How Institutional Investors Are Good for the Housing Market

Earlier this week, President Trump gave his first State of the Union address during his second term. I found plenty to disagree with, including immigration, how tariffs are necessary for economic growth, imposing price controls on prescription drugs, and how he wants to protect Social Security, Medicare, and Medicaid. There was one aspect that stood out: his take on housing costs. President Trump said that the problem with housing is not zoning, his tariffs, or construction costs: it's BlackRock. Trump touted his executive order to ban investment firms from buying up single-family homes. He also asked Congress to make the ban permanent. For reference, institutional investors are large financial organizations that pool money from many investors and buy assets at scale, such as large numbers of homes to operate as rental properties. 

It is not intriguing simply because it has historically been the Democrats arguing against corporations. It is ironic because Trump rose to prominence as a real estate developer by amassing large amounts of capital to buy and develop property. It seems poetic that he is now arguing that assembling capital to buy property is a threat to the American Dream. When examining further, it does not make sense how institutional investors are a threat. 

Institutional investors account for about one percent of single-family rentals (see below) and less than one percent of overall housing stock. Even if Trump were successful in banning all institutional investors from buying up housing stock, it would barely make a dent in housing supply. These firms operate on a scale that is tiny compared to the millions of homes bought and sold each year by individual buyers and families. Moreover, their purchases often target specific markets (e.g., the Sun Belt) or distressed properties. This means that typical first-time homebuyers are largely unaffected by institutional investor activity.  

Not only do institutional investors have a small market size, but they also improve the housing supply. A professor from City University of New York calculated that institutional investors expanded housing supply by 0.5 units for each unit purchased. In part, institutional investors purchase homes and convert them into rentals. Also, institutional buyers measurably have improved local housing markets by reducing vacancy rates and helping to stabilize neighborhoods (Federal Reserve Bank of Philadelphia). This is because investors buy vacant or distressed homes at a faster rate. Because they buy vacant homes quickly, neighborhoods avoid decay. 

This ripple effect even extends to local employment and home values. This investor activity is associated with statistically significant reductions in local unemployment and increases in employment, especially in construction-related industries (Federal Reserve Bank of Philadelphia). Another paper from the Federal Reserve Bank of Philadelphia that was released in 2023 shows permanent consumer welfare gains for homeowners. Homes within a quarter-mile of an institutionally purchased home sold at a value 1.4 percent higher than those that were not. That is not a rounding error, but real money is people's wallets. Who knew that Wall Street could be the good guy?

If Trump really wants homes for more people, banning institutional investors is a funny way of going about it. Institutional investors barely make a dent in the market. What's more, institutional investors actually help the housing market, whether through expanding supply, stabilizing neighborhoods, reducing vacancies, or boosting nearby home values. The real problem is not Wall Street. It is that local housing regulations make it harder to build a home than winning on The Apprentice. It turns out that banning institutional investors will not build a single house. On the other hand, cities with onerous land-use regulations, zoning laws, and permitting barriers do a fine job of stifling housing development. All the handwringing on the federal level cannot fix the housing shortage when the real bottlenecks are at City Hall. 

Supreme Court Strikes Down Trump's Tariffs: Why SCOTUS Didn't Add $2.4T to the Debt

Last Friday, the U.S. Supreme Court (SCOTUS) announced a much-awaited decision. In a 6-3 ruling, SCOTUS declared that Trump's tariffs under the International Emergency Economic Power Act (IEEPA) are unconstitutional. I took this as a win not only for the separation of powers, but also for the economic wellbeing of the American people. Economic estimates calculated that these tariffs would have cost consumers billions of dollars, reduced GDP growth, and harmed net employment while doing little in the way of measurable benefits. In a previous piece, I also point out that it is not only economic modeling. History has shown these adverse economic effects to materialize as a result of tariffs. As I wrote earlier this month, these tariffs are even affecting U.S. national security. So yes, I am quite happy and relieved to see this SCOTUS ruling. 

