for middle class households, whereas the ultra-desirable coastal cities are out of reach even for affluent buyers.

The root cause of this divide is rather straightforward: in large coastal cities, the supply of housing hasn’t kept up with demand as more people flock to those places for work or lifestyle.

In recent years, Americans have been stymied by the largest housing supply shortage in history—a well-documented contributor to record home prices.

That’s on top of a generational spike in mortgage rates, which has priced many average Americans out of the threshold.

Overall, middle-class households have 52 metros in the top 100 to choose from if they are looking for a home priced within their means. The question is whether they’re prepared to move or put down roots in those regions.

Many Americans bemoan the idea of living in the Midwest or smaller southern cities and would prefer the bright lights of San Francisco, Los Angeles, New York, or Boston.

Unfortunately, these metros are the last places middle-class Americans should be going to buy a home. In fact, the same is even becoming true for the upper-middle class.

As Creditnews Research found, a total of 11 metros have become unaffordable even for upper middle-class households since Covid. Six of those metros are located on the Pacific Coast and three on the East Coast.

The most affordable metro areas

With few exceptions, the majority of middle-class households (including lower-middle-class families) can decidedly qualify for a home in America’s 10 most affordable metro areas.

Apart from El Paso, Syracuse, and Little Rock—which became out of reach for the lower-middle class—the following metros have held their own on affordability over the past half-decade.

One state that makes several appearances on our most affordable list is Ohio.

This is due in part to the state’s generous homeowner subsidies in the form of grants and tax credits, coupled with ongoing investments in home construction and affordable housing.

Another catalyst has been the low down payment threshold throughout the Buckeye State, which, at $35,250, is outdone only by Iowa and Mississippi.

Gary Painter, Ph.D, real estate professor at Carl H. Lindner College of Business, stated: “Given the relatively robust economy, a young household’s ability to afford a down payment in Cincinnati and other Ohio cities is quite high relative to regions of similar size across the United States.”

The following cities represent the 10 most affordable metros in America, starting on the low end.

  1. Youngstown-Warren-Boardman, OH-PA: Youngstown shows up first in our rankings, with a monthly payment below $1,000 ($942) in 2024. To qualify for a typical home, buyers need an income of just over $40,000—well within the range of lower-middle-class and middle-class households. Youngstown’s population has fallen in recent decades but appears to have stabilized; the drop hasn’t been as drastic as peer cities Flint, Michigan, and Gary, Indiana. Housing prices are rising, but poverty in this city surpasses that of the state of Ohio.
  2. Toledo, OH: Ohio reappears in our rankings with the Toledo metro claiming the No. 2 spot. With an average monthly payment of $1,130, Toledo’s qualifying income for an average home jumps 20% from Youngstown to roughly $48,500. Average monthly housing costs in this metro soared 78% from pre-Covid (2019) levels of $635 to $1,130 in 2024. Even so, all segments of the middle class should be able to afford a house in this area. Catalysts driving Toledo’s real estate market include reasonable prices and a wide range of job opportunities across manufacturing, healthcare, education, and the public sector.
  3. McAllen-Edinburg-Mission, TX: Rounding out the three most affordable metros is McAllen, where residents must earn just below $50,000 in income to qualify for an average home without stressing their budgets. Qualifying income has roughly doubled since 2019 when it was below $25,000. So has the average monthly payment, hitting $1,156 in that stretch. McAllen’s close proximity to the Gulf of Mexico makes it a less expensive alternative for families who prefer to live by the water. McAllen has come a long way from its beginnings as a private ranch in the late 1800s to a standout economy in the Rio Grande Valley. In a speech given in McAllen in 2023, Texas Governor Greg Abbott touted the state’s massive property tax cuts, which have helped to propel economic development in the region.
  4. Scranton-Wilkes-Barre, PA: Scranton takes the fourth spot in our rankings, representing Pennsylvania’s debut on our list. Households must earn a qualifying income of just over $52,000 to afford an average home in this metro and keep costs at 28% of earnings. Monthly housing expenses in 2024 hover at $1,215, a massive 80% jump versus 2019 when they were below $700. But the entire middle class should still be able to afford a house in this metro. Scranton’s housing market has become more competitive of late, with home prices climbing 4% in Q1 2023. Scranton’s population currently hovers at approximately 376,000 but is projected to reach nearly 400,000 by 2031 despite rising property taxes. Scranton is considered among the top metros in the country for economic development in its comp set and has gained a reputation as one of the best places in the U.S. to retire, owing in part to housing options.
  5. Wichita, KS: Kansas enters the most affordable housing fray thanks to Wichita, which claims the No. 5 spot. Given Wichita’s qualifying income of $55,243, middle-class households can afford this metro without breaking the bank with monthly payments of roughly $1,300 in 2024. But it’s a far cry from 2019’s qualifying income of below $23,000 and monthly housing costs of only $532. Wichita hasn’t been able to escape the real estate market headwinds of late, which has weighed on deal activity, but economic activity in the state has been growing hand over fist. In Q3 2023, Kansas’s GDP grew by nearly 10%, fueled by a booming farming community.
  6. Pittsburgh, PA: The northeast revisits our rankings with Pittsburgh in the No. 6 spot. Pittsburgh’s qualifying income of $55,457 for an average home places it in the same ballpark as the Wichita metro. With a monthly payment of slightly below $1,300, the entire middle class should be able to afford a home in this area. But that doesn’t mean affordability hasn’t deteriorated over the years. Monthly housing costs have soared 66% since 2019 when they were below $800. With approximately 303,000 residents, Pittsburgh’s population is about half of where it was in the 1950s, the collapse of which is aligned with the decline of the country’s steel industry. Home sales in Allegheny County, where Pittsburgh is located, sank 25% between 2021 and 2023 to an all-time low amid the high interest rate and low inventory environments.
  7. Akron, OH: Demonstrating its prominence among the most affordable cities, Ohio is back with Akron—the Rubber Capital of the World—snagging the No. 7 spot. Households must earn a qualifying income of $56,743 to afford an average home in this metro, a 44% jump compared with 2019 levels. But with an average monthly payment of just over $1,300, the middle class wouldn’t feel cash strapped owning a home in this area. Akron’s housing demand remained strong even throughout the latest industry downturn, buoyed by an emerging tech hub that makes the city an attractive destination for jobs.
  8. El Paso, TX: El Paso lassoed the No. 8 spot in our rankings, strengthening the Southwest’s grip among the most affordable metros. As the first metro in our rankings to exclude the lower-middle class, El Paso’s affordability has been slipping away since Covid. The city’s qualifying income and monthly housing costs have roughly doubled to $58,114 and $1,356, respectively, since the pandemic, making it increasingly difficult to afford. El Paso’s per capita income has been on the rise, a trend that is expected to persist into 2025, with a housing market that’s been fueled of late by out-of-state buyers hunting a bargain of late.
  9. Syracuse, NY: As the first metro to represent New York, Syracuse claims the No. 9 spot in our rankings. Syracuse joins El Paso as the second metro where the lower-middle class was priced out since Covid, with the qualifying income soaring from $30,228 to $58,157 in that period. Similarly, the average monthly payment has nearly doubled from about $700 to $1,357 since 2019. But Syracuse’s days among the most affordable metros are probably limited as the housing market continues to draw comparisons to Manhattan and San Francisco. The city has become a hotbed for tech startups and jobs, including the rise of Micron Technology’s semiconductor plant in nearby Clay, NY that’s projected to create 50,000 jobs.
  10. Little Rock-North Little Rock-Conway, AR: Rounding out the top 10 most affordable metros is Little Rock, where once again the middle class is getting squeezed. Residents must earn a qualifying income of $58,286 to comfortably afford a home in this area, a whopping 41% increase compared with 2019. Monthly costs have jumped a steeper 69% to $1,360. Even with that sharp rise, Little Rock is affordable enough to make it into the top 10. While affordability has been waning in this metro, the economy is buzzing with job growth as of Q4 2023 exceeding pre-pandemic levels.

