California winery owner fined $120K for letting worker live in trailer on his land
A winery owner in California faces a $120,000 fine for allowing an employee and his family to live in a trailer on his private property. The move violated a Santa Clara County ordinance that prohibits recreational vehicles from being used as dwelling units.
For years, the county issued daily fines to the Ballard family until they either remove the trailer or evict their worker, Marcelino Martinez. The Ballard family is now suing with the help of the Institute for Justice.
“Marcelino has been our vineyard manager for over 20 years,” Michael Ballard said. “Somehow, the Martinez family living in a trailer on the back of 60 acres, where no one can see them and they don’t come into contact with anyone else, can be interpreted as a public nuisance. That made little sense to us at all.”
In Santa Clara County, housing costs are high. The average home prices sit around $1.5 million and median rent for apartments hover around $3,200. The Ballard family allows Martinez and his family to live in the trailer rent-free as part of his work agreement.
“It’s very hard to live in San Jose, paying rent and buying food is very expensive,” Martinez said. “If I have to leave, I don’t have another choice but to look for another job.”
In 2017, a county code enforcement official visited the property and stated that the trailer could not be used as a home. In response, the Ballard family decided to construct an accessory dwelling unit, which is approved by the county as a lawful place for Martinez to stay.
However, the slow permit process delayed the construction. Until the new unit receives final approval, the Ballard family will continue to incur daily fines, resulting in the $120,000 figure.
The Institute for Justice argues that the fines violate the Eighth Amendment of the U.S. Constitution, which prohibits excessive fines. They contend that treating each day as a new violation inflates the penalty dramatically.
“The fines — I don’t understand. I want them to stop fining Mike,” Martinez said.
“I hope the county recognizes that good Samaritan behavior should not be penalized, it should be encouraged,” Ballard said. “If everyone in a better position helped those less fortunate, it might actually solve some of the homeless problems in this county.”
The county has not responded to recent media requests for comment on the lawsuit.
A New York law went into effect in September 2023 that banned property owners from renting out homes for fewer than 30 days unless the host stayed there with the guests and registered with the city. At the time, the city claimed apps like Airbnb and VRBO exacerbated the city’s rising rents and contributed to a housing shortage.
But Airbnb cited data Tuesday, Sept. 3, that it says casts doubt on those claims one year from the law’s inception. Stays of less than 30 days fell in the city by 83% since September 2023, according to a report from Airdna.
Rent growth in New York still rose 2.4% compared to last year, while nationally it fell by 0.8%, according to data from Apartment List. Meanwhile, median rent in Manhattan crossed $5,000 for the first time ever. Apartment vacancies were also nearly unchanged at 3.4%, according to Apartment List.
Airbnb said hotel operators are the true beneficiaries of the law, with the cost of a single night in the city surging 7.4% over the last 12 months, while nationally, it rose just 2.1%. The average night in New York runs $307.75, nearly double the national average of $157.39, according to data cited by Airbnb from CoStar.
“It’s time for New York City to reevaluate LL18 and consider amendments that would at a minimum, allow homeowners to once again host guests,” Airbnb’s Vice President for Public Policy Theo Yedinsky said in a statement Tuesday. “By rolling back parts of the law, the city can increase the supply of accommodations for consumers, support resident hosts, and revitalize local businesses that depend on tourism dollars. A more sustainable, sensible and equitable model benefits residents, visitors, and the broader community – ensuring that regulations support, rather than stifle, community and economic growth.”
Short-term rental apps have been blamed for rising rents and housing shortages throughout major U.S. cities.
“People own more than one home and rent them out for profit, while others struggle to afford their first home at all,” Tatum Joerndt explained in an analysis for the Lincoln Memorial University Law Review. “Being a renter through Airbnb allows the owner to make more money off these short-term stays than they would renting the property out as a home.”
New York isn’t the only city to pass short-term rental restrictions. In San Francisco, hosts can’t rent their homes for more than 90 days unless they are staying there at the same time. They also have to pay a hotel tax and follow insurance and safety requirements.