Counting Revenue That Does Not Exist

Yet I noticed a couple of estimates that came out in response to the ruling, and they were both budgetary in nature. The first estimate is from the Wharton School of Business, which a leading business school in the U.S. Wharton estimates that unless replaced by another revenue source, future tariff revenues will fall by half. The second estimate is from the bipartisan Committee for a Responsible Federal Budget (CRFB). CRFB writes that "SCOTUS tariff ruling could add $2.4 trillion to the debt [over the next decade]." According to the CRFB, this ruling could raise the debt-to-GDP ratio from the baseline 120 percent to 125 percent. One of the reasons that this SCOTUS ruling matters is because the Trump administration presented the tariffs not only in terms of trade policy, but also as a source of government revenue. 

The Mirage of "Lost Revenue"

Since the administration touted the tariffs as a revenue source, the framing of "the SCOTUS ruling adds debt" is especially misleading. Tariff revenue under the likes of Section 232 or IEEPA are temporary, process-dependent, and potentially disruptive on an international level. Assuming that the tariffs would last indefinitely or that there would not be economic blowback is unrealistic. The SCOTUS ruling does not add to the debt. Pretending that future tariff revenue increases debt ignores the reality that the money has not arrived in the government's coffers. An absence of a tax increase is not the same thing as an increase in the debt. 

Tariffs only shift resources from consumers and businesses to the government temporarily. They do not magically create wealth out of thin air. Calling tariffs "revenue" distracts from the fact that tariffs are a tax. The government does not have first dibs on the gains from private economic activity. Baseline budgeting treats the tax revenue as a permanent fixture once enacted. As I argued last September, the economic and fiscal realities of tariffs made tariffs an unreliable revenue source, especially given the negative economic effects and the risk of retaliation. That disconnect between baseline budgeting and economic reality is why the claim that "SCOTUS ruling causes debt" rings hollow.

The Real Culprit: Congress' Credit Card

The baseline assumption is that Congress does nothing else, that the currently enacted laws are on auto-pilot. This brings us to what really causes debt. U.S. federal debt does not exist because SCOTUS declared Trump's IEEPA tariffs unconstitutional. It is because the government has consistently spent more money than it makes. That is an outcome of basic accounting. As the most recent Congressional Budget Office (CBO) Budget and Economic Outlook shows, the government is projected to create an average annual deficit of 6.1 percent from 2027 to 2036. Keep in mind that this is higher than the 1976-2025 average of 3.8 percent. The fact that the CBO projected before the tariff ruling that the debt-to-GDP ratio would be at 120 percent, a ratio that is higher than it was after WWII military spending, should make us pause and ask what the real issue is.

The Deficit Solution Congress Refuses to Touch

As I detailed in 2024, tax cuts from the Tax Cuts and Jobs Act did not cause the economy to implode. Similarly, the absence of tariffs did not cause the debt "to explode" because of the SCOTUS ruling. It simply exposes how the U.S. economy is becoming increasingly fragile due to Congress' inability to get its spending under control. Tariffs, tax cuts, or emergency powers will not fix that insatiable, profligate spending. If you actually care about government spending (and if you are a U.S. citizen, you certainly should because of how it will directly affect you) and want a smaller deficit, don't go begging for more government revenue. Tell Congress to stop buying things it cannot afford.

Colbert, the FCC, and the Case for Sunsetting the Obsolete Equal Time Rule

Late night television has reached the news cycle once more. Comedian and television host Stephen Colbert was going to broadcast an interview with Texas Democratic Senate candidate James Talarico. However, the interview did not take place. Colbert claims that CBS barred him from conducting the interview to the point where he could not even mention not having Talarico on the show, although the interview was later streamed on YouTube. CBS claimed that it had to do with the equal time rule. 

You are probably wondering what the equal time rule is. This rule comes from the Communications Act of 1934. This particular rule of the Act, which is in §315(a) of the Act, governs political candidates. The rule requires broadcast stations to provide equal opportunities to all legally qualified candidates for public office if they allow any candidate to use their platform. This rule applies to broadcast stations, which include radio and broadcast television. This means that the rule is generally not applicable to cable, satellite, or internet platforms. 

