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I've seen a ton of pro-abundance people criticize the news that Trump is considering normalizing 50-year mortgages. However, most of this criticism seems deeply misguided to me. My best guess is that the Trump administration is attempting smart deregulation that partially rolls back decades of bad federal policies. These policies limited people's choices and were partly responsible for home loans being unavailable to many young people. While it's not clear yet what Trump intends to do to promote 50-year mortgages, a plausible interpretation of the news is that he simply intends to deregulate mortgage term limits and lender liability rules. Specifically, he would direct regulators to amend rules so that the 30-year cap in the "Qualified Mortgage" definition is lifted and so that Government-Sponsored Enterprises (GSEs) are permitted to purchase 50-year mortgages. This matters because the existing Qualified Mortgage rule limits so-called "safe-harbor protection" to fully-verified loans of 30 years or less. This means issuing a longer or looser loan exposes lenders to Ability-to-Repay lawsuits and penalties. For context, an Ability-to-Repay lawsuit is a borrower claim that a lender failed to meet federal underwriting requirements. This creates after-the-fact legal exposure that raises credit risk to creditors, and is a big factor discouraging mortgage lending. These lawsuits were created as part of the lending regulations in the Dodd-Frank Act of 2010 intended to protect borrowers from "predatory" and "irresponsible" lending. But really this just means paternalistically restricting borrowers from making certain choices, allegedly for their own good. The predictable result has been fewer credit options, higher compliance costs, and slower housing-market adjustment, making it harder for people to secure mortgages to buy homes. I've seen many people complain about this announcement from Trump by claiming that this move is simply "subsidizing housing demand" and that we should deregulate housing construction instead. But this critique seems fundamentally wrong to me. First of all, the federal government can't really do much about housing regulations, except maybe by appointing radical Supreme Court justices and threatening state governments to change policy, so it's not really fair to critique Trump for not deregulating housing. But more fundamentally, this type of move is totally different from simply subsidizing housing demand. In a simple economic model, housing prices should be equal to the present value of expected future rents, meaning the price reflects the discounted value of all future housing services that a property can provide. Loosening mortgage regulations should not increase those future rents or change the discount rate; it only reduces financing constraints that determine who can buy a home. This would mean the market would merely allocate housing more efficiently, with some consumers choosing to buy under flexible terms and others renting, instead of everyone being forced into the same rigid 30-year structure that suppresses legitimate variation in borrowing and ownership preferences. This looks nothing like "make the government subsidize housing while restricting supply". Instead, it's exactly the type of thing pro-abundance people should be cheering: Trump is targeting precisely the most relevant federal regulations that make it harder for young people to secure capital to buy housing. These regulations contribute to delaying when people become homeowners, particularly for borrowers with high debt-to-income ratios such as young people with substantial student debt.
You might think that Trump would be implicitly subsidizing the housing market by letting the GSEs Fannie Mae and Freddie Mac buy 50-year mortgages. The argument here is that investors expect the government to bail out the GSEs if they ever face losses, an expectation created during the 2008 financial crisis, when the government took them into conservatorship and provided Treasury funding support. Because investors still price their securities as if that protection exists, expanding what the GSEs can buy is often described as an implicit government subsidy to housing finance. But this argument is misleading. In fact, Trump has taken steps to end the very conservatorships that created those expectations. In 2019, he ordered the Treasury to produce a plan to end them. The Treasury and the FHFA then revised their PSPAs so the GSEs could keep capital. More recently, in May 2025, Trump said he was working on taking Fannie Mae and Freddie Mac public. In October 2025, FHFA Director William Pulte confirmed the administration is working toward ending the conservatorships. I personally think Trump should go even further than merely ending the conservatorships and taking the GSEs public. However, if he does accomplish this and then deregulates mortgage rules afterward, it wouldn't really create a meaningful subsidy. Instead, there would mostly just be a more open credit market. Even though we should obviously *also* be deregulating local housing rules, this type of federal deregulation seems straightforwardly good from the perspective of consumer welfare. This becomes clear once you understand the fundamental economic trade-offs between renting and buying a home through a loan. Unfortunately, I suspect this consumer welfare argument isn't intuitive to almost anyone. The vast majority of people have a poor understanding of the relevant trade-offs when choosing between renting and buying an asset using a loan. This poor understanding causes them to say misguided things about the housing market and what laws we should adopt to fix the alleged problems in this market. So let me explain some of the basics. Contrary to popular misconception, when you buy an asset like a house with a loan, you own the asset from day one, both economically and typically legally as well. The lender doesn't own it. They just hold a security interest that gives them the right to repossess it if you default. This is fundamentally different from renting because renters have no property rights: they can't sell, mortgage, or alter the asset, and their use is limited by a lease agreement that can be terminated. This is the most fundamental economic justification for choosing between renting and taking out a mortgage to buy a house. Different people have different preferences about how much they care about acquiring housing property rights, suggesting that some people should buy housing and others should rent. Good housing policy should not be about protecting people from "greedy" lenders, but instead about recognizing variation in preferences, and ensuring that the market can provide options tailored to people's individual circumstances so they can better obtain a housing situation that fits their needs.
RT @paulsperry_: NEW: This the $2.5 mil, 4,316-square-foot family home of Lina Maliha Khan, the ethnic-Pakistani socialist who's leading Zo…
AI Optimist. Empiricist, not 'rationalist'. Anti world government.
Revisiting Tokyo after almost 15 years away. I spent about 8 years living in this city, in my 20s. I'm happy to say that it really has not changed much. Still the most safe, calm, respectful, walkable major city in the world, with efficient transport and endless food.
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I don't want to undermine anyone's work but can someone explain how can a model score > 50% on humanity's last exam and still fail on ALL my λ-calculus questions, including the easiest ones that even gpt-oss gets right?
Kind / Bend / HVM / INets / λCalculus
Perhaps the greatest shortcoming of the present generation of university presidents in the United States is their inside focus on administration, on money-raising, and so on. Yet no other administrator in the large university is free to establish contact with the students who are the university’s “customers.” Alienation of the students from the administration is certainly a major factor in the student unhappiness and unrest - Peter Drucker, The Effective Executive (1966)
Wonderer. Amor fati. Scaling trust.
📣I'll be in Delhi mid-December--to speak on 14th at https://t.co/zAkyByzBmV in @iitdelhi. I may have some time the couple of days after that and am happy to meet with folks to discuss things #AI.. (DM/email).
AI researcher & teacher @SCAI_ASU. Former President of @RealAAAI; Chair of @AAAS Sec T. Here to tweach #AI. YouTube Ch: https://t.co/4beUPOmf6y Bsky: rao2z