The affordability crisis will return Congress to the Democrats

Then consensus among commentators on Zohran Mamdani's victory in the New York City mayoral race is that young people turned out for him because of the high cost of living in the city. That could be true. Economics tends to be the main driver of politics. Voters turned to a socialist who promised to fix the problem. 

Of course, President Trump promised to fix inflation during his campaign, but he hasn't. The inflation rate is lower, but it has made many things like housing unaffordable for many. The "affordability crisis" will likely return control of congress to the Democrat party in the elections this fall. Can Mamdani succeed where Trump has failed? No. Here's why.

To cure inflation, a good doctor must know the cause of the illness. Aspirin won't cure cancer. Few politicians, Rand Paul excluded, understand money or inflation and don't want to be bothered with facts. Politicians appeal to voter emotions. The average U.S. citizen blames greedy businessmen for high prices and that's a good enough explanation for politicians.

What is the marginal tax rate in the Bible?

 

Recently, J.D. Greear, pastor at The Summit Church wrote, 

I don’t know of anywhere God spells out for us the ideal marginal tax rate, the proper number of refugees a compassionate country should take in, the godly posture toward gun control, whether health care should be nationalized, or exactly what our safety social net should include.

Pastor Greear is engaging in proof texting, something I'm sure he opposes. He slipped into it in a moment of weakness trying to make a point. But as Pastor Greear knows, there are no verses in the Bible that detail God's perspective on those issues. But he also knows that there are no verses that directly address many of the doctrines in our systematic theology books. The most obvious is the Trinity. No verse in the Bible contains the word "Trinity" or spells out the doctrine. Systematic theologians derive the main doctrines of Christianity by studying the whole Bible, comparing verses and distilling them. Political theology does the same. 

What does systematic theology say about marginal tax rates? To answer that, theologians during the Reformation at the University of Salamanca asked first, what is the role of government? From the Bible, they determined that God created government to punish criminals (Romans 13), provide courts to settle disputes (Deuteronomy 17) and national defense. 

Federal government is the real criminal in Somali fraud

President Trump received a lot of criticism for his harsh comments about Somali refugees in Minneapolis after the $250 million theft of Covid relief funds. It's unfair to blame millions for the crimes of a few. But the fraud highlights two important economic points that Americans need to keep in perspective.

The first is that the federal government has tried to rescue citizens from danger for over a century by flooding the country with tsunamis of cash. In every case, bureaucrats have one goal, to push out as much money as possible in as short a time as possible. The mainstream socialist media helps by destroying the reputations, depicting them as desiring that people die, of anyone who tries to slow the flow by implementing safe guards against theft and corruption. 

After the danger has passed, the same media is shocked to find theft and corruption. That song and dance has happened dozens of times over the last century, enough that one would think voters would recognize it. It's no longer entertaining. But that's what happens when voters trust corrupt bureaucrats with billions of dollars of other peoples' money and no accountability for the theft that occurs. Bureaucrats never get punished for wasting money; they get promoted.

$4,000 gold and housing affodability

The price of gold recently hit $4,000 per ounce. That means a lot to economists. When the U.S. government created the Federal Reserve in 1913, gold was worth just $22 per ounce. What happened? 

Gold has had value for thousands of years. So, people have taken care of it and only insignificant amounts have been lost. Almost all the gold ever mined still exists in someone's vault. Mining companies continue to add to the stock, but in comparison to the amount existing, their contributions are small. Central banks hold most gold. 

Socialist mayor of New York City is not a threat

Republicans are hysterical about Mamdani's victory in New York City's mayoral race and predict a meltdown for the city. But he will be a small threat to the city and none for the nation. Just look at what he has promised:

Affordable Housing: Freezing rent on rent-stabilized apartments and implementing city-wide rent freezes.

Public Transit: Making buses free and faster for all New Yorkers.

Economic Measures: Creating city-owned grocery stores in each borough and increasing the minimum wage to $30 by 2030.

Social Services: Implementing universal child care services.

Public Safety: Establishing a new Department of Community Safety to respond to certain emergencies with mental health care workers instead of police. 

New York City elects socialist mayor

Zohran Mamdani, a self-described democratic socialist, became the mayor of New York yesterday! While Argentina flees from 80 years of destruction by socialism, New Yorkers think they can make it work. 

Why is democratic socialism still popular? It destroyed every economy in South America over the last century and therefore is a major cause of the tsunami of immigrants from the south.  The latest disasters are Venezuela and Bolivia. Chile recovered from its infatuation with democratic socialism in the 1970s and has been the only Latin country with a growing standard of living since. Recently, Argentina grew tired of the destruction caused by democrat socialism and elected a libertarian president to turn the country around. Europe's economy stagnated a generation ago because of democratic socialist policies. So why do people still cling to such nonsense?

What good has President Trump done?

 

I disapprove of President Trump's tariff economics, as I mentioned. But the President is quietly doing more good than harm by reducing regulations. According to the Whitehouse web site, federal agencies are killing ten old regulations for every new one. 

In his first term, Trump ordered agencies to eliminate two regulations for every new one. They achieved ten this year! Why is that important? 

The National Association of Manufacturers estimate that regulations cost U.S. businesses over $3 trillion every year. That's 12% of gross national product, which is the total income of the country! Wise people, those who know economics, understand that the money could be put to better use. In other words, the real cost of such regulations is the things we give up to pay for them. Can you imagine what we could do with $3 trillion dollars?