6/23/26: Housing Affordability Crisis, Israel's Nuclear Blackmail Plot

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2:38Turning now to housing. So this really caught my eye. I wanted to break all these numbers down with all of you guys. Let's put it up here on the screen. The Wall Street Journal did an excellent job here where they collated a bunch of data which shows home ownership costs from 2019 to 2025. So let's go through it. So in terms of the amount of principal costs that people are now paying, from 2019 to 2025, people are now paying about 22 % more in their principal payments than they were back in 2019. And remember, this is just 2025 data. It doesn't even include 2026, which has already gone higher.

3:1222 % more when it comes to principal. Now let's look at interest. Whenever it comes to interest, people are paying 35 % more interest, largely because of the increase in overall interest rates. Now, all of that makes sense, and it's still not that crazy. Property taxes have gone up by 31%. Makes sense whenever you factor in the principal payment and some increase overall in city services. But this is where things start to become actually insane. Insurance, home insurance costs, up 72 % from 2019 to 2025. Home maintenance is up by 85%. And then the worst number of them all, emergency repairs, up 175%.

3:54So they say that a home buyer in 2019 could expect to spend about$20 ,000 a year on basic home ownership expenses. By 2025, that annual bill is now$28 ,500, which has massively outstripped overall inflation, which is pegged at 26 % during that same time period just from the Consumer Price Index. By 2025, homeowners who wish that they could sell and move elsewhere are also staying put, turned off by the cost of purchasing today. This is one of the foremost problems in the so-called affordability trap. What we also see here is that sales of previously owned homes have held around$4 million a year since 2023, which is the lowest level in decades, down from the pre-pandemic norm of between$5 million and$1.5 million a year.

4:41So if you do the math, that's almost 5 or 6 million houses that have been kept off of the market, largely because of these exact traps. From the overall monthly insurance payments, taxes, interest, and principal, you're now sitting roughly around$2 ,000 a month, which, if you do the math,$24 ,000. But then you look at the overall household income, especially if you look at overall household after-tax income, you're sitting around 50%. This makes it impossible, especially with the average home rate. The one that really struck me is actually the HOA fee. I don't know what the hell is going on. I don't live in an HOA, but the median HOA fee in 2021 was$500.

5:21The median HOA fee in 2025 is$757. So that's like a gigantic increase, actually, just from 2024 to 2025. But my main takeaway from this is about financialization. So a friend of mine was taking a look at this data, and what he pointed out, shout out to Fred Bauer, was if you look at the things that outpace overall inflation, it's interest, it's insurance, and that's home maintenance and emergency repairs. What do those things have in common? Financialization. The insurance industry, the interest obviously is the banks, but in home maintenance and emergency repairs, that's not just labor costs.

5:58It's because in the last six years, private equity specifically has been rolling up local repair businesses, plumbing, AC, many of these, especially emergency repairs. And they've realized that because people are in dire straits and they'll have to pay anything, if they standardize, roll them up, give them, you know, backend software and all of that, they can squeeze enormous profits out of these homeowners. And that's why the emergency repair number is up so high. But finance is the bedrock of all of these overall cost increases that you can see. Yeah. So let me zoom out and make a bigger picture point and shout out to Gary's Economics, who put it in these terms in a recent video about Elon Musk becoming the world's first trillionaire.

6:37When you have trillionaires, and he's the first one on paper, but probably not the only one. It's just now that SpaceX IPO'd, which actually SpaceX not doing that well today, but that's another story for another day. We might cover that tomorrow. In any case, with the SpaceX IPO, we now officially know that he is a trillionaire. You have all of these billionaires. You look at the way that these, mostly men's, wealth skyrocketed over the past several years, it is astronomical. Just think about the fact that we had in, you know, Bernie Sanders' 2016 campaign, what was his constant refrain? The millionaires and the billionaires.

7:15You're talking about millionaires at this point. It's quaint. It's quaint to think about millionaires. Now we're talking about the billionaires and the trillionaires. And that's just over the course of a decade that that shift has happened. Well, when you are someone who has that amount of wealth, a literally incomprehensible amount of money. A billion dollars is an incomprehensible amount of money. A trillion dollars is beyond the comprehension of any human being. What do you do? And this goes to your point, Sagar. You buy up assets. So is it any surprise then that all of these assets, including homes, become more and more and more expensive, that they find more and more ways to financialize every aspect of this.