The least affordable metro areas

America’s least affordable metro areas won’t come as too much of a shock, with luxurious Pacific Coast metros dominating the rankings.

Half of the metros in this category are located in the state of California. Not to be outdone, Hawaii also makes an appearance, along with a trio of metros on the Eastern seaboard.

America’s middle class is priced completely out of each of these metro areas, including the upper end of the income range at $153,000.

  1. San Jose-Sunnyvale-Santa Clara, CA: San Jose takes first place with a qualifying income of $425,614 just to afford an average home. With an average home price of $1.5 million, the San Jose metro could see some relief from dwindling land on which to build. Surrounded by Silicon Valley, this metro area has been hit by a slow return to offices at tech companies like Zoom, PayPal, and X Corp, threatening to trigger a wave of out-migration and create what’s known as a “donut city” where residents and businesses relocate to the suburbs.
  2. San Francisco-Oakland-Berkeley, CA: It comes as no surprise that the tech capital of California is the country’s second least affordable metro for the middle class. With an average home price of $1.1 million, average monthly payments are just over $7,200, up from $4,679 five years ago. As part of California’s Bay Area, San Francisco has a reputation as one of the country’s most expensive real estate markets. Billions of dollars in investment continue to pour into this high-tech region, making it unlikely that housing prices will retreat anytime soon.
  3. Los Angeles-Long Beach-Anaheim, CA: Continuing with the California trend, Los Angeles rounds up to the top three least affordable metros. LA is the first city on our list to become unaffordable to the upper-middle class since Covid, with a $112,329 increase in qualifying income to $256,286. LA’s average home price hovers at $935,800, resulting in monthly housing costs of nearly $6,000. LA’s financial district is transforming into high-end apartments due to waning demand for offices.
  4. San Diego-Chula Vista-Carlsbad, CA: With an average home price of $924,365, San Diego is out of reach for every segment of the middle class, including the upper-middle class. Monthly payments for an average home are more than $5,900. Market dynamics don’t appear to be improving. San Diego led the nearly two-dozen cities tracked in the latest Case Shiller rankings, owing to an 11.2% increase in housing prices in the 12-month period ending in January 2024. Despite having a vibrant economy and a pristine climate, the vast majority of families couldn’t make it here.
  5. Urban Honolulu, HI: Honolulu rounds out the top five, joining the list of cities that have become too pricey for the upper-middle class. With an average home price of approximately $860,000, very few households outside of the wealthy can afford property here. A one-two punch of a tourism slowdown and recent wildfires have contributed to slower economic growth in Hawaii. But that hasn’t kept real estate values from rising amid strong demand for Honolulu’s beaches, rainforests, and spectacular views.
  6. Oxnard-Thousand Oaks-Ventura, CA: Located in California’s Ventura County, Oxnard takes the No. 6 spot in our rankings. With an average home price of nearly $850,000, monthly payments have soared 77% since 2019 to $5,425. Ventura County has strict land-use rules, pressuring inventory and resulting in a shrinking population, including Oxnard’s middle class, a trend that’s forecast to persist in the coming years.
  7. Seattle-Tacoma-Bellevue, WA: Representing Puget Sound in the Pacific Northwest, Seattle claims the No. 7 spot in our rankings. This metro’s qualifying income has more than doubled over the past decade and is no longer affordable to the upper-middle class. For everyone else in the middle class, Seattle is simply too rich for household budgets. With an average home price of $719,217, monthly payments are almost $4,600. New residents have been flocking to Seattle—the location of e-commerce giant Amazon’s corporate headquarters—for employment opportunities and income growth.
  8. Boston-Cambridge-Newton, MA-NH: The Northeastern city of Boston ranks eighth on our list. Boston’s qualifying income of $181,971 reflects an increase of nearly $80,000 since the pandemic, reserving this metro for high-income households. With an average property price of $664,491, monthly housing costs are now about $4,246, up 77% since 2019. The Boston metro, which extends to Massachusetts cities Cambridge and Newton, plus the neighboring state of New Hampshire, boasts one of the highest in-migration rates among Gen Zers in the country.
  9. New York-Newark-Jersey City, NY-NJ-PA: The New York, New Jersey, and Pennsylvania metros make the cut as the least affordable areas. With a qualifying income of $173,786, New York became out of reach for even the upper-middle class after the pandemic. With an average home price of $634,651, monthly housing costs have climbed 65% higher since 2019 to $4,055. New York Mayor Eric Adams has made affordable housing a priority in the city, increasing financing for new construction and the preservation of affordable homes by 80% in 2023 year-over-year.
  10. Bridgeport-Stamford-Norwalk, CT: Rounding out our top 10 least affordable metros is Bridgeport, CT. This metro, which also extends to Stamford and Norwalk, has a qualifying income of $163,371. With an average home price of almost $600,000, monthly housing costs hover at $3,812. Connecticut has been on the receiving end of an in-migration trend, adding 81,000 residents in 2022. With Connecticut Governor Ned Lamont implementing the biggest income tax deduction that the state has ever seen and lifting a tax credit for low-income workers, the trend is unlikely to reverse anytime soon.