The argument back then was that there were a limited number of radio stations that could broadcast. Those advocating for the rule went under the assumption that broadcast stations had near-control over political speech at the time. The thing is that radio was a nascent form of media communication for the masses. Newspapers, pamphlets, and community meetings were the primary forms of political communication back in the 1930s. 

The scarcity argument did not make sense, and it makes even less sense now. As I brought up last year in my argument about why PBS and NPR should not receive public funding, there is a much more diverse media landscape than there was last century with cable television, satellite TV, internet platforms, podcasts, and social platforms. This rule is downright irrelevant because the free market provides platforms for political candidates better than a subset of broadcasters can. As such, the equal time rule is an incoherent regulation that distorts a market with an abundance of options. 

Not only that, but regulatory relics like the equal time rule risk creating arbitrary burdens and risks political abuse. Last year, late-night television host Jimmy Kimmel made controversial remarks about the assassination of Charlie Kirk. The Federal Communications Commission (FCC) Chairman Brendan Carr threatened ABC, a move that Carr does not regret to this day. Last month, the FCC released guidance saying that talk shows and late-night shows should not be exempt from the equal time rule. 

As I brought up last year in my criticism of the FCC's handling of the Kimmel situation, presidents dating back to Franklin D. Roosevelt have abused federal power to coerce broadcasters, so it is not as if Chairman Carr's coercion is historically unique. At the same time, the equal time rule is what happens when the federal government is given this much leeway to regulate the airwaves. Not only is it ripe for suppressing freedom of speech, but it is a rule built for a media landscape that no longer exists. Scarcity may have been the impetus for the rule, but a rationale from nearly a century ago for a market dynamic that no longer exists does not justify using it a guise for silencing or quashing political speech. Removing this unnecessary and irrelevant rule is long overdue.

Panic Over Data: What a New Study Reveals About the Main Rationale of COVID Lockdowns

In some respects, it feels like the COVID pandemic was a lifetime ago. However, it was only about six years ago that the World Health Organization (WHO) named the disease COVID-19. Aside from countries such as Sweden, humanity collectively freaked out and governments across the world implemented lockdowns in response to COVID-19. The rationale for the lockdowns was not simply that cases were rising, but that if something were not done to flatten the curve, the healthcare systems would be overwhelmed. 

It turns out that needing to implement lockdowns was even more unnecessary than previously thought. A recent study from the Journal of the Royal Statistical Society examined COVID policy, including the lockdowns (Wood et al., 2026). One of their main findings was that most countries reached peak COVID infection before the lockdowns were implemented. This led the authors to say that "the results imply that the full lockdowns were largely unnecessary."

"Largely unnecessary." If only someone warned us beforehand. And no, I am not only talking about when I wrote shortly before the lockdowns in the U.S. that we did not need lockdowns. It turns out that shortly before the pandemic, both the WHO and Johns Hopkins released pandemic guidance stating that there was no rationale for the lockdowns. The authors of this paper try to couch it by saying that the lockdowns might have kept those infection rates down. I have to disagree with that notion. Simply because the lockdowns coincided with the decline does not mean they caused it, as the paper already shows. Many people were already altering their behavior before the lockdowns went into effect. Imagine that: people can adapt to risk during a pandemic without being coerced into a lockdown. It is not as if there has never been a pandemic. These findings from the Journal of the Royal Statistical Society show that the lockdowns were not necessary because the curve for most countries was already bending before the lockdowns began. 

The major implication of this study is that the lockdowns were empirically unnecessary to reverse COVID waves. In other words, the major justification for the lockdowns was weak. The problem, though, is that the costs of the lockdown were neither weak, hidden, nor unpredictable. In April 2020 and May 2020, I covered many costs, whether that was economic devastation, neglected non-COVID healthcare, and social unrest. Sadly, I was right about the havoc that the lockdowns caused.

