WSJ What’s News: How Trump’s Policies Could Ripple Through the Housing Market

Release Date: December 5, 2024
Host: Kate Bullivant
Produced by: The Wall Street Journal

1. Violent Incident in Manhattan: United Healthcare CEO Shot Dead

The episode opens with a breaking news update on the tragic shooting of United Healthcare CEO Brian Thompson outside a Manhattan hotel. Kate Bullivant reports:

"The hunt for a suspect continues after United Healthcare CEO Brian Thompson was shot dead yesterday outside a hotel in New York City in what police are calling a targeted attack." (00:47)

Shelby Holliday adds details on the ongoing investigation:

"Police tell us they're also looking backward to see if there's footage of the suspect canvassing this area before the shooting. They also say they're analyzing a cell phone that was found at the scene." (01:23-01:33)

The New York Police Department has intensified its search efforts, seeking any leads that could identify the perpetrator.

2. Trump's Key Personnel Picks and Policy Directions

Donald Trump's administration is making significant appointments signaling a return to his previous policy stances:

• Peter Navarro has been selected as a senior adviser on trade and manufacturing, reaffirming Trump's intention to impose tariffs on U.S. imports. Navarro, a strong advocate of Trump's tariff policies during his first term, is expected to lead efforts to protect American industries.

• Billy Long, former Representative, is poised to take over as the Commissioner of the Internal Revenue Service (IRS). If confirmed by the Senate, Long will replace Danny Wirfel, who was appointed by President Biden and was set to remain until November 2027. Kate Bullivant notes:

  "Trump has said he would nominate former Representative Billy Long to run the Internal Revenue Service... Trump's decision to pick a new commissioner could signal a significant change in direction for the tax agency." (02:00)

• Pete Hegseth, Trump's nominee for Defense Secretary, faces scrutiny amid personal life allegations. Despite mounting concerns among Republican senators, Hegseth remains steadfast:

  "Hegseth said he spoke to Trump yesterday morning and that he had his full support." (02:30)

These appointments indicate Trump's commitment to reshaping key government sectors in line with his administration's priorities.

3. Bipartisan Legislation on Corporate Bankruptcy Protections

A bipartisan initiative led by Illinois Democrat Dick Durbin and Missouri Republican Josh Hawley aims to safeguard employees during corporate bankruptcies. WSJ Pro bankruptcy reporter Alicia McElheny elaborates:

"The bill would double the priority claim for employees' wages from $10,000 to $20,000 per employee and extend the timeframe for these claims. Additionally, it would restrict companies in bankruptcy from giving bonuses or payouts to executives and insiders while ensuring employees retain their retirement and health benefits." (03:29-04:16)

This legislation addresses the surge in corporate bankruptcies, which increased by over a third in the year leading up to September. The proposed measures prioritize workers' wage claims, providing them with greater financial security during company restructurings.

4. Ukrainian Talks with Trump Team on War with Russia

Ukrainian officials have initiated high-level discussions with the incoming Trump administration regarding the cessation of hostilities with Russia. Key points include:

• A senior aide to Ukrainian President Volodymyr Zelensky met with Keith Kellogg, Trump's designated special envoy for Russia and Ukraine, Mike Waltz, the incoming National Security Adviser, and J.D. Vance, the vice president elect.

• Significant disagreements persist, particularly over Ukraine's potential NATO membership. Zelensky has indicated willingness to consider a ceasefire if NATO membership is secured, a stance met with limited enthusiasm from the Trump team.

Kate Bullivant summarizes:

"Zelensky has recently signaled Ukraine could agree to a ceasefire if Ukraine were permitted to join NATO, something the Trump team has shown little interest in supporting." (04:16-04:30)

The negotiations highlight the complexities of ending the conflict, with geopolitical interests and strategic alliances at play.

5. Political Developments in South Korea

South Korea is experiencing political turbulence as President Yoon Suk Yeol replaces the country’s Defense Minister amid impeachment efforts. The context includes:

• Opposition parties are pushing for the impeachment of both President Yoon and the Defense Minister following the brief imposition of martial law, which deployed armed troops in Seoul.

• The outgoing Defense Minister has apologized for ordering troop deployments related to martial law.

This political shift underscores the domestic pressures and governance challenges faced by South Korea’s leadership.

