Even prior to tariffs, life in America was already unaffordable. The usual talking heads tried to play down the idea of inflation by changing the definitions, excluding key metrics such as housing, energy, education, and heath care (the biggest expenditures for the average American, by far) from the numbers in order to maintain the "low inflation rate" narrative.
On the ground, everyone knew the truth - that everything was getting too expensive, and the jobs did not pay enough. People were priced out of the cities, homelessness rates spiked, crime was on the rise, and overall, the quality of life in the US was going down, regardless if you were rich or poor. All the data, experts, and studies showed that this was true - but nothing was done about it so things just got worse over time, not better. What went wrong?
Aside from tariffs and federal taxes, there is one thing that affects the costs of all things - housing. When rents are high, the cost of doing anything - including the act of existing in itself - becomes more expensive. Higher rents mean higher overhead to businesses, less income for workers, which means less spending, slower economic growth, corporate monopolization, higher wealth inequality, longer commutes (which means more pollution), less jobs, less savings, urban flight - all the "core" problems that people on both sides of the political spectrum complain about can be traced to that one thing Americans also obsessed about - the idea of owning land..."The American Dream".
In the 1970s back when homeownership was still affordable, that dream was still alive. For most Americans now, that idea now feels far distant - if not, impossible. Even for those who were lucky enough to make the cut, the dream has turned into a nightmare because of the costs of maintenance and taxes have all gone up, too. (The "housing rich, cash poor" population, as we call them.) The "great unraveling" that we're witnessing now already started a long time ago - but as we get closer to reaching its climax, the symptoms of it are just becoming more obvious.
The political turmoil, tariffs, the rise of populism and the presidency are all symptoms, not the cause. If you want to look at what actually caused all of this, you have to look at all the things that lead up to it, mostly of topics people avoided talking about and what was never broadcasted in the media due to its unpopularity: zoning policies. More specifically, the rampant NIMBYism that has plagued both parties for the last half-century and why that ended up leading to America's decline.
If you're unfamiliar - NIMBY stands for Not In My Back Yard - where homeowners block "undesirable" housing construction in their local neighborhoods due to personal or superficial reasons unrelated to need. The most common example is wealthy homeowners opposing the construction of condos or apartment complexes because it would "ruin their view", or it would bring in "undesirables" into their neighborhood - i.e. the poor. While blatantly classist, because US regulations tend to favor local governments over federal ones in terms of its zoning policies, NIMBYism has basically been the norm in American land-use policies for several decades now, and is the reason why the country faces an affordability crisis today.
NIMBYism is basically an irrational, incoherent point of view since it is bad for everyone, including the homeowners themselves. It's bad for businesses because high rents increase the barrier to entry and prices out competition. It's bad for progressive ideas because it gives massive leverage to classists and bigots who want to keep "certain people" out of their neighborhoods, without any sort of due-process. (Look up "redlining" if you want to see a more explicit form of this put into practice.)
It's even bad for the NIMBYs themselves, because when the people can't live near where they work, prices go up, service declines, and your quality of life also goes down as a result. The most tragic example of this is where children of homeowners can no longer afford to live in the neighborhood they grew up in - and end up moving on not because of want, but necessity. And as these homeowners age, they're left wondering why their kids don't visit them more often or become distant - it's because they can't afford to, sadly. Sometimes, it's as simple as that.
There are lots of surface-level "explanations" that try to explain these trends to people, but since most of them avoid the core reason - NIMBYism - they are largely to distract, not inform. So given that people are talking about the wrong things, nothing gets done, and society just continue to unravel over time, regardless of who's in charge or what party has the majority votes - it's an ideology that permeates everywhere and crosses party lines and exists in both public and private sectors, at every level.
The Great Collapse
There were many warning signs leading up to this point (homelessness, crime, normalization of school shootings in affluent neighborhoods, rising inequality, etc.), many of them well-documented and echoed by virtually all of the experts out there. But since Americans chose to ignore rather than address these problems, we have reached a point of no return where these problems get "fixed" by the system itself collapsing and having to start anew. (The fetishization of "Creative Destruction" in tech probably didn't help - they're getting what they wanted, in a way.) So there will be no "soft landing" - this will be a face plant right into the concrete, and perhaps that will knock some sense into the way things are done after we bleed out for a while. It will not be a pleasant experience for most, either way.
Most people (including myself), thought that this would come in the form of a big crash in the real-estate market. People are leaving US cities in droves right now, demand is at an all-time low, but the prices still remain stubbornly high. A lot of people are still holding onto the idea that America is "still great", and people actually want to be there. The numbers say otherwise - California lost enough people to lose a house seat, and is projected to lose a few more in a decade, given projections right now. "Delusional" - as some experts have called it.