Meanwhile in Atlanta, one must be a city resident to own a short-term rental and they can only own two. Atlanta also charges a fee for an annual rental license and an 8% tax on rental fees for each property.
Quincy, a rural town in central Washington, is the most-searched summer travel destination on Airbnb. Quincy is seen as a perfect escape from the city, known for beautiful hiking trails, camping spots and the river. Quincy is also home to one of the most stunning music venues in the world, the Gorge Amphitheatre. Quincy is followed by Columbia, S.C. and Las Vegas as the most-searched summer destinations.
DOJ’s collusion case claims RealPage’s algorithm is the reason rent is too high
Have you been paying too much for rent? Across the country, rent prices skyrocketed in 2022 and 2023 and it could be because of illegal activity. The Justice Department on Friday, Aug. 23, filed an antitrust suit against RealPage, a Texas-based software company that is accused of using algorithms to allow widespread collusion among landlords.
“Everybody knows the rent is too damn high. And we alleged this is one of the reasons why,” Attorney General Merrick Garland said. “When companies, and in this case, landlords, use a software tool to facilitate cooperation with respect to rents, they violate the antitrust laws, they make rents higher than they would otherwise be, and they prevent rents from going down.”
The federal government joins attorneys general from eight states in suing RealPage. The company, which has been fighting these allegations for years, said the case lacks merit and will do nothing to bring down rent prices.
It’s a collusion case, it’s a price-fixing case, it’s a cartel case, but it’s not one where the landlords are accused of directly communicating or agreeing among themselves.
Professor Spencer Waller, Director, Institute for Consumer Antitrust Studies
“We are disappointed that, after multiple years of education and cooperation on the antitrust matters concerning RealPage, the DOJ has chosen this moment to pursue a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years,” RealPage said in a statement.
To understand more about the case and its merits, Straight Arrow News interviewed Spencer Weber Waller, a professor and director of the Institute for Consumer Antitrust Studies at Loyola University.
This interview has been edited for length and clarity. Watch the full interview in the video above.
Simone Del Rosario: Professor, what is the difference between RealPage suggesting rent prices and what we see from a Zillow or Redfin estimate?
Spencer Waller: RealPage is a software system that has a very high market share among landlords in places like New York and some other cities. And the gist of this case, and it’s interesting, it’s a collusion case, it’s a price-fixing case, it’s a cartel case, but it’s not one where the landlords are accused of directly communicating or agreeing among themselves.
It’s kind of what we would call a hub-and-spoke conspiracy, where the landlords are using a common agent, a third party, to coordinate their behavior. And the complaint talks about how each of these large landlords feeds a variety of confidential proprietary information, and then the algorithm and RealPage communicates with them only, but it’s effectively the same as them communicating with each other because RealPage has access to all of this confidential information, uses it to formulate, according to the complaint, common recommendations that are inevitably followed by the landlord. And you end up with essentially the same result as if they had gone into a room or emailed each other and agreed to a common and ever-escalating rent for the various apartment buildings and other stuff that they own.
Simone Del Rosario: RealPage has been fighting these allegations for a couple of years now. They argue the software is not the reason prices are so high, that it is a lack of housing. They also say that their customers aren’t required to use this price, and in fact, many of them don’t use the suggested price. So what arguments does the DOJ and these other states have to make in order to prove their case?
Spencer Waller: There are two sets of cases going on: One is this government action that was filed late last week, and then there are separate class actions where groups of consumers are saying that they’ve overpaid. So the antitrust laws would not deal with a situation where a landlord had high prices on their own unless they were a monopoly and that isn’t at stake here. So high prices by themselves are not a violation of the antitrust laws without something more.
The something more in this case — a civil case, nobody’s going to jail, the government case has no fines — [is] the government is trying to stop the use of a common platform, a common algorithm, a common coordination point. And this has been done before.
