In reaction to President Trump’s remarks on improving the affordability of housing by getting corporate landlords out of the market the editors of the Washington Post declaim:

One of the most common types of small business in the United States is to own rental property. The median landlord owns two properties. It’s a side gig where people can make some money in addition to their full-time job by providing someone else a place to live.

Large investors, those with over 100 properties, own 1 percent of U.S. homes. Yet, detractors on the left and right have made them into villains who are scooping up houses from hard-working families.

concluding:

The problem with housing is that there isn’t enough of it. Government shouldn’t care who buys it. It should be looking for ways to make it easier to build more of it, which will mean getting out of the way. Scapegoating investment bankers is always politically popular, especially in an election year, but it won’t do anything to make housing more affordable.

I concur with the editors but I would go one step farther. They are pretending this is a purely market problem, when in fact it is a governance coordination problem. Repurposing the “Micawber Principle“:

Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Construction permits an increase of .5% of housing stock, annual “natural increase” .5%,—result happiness; construction permits an increase of .5% of housing stock, total population increase including “natural increase” and immigration 2%—result misery.

In any market, when supply is locally constrained and demand is nationally determined, the locus of political control becomes the problem. That is precisely the structure of U.S. housing. Construction permits impose a hard ceiling on the pace of housing supply. When construction permits are scarce, markets do not equilibrate through building they equilibrate through price.

If housing completions grow at roughly the rate of natural household formation, but population growth is driven materially higher by immigration, the arithmetic guarantees rising prices. This is further complicated by the reality that increases in the demand for housing are not uniform throughout the country. It may increase by .5% in Cook County but increase by 5% in Dallas Texas’s Main County. Even a national immigration policy that is statistically manageable becomes locally catastrophic when its effects concentrate in a handful of metros.

Even aggressive housing reform operates on a 5–10 year horizon. Immigration policy operates on a 6–12 month horizon. When those are misaligned, shortages are guaranteed. Yes, some immigrants work in construction. That does not negate the arithmetic of net demand, nor does it eliminate zoning, land, and infrastructure constraints. This is not an argument about who should be allowed into the country. It is an argument about whether the federal government should impose demand shocks on local systems it does not control.

My preferred solution is for state and local governments to streamline and increase the number of construction permits issued while the federal government constrains the increase in the immigrant population to something we can support. A nation that nationalizes demand while localizing supply has chosen permanent scarcity. That is not compassion. It is policy malpractice.

The other topic I wanted to discuss this morning involves the several incidents of people being shot by federal law enforcement officers. First, a woman was killed by an ICE officer in Minneapolis. Victoria Albert, Alyssa Lukpat, and Joseph Pisani report at The Wall Street Journal:

A U.S. Immigration and Customs Enforcement officer fatally shot a woman during an operation in Minneapolis on Wednesday, leaving federal and city officials sparring over what caused the deadly encounter.

The Department of Homeland Security said that the woman attempted to run over law-enforcement officers and that an agent fired in self-defense. Minneapolis Mayor Jacob Frey said he had seen a video of the incident and in fiery remarks disputed the department’s version of events as “bull—t,” telling ICE to get out of the city.

“This was an agent recklessly using power that resulted in somebody dying,” he said during a news conference Wednesday. He said the woman who died was 37 years old. When asked if the woman was using her vehicle as a weapon, as DHS alleged, he said “that does not appear to be the case at all.”

These incidents are not isolated. They are the predictable result of an unstable mix of inconsistent border enforcement, sanctuary policies, aggressive federal enforcement, and an increasingly confrontational public culture.

My parents taught me that when a law enforcement officer tells you to stop you do it. Tragically, the woman who was killed did not follow that advice.

They also taught me that authority does not excuse recklessness, and that those who wield state power bear a higher burden of restraint.

IMO the ICE officer should be placed on administrative leave, the federal district attorney should investigate the incident, and, if probable cause is found, the officer should be prosecuted to the full extent of the law. Experience suggests that no one will be satisfied by the outcome.

