Bernie Sanders, Elizabeth Warren, and the Congressional Progressive Caucus recently sent an open letter to the chairman of the Federal Reserve, Jerome Powell, demanding lower interest rates.The letter is full of the economic illiteracy one would expect from progressives, especially those in Congress. For example, it misreads price inflation data and argues that the failure to lower interest rates endangers home affordability and increases income inequality. These assertions are false and easily disproven.Artificially low interest rates lead to more of the same economic sickness—malinvestment, bloated government and personal debt, and a never-ending cycle of boom and bust that enriches the political class while impoverishing the average American.Home

Stoked by ultra-loose monetary policy from the Federal Reserve, capital markets have been in a persistent bubble for several years. Printing trillions of new dollars and maintaining a zero-interest rate policy (“ZIRP”) was marketed by politicians and bureaucrats as supportive of the “main street economy,” but those trillions were directed primarily towards speculation in capital markets. Nowhere was this malinvestment more apparent than in apartment investing. After rising consistently for several years during the Bernanke-Yellen era, valuations for apartment rental properties reached unthinkable levels in the wake of the covid panic and related monetary splurge of 2020-2021. During this time, syndicators with little or no prior experience in real estate

During the most recent commercial real estate bubble, two things happened in tandem. First, due to the Federal Reserve’s zero interest rate policy, savers were unable to invest their cash at a decent rate of return. Second, prices of illiquid assets inflated in an extreme manner, riding on cheap debt and the rush of investors stretching for yield on their capital.Such was the state of capital markets for several years, as the Obama, Trump, and Biden regimes—along with their counterparts at the Fed—pumped trillions of newly created dollars into the United States economy. Predictably, commercial real estate prices soared, rising to a crescendo in late 2021 to early 2022.Throughout this time, the market for real estate investment trusts (REITs), companies that invest

Since government regulates nearly everything, it is not surprising that regulations often prohibit the sale and consumption of raw milk. Like many other regulations, these prohibitions reflect political favoritism, not health science.
Original Article: Government Prohibitions on Raw Milk Are Ignorant and Dangerous

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The Federal Reserve’s inflation of the money supply and interest rate manipulation distort capital markets through, among other things, the creation of asset bubbles. As the cost of borrowing decreases and cheap money floods an economy, speculation in capital markets increases, leading to prices unmoored from fundamentals.
Underlying these asset bubbles is a certain investor psychology—one based on expectations, encouraged by Fed actions over the last thirty-five years—that the Fed will always step in with easy money when asset prices threaten to decline.
Overleveraged speculators caught out by rising interest rates and risky loans are experiencing significant distress. Meanwhile, the apartment market continues to demonstrate dangerously speculative behavior.

The apartment investment industry has experienced severe malinvestment over the last several years, resulting in a massive bubble that has only recently begun to deflate with rising interest rates. A tidal wave of easy money—enabled by the Federal Reserve and four consecutive United States administrations, from George W. Bush to Joe Biden—drastically lowered the barriers to entry. As a result, even those with no investment acumen have raised and used other people’s money for complex, high-risk projects like buying, developing, and managing apartment buildings. Bridge loans, a natural outgrowth of enormous amounts of liquidity searching for yield in an environment with a zero-interest rate policy, have facilitated this process. The results should not be surprising,