Housing affordability: Pre-Covid vs. 2024

The fact that housing became more expensive after Covid is hardly breaking news. The question is, by how much?

Our analysis shows that average Americans have to earn almost twice as much today compared to pre-Covid to qualify for an average home.

Thanks to the doubling of qualifying income thresholds, 39 out of 100 of America’s most populous metros dropped out of middle-class affordability.

Taking into account lower-middle-class families, that figure balloons to a staggering 60 metro areas.

Perhaps predictably, the metropolitan areas witnessing the sharpest increases in income thresholds and housing expenses since Covid eerily match the 10 most unaffordable metros in 2024.

  1. San Jose-Sunnyvale-Santa Clara, CA: In addition to being the most unaffordable metro in the country for the middle class, San Jose real estate has seen the largest increase since pre-Covid times. Home prices are up a whopping 73% versus 2019 levels. Average monthly payments in this metro are unnervingly close to $10,000 compared with pre-Covid levels of $5,716.
  2. San Diego-Chula Vista-Carlsbad, CA: Not only does San Diego make the top four least affordable metro areas, but it’s also seen one of the biggest spikes since the pandemic. San Diego has experienced a 95% increase in qualifying income since 2019 to $253,157.
  3. Los Angeles-Long Beach-Anaheim, CA: While Los Angeles was never really affordable for the middle class, since Covid, housing affordability has gone off the deep end. Between 2019 and 2024, housing costs in LA have soared by $112,329. Over that period, average monthly payments have increased by a staggering 78%.
  4. San Francisco-Oakland-Berkeley, CA: San Francisco joins the other major California metros with a massive spike in qualifying income standards since Covid, rising $109,492 since 2019 to $310,000 in 2024. But although residents here command a high income, even the upper-middle class doesn’t make enough to afford the average home.
  5. Oxnard-Thousand Oaks-Ventura, CA: Oxnard is one of several California metros that have become out of reach for even the upper-middle class after Covid. Since the pandemic, qualifying income in this metro has soared almost $101,200, making it unaffordable even for those earning above $150,000.
  6. Urban Honolulu, HI: This Hawaii metro experienced a 64% jump in qualifying income since 2019 to $235,543. Over the past half-decade, Honolulu real estate has priced out even the upper-middle class with monthly payments nearing $5,500.
  7. Seattle-Tacoma-Bellevue, WA: Since the pandemic, this metro’s qualifying income has increased by $88,253 to $196,971, pricing America’s entire middle class out of the Seattle market.
  8. Boston-Cambridge-Newton, MA-NH: Known for its red-hot housing market, this New England city has become unaffordable for the middle-class homebuyer. In fact, even the upper-middle class has been priced out since Covid. Since the pandemic, Boston’s qualifying income has increased by $88,253 to $196,971.
  9. Bridgeport-Stamford-Norwalk, CT: Bridgeport doesn’t have the name recognition as other major metros on the list, but its affordability crisis has worsened since Covid. The qualifying income for an average home has increased by more than $77,400 since 2019. Monthly housing costs are up a massive 90% from pre-Covid levels.
  10. Riverside-San Bernardino-Ontario, CA: Due to large population growth and close proximity to LA, Riverside’s housing market has soared over the past half-decade. Since 2019, buyers need to earn $75,114 more to qualify for an average home in this metro.

Can homeownership become more attainable?

This study serves as yet another piece of evidence that America’s middle class isn’t what it once was—certainly from a homeownership point of view.

In previous generations, being able to own a home was almost taken for granted. Not anymore. And considering the steep drop in affordability since Covid alone, housing is unlikely to become more attainable anytime soon.

The good news is that the housing affordability crisis hasn’t gone unnoticed.

The issue is top of mind at the White House, with the Biden administration proposing tax credits and other home buying initiatives to make it easier for the middle class to enter the market.

Some builders are also set to convert empty office space into residential units—a promising, albeit limited, plan to improve housing access.

In the meantime, a growing number of metro areas are becoming out of reach for middle-class homeowners—thanks to elevated mortgage rates, sky-high house prices, and scarce inventory.