That seems to be very much what is happening in the case of another ICE shooting in Oregon. Claire Rush and Gene Johnson report at the Associated Press:

PORTLAND, Ore. (AP) — Federal immigration agents shot and wounded two people in a vehicle outside a hospital in Portland on Thursday, a day after an officer fatally shot a woman in Minnesota, authorities said.

The shooting drew hundreds of protesters to the U.S. Immigration and Customs Enforcement building at night, and Oregon Attorney General Dan Rayfield vowed to investigate “whether any federal officer acted outside the scope of their lawful authority” and refer criminal charges to the prosecutor’s office if warranted.

The Department of Homeland Security said the vehicle’s passenger was “a Venezuelan illegal alien affiliated with the transnational Tren de Aragua prostitution ring” who was involved in a recent shooting in the city. When agents identified themselves to the occupants during a “targeted vehicle stop” in the afternoon, the driver tried to run them over, the department said in a statement.

It has also been reported that the state authorities are investigating the incident.

In addition to supporters of different political parties taking opposing views of the incidents there appears to be a recurring argument between those who think the laws should be enforced and those who do not. That as made quite clear in the mayor of Minneapolis’s statement, quoted above.

Under our present circumstances, every enforcement action is perceived as provocation, every protest as insurrection, and every tragedy as evidence of bad faith.

There are a couple of things I wanted to comment on this morning. The first is President Trump’s remarks about the limits of his global power reported by Isabela Murray and Michelle Stoddart at ABC News:

President Donald Trump reportedly told The New York Times that his “own morality” serves as the thing that could potentially limit his global powers — adding that he doesn’t “need international law.”

As part of a wide-ranging interview with The New York Times published Thursday, Trump was asked Wednesday whether there were any limits to his global powers.

“Yeah, there is one thing. My own morality. My own mind. It’s the only thing that can stop me,” Trump reportedly said to The New York Times.

That highlights why I have never voted for Donald Trump. He inhabits a different world from the rest of us. I think the Japanese have a word for it—betsu sekai, a separate world. F. Scott Fitzgerald put it well in The Rich Boy:

Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft where we are hard, cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand.

That applies just as well to John F. Kennedy as to Donald Trump. They can never really understand us and vice versa and, importantly, we can’t just rely on their good will and good judgment. In a constitutional system built on external restraints including laws, institutions, and norms, any leader who believes only his own conscience limits him is already operating outside the system’s logic. Trump is dangerous because he is unbounded and morally under-equipped.

The editors of the Washington Post point to the “U-Haul index”:

You’ve heard of voting with your feet. What about a referendum via U-Haul?

The rental company released its annual growth index this week, which measures the net gain or losses in one-way customers taking their trucks from one state to another, based on over 2.5 million transactions. Texas claimed the top spot for growth. That’s the seventh time it’s happened in the last decade. Florida, South Carolina, North Carolina and Tennessee rounded out the top five. Nine of the top 10 growth states voted red in the last presidential election.

The states with the lowest growth were the usual suspects. California came in last. Massachusetts, New York, Illinois and New Jersey rounded out the bottom five. Of the bottom 10, seven voted blue in the last election.

concluding:

U-Haul’s results don’t correlate perfectly with population or economic growth, but they underline domestic migration patterns: People want to live in pro-growth, low-tax states, while the biggest losers tend to be places with big governments and high taxes. The consequence of state policies trickle down to the metropolitan level. The top three growing metro areas — Dallas, Houston and Austin — are in Texas. The 10 biggest growth cities are all in Florida, South Carolina and Texas.

The plaint that people are just moving to places the weather is nicer doesn’t withstand California’s losses of population. As it turns out California’s flirting with a wealth tax impels wealthy people to move elsewhere.

Taxes are not the only variable but they are the variable policymakers actually control and voters appear to be responding.

Party loyalty ain’t what it used to be. Especially when tax policy collides with personal balance sheets. Popular sentiment is one thing; established power bases are another and the two are rather clearly in conflict. It’s hard for me to see how the states that are losing population avoid a fiscal death spiral as their tax bases shrink leaving their obligations remain.