If you go all the way back to the 1930s, there was a similar kind of case involving the movie industry where the government won, where they couldn’t really prove that the movie studios were trying to coordinate on price that would be charged in the movie theaters during the Great Depression; they couldn’t really prove that the movie studios talked to each other, but they had each sent sort of a common letter to their distributors talking about the prices that would be set. And that was enough.
So this hub and spoke where you use a third party to coordinate is an accepted legal strategy. Of course, the government has to prove this, but the complaint has a solid legal theory.
Other countries use similar kinds of coordination. I was an expert for the government of Chile some years ago where supermarkets were coordinating their price through a wholesaler. But again, there was no evidence that they specifically talked to each other. They may have, but the government couldn’t prove it. But to use a common agent to then formulate a plan to set a common price and/or raise it, those are illegal under U.S. law. Again, if you can prove it.
Simone Del Rosario: We are entering an era where AI and algorithms are going to be ruling business. What sort of things can we take away from the fact that algorithms are going to be calling a lot of the shots more and more?
Spencer Waller: Antitrust is grappling with this. The basic requirement for violation of Section 1 in the Sherman Act is some agreement in restraint of trade. It doesn’t have to be a written agreement. It doesn’t even have to be a formal agreement. It can be approved by direct or circumstantial evidence.
If you saw a bunch of people and you asked them how much for an apple on the street, and they each said $0.4325, that would be kind of odd. And you look into it, and you try to see if they had some mechanism by which they coordinated that price.
Now, it would be a pretty cut-and-dry case if each real estate company or anybody else coordinated through an accountant, through a trade association, or just like some expert consultant. There are all kinds of cases like this, where if you feed this common, highly-proprietary, highly-detailed, forward-looking information to a third person who formulates recommendations and then the recommendations are followed. That has held in other circumstances, other factual circumstances, to be enough to show an agreement. And that’s what the government is alleging here. And the fact that it’s a permutation involving an algorithm rather than a human or an old-fashioned way of coordinating is interesting. But that’s acceptable in a legal theory. And again, the law is reasonably easy. The facts are hard.
Simone Del Rosario: What do you expect RealPage to come forward with to say this is not collusion and it’s not an antitrust violation?
Spencer Waller: Well, at this stage, a complaint has been filed. I’m going to put on my hat as a civil procedure professor rather than an antitrust person. What happens now is the defendant has a choice. They can either file an answer, which just says, you admit, you deny, or you don’t know about the allegation. They would admit that they’re RealPage and they’re incorporated wherever they’re incorporated. And they would then admit and deny the key paragraphs of the complaint. And then the case goes into discovery.
Most defendants in this situation file a motion to dismiss that says even if everything in the complaint is true, it doesn’t amount to a violation of the law. A judge has to decide that. As I understand it, the government’s case is going to be decided by a judge, not a jury. The judge has to decide a motion to dismiss and the judge has to accept everything in the complaint as true and then measure it up against the law.
And as I was saying, the law is supportive of the government’s case. They’re smart people. They have good lawyers on this. The states are important partners in this case. They have other very gifted antitrust lawyers who work on this in conjunction with the DOJ. A little bit’s about the predilections of the judge, but I would expect that this is a strong complaint that’s a good chance of making it through the motion to dismiss.
At that point, the defendants have kind of a moment of truth. Do they want to spend the time and money turning over all their documents and depositions and other information to the government, a bunch of which they’ve already had to do? So they sort of know what’s coming.
And at that point, given that nobody’s going to jail and the government doesn’t get any money out of this, I would expect them to have some serious conversations about settling this case if, again, if it survives that motion to dismiss. If the defendants are successful in their motion to dismiss, the case is over and the government would have to appeal.
New York City to use city land in massive housing expansion
New York City Mayor Eric Adams has issued an order to figure out what city-owned land would be best for housing development. The city is currently tackling an affordable housing crisis, as it struggles with a rental vacancy of just 1.4%
The order from Adams requires all city agencies from the New York City Police Department to the New York City Department of Parks and Recreation to look for city-controlled land that could be transformed into housing.