When, or if, housing could become more attainable is yet to be seen.


Tyler Durden Tue, 04/02/2024 - 18:20

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Tennessee Lawmakers Pass Bill Targeting mRNA Vaccines In Food

Tennessee Lawmakers Pass Bill Targeting mRNA Vaccines In Food

Following concerns over research to embed vaccines in produce, the Tennessee…



Tennessee Lawmakers Pass Bill Targeting mRNA Vaccines In Food

Following concerns over research to embed vaccines in produce, the Tennessee Senate has passed a bill which would require any food containing vaccines or vaccine materials to be labeled as pharmaceutical drugs.

Lettuce grows under artificial lights on an automated growing rack at a farm in Nottingham, Maryland, on April 14, 2023.

The bill, HB 1894, was passed by the Senate in a 23-6 vote on March 28 after the state House passed it 73-22 on March 4. It awaits the governor's signature.

The bill comes in response to a University of California-Riverside research project looking into whether mRNA which targets pathogens could be implanted into edible plants, which would then be consumed. The research was funded by a $500,000 grant from the National Science Foundation.

"You would have to get a prescription for that to make sure that we know how much of the lettuce you have to eat based off of your body type so we don’t under-vaccinate you, which leads to the possibility of the efficacy of the drug being compromised, or we overdose you based off how much lettuce is [eaten]," said Republican state Rep. Scott Cepicky during a House committee meeting in February, WKRN-TV reports.

Cepicky said that the bill, which local media described as a move targeting "vaccine lettuce," would classify foods modified to act as vaccines, as pharmaceuticals.

"So if you want to consume them you would go to your doctor and get a prescription," he said.

In a 2021 press release, UC Riverside associate professor of Botany and Plant Sciences, Juan Pablo, said "We are testing this approach with spinach and lettuce and have long-term goals of people growing it in their own gardens," adding "Farmers could also eventually grow entire fields of it."

According to Pablo, "Ideally, a single plant would produce enough mRNA to vaccinate a single person."

Another researcher, Nicole Steinmetz, said in the same release that they planned to use nanoparticles or "plant viruses, for gene delivery to plants."

When asked by WKRN-TV about the status of the research, a UC Riverside spokesperson said that the project is not yet complete.

"Research into the process of having plant chloroplasts express vaccine chemistry is ongoing. There are no definitive results to report," said Jules Berinstein after the Tennessee bill was passed.

Democrat Senators oppose

During the debate on the Tennessee Senate Floor, some lawmakers questioned the need for the bill.

"Does the sponsor know of any instances of there being food offered in the state of Tennessee that contains vaccines in some kind of a retail or public forum?" asked state Sen. Heidi Campbell.

Rep. Cepicky hit back, highlighting in February that a Kentucky company has already been "infecting growing tobacco plants with a genetically modified coronavirus" to see if it can produce antibodies for a potential vaccine, adding that the company "can already do this right now."

Massie sounds the alarm

In 2023, US Rep. Thomas Massie (R-KY) raised concerns over the use of federal money to create "transgenic edible vaccines," which would transform edible plants such as spinach and lettuce into mRNA vaccine delivery vehicles.

In September 2023 during a debate over an appropriations bill, Massie highlighted an incident in which an edible vaccine was introduced into a corn crop used to feed pigs in order to mitigate diarrhea. The corn crop, however, became commingled with a soybean crop - contaminating 500,000 bushels that had to be recalled.

"Do we want humans eating vaccines that were grown in corn meant to stop pigs from getting diarrhea? I don’t think we want that to happen. Yet that almost happened, and it could happen," said Massie. "There is another case where the pollen cross-contaminated another crop of corn, and 155 acres of corn had to be burned. What are the cases where we’re not discovering this? I think it’s dangerous to play God with our food."

Tyler Durden Tue, 04/02/2024 - 18:40

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Eating The Rich Won’t Feed The Beast

Eating The Rich Won’t Feed The Beast

Authored by Joakim Book via The American Institute for Economic Research,

Wealth in a free society is…



Eating The Rich Won't Feed The Beast

Authored by Joakim Book via The American Institute for Economic Research,

Wealth in a free society is a rough tallying score of how much economic value someone has provided to the rest of us. A rich person’s wealth — bar inheritance and cronyism — is a testament to how much they enriched us...

As Johan Norberg writes in The Capitalist Manifesto

If anything remains of the revenue when employees, suppliers and lenders have been paid for their efforts, it is called ‘profit’ and we are very angry when it’s a large sum. In fact, we should be happier the bigger it is, because it shows that everyone else in the chain has been paid first and that the company has still succeeded in its ambition to transform time and resources into something we value.

Billionaires aren’t policy failures, but clear indications of (distributed) value created: jobs and incomes, improved goods and services, and a better standard of living. “Capitalism,” said the Austrian economist Ludwig von Mises in a Mont Pelerin lecture in 1958, “is not simply mass production, but mass production to satisfy the needs of the masses.”

But the rich don’t pay their fair share, you might say. On the contrary, any serious investigation reveals that they pay everyone’s share. Some one-fifth of federal tax revenue already comes directly from the incomes of the richest one million American households. The incomes of the highest-earning 20 percent of households more or less bankroll the federal government. The Congressional Budget Office in its “The Distribution of Household Income” report notes:

High-income households generally pay a larger share of federal taxes. In 2020, for example, households in the highest income quintile received about 56 percent of all income and paid 81 percent of federal taxes.

But income inequality is a runaway train, you might say. On the contrary, any serious investigation shows that the pre-tax income of the top 1 percent in America has been roughly flat for twenty years. Counting after-tax income instead, as a share of total income the super-rich today lay claim to about the same share (9 percent) they did in the 1960s. In the UK, income inequality is the same today as when Thatcher left office, and globally speaking inequality is probably lower than it’s been in 150 years. 