Rather than save lives, the lockdowns actually increased excess deaths. Lockdowns decreased the U.S. GDP by 5.4 percent and consumer spending by 7.5 percent, which came with an economic cost of $9.3 trillion to the U.S. economy. Then there is the widening global inequality; stunting the educational advancement of an entire generation of children; declining social-emotional skills; ruder people, greater fear, and more authoritarianism; higher obesity, greater substance abuse, and a backlog of healthcare issues; and increased political polarization, conspiracy thinking, mental illness, and violence. 

There is no shortage of the damage that the lockdowns caused. Lockdowns were necessary for and costly for everything. What makes this lamentable is that it was predictable and unnecessary. Yet no one is being held accountable for this carnage, maybe because so many were complicit or because it is easier to avoid inconvenient truths than it is to ignore deleterious policy. So why do I bring this up six years later? Because there will be another pandemic and important decisions will need to be made for pandemic strategy. It is my hope that perhaps next time decision-makers can actually use evidence and basic risk assessment instead of fear, panic, and lockdowns that ruin millions of lives. Because let's be real: a policy that was unnecessary, harmful, and predictable should never been applauded as "following the science."

2/12/2026 Hodgepodge: Interest on Debt, Who Pays for Trump's Tariffs, and National Guard Costs

This has been quite a busy week for me personally. I wanted to make sure that I got in two entries in this week, so I want to give a grab bag of some of the ongoings within the wonderful world of public policy. I hope to return to providing more in-depth analyses next week. 

Interest on U.S. Debt. Earlier this week, the Congressional Budget Office (CBO) released its Budget and Economic Outlook for the next ten years. This report has some eye-popping findings, such as the debt-to-GDP ratio is expected to hit over 120 percent in the next decade. For context, all that wartime spending for World War II only got the debt-to-GDP ratio to 106 percent. This is not the sort of record that the U.S. should want to break. Because of that profligate spending, the U.S. is paying off more interest on debt than ever. According to this report (p. 82), the U.S. government is projected to spend a whopping $16.2 trillion (yes, that is trillion with a "t") on interest between 2027 and and 2036.

Who pays for Trump's tariffs? Trump and Vance were under the belief that other countries were going to pay for Trump's tariffs, that Trump's tariffs are without cost or consequence. It turns out that is false. When I reported on this topic about three weeks ago, I covered a report by the Kiel Institute that says that the U.S. as the importing country pays 96 percent of the costs of the tariffs. What was not clear from this Kiel Institute report is whether the businesses paid or if it was the consumers. 

This is where the Budget and Economic Outlook comes into play. According to the CBO (p. 30), 95 percent of the tariffs were paid by raising consumer prices on U.S. consumers. This means that businesses have by and large passed on the costs to the everyday American. This lines up with a recent Tax Foundation estimate that Trump's tariffs are a tax of $1,000 in 2025 and $1,300 in 2026 for the average household. 

National Guard. In response to the rampant crime in Washington, DC, President Trump deployed troops to reduce crime in DC. Irrespective of the debate about whether this is effective, we now know how much this cost. The CBO recently released a report on how much all Trump's deployment of the National Guard to all cities cost, which was $496 million from August to December 2025. For DC alone, that was an amount of $223 million. Regardless of what you have to say about the crime rates, there has to be a more cost-friendly route to bring crime down without having to resort to using the National Guard. Perhaps another conversation for another time. 

Plastic Surgeons Draw a Line in the Sand on Youth Gender Surgery...with a Scalpel

Over the past several years, the growing number of medical interventions aimed at treating pediatric gender dysphoria has made its way towards the center of public policy debates. The theme of children's welfare has come up in debates on banning video games, subsidizing school lunches, universal preschool, same-sex adoption, and Drag Queen Story Hour. This is hardly the first time that "Think of the children" has been used as a rallying cry to advance a cause. The Supreme Court's decision in Skremetti v. United States last year was a reminder that we do not have to take the word of activists at face value. Last week, the American Society of Plastic Surgeons (ASPS) released a statement saying that youth gender surgery is not evidence-based. This statement exposes another crack in the framework that assumes that youth gender surgery is a safe practice and settled science. 

