Choosing to rent instead of buying a home

In the US, owning one’s own home has always been portrayed as the ultimate dream and people strive to do so as soon as they have some kind of stability in terms of jobs and location. The equity in one’s home was portrayed as the best way to save for financial security and indeed for most people, the value of their home is their most substantial asset.

An owned home is typically the most valuable asset for U.S. homeowners. Black and Hispanic homeowners typically derive a higher share of their wealth from owned homes than White and Asian households.
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In 2021, 62% of U.S. households lived in homes they owned as their primary residence. But homeownership is less common among Black, Hispanic and multiracial households. In 2021, 40% of Black households, 47% of Hispanic households and 45% of multiracial households owned their primary residence. In the same year, 70% of White households and 58% of Asian households lived in homes they owned.

But as the prices of homes have increased along with mortgage rates, that dream of homeownership has become increasingly elusive for many. Now people are beginning to question whether buying a home is even desirable.
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Another crypto heist and the NFT bust

I know hardly anything about cryptocurrencies or the underlying blockchain structure but was under the impression that it was supposed to be very secure because the ‘ledger’ was widely distributed over many computers and thus hard to hack. But now we hear of yet another heist of cryptocurrency, this time for a whopping $1.5 billion.

North Korea was behind the theft of approximately $1.5bn in virtual assets from a cryptocurrency exchange, the FBI has said, in what is being described as the biggest heist in history.
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Describing this particular form of North Korean malicious cyber activity as “TraderTraitor”, the FBI on Wednesday warned that the virtual assets, stolen from ByBit, a Dubai-based crypto trading platform, would eventually be turned into currency.

“TraderTraitor actors are proceeding rapidly and have converted some of the stolen assets to bitcoin and other virtual assets dispersed across thousands of addresses on multiple blockchains,” said an FBI statement.

The bureau added that it expected the assets would be further laundered and eventually converted to fiat currency – a normal, government-backed currency that is not tied to commodities such as gold.
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Hackers linked to North Korea stole more than US$1.3bn in cryptocurrency in 2024 – then a record amount – according to a report published in late December. The thefts were spread out over 47 incidents, the blockchain analysis firm Chainalysis said, adding that the total was a dramatic jump from the $660m seized in 2023.

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Real estate scammer now advising on government real estate

That wealthy people are able to exploit all manner of tax loopholes is well known. Most of these loopholes do not occur by accident but are inserted by lawmakers at the instigation of lobbyists. One of the most common areas for such loopholes is in real estate because there is so much ambiguity about valuations that can be fiddled with endlessly. Trump used those loopholes all the time and was found guilty of it in one case but escaped many others.

ProPublica writes about someone who specialized in these kinds of shady dealings many times who has now been made a senior adviser to the General Services Administration, which manages the federal government’s property, even though he pushed a scam that the IRS called the “Worst of the Worst”.
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Trump Day One agenda

Trump has made a lot of statements about what he will do on day one of his administration, so many that there will not be enough hours in the day to do most of them even if he were serious about the promises. But I know what his most important priority will be and that is to try and show that the crowds at this inauguration exceed in size what Barack Obama had in 2008. That his inauguration crowd in 2016 was much smaller than Obama’s was something that really rankled him to the extent that he made his then press secretary Sean Spicer look foolish by trying to argue otherwise when the aerial evidence clearly showed the opposite. Trump continued to lie about this long after everyone other than his cult followers knew that it was false. So brace yourself for this to be his top priority.

But what about the more consequential things that he has promised to do one day one?
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The phony debate over cutting the budget deficit

One of the longest running pointless discussions in US politics is about what to do about the federal budget deficit. This is simply the annual excess of all government spending over all government revenues. The cumulative total of all such deficits is the government debt. For the fiscal year 2024, the government had revenues of $4.92 trillion and spent $6.75. trillion, leaving a deficit of $1.83 trillion. The national debt up through November 2024 was $36.09 trillion.(See here for more.)

Different people have different views about how big of a problem the deficit is. One school of thought uses the metaphor of the government budget being like a family’s budget, and that a deficit means borrowing money that has to be paid back with interest later. They argue that running up deficits year after year means that the debt burden will become intolerable and that we are leaving future generations (our children in this metaphor) in a fiscal hole that they will have a hard time digging themselves out of. They view this as a horrible prospect.
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Don’t believe the lies about the minimum wage

State and federal-mandated minimum wages set a floor for what employers can pay their employees. It benefits more than the minimum wage workers because it raises wages up the line. Hence it is should be no surprise that the capitalist class and its supporters hate raises in the mandated minimum wage and try to do everything in their power to keep them from being raised because it lowers their ability to exploit workers and increase their profits. In their mind, the there should be no mandated minimum wage and all wages should be set by the employer and the employee, negotiating freely. Of course they oppose unions as well since those too interfere in the glorious working of the free-market. In this world view, a single employee and a company or massive corporation are equally matched powers and thus the figure they arrive at would reflect the true market value of labor.