But for whatever ideological reason, maybe you want the rich to be eaten. Well, the hungry behemoth that is the US federal government is already eating the rich, yet its stewards and proponents want ever more. It’s not just that government spending has exploded out of control at least since the pandemic, but in the last five years tax revenue as a share of GDP has increased in almost all rich countries, from France and the UK to South Korea and the US. And the American tax system is already almost unbelievably progressive.

Like an unstoppable Pacman, the world’s governments keep eating.

It’s not even that easy to (painlessly!) commandeer the abundant wealth the rich supposedly have.

Even If You Want It, The Rich Don’t Have Your Money

The rich aren’t rich because they stole your stuff and hoarded it, like some mythical dragon. Mostly, they’re rich because they built a thriving business that made all (or at least a lot)  of us better off, and we, in the form of market returns,  rewarded them handsomely for that creation. In Bureaucracy, one of Mises’ lesser-known works, the roles of consumers and entrepreneurs are quite clear: “the real bosses, in the capitalist system of market economy, are the consumers.” By their very actions of buying certain goods over others, consumers “decide who should own the capital and run the plants.”

Jeff Bezos or Elon Musk aren’t ultrarich because they chose to be (though they may have), worked hard (which they verifiably did), or stole their wealth from someone else (which they didn’t). They’re rich because consumers rewarded them with purchases and because financial markets priced their respective company shares accordingly.

Whatever your opinion on Amazon’s effect on local commerce or its labor conditions — to say nothing of Tesla’s pretty ruthless use of taxpayer subsidies — it’s undeniable that their companies have provided cheaper and better goods to many, many people.

Most people in my generation think about wealth as a pile of money, stashed away in a bank vault or the basement of some outrageous mansion. Instead, wealth largely consists of ownership in productive businesses that make the world run (and, overwhelmingly, real estate, which is even more hopeless to expropriate and redistribute).

And it’s not that easy to just “take it,” even abstracting away all the political or legal hurdles to expropriating Americans’ private property.

Dismantling companies to give their “value” back to the deserving poor — many of whom will lose their jobs in said companies in the process — seems like a bad idea, since you’ll destroy that value. For large, publicly traded companies, we do have some neatly divisible spoils in the form of shares. Per the SEC, Bezos owns some nine percent of Amazon, or 938,251,817 shares in total.

Nobody needs that much, say the billionaires’ critics confidently, so we righteously confiscate 900 million of those, worth about $158 billion at the time of writing. 166 days into this Fiscal Year, the Treasury has spent 2,684,154,624,114 dollars — almost 3 trillion, comfortably on its way to a proposed $7.2 trillion for the year — a neat $23 billion a day. At face market value, Bezos’ great fortune would finance the government for… less than a week.

Except that it won’t even do that.

The minute we announce this expropriation, the price of AMZN — and all other similar companies we may or may not confiscate in the future — falls like a rock. No buyers. What we’ll raise from this insane play amounts to much less than the face value of the stocks the day before. 

Let’s keep making fantastical wishes and assume that it didn’t — maybe all investors agree that this policy is necessary, and nobody is troubled by it — as we sell the shares to finance spending (or hand them out to the 100 million or so poorest Americans who, in turn, sell them instead), we’re mechanically crashing the price of AMZN shares. Ordinarily, Nasdaq trades about 46 million Amazon shares a day and since only a small portion of that is net buying (index funds, brokers, intraday trading etc), it would take us months to offload our 900 million in spoils. Realistically, we’d net a much smaller amount from our sophisticated heist.

If we do this bright and early on a Monday morning, when Sunday comes around we’re once again broke, assuming of course that we acquired the full market value. Does anyone think we can repeat the trick next week? Surely, all the other potential targets saw what we just did, and have been busy moving to Singapore or London or the Bahamas, transferring their ownership to offshore entities, or otherwise shielding them in nonprofits or any number of other defensive measures to ensure that the proceeds from the next billionaire we go after will be much, much lower.

We expropriated (“ate”) the top-2 richest American and aside from financial market chaos, all we got for it was financial support for the bottom third of Americans equivalent to one round of stimmies — plus a whole lot of disincentives to live, work, create, invest, or incorporate in America. What we achieve is a one-time transfer from the ultrarich to the poor, and permanent damage to the very economic goose that laid America’s abundance of golden eggs.

So…Don’t Take It?

If the rich are rich because they provided the rest of us with a lot of value through the businesses they built, we want the rich to be richer still — not poorer. The rich aren’t rich enough.

If we wish to expropriate their riches for our allegedly benevolent ends, we’ll need much more than their current riches to move the needle. The rich aren’t rich enough.

Taxing the rich truly is a lunatic’s solution to our fiscal headaches — a nightmarish one at that.

Instead of trying to orchestrate a costly and not-that-fruitful reshuffling of the pie, perhaps we should just leave the rich to keep expanding it — for their sake, for our sake, and ultimately for the peace of the republic.

Or, formulated as the “Bourgeois Deal” by Deirdre McCloskey’s and Art Carden’s condensed version of McCloskey’s three-part Bourgeois masterpiece — Leave me alone and I’ll make you rich.

Tyler Durden Tue, 04/02/2024 - 17:40

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Two Weeks To Flatten Became Eight Months To Change The Election

Two Weeks To Flatten Became Eight Months To Change The Election

Via The Brownstone Institute,

In 1845, Congress established Election Day…



Two Weeks To Flatten Became Eight Months To Change The Election

Via The Brownstone Institute,

In 1845, Congress established Election Day as the Tuesday after the first Monday of November. The Act sought “to establish a uniform time” for Americans to cast their ballots for president. Historically, voters needed to provide a valid reason – such as illness or military service – to qualify for absentee ballots.