This is all part of a broader initiative by the Adams administration. The goal is 500,000 new homes by 2032 to help with that housing crisis. Mayor Adams emphasized that his administration is leaving “no stone unturned” in the quest to alleviate the housing shortage.
Projects like a recent rezoning in the Bronx will yield about 7,000 new homes, 1,700 of which are said to be below market rate.
The order also establishes a task force that will assess city-controlled land for housing potential and provide guidelines for agencies to support housing production.
Officials said they’ll explore every option, from garages to libraries, in order to deliver on their pledge to build half a million homes by 2032.
Kamala Harris’ economic plan is Biden 2.0 on prices, housing and child tax credit
Vice President and Democratic presidential nominee Kamala Harris gave the first real look into her economic agenda Friday, Aug. 16. The speech in Raleigh, North Carolina, marks the first major policy address given since she has taken over the top of the ticket.
Harris is looking toward the economy as it remains one of the top priorities for the majority of voters. The policies she laid out this week take those of the Biden-Harris administration a step further.
Price gouging
Harris said she supports a federal ban on price gouging. While most states have some sort of ban on the books in cases of emergency, this would allow the federal government and Federal Trade Commission to enforce laws nationwide.
“Look, I know most businesses are creating jobs, contributing to our economy and playing by the rules. Some are not and that’s just not right,” Harris said Friday. “And we need to take action when that is the case.”
Vice President Harris: As president, I will work to pass the first-ever federal ban on price gouging on food pic.twitter.com/NE4t50hpfc
President Joe Biden has made price gouging a key talking point of his presidency, especially in the case of pharmaceuticals. He touted allowing Medicare to negotiate drug prices and created a task force to deal with unfair and illegal pricing spearheaded by the Department of Justice and FTC.
“Too many corporations raise prices to pad their profits, charging more and more for less and less,” Biden said during his 2024 State of the Union address. “That’s why we’re cracking down on corporations that engage in price gouging and deceptive pricing.”
Sen. Elizabeth Warren, D-Mass., introduced a bill on a federal price gouging ban in the Senate in February. That bill makes it illegal for a person to sell something at a grossly excessive price, leaving the FTC to define what is considered “grossly excessive.”
But critics say an anti-price gouging policy is tantamount to price controls.
“Government-imposed price controls create scarcity and a vicious cycle of poverty and dependence on government. So naturally, Kamala Harris likes them,” Sen. Mike Lee, R-Utah, posted on X.
🧵 1. Government-imposed price controls create scarcity and a vicious cycle of poverty and dependence on government. So naturally, Kamala Harris likes them. pic.twitter.com/679Xn49FFA
Grocery prices have climbed 21% since Biden took office. Democrats often blame corporate greed while Republicans blame federal spending.
While grocers did see elevated profit margins during the height of inflation, an analysis by the Federal Reserve Bank of San Francisco said markups are not the main driver of inflation post-pandemic, claiming supply chain shocks drove prices up.
For his part, former President Donald Trump highlighted how he plans to bring down grocery prices on Thursday.
“We’re going to drill, baby drill, that’s going to bring down prices of everything, because energy brought it up,” Trump said.
Housing affordability
Harris is also building off of the Biden administration’s efforts to increase housing inventory and affordability. Biden outlined plans for 2 million homes during his State of the Union address.
“I’ve cut red tape so more builders can get federal financing, which is already helping build a record 1.7 million housing units nationwide,” Biden said in March. “Now pass my plan to build and renovate 2 million affordable homes and bring those rents down!”
Haris is upping the ante to 3 million housing units in her first term, including tax incentives for builders to expand supply.
“I know what home ownership means,” Harris said Friday. “It’s more than a financial transaction. It’s so much more than that.”