6. Corporate News: Airbus Job Cuts and Bitcoin Surge

• Airbus announced plans to cut approximately 2,000 jobs within its defense and space divisions, representing about 5% of the workforce in these sectors. The reductions will primarily affect operations in Germany, France, the UK, and other international markets. This move is part of Airbus’s strategy to reduce costs amidst a challenging economic environment.

• Bitcoin has surpassed the $100,000 mark for the first time, buoyed by a 40% increase in value since Election Day. This surge is attributed to investor optimism following Donald Trump’s nomination of Paul Atkins, a crypto-friendly former regulator, to lead the Securities and Exchange Commission (SEC). Kate Bullivant remarks:

  "The world's largest digital currency has risen more than 40% in the four weeks since Election Day, setting one record after another amid hopes that Trump will turn US Government policy into a growth engine for crypto." (05:00-05:30)

These developments reflect shifting dynamics in both the aerospace industry and the cryptocurrency market.

7. OPEC Meetings and US Job Data

• OPEC is convening with its allies to deliberate on oil production levels, with expectations of delaying the planned increase in output. Brent crude futures remain relatively stable in response to these discussions.

• US initial weekly jobless claims are scheduled for release at 8:30 AM Eastern Time, following robust job openings data that indicated a resilient labor market earlier in the week.

These economic indicators provide insights into the current state of global energy markets and the US economy.

8. Impact of Trump’s Immigration and Trade Policies on the Housing Market

The centerpiece of the episode delves into how President-Elect Donald Trump’s proposed immigration and trade policies could significantly impact the construction industry and, by extension, the housing market. Kate Bullivant engages with WSJ reporter Elizabeth Findell to explore these implications.

Key Concerns:

• Immigration Policies:

  Elizabeth Findell explains:

  "Immigrants have always made up a significant portion of folks who work in construction, and many of them are undocumented... Builders are very concerned about finding workers. Even when they're paying good wages and unemployment is high, most native-born Americans just aren't willing to take the most physically difficult jobs." (08:18-11:38)

  Trump's promise to deport millions of undocumented immigrants poses a threat to the workforce, with estimates suggesting that 13% of the construction industry relies on undocumented labor. Past deportation efforts have led to substantial disruptions:

  "A study found that when about 300,000 undocumented immigrants were deported between 2008 and 2013, the affected counties lost about a year's worth of construction on average, and new home prices went up 20%." (10:05-10:28)

• Trade Policies:

  On the trade front, Trump's proposal of 25% tariffs on imports from Canada and Mexico could increase the cost of construction materials, such as wood and steel, which are heavily imported. Elizabeth highlights:

  "About 7.3% of home building materials are imported... Causing the cost of housing to go up, which is problematic because actually lowering the cost of housing was a large part of the campaign." (08:18-09:00)

Potential Outcomes:

• Increased Housing Costs: The combined effect of a reduced workforce and higher material costs could lead to significant increases in home prices, exacerbating the existing housing shortages in growing regions like Texas.

• Slowed Construction Industry: Builders may struggle to complete projects on time or may need to raise wages to attract workers, further elevating costs.

Elizabeth Findell underscores the irony in Trump's stance on immigration:

"Trump frequently claimed on the campaign trail that immigrants are taking jobs from American workers. And yet... builders are already struggling to fill jobs." (11:24-12:01)

Conclusion:

Trump’s immigration and trade policies, while aimed at protecting American jobs and reshoring industries, may inadvertently strain the construction sector and drive up housing costs. This outcome contradicts one of the key campaign promises to make housing more affordable, highlighting the complex interplay between policy intentions and economic realities.

Closing Remarks

Kate Bullivant wraps up the episode by thanking Elizabeth Findell for her insights and reiterates the significant challenges the construction and housing markets may face under Trump’s proposed policies. The discussion underscores the importance of carefully balancing immigration and trade strategies to avoid unintended economic repercussions.

Notable Quotes:

• "Trump has said he would nominate former Representative Billy Long to run the Internal Revenue Service." – Kate Bullivant (02:00)

• "Builders are very concerned about finding workers." – Elizabeth Findell (11:38)

• "The world's largest digital currency has risen more than 40% in the four weeks since Election Day." – Kate Bullivant (05:00)

This summary captures the key discussions, insights, and conclusions from the WSJ What’s News episode titled "How Trump’s Policies Could Ripple Through the Housing Market." For the full transcript and additional updates, visit WSJ.com.