But Covid served as a pretext to overturn that tradition. Just 25% of votes in 2020 occurred at the polls on Election Day. Mail-in voting more than doubled. Key swing states eliminated the need to provide a valid reason to cast absentee ballots. The virus and racial justice became justifications to disregard verification methods like signature requirements.

Rejection rates for absentee ballots plummeted by more than 80% in some states as the Covid regime welcomed an unprecedented increase in mail-in voting. Politicians and media outlets ignored rampant voter fraud in the months leading up to the election. They treated concerns surrounding absentee voting as obscure conspiracy theories despite a bipartisan commission describing it as “the largest source of potential voter fraud” just a decade earlier. 

It is now clear that the overhaul of our election system was a deliberate initiative from the outset of the pandemic response. In March 2020, when the Government’s official policy was still “two weeks to flatten the curve,” the administrative state began instituting the infrastructure to hijack the November presidential election, more than 30 weeks beyond when the Covid response was supposed to end. 

March 2020: The CDC and the CARES Act Meddle in the Election

On March 12, 2020, the CDC issued a recommendation for states and localities to “encourage voters to use voting methods that minimize direct contact with other people,” including “mail-in methods of voting.”

Two weeks later, President Trump signed the $2 trillion CARES Act, which offered states $400 million to re-engineer their election processes for that November. 

At the time, proponents of the CARES Act argued it was necessary to reopen the country. For example, the New York Times argued it was “critical to fund and implement the safety measures necessary to let Americans get back to work, school and play without a recurrence of the virus.”

But political actors immediately plotted ways to use the funds to entrench their power long past the proposed two-week lockdowns. Nearly every swing state announced plans to promote mail-in voting and reduce electoral safeguards in a Congressional report

“Michigan will use the funds to bolster vote by mail,” the report announced. Governor Gretchen Whitmer received $11.3 million from the CARES Act to change election procedures in her state. In November, 57% of Michigan voters (over 3 million people) cast their ballot by mail. For the first time, the state did not require a reason for absentee voting, and mail-in ballots more than doubled. President Trump would go on to lose Michigan by just 150,000 votes.

When Trump signed the CARES Act, just 0.05% of Michigan residents had tested positive for Covid. The state’s political leaders later boasted that their agenda had not been focused on public health. “Even when there’s not a pandemic, once people begin using the absentee ballot process, they’re much more likely to continue to do so in the future,” said Michigan Secretary of State Jocelyn Benson after Election Day.

Pennsylvania received $14.2 million from the CARES Act to address its election process. At the time, the infection rate in the Keystone State was 1 in 6,000 (0.017%). Democratic Governor Tom Wolf’s administration told the federal government it would use its plans to increase absentee voting. In November, 2.5 million Pennsylvanians voted by mail. President Biden won 75% of those votes – a difference of 1.4 million. President Trump lost the state by under 100,000 votes.

The CARES Act provided Wisconsin with over $7 million for election matters. Democratic Governor Tom Evers said the state would use funds to provide “absentee ballot envelopes,” to develop “the statewide voter registration system and online absentee ballot request portal,” and “to account for additional costs” related to mail-in voting.

Governor Evers explained, “Having as many absentee ballots as possible is absolutely a top priority [and] always has been given the emergency we’re in.” Eight months later, 1.9 million of the state’s 3.3 million voters cast their ballot by mail. The rejection rate for absentee ballots plummeted from 1.4% in 2016 to 0.2%. President Biden won Wisconsin by just 20,000 votes. 

Democratic activists were unsatisfied with the $400 million added to the national debt to reshape the elections. Mark Zuckerberg’s foundation offered an additional $300 million. In Time, Molly Ball celebrated the “shadow campaign that saved the 2020 election.” She quoted Amber McReynolds, the president of “nonpartisan National Vote at Home Institute,” who called the government’s reluctance to provide additional funding “a failure at the federal level.” Despite her professed “non-partisanship,” President Biden rewarded her service by appointing her to the Board of the US Postal Service. 

In Time, Ball hailed the mail-in activists’ efforts, which included targeting “Black voters” who may have otherwise “preferred to exercise their franchise in person.” They focused on social media outreach to try to convince people that a “prolonged [vote] count wasn’t a sign of problems.” Their informational warfare may have changed Americans’ perception on mail-in voting, but it could not eradicate the predictable controversies that it created. 

April and May 2020: Voter Fraud Skyrockets

In May 2020, New Jersey held municipal elections and required all voting take place via mail. The State’s third largest city, Paterson, held its election for city council. The results should have been a national scandal that ended the push for mail-in voting.

Shortly after the election, the Postal Service discovered “hundreds of mail-in ballots” in one town mailbox. A Snapchat video showed a man named Abu Razyen illegally handling a stack of ballots he said was for candidate Shanin Khalique. Khalique initially defeated his opponent by just eight votes. A recount found their vote was tied.

Paterson resident Ramona Javier never received her mail-in ballot for the election. Neither did eight of her family members and neighbors, yet they were all listed as having voted. “We did not receive vote-by-mail ballots and thus we did not vote,” she told the press. “This is corruption. This is fraud.”

Election officials rejected 19% of the ballots from Paterson, a city with over 150,000 residents. While Paterson’s election was particularly troublesome, mail-in ballots were problematic across the state. Thirty other New Jersey municipalities held vote-by-mail elections that day, and the average disqualification rate was 9.6%.

New Jersey brought voting fraud charges against City Councilman Michael Jackson, Councilman-Elect Alex Mendez, and two other men for their “criminal conduct involving mail-in ballots during the election.” All four were charged with illegally collecting, procuring, and submitting mail-in ballots.

