SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
homeownership
Property Insurance Is the Canary in the Climate Coal Mine
We too have a little bird trying to call our attention to a major problem. That bird is the insurance industry with its army of actuaries.
Nov 18, 2025
As the cost of insuring our houses escalates around the United States and the world, it appears that property insurance is acting like a canary in a coal mine.
Canaries used to be taken into coal mines because they served as an early warning system if dangerous gases were building up. Since the canaries were more sensitive to these gases than people, they protected the miners from life-threatening conditions. When the canary dropped dead, the miners could still get out.
Like the canaries, the actuaries who interpret data for insurance companies are more sensitive than most individual people to changes going on in the world. Actuaries earn big salaries because the financial health of their employers depends on them.
Things have already gotten so bad that the National Academies of Sciences, Engineering, and Medicine (NASEM) recently sponsored a webinar panel discussion: "Extreme Weather Events and Insurance: Households, Homeowners, and Risk." (This link will take you to a video of the event.)
Any coal miner who refused to evacuate a mine when the mine’s canary keeled over—perhaps saying, “I don’t believe there is any real danger here”—would not have been long for this world.
The panelists were located in the United States (Washington, DC and Madison, Wisconsin) and England (London and Cambridge). Climate changes are not limited to the United States, nor is awareness that we need to do something about them if we can.
The panelists were not grinding particular political axes. They were discussing the measured fact that an increasing number of extreme weather events are destroying valuable property—housing, commercial buildings, streets, bridges, etc.—requiring insurance company payouts to policyholders.
These insurance payouts must be financed by the premiums charged to people who are insuring their property. As damages increase, the premiums also have to increase. Although premiums may be regulated by state regulators, if they do not allow the needed increases insurance companies will pull out of doing business in that state.
As insurance companies pull out, it may become more and more difficult—perhaps even impossible—for people to insure their houses. But if a house cannot be insured, banks won’t finance a mortgage on it, and if it cannot be financed the owner may be unable to sell it.
For many people, their home is their primary investment, and they cannot afford to live in it if they cannot insure it. If it burned down or was otherwise destroyed, they would be wiped out financially. But if they cannot sell it, then the homeowner is a real pickle.
Disrupted housing markets can produce disastrous results for a country’s economy in general, as we Americans discovered during the recession beginning around 2008.
The impact of a world that is heating up is not being felt as much in the United States as in many other countries in Europe, Africa, and Asia which are suffering from unusually long bouts of very hot weather, flooding downpours alternating with extreme droughts, forest fires, etc. Some island nations may be literally wiped out as melting icebergs and glaciers increase sea level, putting them underwater.
But enough extreme weather events are already occurring in the United States that the insurance companies must make major increases in their prices.
Any coal miner who refused to evacuate a mine when the mine’s canary keeled over—perhaps saying, “I don’t believe there is any real danger here”—would not have been long for this world.
Americans who continue to politicize discussion of global warming—either denying its existence, its extent, its speed, or its seriousness—will be like that coal miner. We too have a little bird trying to call our attention to a major problem. That bird is the insurance industry with its army of actuaries. We ignore that warning at our own risk, and at the risk of our children and grandchildren.
Keep ReadingShow Less
Privatizing Freddie and Fannie Is Another Trump Scheme to Make the Rich Richer
The basic story here is that in order to give donors in the financial industry still more money, Trump is planning to privatize a perfectly well-functioning public system for securitizing mortgages.
Aug 13, 2025
In Washington no bad idea stays dead long. Therefore it should not be surprising that U.S. President Donald Trump is planning to move forward with plans to privatize Fannie Mae and Freddie Mac, the mortgage giants that have been in government conservatorship for almost two decades.
As with many of the moves undertaken by Trump, it is not clear what problem this is meant to solve. For the period they have been in conservatorship, Fannie and Freddie have been securitizing mortgages at a low cost and have not faced any substantial management problems.
There is of course one problem that privatizing Fannie and Freddie would solve. This is yet one more way that the financial industry can run up some profits and high pay for top executives at the expense of the rest of us.
The Congressional Budget Office calculated that having private institutions, rather than Fannie and Freddie in their current form, would add roughly 20 basis points, 0.2% to the cost of securitizing mortgages. With around $1 trillion in mortgages being securitized each year, that comes to $2 billion annually. That is not huge in the context of the federal budget (0.03%), but it is four times the annual appropriation for the Corporation for Public Broadcasting that got Trump so upset.
Trump is giving a green light to his finance buddies to find every more creative ways to rip off businesses and ordinary people.
And in the case of privatizing Fannie and Freddie, we literally get nothing for it except a less efficient mechanism for securitizing mortgages. This is similar to the plans for privatizing Social Security. We have an extremely efficient public system, but many people in the Trump administration see the opportunity to make trillions of dollars in fees by turning it into a private system.