7:58Why? Because it is money in search of assets. And we have money consolidated in the hands of a very few number of people. You know, when you have a little more money in your pocket, you're not going out and buying all these things. You're able to indulge. Maybe you go on vacation. You're able to buy steak, right? The average person, it's much more hand and mouth. So you're not out there looking to buy up the entire world. The more wealth inequality that we have, the more that you have trillionaires and 100 billionaires that are dominating the entire economy of the entire globe, the more they're going to bid up the price of assets.

8:38It is inevitable when you think about the way those dynamics work. So that is a part of the underlying story of why these costs keep going up and up and up. And there is no relief in sight. If you want relief, you have to tax these people. That's what you have to do. You have to do a wealth tax. You have to take some of the wealth. You cannot allow there to be these trillionaires and multi-multi-multi-billionaires controlling everything and buying everything up if you are a person who would like to aspire, excuse me, one day to be able to, I don't know, own a home or own really anything. If you are that person, then you should be in favor of reining in the wealth and power of these oligarchs.

9:20So I think that is a very critical piece of this that also oftentimes goes overlooked intentionally. You know, and that's not to say that like the sort of abundance agenda of deregulation and Yimbyism, that's not to say that stuff doesn't matter. But the overarching structure here of these increasing numbers of trillionaires and billionaires buying up everything is going to make it so that we never get out of this doom loop until we check their wealth and power. There's a demand side and a supply side. That's the thing we have to look at both. Let's put D3 up here on the screen, just because I want to go through even some more of the math.

9:56And when you do, it's crazy. This is where they say that Morgan Stanley is predicting that home buyers will face a harsh reset. And mostly, they say, what it points is to this conclusion, is that the base case projects mortgage payments will have to decline about 24 % of household income to 21 % in the coming decade, as rates have to moderate over the long term. But that will still leave affordability well above the 15 % average that prevailed in the years after the 2007 to 2009 financial crisis. The squeeze will reshape ownership and rental dynamics and will make it so that aspiring owners will continue to comprise more and more of the overall U.S.

10:36population. In terms of the reset, what they say is that it will reset the way specifically that wealth is built in the long term, specifically probably for people who are our age and more in the millennial demographic, because home ownership was the bedrock of wealth building over the post-war period. But now, when the first-time homebuyer is some 36 to 40 years old, and then the average homebuyer is like in their 50s, then you have different situations where having that lack of asset, which we'll appreciate over time, just scrambles the entire way that you think about your future, not to mention whenever it comes to your community.

11:12So I think that that data is really, really important, actually just about home buying and the way that assets will move in the future. But I also think that whenever it comes to the housing front, it shows how the current way that I mean, I really struggle with this. I believe in some localism. I really do, especially when it comes to data centers. You know, NIMBYs definitely have a point in their ability. But but I like tension facilities. Yeah. Or yeah, in your case, whatever you want. Beautification, you know, zoning. I really do get it. Like I get it whenever it comes to what makes a community nice.

11:48However, are we not at a genuine crisis level? Like, that's how I start to think. And that's when people start complaining about, oh, like, this is going to overwhelm, you know, X services. I hear you. But then we need to make it so that you have the housing and you have the services. Like, there needs to be. I just read that we spent$80 billion on the Iran war, which is great. $80 billion is what the Pentagon is asking for to recoup costs of what the Iran war. That is 80 % of what we spent in 20 years just on the Afghan National Security Forces. 20 years in Afghanistan on the ANSF is what we just spent in three weeks in the war in Iran.

12:25That's insanity. So just to show you all in terms of the cost that we're dealing with here, maybe some of it could go to an overall homestead fund or builder incentives. You need funds up front. Then you need tax incentives for the builders. You need to make it so that the market that is best served for the builder, they have an incentive to build first-time starter home. You need to make it so they keep the private capital people out of competing for said things. But I also think you honestly need a mechanism to make and genuinely force in some cases, especially in these high-cost-of-living areas, to be able to build more housing.

13:00And I hear 100 % of the people who already live there, we're not saying you're going to get screwed. We should make sure that there's services and all of that too. But increasingly, all I hear from the homeownership class is like, oh, we can't have that. We can't have that. And I'm like, I'm sorry. Like, you know, when you have people pulling$200 ,000,$300 ,000 a year and they can't even buy a home in a high cost of living area, like we're cooked, you know, as an overall society. Yeah. And, you know, that, so it's the housing costs, but it's all the other costs too. One of the things we focused on a lot is the electricity costs, which have skyrocketed, which is also documented in that Wall Street Journal piece that we were talking about.