A state judge later ordered a new vote, finding that the May election “was not the fair, free and full expression of the intent of the voters. It was rife with mail in vote procedural violations constituting nonfeasance and malfeasance.”

Politicians refused to concede that the incident revealed the vulnerability of absentee balloting. Instead, Governor Phil Murphy told the press that the scandal was a good sign. “I view that as a positive data point,” he argued. “Some guys tried to screw around with the system. They got caught by law enforcement. They’ve been indicted. They’ll pay a price.”

Murphy and other allies of Joe Biden ignored the threat, presuming the forces would not hurt their hopes that November. 

In Wisconsin, the April 2020 primary election offered further evidence of the challenges and corruption surrounding mail-in voting. Following the primary, a postal center outside Milwaukee discovered three tubs of absentee ballots that never reached their intended recipients. Fox Point, a village outside Milwaukee, has a population of under 7,000 people. 

Beginning in March, Fox Point received between 20 and 50 undelivered absentee ballots per day. In the weeks leading up to the election, the village manager said that increased to between 100 and 150 ballots per day. On election day, the town received a plastic mail bin with 175 unmailed ballots. “We’re not sure why this happened,” said the village manager. “Nobody seems to be able to tell me why.”

Democrats admitted the system threatened election integrity. “This has all the makings of a Florida 2000 if we have a close race,” said Gordon Hintz, the Democratic minority leader in the Wisconsin State Assembly. New York Governor Andrew Cuomo went further. “It’s a harder system to administer, and obviously it’s a harder system to police writ large,” he said. Cuomo continued, “People showing up, people actually showing ID, is still the easiest system to assure total integrity.”

The Wisconsin primary also featured special elections for the Wisconsin Supreme Court. A liberal judge upset the incumbent conservative justice, and partisans embraced their overhaul of the electoral system. The New York Times reported: “Wisconsin Democrats are working to export their template for success – intense digital outreach and a well-coordinated vote-by-mail operation – to other states in the hope that it will improve the party’s chances in local and statewide elections and in the quest to unseat President Trump in November.”

Despite the corruption, the lost ballots, and the admissions of threats to electoral integrity, the process had been a success in political terms; their candidate had won. The ends had justified the means. Citizens lost faith in their election process, and political leaders readily admitted that their concerns were justified; but the professional politicos and their mouthpiece, the New York Times, characterized the disaster as a “template for success.”

Controversies continued to emerge surrounding mail-in ballots.

In September 2020, a government contractor threw Trump mail-in ballots in the trash in Pennsylvania. ABC News reported that “ballots had been found in a dumpster next to the elections building.” A week later, three trays of mail with absentee ballots were found in a ditch in Wisconsin.

In Nevada, the Reno-Sparks Indian Colony offered gifts, including gift cards, jewelry, and clothing to Native Americans who showed up to vote. Activist Bethany Sam organized the event, where she donned a Biden-Harris mask and stood in front of the Biden-Harris campaign bus.

Voters in California received ballots with no place to vote for president, over 20% of ballots mailed to voters in Teaneck, New Jersey, had the wrong Congressional districts listed, and Franklin County, Ohio reported sending over 100,000 absentee ballots to the wrong address due to an “envelope stuffing error.”

In October, Texas police arrested Carrollton Mayoral Candidate Zul Mirza Mohamed on 109 counts of fraud for forging mail-in ballots. Authorities discovered fraudulent ballots at Mohamed’s residence with fictitious licenses. That same month, a Pennsylvania district attorney charged Lehigh County Elections Judge Everett “Erika” Bickford with “prying into ballots” and altering the entries from a local election that June. That election was decided by just 55 votes.

Reports continued to emerge after the election. The New York Post uncovered election records that showed dead people had cast absentee ballots that November.

California law enforcement arrested two men with a 41-count criminal complaint for allegedly submitting over 8,000 fraudulent voter registration applications on behalf of homeless people. Their goal was to get Carlos Montenegro, one of the defendants, elected Mayor of Hawthorne, a city in Los Angeles County. The state also alleged that Montenegro committed perjury by falsifying names and signatures in his paperwork for his mayoral campaign.

In 2022, a Georgia investigation found more than 1,000 absentee ballots that never left the Cobb County government facility. Two months earlier, mail-in ballots from the 2020 election were discovered in a Baltimore USPS facility. In 2023, Michigan police found hundreds of mail-in ballots from the 2020 election in a township clerk’s storage unit.

All of this was entirely predictable, but perhaps that was the point. From the outset, the Covid regime sought to abolish the safeguards of our election system despite well-known concerns regarding election integrity. 

The United States of Amnesia: Voter Fraud Was Nothing New

The Covid regime’s messaging was clear: only conspiratorial lunatics would question the integrity of an election system that more than doubles its mail-in voting. FBI Director Christopher Wray testified, “We have not seen, historically, any kind of coordinated national voter fraud effort in a major election, whether it’s by mail or otherwise.”

But this wasn’t true. It contradicted long-standing conclusions regarding electoral integrity. Just as the public health apparatus abandoned thousands of years of epidemiological practice to implement lockdowns, the media and elected officials abandoned principles that until that moment had been common sense.

Following the controversy of the 2000 Presidential election, the United States formed a bipartisan Commission on Federal Election Reform. President Jimmy Carter, a Democrat, and former Secretary of State James Baker, a Republican, chaired the group.

After five years of research, the group published its final report – “Building Confidence in U.S. Elections.” It offered a series of recommendations to reduce voter fraud, including enacting voter-ID laws and limiting absentee voting. The commission was unequivocal: “Absentee ballots remain the largest source of potential voter fraud.”

The report continued: “Citizens who vote at home, at nursing homes, at the workplace, or in church are more susceptible to pressure, overt and subtle, or to intimidation. Vote buying schemes are far more difficult to detect when citizens vote by mail.”