The vice president also proposed a $25,000 tax credit for first-time home buyers as down-payment assistance, a policy that would require approval from Congress.
Trump also addressed housing needs and lack of inventory this week.
“We’re going to open up tracks of federal land for housing construction,” Trump said Thursday. “We desperately need housing for people who can’t afford what’s going on now.”
Most federal land is controlled by the Bureau of Land Management, Fish and Wildlife, the National Park Service and the Department of Agriculture.
Biden called to make permanent the 2021 pandemic-era child tax credits at $3,600 per child. When the policy expired, it reverted to $2,000 per year.
“Restore the Child Tax Credit because no child should go hungry in this country,” Biden said in his address to Congress. “The way to make the tax code fair is to make big corporations and the very wealthy finally pay their share.”
Harris is looking to expand the tax credit and is also looking for a subsidy reminiscent of baby bonuses that would give parents $6,000 the first year the child is born.
“The costs can really add up, especially for young parents who need to buy diapers and diapers and clothes and a car seat and so much else,” Harris said.
This policy is where the campaigns of Harris and Trump are most aligned.
“We will support baby boomers and we will support baby bonuses for a new baby boom,” Trump said in August of last year.
Trump’s running mate, Sen. JD Vance, R-Ohio, laid out his own plan for the child tax credit over the weekend.
“I think one of the things you can do is make it bigger per child,” Vance said on CBS Face the Nation. “I think we’d love to see it at a higher dollar value. And again, President Trump and I have proposed that. I mean, look, I’d love to see a child tax credit that’s $5,000 per child.”
Despite the appearance of bipartisan support, a bill that would have extended the popular pandemic-era child tax credit failed to pass the Senate this summer.
More landlords offer incentives to get more renters
Rent prices have skyrocketed in the past few years, but renters might be finding a bit of an edge now. More rentals are sitting empty — leading landlords to look for ways to sweeten the pot.
Zillow said the share of listings offering incentives, like free parking or a few weeks rent-free, is up to 33.2%. That is a big difference compared to August 2023, when only 25.4% of landlords were offering incentives.
Zillow also said it found six metro areas where these deals are especially popular. More than half the rental listings on Zillow are offering incentives in Raleigh, North Carolina; Charlotte, North Carolina; Atlanta, Georgia; Salt Lake City, Utah; Nashville, Tennessee; and Austin, Texas.
According to the Bureau of Labor Statistics, housing accounted for almost 90% of the monthly increase in consumer prices across the economy in July, up 5.1% from last year. Zillow also said apartment rents are still getting more expensive, also up 5.1% over the past two years.
In June 2024, nearly 60,000 multifamily units were completed across the United States, according to government data — the biggest increase in supply since 1973. That made it harder for landlords to fill some units. The rental vacancy rate is 6.6%, the highest it has been since the winter of 2021.
What Elmo taught us about Americans’ mental health
It started out as a simple question, but it quickly shed light on something much more complicated. In January 2024, Sesame Street’s Elmo made an innocent post on X.
“Elmo is just checking in,” the character said. “How is everybody doing?”
That opened the floodgates. Thousands of people responded, voicing their issues with “existential dread,” mental burnout and overall dissatisfaction with daily life. That inspired Sesame Workshop, the popular kids’ show’s nonprofit, to take a deeper look at the state of well-being in America.
Sesame Workshop teamed up with research company The Harris Poll to survey more than 2,000 Americans aged 16 and older. They asked what people’s well-being priorities for the future are.
Ninety percent said mental health was a big concern, compared to 89% who said the same about physical health, economic security and personal finances, and having “a safe place to call home.”
More than two-thirds (67%) of those surveyed said they wish their parents had been more honest about their own mental health struggles. And nearly three-quarters (73%) of Americans said they wished they’d learned more about how to manage their emotions when they were children — including 84% of parents who took the survey.