Why This Statement Is Surprising

At face value, you would not think that ASPS would sign such a statement. If anything, you would assume that ASPS would be in favor of more youth gender surgery because they have a financial interest in performing more elective procedures. They would be the last medical association that you would expect to be against it, and here we are. And maybe that is the significance of this statement. 

Plastic surgeons are sensitive to malpractice exposure. About 1,000 of these youth gender procedures are done annually, which is small considering the revenue they make from breast augmentation, face lifts, or liposuction. The procedure revenue from youth gender surgery is dwarfed by the liability risk. Plastic surgery is already in a delicate place with regard to reputation. Plastic surgery is seen as elective, cosmetic, or sometimes exploitative. Performing irreversible procedures on minors that lack an evidence base is a recipe for legal disaster and would only create reputational risk. 

The Evidence and the Risk

This statement brings another concern to light: the plastic surgeons are the ones who are charged to treat patients who might deal with long-term side effects. In its statement, ASPS highlights the irreversible bodily changes, including loss of fertility and altered sexual function, as well as typical surgical risks like infection and the need for revisions. Then there are the mental health and developmental outcomes that are poorly understood. ASPS highlights the Cass Review or systematic reviews from European countries that have been carrying out these procedures for longer than the U.S. In addition, they add a systematic review by the ASPS and the 2025 HHS report to the evidence base. 

When the people doing the surgery say that "the evidence is not there," it is insight that would be gained from lived clinical experience. Plastic surgeons profit from the surgery, tend to have a strong belief in bodily autonomy, and routinely defend elective procedures. If they are recommending that individuals under 19 do not undergo the procedure, perhaps there is a very good reason for that recommendation. 

Adults versus Adolescents

There are a number of things that I think are not good life decisions, whether that is having children before getting married, entering a polygamous marriage, smoking cigarettes, eating fast food every day, or not exercising. I also believe that as long as they are not harming anyone else, adults should be allowed to make whatever decisions about their lives, regardless of what I or anyone else thinks about the decision. This issue is not about adults making a decision to undergo these surgeries with informed consent nor is this about whether transgender individuals should be treated with dignity (for the record, they should, just like everyone else). 

We are talking about adolescents here, and the ASPS statement underscores an obvious point. Adolescents do not have the understanding (mens rea), maturity, or capacity to make such a decision. When a procedure is irreversible, the evidence base is against doing the procedure, and the patient is still in a developmental stage in their lives such as adolescence, this stance is both prudent and necessary. 

The Ideological House of Cards

This ASPS statement is not simply a victory for evidence-based science or maybe a chance that people can trust that the medical field will value evidence and safety over ideology. It is another example of how gender ideology is teetering like a house of cards. The MTF transgender athlete debate exposes contradictions between self-identity and biological reality. Gallup polling shows that more adults are in favor of transgender individuals playing on sports teams that correspond with their biological sex (currently at 69 percent). More adults are uncomfortable with pronoun usage, with discomfort increasing from 48 percent of adults in 2021 to 54 percent of adults in 2025. 

Meanwhile, acceptance of someone undergoing these procedures has declined from 46 percent in 2021 to 40 percent in 2025. Pew Research polling data from 2025 shows that 49 percent of Americans believe transgender individuals should use the bathroom corresponding to their biological sex, as well as 47 percent of adults who believe teachers should not teach students about gender identity. Add the medical risks and irreversible consequences for minors highlighted by ASPS, and it's clear as day that when ideology trumps evidence, this house of cards is not merely wobbly; it is poised to collapse. At the rate that it is going, it is simply a matter of when and how hard of a fall it will be. 