13:35And this again goes back to like the oligarchs and their demands. That is the primary reason why electricity costs are going up and up and up. And I took notice of this recent development with federal energy regulators. Here's the headline here. Federal regulators order grid operators to speed power to energy-hungry AI data centers. Federal regulators on Thursday, this is last week, ordered regional grid operators to help large energy users connect more quickly to the nation's inefficient and aging electric transmission system, a step they said is needed to accommodate surging demand from power-hungry artificial intelligence data centers.

14:15Now, they're claiming, oh, don't worry, it's not going to add to your costs. Okay, do you believe that? Do you believe that? And here's the other thing. It's not just about the cost. We just literally do not generate enough electricity to deal with the amount that these, you know, the operators that are the major AI tech companies, what they are pushing towards, we do not have that level of electricity generation. So if we're having to, if there are going to be blackouts, if we're going to have to ration electricity generation needs, who do you think is going to be prioritized in that situation?

14:53It reminds me very much of when we had the Flint water crisis and the Ford and NGM were like, hey, this new water is like corroding our parts. We can't do it like you're destroying our business. The government was quick to, oh, well, don't worry, we'll switch you back to the other system. We got you. Meanwhile, people and their children were literally being lead poisoned every day. And it took years before that was addressed. It's going to be the same dynamic here, right? The people with the money and the power are going to get their needs met first. And so this to me is one, you know, emblem of the direction that the federal government and a lot of the state governments are going to go in as well, where they are being prioritized.

15:37Oh, you're a giant new data center and you need to be connected to the grid, even though this is going to spike energy rates and electricity rates for consumers across this entire region. Don't worry. We've got your back. We will fast track your ability to connect into the grid with no requirement that we're building out additional electricity generation needs. So it is this dynamic which will continue to make costs higher and higher and higher across the board. Yeah. And I will just point to the story that I relayed last time, our last show about Sterling, Virginia, where this exact situation happened.

16:11Those generators with the extreme wine, which were overwhelming the noise in the neighborhood, they were told it would only be on temporarily. The generators have now been on for over a year. So you could see, and these residents have no recourse, are sitting there with loud hearing damage level noise perpetuating the entire neighborhood that for over a year with zero recourse. So whenever it comes to these promises from the electricity utilities, oh, it's not gonna increase. The truth is, you can see this is about priority. And they need, look, they need these data centers to come online at the end of the day.

16:49That's the only thing powering the American stock market. The whole bet of the entire economy. So if that doesn't work out, it all goes bust. So it just makes it so that at the end of the day, they're going to get the preferential treatment, the rates. And yeah, if we're ever in a power generation crisis, we all know which way it's going to go. And you can only take it back one way, which is democracy. All right. So we have some great guests sitting by the Blowback Pod to talk about their special relationship series on Israel and the United States. Let's get to it. Apple Vacations, where your story starts.

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19:19Breakfast burritos, schmear-loaded bagels, real mac and cheese. Hero Bread bakes loaves, bagels, and tortillas that don't taste or feel like cardboard. Noodles that don't fall apart in hearty sauces. Plus, limited-edition small batch bakes like the 2-grams Net Carb Hero Croissant or 1-gram Net Carb Hero Cheddar Biscuit. Handmade in a Sonoma-based French bakery. Shop now on Hero.co. Use code IHEART for 10 % off. That's hero.co. Per serving, not a low-calorie food. Some products contain allulose. See nutrition info on hero.co for sodium and sugar content. There's been a lot in the news lately and a lot that is quite relevant about our special relationship with the nation-state of Israel.

19:59So luckily for us, we are joined by two experts today. We've got Brendan James and Noah Colwin, co-hosts of the Blowback Pod. And they have just released, right now for premium subscribers, a special edition called No Daylight that looks at the historical trajectory of the U.S.-Israel relationship. It is fantastic. Everybody go and subscribe. Gentlemen, welcome to the show. Good to see you guys. Thank you. Thanks for having us. Yeah, of course. So let's go ahead and start by taking a listen to some of the things that President Trump has said lately about his relationship with Benjamin Netanyahu.