What the latest inflation report means for mortgage rates as refinancing surges
After mortgage rates hit their lowest levels in more than a year last week, applications to refinance surged 35% compared to the previous week. The Mortgage Bankers Association Refinance Index is up 118% from a year ago.
The average 30-year fixed mortgage rate has gone from under 3% in 2021 to nearly 8% in October 2023, driven by movement from the Federal Reserve’s federal funds rate, the interest rate banks are charged for overnight lending.
Mortgage rates fell last week to 6.47% in anticipation that the Fed will lower rates after a weak jobs report for July. Following more softening in inflation in July’s consumer price index, the measure is 2.9% annual inflation, edging closer to the Fed’s 2% target, experts are pinning more certainty on a September rate cut.
Straight Arrow News interviewed Federal Reserve expert Kathleen Hays following the inflation release and got her thoughts on how it could impact the housing market. Hays is the editor-in-chief of Central Bank Central.
Below is an excerpt, edited for length and clarity. Watch the exchange in the video above.
Simone Del Rosario: We’ve seen mortgage rates go down to levels lower than they’ve been in more than a year. This is done in anticipation that the Fed is going to be cutting rates. So when the Fed does cut its rate, how are people going to be affected? Are rates going to come down even more? Has the air already been taken out of the tires because they’re expecting the cut? What’s happening there?
Kathleen Hays: Well, of course, we had the big bond market rally so that’s pushed deals down a lot. And that was one of the things, of course, that intensified after we got the Fed decision and then the unemployment rate going up, making people that much more worried about it.
Of course, that’s the direct link between mortgage rates and the bond market, right? The 10-year-note yield, when it goes down, you’re going to see mortgage rates come down too.
On a human level, doesn’t anybody know somebody who’s trying to find a house and they can’t because people still don’t want to move out of their low-mortgage-rate mortgages? They don’t want to sell their house yet. Doesn’t anybody want to sell their own house and they figure, well, I don’t know, the mortgage rates are so high, maybe I’ll wait.
Part of the issue with the how much home prices will come down is the fact that inventories are low. And when the Fed cut rates so much during the pandemic, there was a huge bout of home buying, and that’s another reason why, even with somewhat lower [mortgage] rates now, the home sales are not up that much yet. But I think it’s a very important factor right now.
Now, if someone could get a 5.5% mortgage, they would snatch it up, right? And when it got so low, ‘Oh God, if I had to pay 3.75%,’ you know? So it’s a very powerful thing that could happen.
As the Fed starts cutting rates, presumably yes, bond market will rally, you’ll get yields coming down more, and that’s going to fade through and be a very important factor. So that’s kind of in abeyance right now, but it’s a little bit complicated, and home prices are much higher than they were.
Home affordability is so much worse than it was, partly because of what happened back during the pandemic, but it’s something to look forward to. And in terms of the housing industry, [there are a] lot of calls for, ‘We need more homes now.’
That’s the thing. We need more construction. Well, if I’m a contractor, if I’m a developer, if I’m a builder, if I can see mortgage rates coming down, presumably that would encourage me that that’s going to heat up the market, and it’s going to make more sense for me to do that.
Research finds installing solar panels on your home could increase its value
Homeowners looking to increase the value of their properties may want to consider installing solar panels. According to data from Solar Reviews, a platform that helps consumers compare solar companies across the U.S., houses with solar panels tend to sell for 7% more than those without.
For example, a home valued at $450,000 could see a price increase of about $31,500 with the addition of solar panels. Given that the average cost of installing a residential solar system is around $19,000, this potential increase in home value could not only cover the installation costs but also provide the homeowner with an additional profit of $12,500.
Research also suggests that homes equipped with solar technology not only sell for higher prices but also tend to sell faster. According to Rocket Homes, properties with solar panels spend about 13% less time on the market compared to homes without them. This trend could be linked to the growing attention and interest these energy-efficient features bring to property listings.
