It’s pretty clear that Republicans don’t want to pass stimulus.
It’s not about national debt. Though they often position themselves as the ‘fiscally responsible’ party, the numbers say otherwise. Republicans have contributed to the nation’s growing I.O.U. bill, possibly even more than Democrats.
It always comes down to motive. That tends to fall into one of three things: reelection, personal gain, or representing the people that elected them.
If there’s one thing we can all agree on, it’s that the third is the least common.
Stimulus check fiasco
At first glance, it may seem like Trump is sweeping in and ‘doing the right thing’ by demanding $2000 stimulus checks. Most Americans would agree that $600 stimulus check are, at best, stingy.
Behind door B, there’s the possibility that he’s is throwing a tantrum against Republicans, revenge for failing to back his bid to dispute election results.
But something about this whole thing stinks.
Not quite right
It doesn’t really add up. McConnell and Trump are in regular contact. Why wouldn’t the president have pushed on the issue earlier?
Talks have been stagnant for months. It seems a glaring oversight – too glaring – that the two wouldn’t have discussed the dollar amount of stimulus checks. After all, stimulus checks are by far the most popular and stimulus benefit with the heaviest media coverage.
We also know that Trump has a huge influence over McConnell. If Trump really wanted to pass a bill with more direct-payment relief, he could push it through the hoop. He’d have the support of Democrats. He’d only need to rally a handful of his cronies to make it happen – well within his purview.
Instead, he abruptly left Washington.
So what is the real agenda?
Always follow the money
The answer might be real estate.
Though it’s hard to predict, experts estimate that some 20–40 million people face eviction when protections expire.
There’s two ways of looking at that.
The first is that this is a humanitarian crisis. Homelessness will skyrocket and the human toll will be heavy.
The second is that of an opportunistic parasite.
Rental protections are a pain in the ass for major real estate companies. Whether or not someone lost their job to the pandemic has little bearing on those who are watching the bottom line. A block on the ability to evict is a major inconvenience.
By extension, millions of people failing to pay rent will trigger a waterfall of mortgage defaults. This will mostly impact smaller scale landlords – ones with a second or third rental property who cannot afford to pay multiple mortgages without active tenants.
Within the next year or so, a wave of foreclosures will drive the sell listings up – and real estate prices down.
Former renters, saddled with debt, and small-time landlords, still recouping from foreclosures, simply won’t have the means to take advantage of discounted rates.
Lessons from the Great Recession
Without sufficient stimulus, housing market conditions will begin to feel like Great Recession Deja vu.
In 2008, as mortgage holders defaulted, houses went into foreclosure and real estate prices tanked as supply exceeded demand.
Large real estate investment firms were poised to pick up some bargains.
One such firm was Blackstone Group. As the housing market imploded after the 2008 financial crisis, Blackstone Group had $10 billion at the ready.
They didn’t really have $10 billion – but they did have some book smart, ethically questionable people that knew how to work debt to their advantage.
Blackstone Group picked up more foreclosures than anyone in the heat of the Great Recession. It proved to be a good investment. Just seven years later, they were enjoying a 225% ROI.
What does this have to do with the seemingly school yard politics going on in D.C. now?
It may seem like Trump is at odds with GOP leaders. But by following the money, the more likely situation is that they are in cahoots, trying to reproduce the conditions of the Great Recession.
The stand-off between Trump and Senate Republicans is textbook distraction politics.
Let’s not forget that Trump became an alleged billionaire himself as a real estate mogul. He sees the stars aligning on a 2008 market opportunity repeat. He has recognized these patterns before.
In a 2007 interview, Trump reportedly said that he was “excited” for a housing market crash before adding that “I’ve always made more money in bad markets than good ones.”
But wait a minute…isn’t Trump the good guy here? Isn’t he the one advocating for larger, $2,000 stimulus checks for Americans that would help them pay rent and in their homes?
Stall baby, stall!
Not exactly. Trump and Republicans want to stall.
By that measurement, McConnell deserves a trophy (likely his first). More time means more houses for sales. More houses for sale means cheaper prices. Cheaper prices means more houses for major real estate firms.
The longer people are starved out, the less likely aid will matter – even if it does come one day.
But what about McConnell? Is he really worried about national deficit? After all, he’s not a real estate mogul like Trump and his son in law, Jared Kushner. He doesn’t have any personal incentive to create a housing crisis, right?
At first glance it might seem that way. But just beneath the surface, an answer.
Who do you suppose is the Kentucky Senator’s top campaign contributor?
Blackstone Group, the MVPs of the Great Recession.
On an earnings call from April of this year, Blackstone Group’s COO told investors that the real estate vulture fund was “well positioned for investment opportunities in a recession.”
Investment opportunities that Mitch and Donald are manufacturing for personal gain.
The truth, however vile, if often the simplest explanation.