Here are Karl Rove’s predictions for 2026 from his piece in the Wall Street Journal:

What does my 2026 crystal ball say? The House goes Democratic; the Senate remains Republican. The GOP breaks even on governorships. Pennsylvania Gov. Josh Shapiro emerges as the 2028 Democratic hopeful who most helped himself. The MAGA civil war grows.

The Supreme Court affirms birthright citizenship, allows political parties to raise unlimited contribution, and rules against Mr. Trump on tariffs. He imposes new ones based on different authorities, some limited in duration or requiring congressional approval. The U.S.-Mexico-Canada Agreement is renewed with modest changes.

The House approves a majority of appropriations bills under regular order. Congress keeps the government running after Jan. 30 with a continuing resolution and no significant shutdown. Congress overrides a Trump veto.

Americans don’t get a $2,000 tariff rebate. Republicans can’t pass major healthcare reform. Inflation stays above 2% and GDP grows less than in 2025. The S&P 500 rises less than half of 2025’s increase.

The Trump Gold Card—permanent residency for $1 million—generates huge demand. The Kennedy Center isn’t the last building or program on which Mr. Trump tacks his name. He ends December with lower approval than today.

There’s no Ukrainian peace deal. Realizing Vladimir Putin is playing him, Mr. Trump steps up support for Kyiv. Russia increases hybrid warfare against the West. Greenland stays Danish but with a bigger U.S. military presence. Center-right parties win in at least two more European countries.

Nicolás Maduro’s fellow gangsters remain in office, but Venezuela moves toward elections. Growing unrest in Iran forces the mullahs to make economic reforms, crimping their terror activities.

More states and countries ban cellphones in schools. Generation Z church attendance rises. Led by GLP-1 drugs, weight loss will accelerate.

Norway wins the most Winter Olympics medals. England takes the World Cup, the Broncos the Super Bowl. Matthew Stafford is NFL MVP. No Oscar picks: The Academy has lost its mind.

Whether you agree with his political views or not, that he has considerable insider access cannot be denied. I materially concur with his predictions with a few exceptions.

I don’t think it matters whether Josh Shapiro helps his notional presidential campaign or not. He won’t be the Democrats’ 2028 candidate for president. Picking him would fracture their coalition by alienating key elements of the activist base and minority constituencies.

The SCOTUS predictions are consistent with the court’s originalist and textualist bent although the confidence with which Rove asserts them exceeds what the Court’s recent pattern of selective restraint would justify.

The economic predictions are basically betting on a continuation of trend which is safe, unoriginal, and often wrong at turning points.

I have no idea about sports outcomes. The sports predictions are filler, included more for personality than analysis.

And he’s right that the Academy of Motion Pictures Arts & Sciences has lost its mind which is now a predictable feature of most legacy cultural institutions.

While I’m on the subject of global conflict, I thought I would call attention to the thoughts of the editors of the Wall Street Journal on the riots going on in Iran:

President Trump warned Iran’s regime on Friday on Truth Social that “If Iran shots [sic] and violently kills peaceful protesters, which is their custom, the United States of America will come to their rescue. We are locked and loaded and ready to go.” By then Iran had killed at least eight protesters. Now the death toll is at least 36, according to the Human Rights Activists in Iran group. Regime thugs are raiding hospitals to arrest the wounded.

Statements from Mr. Khamenei, his judicial chief and the Governor of Tehran suggest the regime is preparing a new crackdown. The latter gave a green light to shoot “rioters,” which is how Iran’s authorities have long painted protesters who challenge the regime.

Mr. Khamenei is testing Mr. Trump and even more so his own people. Despite food inflation over 60% in 2025, Iran said Monday that a new policy will cause prices of essential goods to increase, perhaps by between 20% and 30% in the coming weeks. The idea is to end some importers’ preferential dollar-exchange rate—which had fed arbitrage and corruption and undermined the rial—and replace it with direct consumer subsidies.