The findings were reinforced by subsequent election scandals. 

A 2012 New York Times headline read: “Error and Fraud at Issue as Absentee Voting Rises.” The article made the front page of the paper and echoed the concerns of the Carter-Baker Commission. “Fraud Easier via Mail,” the paper explained.

“You could steal some absentee ballots or stuff a ballot box or bribe an election administrator or fiddle with an electronic voting machine,” said Yale Law professor Heather Gerken. That explains, she said, “why all the evidence of stolen elections involves absentee ballots and the like.”

The Times continued the potential corruption of mail-in ballots. “On the most basic level, absentee voting replaces the oversight that exists at polling places with something akin to an honor system,” the author wrote. The Times then cited US Circuit Court Judge Richard A. Posner: “Absentee voting is to voting in person as a take-home exam is to a proctored one.”

The report went on: “Voters in nursing homes can be subjected to subtle pressure, outright intimidation or fraud. The secrecy of their voting is easily compromised. And their ballots can be intercepted both coming and going.”

Historic controversies supported this consensus. The 1997 Miami mayoral election resulted in 36 arrests for absentee-ballot fraud. A judge voided the results and ordered the city to hold a new election due to “a pattern of fraudulent, intentional, and criminal conduct.” The results were reversed in the subsequent election.

Following Dallas’s 2017 City Council race, authorities sequestered 700 mail-in ballots signed “Jose Rodriguez.” Elderly voters alleged that party activists had forged their signatures on their mail-in ballots. Miguel Hernandez later pled guilty to the crime of forging their signatures after collecting unfilled ballots, and using them to support his candidate of choice.

The following year, it appeared that Republic Mark Harris defeated Democrat Dan McCready in a North Carolina congressional race. Election officials noticed irregularities in the mail-in votes and refused to certify the election, citing evidence and “claims of…concerted fraudulent activities.” The state ordered a special election the following year.

In 2018, the Democratic National Commission challenged an Arizona law that set safeguards around absentee voting, including limiting who could handle mail-in ballots. US District Judge Douglas L. Rayes, an Obama appointee, upheld the law. “Indeed, mail-in ballots by their very nature are less secure than ballots cast in person at polling locations,” he wrote. He found that “the prevention of voter fraud and preservation of public confidence in election integrity” were important state interests and cited the Carter-Baker Commission’s finding that “Absentee ballots remain the largest source of potential voter fraud.”

The rest of the world recognized the obvious threat that mail-in voting poses to election integrity. In 1975, France banned postal ballots after rampant voter fraud. Ballots were cast with the names of dead Frenchmen, and political activists in Corsica stole ballots and bribed voters. 

In 1991, Mexico mandated voter photo IDs and banned absentee ballots after the Institutional Revolutionary Party repeatedly committed fraud to maintain power. In Austria, Belgium, Canada, Chile, Denmark, Estonia, Ireland, Lithuania, Luxembourg, Poland, Portugal, Slovenia, Spain, Turkey, and the United Kingdom, photo ID is required to get an absentee ballot.

In August 2020, economist John Lott analyzed how Covid was being used as a pretext to overhaul electoral standards in the United States. He wrote

Thirty-seven states have so far changed their mail-in voting procedures this year in response to the Coronavirus. Despite frequent claims that President Trump’s warning about vote fraud/voting buying with mail-in ballots is “baselessly” or “without evidence” about mail-in vote fraud, there are numerous examples of vote fraud and vote buying with mail-in ballots in the United States and across the world. Indeed, concerns over vote fraud and vote buying with mail-in ballots causes the vast majority of countries to ban mail-in voting unless the citizen is living abroad.

There are fraud problems with mail-in absentee ballots but the problems with universal mail-in ballots are much more significant. Still most countries ban even absentee ballots for people living in their countries.

Most developed countries ban absentee ballots unless the citizen is living abroad or require Photo-IDs to obtain those ballots. Even higher percentages of European Union or other European countries ban absentee for in country voters.

Political actors treated opposition to absentee balloting with scorn while ignoring its history of corruption. Mail-in voting may have been the decisive factor in the 2020 election, but Trump and his allies searched for other explanations to avoid his complicity in signing the CARES Act. 

The Trump campaign promised to produce “irrefutable” evidence that proved Trump won the election “in a landslide.” “I’m going to release the Kraken,” one Trump election lawyer told Lou Dobbs in November 2020. President Trump and Rudy Giuliani tweeted blame at Dominion voting machines. Sean Hannity said privately that Giuliani was “acting like an insane person.” 

Two days later, he told viewers about a “software error” from Dominion that “wrongfully awarded Joe Biden thousands of ballots that were cast for President Trump, until the problem was amazingly fixed.” In August 2023, Trump announced that he would release an “irrefutable report” demonstrating voter fraud in Georgia. He canceled the announcement two days later.

In the process, they ignored a far more obvious explanation.

Presidential elections in the 21st century have been decided by an average of 44 electoral votes. Pennsylvania, Georgia, Michigan, and Wisconsin offer a combined 62 votes in the Electoral College.

Under the pretext of Covid, states abolished their electoral safeguards.

They turned Election Day into a month of voting.

After prominent Democrats refused to certify the 2000, 2004, and 2016 elections, the victors chastised any concerns for electoral integrity as attacks on democracy.

This is all theater. From the outset of the pandemic response, the liberalization of voting rules was integral, all justified based on nonscientific grounds while invoking the cover of science. It wasn’t stopping disease spread that drove the dramatic upheaval in the American system of voting that has caused such widespread distrust. It was the drive for a result different from one that swept the country four years earlier. 

Tyler Durden Tue, 04/02/2024 - 14:00

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