Housing affordability
O’Leary said that he doesn’t care who wins the presidential election — though he has previously noted that a Donald Trump presidency might benefit his energy investments. Instead, he emphasized the importance of the policies implemented by the next president, as his role as an investor requires him to strategically allocate capital.
Yet, housing impacts all Americans, not just investors. Despite significant interest rate hikes by the Federal Reserve, home prices remain elevated. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, for example, has surged 54.5% over the past five years.
Moreover, a recent analysis from Zillow indicates that, as of 2024, homebuyers need to earn over $106,000 annually to afford a home comfortably, marking an 80% increase from 2020.
Harris’s housing strategy extends beyond the proposed $25,000 down payment assistance. She’s also calling for the construction of 3 million new housing units and offering tax incentives to builders.
O’Leary remains skeptical about the feasibility of these plans, expressing doubts about the federal government’s ability to influence housing. “Housing is state by state. She can do nothing to solve that problem. There’s no way she's building 3 million houses. Which state is going to give her that mandate?” he questioned.
In response to CNN anchor Jessica Dean’s comment that Harris intends to collaborate with state and local entities to address the affordable housing crisis, O’Leary retorted, “Really? Then, what’s she been doing for the last three and a half years? They haven't solved that problem. What have they been doing at all?”
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Read MorePrice gouging
Rising food costs have been another major concern for many Americans. According to Bureau of Labor Statistics data, the prices for food purchased for home consumption have escalated by 25% since the beginning of 2020. This spike in grocery prices reflects broader inflationary pressures affecting various sectors of the economy.
Harris has a solution in mind: her campaign has revealed plans to introduce a federal ban on “corporate price-gouging in the food and grocery industries.” Additionally, she intends to increase scrutiny of potential mergers and acquisitions among large food producers and grocery chains, “specifically for the risk that the proposed merger would raise grocery prices for consumers.”
O’Leary is critical of such regulatory intervention. He cites historical precedents from other countries, arguing that similar policies there did not yield positive outcomes.
“Let's take her price gouging idea… They tried that in Venezuela, Cuba, North Korea, the USSR. No, that’s not going to work. It’s impossible to understand how a corporation would set pricing based on gouging. What does that even mean? That's why it’s being ridiculed,” he commented.
Responses are mixed on proposals
Ernie Tedeschi, who previously worked on President Biden’s Council of Economic Advisers and is now the director of economics at Yale University’s Budget Lab, told the Wall Street Journal that profit while margins for food and beverage retailers have stayed high post-pandemic, margins for retailers in other sectors, like clothing and general merchandise, haven’t seen similar increases.
Tedeschi remarked that economists “need to be curious about this and figure out what is going on.”
Bans on price gouging can effectively serve as price controls. And according to basic economic principles, setting a price ceiling can deter sellers, leading to reduced availability of goods and potentially leading to shortages.
Michael Sinkinson, an economist at Northwestern University’s Kellogg School of Management, highlighted the challenges of implementing effective price controls, telling the Journal, “It can be very hard to create any price control that is not gameable.”
Sinkinson further raised concerns about the mechanisms of establishing such controls, asking, “How do you set a price control? What is the right benchmark?”
While there are complexities in formulating and enforcing price regulations, Michigan Gov. Gretchen Whitmer supports the ongoing discussion. She appreciates the intent behind the proposal, stating in an interview on CNBC it “speaks to Kamala Harris’s values.”
“I think that any effort we make to keep more money in Americans’ pockets is worth walking the path,” Whitmer added.
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