Trump's Tariffs Are Helping Push U.S. Allies into China's Arms and Undermining National Security

Last week, British Prime Minister Keir Starmer visited Chinese President Xi Jinping. This is the first time a British PM visited since 2018. The purpose of this visit was to reset Sino-British relations. One of the topics of discussion at this visit was trade. If this were an isolated incident, that would be one thing. But other Western nations are initiating trade talks with China. Last month, Canada struck a new trade deal with China. Finland, Ireland, and Germany are also re-engaging with China. There are multiple reasons for other Western countries to re-engage with China, whether it is economic development, access to a large consumer market, investment flows, or shifting geopolitics. 

Unpredictable U.S. Foreign Policy Adds Fuel

Those shifting geopolitics are particularly notable. In the last month alone, the Trump administration has captured Nicolás Maduro and threatened allies with tariffs in order to chase his dream of annexing Greenland, the latter of which is categorically unwise. Trump's foreign policy unpredictability creates incentives to hedge against an increasingly unreliable ally, which is hardly unsurprising seeing more Western countries gravitate towards China. One major factor that I would like to cover today is Trump's tariff policy and how that is becoming a turnoff for the US' allies. I will caveat by saying tariffs alone do not explain why other countries are re-engaging with China, but it is a major element that is part of the broader drive towards a pivot, as this analysis from the Chatham House details. 

Trade Diversion: Another Form of Tariffs Backfiring

The sad part is that this pivot is wholly predictable. I have talked about trade retaliation before here at Libertarian Jew. There is direct retaliation, which is when a country responds to tariffs by implementing their own tariffs in response. Then there is indirect retaliation, such as trade diversion. Trade diversion is what happens when tariffs or other trade barriers cause countries to shift imports and exports away from the most efficient or preferred trading partner toward alternative countries simply to avoid higher costs. Under trade diversion, the trade does not disappear but rather gets rerouted. 

Historical Evidence of Trade Diversion

Trade diversion has played out in history more than once. During the 1930s with Smoot-Hawley, a National Bureau of Economic Research (NBER) paper shows how U.S. exports to retaliating countries fell by 28-33 percent, and trade diversion also occurred. Another NBER paper discovered trade diversion as a result of US agricultural tariffs from 1990 to 2014. In Trump's first term, tariffs on China caused China to divert $21 billion of trade flows away from the United States to other countries (see below). In its 2025 paper on responses to Trump's tariffs, the International Monetary Fund (IMF) recognizes trade diversion as a response. Additionally, a study from the North American Journal of Economics and Finance shows how the signing of NAFTA and preferential tariff treatment with Mexico and Canada shifted US imports away from Asian sources toward Mexico. 

Trump's Tariff Strategy and Consequences for National Security

Trump's current trade strategy fits within this historical pattern of trade diversion. The problem is that Trump's posture on tariffs will continue to agitate U.S. allies and make it more attractive for some allies to deepen their economic ties with China. What Trump seems to not understand is that national security is not merely about what the U.S. can produce, but also the allies that one can rely on in times of crisis or need. Research shows that economic cooperation lends itself to stronger security cooperation.

Since tariffs make allies economically worse off, they are incentivized to look elsewhere. Having these allies increase trade and investment with China will create increased strategic dependence on China. What is more is that this re-engagement will mean that U.S. allies will invest more in China and Chinese suppliers. This entanglement with the Chinese economy will make U.S. allies less likely to align with U.S. strategic priorities. When allies rely more on China, China gains leverage and the U.S. will have less influence in trade negotiations, diplomacy, and security concerns abroad. This will undermine U.S. influence, which in turn weakens U.S. national security. 

"America First" Becomes "America Alone"

Trump's tariff strategy ultimately defeats its own stated purpose. Trump is not isolating China or strengthening American security. He is weakening the very alliances that give the United States leverage on the global stage. With a tariff-first approach, Trump is treating allies as economic adversaries, which understandably leads allies to diversify their trading partners more, including toward China. As allies partner more with China, the United States loses its global influence. National security is not only about domestic production, but also partners who share risks, supply chains, and strategic goals. By undermining these foundations, Trump is handing China geopolitical leverage. By alienating allies and strengthening a rival, "America first" becomes "America alone" while China has the last laugh.