As with a privatized Social Security system, we would also be exposing ourselves to needless risk by privatizing Fannie and Freddie. The basic problem is that we would be allowing a private corporation to operate with a government guarantee against losses. This guarantee gives a private securitizer an enormous incentive to securitize bad mortgages in order to increase volume and make more profits. That was the story of the housing bubble and the subsequent collapse and financial crisis in 2008-09.
If a private securitizer is carefully regulated, it can limit the risk of reckless lending. But does anyone believe that the Trump administration is going to have careful regulation of the financial industry?
The basic story here is that in order to give donors in the financial industry still more money, Trump is planning to privatize a perfectly well-functioning public system for securitizing mortgages. This move will almost certainly increase the cost of mortgages for homebuyers, the only question is by how much. And it raises the risk for future financial crises and government bailouts.
Making the financial sector less efficient in order to hand money to contributors is very much front and center in the Trump administration. This is the same story with his decision to promote crypto currency, which is making Trump and his friends tens of billions of dollars; as opposed to letting the Federal Reserve Board issue a digital currency, which would save us tens of billions in bank and credit card fees.
The evisceration of the Consumer Financial Protection Bureau follows the same pattern. Trump is giving a green light to his finance buddies to find every more creative ways to rip off businesses and ordinary people.
That’s how we should understand the drive to privatize Fannie and Freddie. How could anyone oppose it?
Keep ReadingShow Less
Economic Anxiety of Americans Surges Under Trump: Poll
"The president promised to lower costs on day one, and by that standard, he's broken that promise and has made choices that will cost families thousands of dollars a year," said one policy expert recently.
May 12, 2025
The Trump administration has made its desire for Americans to expand their families well known, but a new survey out Monday details how a growing number of people are postponing such major life decisions—including having children, buying a home, or expanding their education—due to the economic anxiety created by President Donald Trump's policies.
The Harris poll was conducted on behalf of The Guardian between April 24-26, in the wake of the news that the White House was considering multiple ways to encourage people to have more children. The proposals being floated by "pronatalist" advisers include a $5,000 "baby bonus" that the administration would offer to people when they have a new baby—which would cover less than half of the average annual cost of childcare in the United States.
The survey suggested that the proposal was not enticing to would-be parents in the U.S., with 65% of people who had previously planned to have a child in 2025 reporting they were now holding off on the decision. Thirty-three percent said they were not comfortable expanding their families in the current economy, and 32% said they were unable to afford having a child.
Trump has imposed and rolled back various tariffs several times since taking office; the White House announced Monday that reciprocal tariffs with China were being paused for 90 days while the two countries try to work out a trade deal. Tariffs on Canadian and Mexican goods are partially in effect, and the administration has also imposed tariffs on aluminum and steel imports, cars, and car parts.
The U.S. economy contracted in the first quarter, with the gross domestic produce declining at an annual rate of 0.3% after having climbed by 2.4% in the final quarter of 2024.
For Americans, the tariffs have meant higher prices for items like toys, children's clothes, household tools, and washing machines.
As Common Dreams reported last week, despite Trump's proposal of a "baby bonus," Groundwork Collaborative executive director Lindsay Owens has termed the tariffs a "baby tax"—directly causing essentials like strollers, high chairs, and cribs to cost more.
"The president promised to lower costs on day one, and by that standard, he's broken that promise and has made choices that will cost families thousands of dollars a year," said Groundwork Collaborative fellow Michael Negron told a U.S. House committee last week.
Nearly 80% of people surveyed said they've experienced higher grocery prices since Trump took office—despite the fact that he explicitly promised his presidency would swiftly bring about a lower cost of living—and 60% said they noticed their monthly bills going up.
The Harris poll found that 66% of people are now putting off making large purchases like cars or home appliances under Trump's economy, and three-quarters of those who had previously been hoping to buy a home are postponing that purchase.
Mortgage rates are currently 6.7%—more than double what they were four years ago.
CNN reported last month that although interest rates on home loans have been falling, "President Donald Trump's scattered approach to tariffs and an escalating trade war with China has injected volatility into the stock market, and resulted in a sell-off in U.S. bonds last week."
Sixty-eight percent of Millennial and Gen Z renters—those in their 20s, 30s, and early 40s—said they had a goal of buying a home, compared to 29% of older renters, suggesting that the major life decisions of younger Americans are being most affected by the Trump administration.
The Harris poll also asked respondents if they believed the economy is worsening, and found a partisan divide: 33% of Republicans said yes compared to 73% of Democratic voters who agreed.
But among Independents—44% of whom supported Trump in the 2024 election, according to a post-election survey—64% agreed with the majority of Democrats about the economy's trajectory.
Nearly a third of respondents said they believe Trump's tariffs will cause the most harm to their household finances, despite the president's claims that the tariffs will "make America wealthy again."
During his testimony last week, Negron said that higher prices on essential goods and services "are the types of things that you would expect to hear when you look at what experts have said, that [tariffs are] going cost anywhere from $4,500 to $5,000 more for the average household once they're fully in effect."
"When you look at the promises to lower prices," he said, "the administration is not living up to them."
Keep ReadingShow Less
Most Popular