20:30And Bibi Netanyahu worked well with me, but he will tell you, we're the ones with the guns. We're the ones with the whole deal. were the ones with the B-2 bombers, etc. If it weren't for Donald Trump, Israel would have been eviscerated. Your relationship with Netanyahu is... It's good, but we have to keep them a little bit sane. Are you going to be able to control Israel from attacking Lebanon? Yeah, I will be. I mean, I wonder. They have a lot of respect for me, and they do as I say. Mr. Bibi Netanyahu happens to be a good man, gets a little excited sometimes. But he happens to be a very good man.

21:14We've had an amazing partnership. He's been an amazing prime minister. We have a little dispute over Lebanon. I say you can do a little softer touch, Bibi. You don't have to knock down a building every time somebody walks into it that's from Hezbollah. But it's been an amazing partnership. But he will say we're the big partner and he's the very small partner. And that's true. So, Noah, I'll start with you. What have you made of these comments from Trump? Also, more critically, the comments from J.D. Vance. Do you think this split with Israel is real? uh that's a great question i think that this split is an inflection point i don't necessarily know if i would say that it's real in the way that people necessarily um like the at least popular sentiment uh would like it to be um just generally because of the contempt towards israel uh and the netanyahu government but i do believe that what this shows and what it indicates and what it surfaces, and this is actually part of the point of our miniseries, is that we're interested in examining like, well, OK, how do these moments of daylight emerge when it's clear that the US and Israel have divergent interests?

22:22And how is it then that they get sutured back shut? And I would argue that at this time, when I say we're at an inflection point, we're at a moment where we're figuring out, OK, is this going to be one of those moments, as it has been for most of the past 80 years where something gets to shut back together? Or is this actually going to be part of a longer process initiated since October 7th, 2023, where the U.S. and Israel's strategic partnership is perhaps, you know, coming undone or at the very least significantly changing in character from how it's been before? Yeah, Brendan, let's let's talk here a little bit, zooming out when how it pertains to your guys' season, going back from the beginning.

23:04I have alluded to this in the past about Truman's haberdashery partner and kind of the very strange circumstances in which the United States even became entwined with Israel. But why don't you take the audience through some of that? Well, it's a fascinating thing. I think many people will be caught off guard if they listen, particularly if they're younger, they're unfamiliar with some of this history. Harry Truman, of course, was the president, the U.S. president that recognized the state of Israel when it was founded in 48. But for several years before that, from 1945 onward, the beginning of his presidency, he was not so keen on there being a Jewish state in the Middle East.

23:45He opposed it. He told the Zionist lobby he opposed it. He told his own advisors he opposed it. He told the public he opposed it in one way or another. He thought it was an ethnostate, alternatively called it an ethnostate or a theocracy, neither of which were ideals that he felt were worthy of lending American support to. The problem was, is he had a sort of a showdown in his own cabinet between his foreign policy establishment, which at the very top was led by no less than George Marshall, a decorated general from World War II. None of them supported, virtually none of them supported, and certainly no one high up supported the foundation of a Jewish state.

24:25and there were even cold warriors right wingers who said um we think this will drive the arab states that have a lot of oil into the hands or rather into the arms of the soviet union uh there's no reason to do this everyone including truman was much more sympathetic to the idea of a binational or federated state that's what they were working in concert with the british empire to bring about because a lot of this also meant the british were exiting the middle east However, his domestic advisors were very keen on him supporting a state of Israel, not only because of their own personal Zionism, which they had reached some of them actually quite recently in their careers, but because it was a very easy way for him to hold together the New Deal coalition that he inherited from FDR.

25:10It was a purely domestic, purely political calculation that the ethnic makeup of the New Deal coalition, which included Jews in very important states and very important cities that he had to win, that this was something that we need not worry about the consequences of overseas as long as it secures us the election and the sort of democratic parties coalition that was so important. So you have Truman being the first guy who recognized Israel who didn't even think it was a good idea and who really didn't pay attention to much of the issue of Palestine after except to express frustration with issues of refugees returning and indeed what you might call the right of return that he was rather repulsed by Israel's conduct.

25:53However, it was at that point he had already given in to the political pressures and had recognized the state of Israel and couldn't really do much about it. And at that point in the, you know, in terms of the political valence, Zionism was a cause more associated with the political left that has shifted over the years. Talk about how that political dynamic has shifted as the orientation towards Israel has shifted and become this security arrangement that we know today. It's very fascinating, again, for people who think of, you know, reasonably now look around and think of Palestine as something that is a cause for the center left, left of center and all the way to the far left.