Supporting this, a survey by the National Association of Realtors found that nearly two-thirds of real estate agents observed increased interest from buyers in homes that offer energy-efficient features, such as solar panels. This sentiment is echoed by a Davidson Homes poll, which reported that 50% of homebuyers consider energy efficiency to be the most important feature when purchasing a home.
How much sway does Fed’s interest rate policy have over residual inflation?
The latest consumer price report released on Wednesday, May 15, showed a slight easing of inflation in April. It was led by lower grocery prices and declining auto prices, both new and used. The Bureau of Labor Statistics said overall consumer prices rose 3.4% on the year and 0.3% on the month, with shelter and gas prices accounting for more than 70% of total monthly inflation.
Meanwhile, core inflation — which excludes food and energy categories — rose 3.6%. That is the lowest annual increase for core prices since April 2021.
Every bit of new economic data brings speculation on the Federal Reserve’s next move with its interest rate policy. The Fed has very few tools to help bring down inflation; the one it has used the most is hiking interest rates.
The Fed has vowed to keep interest rates restrictive until there is clear evidence inflation is on its way to the preferred 2% target. While markets had initially predicted the Fed would cut rates six times in 2024, now even two rate cuts is an optimistic stance.
“We’ve had a lot of trouble getting inflation down and I think there’s also the argument there where it’s like, ‘Are the Fed’s tools even the right tools to be fighting inflation? Are interest rates even something we should be paying attention to?’” said Kyla Scanlon, an economic commentator and author of “In This Economy? How Money & Markets Really Work.”
“Shelter inflation is a huge contributor to the print that we see in the consumer price index,” Scanlon said. “Auto insurance — something that can’t really be controlled by interest rates in a really big way — is also a huge part of the CPI print.”
Motor vehicle insurance is up 22.6% over the past year, according to the latest CPI report. Shelter is up 5.5% on an annual basis. Both are areas of spending that are necessary. In the latest inflation report, shelter and gas prices comprised more than 70% of the monthly increase for all consumer items.
In an interview with Straight Arrow News, Scanlon spoke more about Americans feeling negative about the economy in contrast to the data, where inflation is slowing, unemployment is low and wages are up. Below is an excerpt from that interview. Watch the exchange in the video above.
Simone Del Rosario: You were really at the forefront of the bad vibes economy that we’ve unfortunately been living in for a couple of years now. We’ve gone through a lot. But I wanted to ask you, what is the biggest source behind the current bad vibes?
Kyla Scanlon: I don’t know, I’ve spent two years trying to figure that out. I mean, I think it’s really tough. We have a structural affordability problem; the housing market is a nightmare, inflation is a pressure cooker.
It would be silly to think that just because inflation is going down — so things are getting less expensive, less fast — that people would be feeling better. So I think that we have these structural issues that maybe aren’t being addressed as quickly as people want. That’s leading to negative consumer sentiment.
And then you can point to things like media headlines being extraordinarily negative. You can point to the polarization. The United States is just really disconnected right now. We all feel it, we all see it.
I think in that sort of environment, it’s difficult to have positive consumer sentiment, even if GDP is going up, even if the labor market is doing okay, even if inflation is slowing down. There are real reasons behind the negative consumer sentiment despite a relatively okay economy.
Simone Del Rosario: I like to say that there are the prints and then there’s the perception. You’ve talked about needing to be really good at media literacy when trying to navigate this. How much do you think the bad vibes are driven by this negative news coverage?
Kyla Scanlon: I think a lot. I feel like it’s sort of lazy to be like, ‘It’s just the headlines,’ but if you have a negative word in the headline, the click-through rate increases by 2.3%. If you have a positive word, the click-through rate decreases by 1.9%. So I think that sort of statistic just tells us quite a bit about what people are clicking on and what they’re consuming.
So I do think there is this framing issue that the media has just because of the inherent business model. And of course, you’re going to feel bad if everything you read is bad.
Straight Arrow News also spoke to Scanlon about the impact proposed tariffs on China could have on inflation. You can watch that interview here.