But given that the current president comes from a real-estate background, he wasn't about to let that happen - at least, not without a fight. The thing that both this and the previous administrations had in common in regards to monetary policy - is that that they both wanted low-interest rates to come back again. Back when they could print and borrow money without feeling too bad about it, even though it really is a loan saddled to the next generations - it was more important to maintain the idea of economic growth, largely for themselves.
If interest rates go up, the economy goes into an "official" recession and that is the end of that narrative - and for those people who are either too rich or too out of touch to care - that feels more important than, say, if the average American is making enough to eat and pay rent at the same time. So the great NIMBY deception continues - your life and neighborhood may be in shambles, but at least your "home values" are up, right?
Economically, the tariffs will not do anything its proponents claim it does, so I wouldn't bother trying to make sense of it. It's better to think of it as someone trying to avoid dealing with the fact that the real-estate empire he spent building up his whole life is on the verge of collapse, and he's lashing out at everyone and everything in an irrational fit of rage. A serial failed businessman - once again turning to the government for a bail-out - except that the government itself has exhausted its levers due to bad decisions in the past...oh, but what's this? Tariffs can raise money for the state without having to tax the landlords themselves?
NIMBYs have, for years, giving themselves exemptions from taxes (look up Prop 13 in California, for example), which also lead to the lack of funding for things like schools and critical infrastructure - but things have gotten so bad that those loopholes have also started to run dry. So the tariffs are just the latest iteration of the ideology trying to keep the "American Dream" alive - again, at everyone else's expense.
Some people speculate what would have happened had the other party won last round. There would've been some differences in the outcomes, for sure - there probably wouldn't have been additional tariffs, for one, but Americans would have gotten worse-off in the "usual" way, with rising prices in everything else, as "normal". Would you like to get shot, or stabbed? Those are the choices that we had. We'll never know at this point, either way - people just went with the guy that didn't seem like he had anything to lose, just like them. Are people at least aware of the severity of the problems now or are they retreating into denial, once more? That part is still unfolding as we speak.
The Future
NIMBYism is a hard problem to tackle because it's not an interest group or organization that you can specifically point at and identify - it's a mindset based on scarcity economics and some of the worst parts of human nature, politicized. Because it's so ubiquitous - especially among the wealthy elite and ruling classes - the most likely outcome, as mentioned above, is a big collapse in the systems themselves. Given that the driving force behind it has always been irrational to begin with, the chances of reform or a "reasoned" outcome seem unlikely at this point.
It's worth mentioning that China has a 90% homeownership rate because the state itself provides enough subsidized housing to provide its citizens with a path towards having a stake in the country in that way. Most of them are high-density condos or rural houses out in the middle of nowhere, but something is probably better than nothing. Here in America, most people own nothing, still holding onto the "American Dream" - as they leave snide commons on social media, mocking all those "poor people" living in big buildings, as if being housing secure was ever a bad thing. We've conditioned people to prioritize their pride over well-being - and seems to go all the way to the top, to the presidency itself.
In Japan and Korea - though not as regimented as China's housing policies - are more sympathetic to housing density, which is why their homelessness rates and worker participation is much higher than in the US. While NIMBYs are everywhere, their governments has chosen not to give these people the power to control zoning (it's usually done at the federal levels where they are obligated to meet certain quotas, not local), which results in higher qualities of living overall. In the face of catastrophic failure, the places that have been running in the other direction will likely do well - and they've been doing it for a while, having a long head start. This is why both administrations tend to have an neurotic obsession with countries like China - on some level, they know that they're being left behind.
So with the markets about to collapse and the supremacy of the dollar now in question, what will that new landscape look like? There is a big opportunity here for cryptocurrencies to be the great "bridge" between businesses everywhere after society itself fragments into a million pieces. What's not subject to tariffs and the whims of nation-states but also allows you to transact globally at every level? There is only one option right now. Most projects are not ready to handle real-world use cases right now (and will probably collapse) - except a few, who may be fast enough to adapt. Either way, there will be some interesting things happening in that area, especially as the economy further goes into turmoil - the calls for "utility" in the technology itself may finally have a place to prove itself.
Finally, it comes down to the state of America itself. Despite all the distractions and misdirections, the housing market will crash anyway (the fundamentals of supply and demand never changes), and the nightmarish version of "The American Dream" we have now will finally come to an end. The current crop of leaders were largely part of the problem leading up to now, and the hope is that at some point, we'll see new blood enter into the mix and things will turn itself around. But change doesn't come easy, since the issues we're dealing with now have been building up for almost an entire generation, so it will take some time, either way.
But everything starts with the basics - having a roof over your head, having a place to live. When the real-estate markets crash, at least rents may become affordable, once again. One thing at a time, eh? 📉🎭📈