They continue by pointing to the Iranian regime’s financial problems and lament:

Today’s protests aren’t yet large enough to topple the regime, but the combination of now-undeniable failures and new American pressure raises the chances. This isn’t 2009, when Barack Obama stayed mute to appease the Ayatollah.

IMO the United States has erred with respect to Iran repeatedly over the period of the last 45 years, beginning with President Carter’s handling of the ouster of the Shah. Our compromising of our own intelligence resources there is a case in point. I have no idea how the Iranian people would react to an intervention there by President Trump and I don’t think U. S. intelligence is that much better off. That’s how badly we’ve bungled things.

As flawed as the Shah’s regime was Iran was one of the linchpins of our Middle East policy. Since his fall, that policy has been something like the final scene in the movie The Red Shoes. The ballet goes on but something essential is missing.

I am not confident that we could simultaneously manage a land intervention in Iran, “run” Venezuela, supply the Ukrainians, and enforce our sanctions against Venezuela in as muscular a fashion as we have recently. We have the military resources to it; it’s our ability to manage them concurrently that I doubt. The United States is now acting as if it still inhabits a world of discrete, sequential crises when it is actually in a world of concurrent, compounding ones.

Perhaps the Israelis have more insight into Iran. Their intelligence on the ground there seems to be better.

The editors of the Washington Post remark on the U. S. military’s boarding and seizure of a Russian oil tanker off Iceland:

Wednesday’s daring boarding of the sanctioned oil tanker Marinera off the coast of Iceland by U.S. Special Forces brings to four the number of ships seized by the Trump administration as part of its enforcement of an oil embargo against Venezuela. Secretary of State Marco Rubio told reporters the seizure was part of “stabilization” efforts for Venezuela.

That sounds more like an action in a low intensity global conflict than stabilization to me but I’ll withhold judgment for anow. “Stabilization” greatly understates the seriousness and scale of the actions taken not to mention presenting serious military and legal risks. Robust terminology matters in public discourse.

I agree that economic sanctions need to be enforced; I am less certain that this was the proper means of enforcement.

They continue:

Look closer, and a different valence emerges to this story: The whole episode has Cold War overtones, with a hint of Tom Clancy. Taken as part of broader trends, the successful operation suggests Trump has markedly cooled toward Russian President Vladimir Putin.

I’ll interrupt again here. There’s a wry observation that President Trump believes whoever he spoke to most recently. Apparently, he hasn’t spoken with President Putin recently. The editors’ inference that Trump’s attitude toward Putin has ‘markedly cooled’ rests on anecdotal evidence and is, at best, thin.

And again:

This tanker, previously known as the Bella 1, was registered in Panama. It left Iran in late November and sailed to Venezuela. Days after its crew repelled a U.S. Coast Guard attempt to board, the Kremlin hastily allowed it to reflag itself as a Russian vessel, waiving all normal procedures for doing so. The Bella 1 then changed its name to the Marinera and set sail toward Russia.

Once it was officially registered as Russian, the Coast Guard suspended attempts to board. But the Trump administration kept tracking it. This week, U.S. officials said Moscow had deployed a submarine and other naval assets to meet the Marinera and escort it. The Kremlin reportedly asked the U.S. to back off and said it was monitoring the situation “with concern.” To their credit, the Trump administration ignored Moscow and took the ship anyway.

This isn’t the first time Trump has flipped Putin the bird in the past week. “I’m not thrilled with Putin. He’s killing too many people,” Trump icily said during his news conference after Saturday’s snatch-and-grab operation against Nicolás Maduro.

For me the most interesting part of the editorial is this:

Since Trump’s Dec. 28 summit with Zelensky, which at the time looked quite promising, even more substantive progress has been made. Special envoy Steve Witkoff and Trump’s son-in-law Jared Kushner met this week with Ukrainian and European leaders. The document that emerged from their talks shows the U.S. taking the lead on ceasefire monitoring and Europe taking the lead on fielding a multinational ground force to deter future Russian aggression. The self-described Coalition of the Willing has also pledged to finance the ample arming of Kyiv and even gestured at prepositioning weapons for easy access should war break out again.

which, as readers may notice, is very much what I have been proposing for more than a year.

