Chapter 1: What is the main topic discussed in this episode?
This is Andrew Ross Sorkin, the founder of Dealbook. Every year, I interview some of the world's most influential leaders across politics, culture, and business at the Dealbook Summit, a live event in New York City. On this year's podcast, you'll hear my unfiltered conversations with Gavin Newsom, the CEO of Palantir and Anthropic, and Erica Kirk, the widow of Charlie Kirk.
Listen to Dealbook Summit wherever you get your podcasts.
From The New York Times, I'm Michael Barbaro. This is The Daily. A few days ago, when President Trump proposed the introduction of a 50-year mortgage, he challenged a bedrock of the American housing market and financial system. But above all, he revealed just how desperate he is to lower prices for consumers and how willing he is to embrace radical solutions to do so. It's Monday, November 17th.
Democrats had a clean sweep around the country on Tuesday. It was a resounding demand for relief from the rising cost of living in an off-year election.
In the final analysis, the message from the elections two weeks ago in New Jersey, Virginia, and New York was exceptionally clear. The country is unaffordable.
People's groceries bills are still high. They're still dealing with inflation. They're suffering. Focus on domestic policy and on making people's lives better. Everyone embraced that message, except for President Trump, who initially dismissed it, much to the consternation of his fellow Republicans. The president says there's virtually no inflation and that grocery prices are going down.
Do you agree with him on that? No. I go to the grocery store myself. Grocery prices remain high. Energy prices are high. So affordability is a problem.
Who said that they agreed with the American people that the president had not done enough to bring down prices. So after a few days of denial, Trump abruptly changed his tune. Suddenly, he was Mr. Affordability.
President Trump accusing four of the biggest meatpacking companies of driving up U.S. beef prices.
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Chapter 2: What is the significance of Trump's 50-year mortgage proposal?
Conor Doherty is a housing reporter for The Times. And on the left, you have Franklin D. Roosevelt, and above him it says, 30-year mortgage. And on the right, you have President Donald Trump, and above him it says, 50-year mortgage.
And when you saw that, Connor, did you know what that meant?
Yeah. Right off the bat, you see he's trying to come up with an idea that will lower mortgage payments for everyone who has a mortgage.
Right. Address affordability by making housing more affordable.
Yes. Making payments more affordable.
Right. And quite importantly, this image puts him in the pantheon of great presidents who radically rearrange the U.S. housing market. And to use that image maybe as a roadmap here, Let's talk about the left side image, FDR and the 30-year mortgage, which is the starting point for Trump and I suspect for this conversation.
So I suppose what we should probably do is go to a little bit before FDR and say what the housing market used to be like. Many fewer Americans owned their homes and they had a lot of different ways for borrowing the money to buy a home.
now one of the most popular models was something called building and loan associations some of your older or film buff listeners might know that during the movie it's a wonderful life there's a fictional company called the bailey brothers building and loan so right basically they're co-ops a bunch of people buy into like what is essentially a pool of money and then they can borrow from that pool of money
their shareholders in this pool, and then that allows them to borrow money from it. So a very complicated model. It had a lot of risk to it. But the point is, is that it's a very haphazard market. And it's a market that the government has essentially no involvement in, right? So during the Great Depression, obviously, there's total chaos. There's a huge run on banks.
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Chapter 3: How does the 50-year mortgage aim to address housing affordability?
And not only that, there's some questions about whether or not it would even really save you money. So for instance, if banks are going to be doing 50-year mortgages, the interest rate on the 50-year mortgage is almost certainly going to be higher than on a 30-year mortgage. And the reason is a 50-year mortgage is much riskier.
If you're lending someone money over 50 years instead of 30 years, there's a much higher chance that something will go wrong in those 50 years.
Mm-hmm.
On top of that, if you are buying that home after 50 years, it takes you a lot longer to start owning real equity in that home. As anybody knows, looking at their mortgage statement, in the first few years, you're mainly only paying interest. And in the last years, you're mainly only paying principal. So it would take you 20 years to start really having significant equity in the house.
Right. And I guess we should probably mention the reality that if a lot of Americans started to take out 50-year mortgages, and we assume many people don't start taking them out until they're in their late 30s and early 40s, which is when a lot of Americans now embark on home ownership, a lot of people are not going to make it to the end of these mortgages. I mean, they're going to die, right?
Yeah.
Unquestionably. Now, what's really striking about the critiques of this idea is just how much of it is coming from within Trump's party and some of Trump's closest allies. You have Laura Loomer, the conservative activist, saying lifetime mortgages. You have Marjorie Taylor Greene, who is one of the most strongly associated with America first. Well, she says, you'll be in debt for life. You have
Christopher Ruffo, another conservative activist, saying if you have a 15 or 30-year mortgage, you'll actually own your home, whereas a 50-year mortgage, you're never going to own your home. Essentially, you're just renting it from the bank now.
Interesting.
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Chapter 4: What historical context supports the introduction of long-term mortgages?
It's not a true social post with two presidents on it. It's not a 50-year mortgage. It's this very unsexy, difficult, slow, brain-breaking work of changing the way zoning works and stimulating local housing markets. And it's probably not going to be coming from the White House. Absolutely right.
I think the federal government can be a huge part of this story. I think there are lots of things the federal government can do to help these efforts that are happening in state and local governments. But they're not going to be the author of them.
Well, Connor, thank you very much. I appreciate it.
Thank you.
We'll be right back.
Here's what else you need to know today. One of the Republican Party's most high profile alliances between President Trump and Representative Marjorie Taylor Greene of Georgia officially imploded over the weekend.
Greene, a once fierce Trump advocate who backed his efforts to overturn the 2020 election results, has infuriated Trump recently by criticizing his handling of the economy and the Jeffrey Epstein investigation. As a result, Trump withdrew his support for Greene, called her a traitor, and accused her of becoming a Republican in name only.
What do you think happened? What do you think is the reason for this?
Unfortunately, it has all come down to the Epstein files, and that is shocking. And, you know, I stand with these women. I stand with rape victims, and I will not apologize for that.
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