Of course this is a fantasy indulged by the capitalist class and has no basis in reality. There is a massive power discrepancy between employer and employee and you need the federal and state governments and unions to at least partially redress that imbalance.
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The BRICS challenge to US financial dominance

The US is an imperial power. Unlike other former empires such as Britain, France, Germany, and Belgium, it hides its imperial nature by various ways, as Daniel Immerwahr describes in his book How to Hide an Empire that I reviewed back in 2019 and further discussed here. Rather than exercising direct over control over large countries, the US empire consists of small regions it calls ‘territories’ and bases scattered over all the world, because that enables it to exercise control without having to deal with large local populations. It is what Immerwahr calls a ‘pointillist’ empire.

China is challenging the US on the global stage and is also adopting the pointillist model with its ‘Belt and Road Initiative’ in which China invests heavily in infrastructure and other development projects in countries around the world, cementing economic links. Back in 2019, the Chinese leader Xi Jinping hosted a summit on this and despite heavy lobbying by the US to deter countries, 125 nations signed up and attended.
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Medicare tax avoidance by wealthy people

Medicare is the government-run health insurance program for people over 65 years of age. It is a very well-run program and funded by a tax on income that is automatically deducted from people’s paychecks. The Medicare tax is not huge. It is 2.9% for most people and 3.8% for high earners. If you are self-employed, or get any income that is not a salary or wage, you are still obliged to pay that tax when you file your annual income tax. I have done so routinely with any outside income I got from giving talks or from my writings. You fill in a separate form to report self-employment income and another form to pay the tax on it. It is pretty straightforward.

ProPublica has gone through the tax records and found that very wealthy people have exploited a loophole that enables them to avoid paying any Medicare taxes on their income. The article focuses on three of the most egregious tax avoiders.

The trove of tax records behind ProPublica’s “Secret IRS Files” series contains plenty of examples of billionaire financiers who avoided Medicare tax despite earning huge amounts from their companies. In 2016, Steve Cohen, the owner of the New York Mets, paid $0. So did Stephen Schwarzman, head of the investment behemoth Blackstone. Bill Ackman, the headline-grabbing hedge fund manager, was able to shield almost all his income from the tax.
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But these maneuvers by the rich hasten Medicare’s future crisis. Sometime in the 2030s, the program’s trust fund is due to run dry. Closing the loophole, along with eliminating other ways around the tax for wealthy business owners, could raise more than $250 billion over 10 years for Medicare, according to recent government estimates.

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The tax games that rich people (and companies) play

Rich people and companies have all manner of ways to avoid paying any taxes at all, let alone their fair share, all because of so-called ‘loopholes’ in the tax laws. These tax evasions are facilitated by giant accounting firms, especially the largest known as the Big Four: Deloitte, Pricewaterhouse Coopers (PwC), Ernst & Young (EY), and KPMG. These accounting firms are not just passively looking after the books, they are often key to setting policies.

The International Consortium of Investigative Journalists (ICIJ) reveal one such massive loophole that is being exploited and how Deloitte played a leading role in doing so.
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The steady decline of Trump’s Truth Social stock

I do not really understand how the stock market works other than at the most naive level. I know that in theory, the price of a company’s stock should reflect the value of the company, so that if the company is making profits and pays good dividends to its shareholders, then the stock price should rise, while if it is losing money and risks going out of business, then its price should drop.

But in the modern world of high finance, there are many more factors that seem to be in play, such as the predictions of future earnings and profits and prospects for growth. Those can raise a company’s stock price even as it is losing money. And there are even more esoteric factors that only the mavens know about.

This brings us to creepy Donald Trump’s social media company Truth Social. I wrote back in April about how it merged with a publicly traded shell company Digital World Acquisition Corp and the initial value of the creepy Trump’s stock was a whopping $6.3 billion. But as economic journalist David Cay Johnson wrote, the underlying value of the stock was effectively zero since its revenues were a paltry $4 million while having an operating loss of $58 million.
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