To my eye, the critical questions are not whether the United States and our European allies make good on their promises, but rather: (a) what European peacekeeping forces do if they come under Russian fire, and (b) how the United States responds if they do. At present, I have little confidence that either question has been seriously answered.

At Quartz, Catherine Baab reports that the “white-collar contraction” is continuing. Job losses are concentrated in sectors most closely tied to business confidence and corporate investment: professional and business services shed 29,000 jobs, information services lost 12,000, and manufacturing employment also declined. These losses were offset by gains in education, healthcare, leisure, and hospitality—sectors that are largely insulated from economic cycles because demand remains relatively steady regardless of growth conditions. Employment also fell noticeably on the West Coast, particularly in California, Oregon, and Washington, a further signal of retrenchment in tech-, consulting-, and media-heavy job markets.

Healthcare alone accounts for nearly two-thirds of the offset. That is not a market-driven expansion but one sustained by subsidies, third-party payment systems, and licensing regimes. In other words, the growth is occurring in protected, regulated human-services sectors while contraction is concentrated in the very white-collar, credentialed, “knowledge” fields that were supposed to define the modern economy.

This is not just a cyclical adjustment. It is beginning to look like a structural shift. The tech–consulting–media complex that underwrote the last quarter-century of professional-class expansion was built on assumptions of perpetual growth, cheap capital, and human cognitive scarcity. All three are now being challenged. The so-called “knowledge economy” is showing signs of having been a historical interlude rather than a permanent settlement.

Maduro has been indicted; let the lawfare begin! As for Venezuela’s fate we can only speculate. Despite President Trump’s confidence that we’ll “run Venezuela” the regime in Caracas doesn’t seem to be going anywhere.

Let’s do some wild speculation about what might happen to get our arms around the possibilities. As I see it the following have various degrees of likelihood:

1. U.S. “runs” Venezuela until free, fair, and democratic elections are held. Venezuela becomes a liberal democratic ally of the United States.

This is the best case scenario. I consider this possibility extremely unlikely. It would require the collapse of the Chavista regime, temporary U. S. or multinational control, a complete rework of Venezuela’s security sector and judiciary, and huge capital inflows.

The honest reality is that there is so much opposition to this scenario it’s hard to see how it could happen. The U. S. doesn’t have the will to make it happen. Venezuelan elites are likely to resist literally violently—they have an enormous amount to lose, not just their livelihoods but their lives. Russia and China are unlikely to sit idle while all of this is going on.

2. Iraq redivivus

In this scenario there would be forcible regime change followed by chaos in which an insurgency arises. In my opinion the probability of this is low. Venezuela is not Iraq and U. S. public opinion would be very much against it.

3. The Chavista regime stays, makes reform promises, but doesn’t deliver.

This would be the classical response of an authoritarian regime. Announce electoral reforms, release a few political prisoners, signal openness to investment, get sanctions relief then stall and backslide. I think the likelihood of this scenario is medium to high. It is quite consistent with the behavior pattern of this regime.

4. The Chavista regime stays but there are no real reforms or no foreign investment.

Basically, things just muddle through. Venezuela gets continued support from China and Russia. IMO the likelihood of this scenario is medium.

5. There is an internal coup.

IMO the likelihood of this is low.

I think it’s instructive to think about the analogies to Iran and Cuba with Zimbabwe as an object lesson.

In the Iran case Venezuela would remain a sanctioned oil state with a culture of evasion and transactional détente. Although superficially that seems likely Venezuela does not have the ideological framework Iran has or the accompanying institutional stability.

Cuba, too, has some superficial similarities but Venezuela has an oil and smuggling economy. It is not a closed island economy like Cuba.

In the Zimbabwe case we see an ongoing economic collapse, hyperinflation, and retrenchment of the ruling party. However, Zimbabwe is not a strategic oil state and it doesn’t have a security partner (Cuba) as Venezuela does.

None of these analogies is particularly close.

Please feel free to add your own prognostications in comments.