Reviving Rationality in Washington: How to Make Federal Policies Make Sense Again!

In today’s society, disparities in socioeconomic status (SES) contribute significantly to the inequalities seen in various aspects of life. Factors such as income, education, marital status, and wealth play a crucial role in shaping these discrepancies. Interestingly, even within homogenous white communities where racial bias should not be a factor, substantial gaps persist based on educational levels, household structures, income, and credit scores. These findings highlight that SES disparities, though often linked to historical discrimination, are not solely racial in nature. The struggles faced by individuals from low-income backgrounds, as vividly portrayed by Vice President J.D. Vance in his book Hillbilly Elegy, transcend racial boundaries.

1. The Brookings study refrained from attributing blame for the observed valuation differences. However, the organization PAVE swiftly pointed fingers at predominantly white, male, and older appraisers, claiming they are the root cause of systemic bias. Despite efforts by various parties to challenge the Brookings study and similar claims, PAVE chose to stand by its assumptions, leading to a reinforcement of preconceived notions.

2. While the appraisal sector has acknowledged the need for diversity within its workforce, PAVE’s accusatory stance has inadvertently instilled doubt in the housing market and the valuation process. With discussions about establishing a federal entity to set home prices looming, the industry witnesses a potential crisis. Appsraisers facing lawsuits based on weak evidence add further strain to an already fragile system. Moreover, the rise of automated valuation models by Fannie Mae and Freddie Mac poses risks due to their lack of transparency, making the housing market susceptible to manipulation.

3. PAVE’s recommendations, based on flawed analysis that ignored crucial SES factors, were bound to fall short of their intended results. By arriving at incorrect conclusions, PAVE’s proposed solutions are likely ineffective at best and detrimental to equity goals at worst.

President Trump’s recent decisions to overturn misguided policies by the Biden administration are crucial steps towards restoring sensible governance. A vision of a colorblind society, as articulated by Dr. Martin Luther King Jr., is imperative in assessing individuals based on character rather than skin color. The initiatives to eradicate divisive policies are pivotal in moving towards a fairer and more inclusive society.

To bridge income and wealth gaps, the Trump administration must introduce tax, immigration, and regulatory reforms that support a thriving economy benefiting lower-skilled workers. Encouraging stable two-parent households, advocating for school choice, and holding teachers’ unions accountable are essential strategies to address systemic failures.

Expanding homeownership opportunities can be achieved through executive actions that reduce construction costs and regulatory hurdles. Auctioning federal Bureau of Land Management (BLM) land for private development can lead to the creation of millions of homes, addressing housing shortages and generating revenue for federal investments.

In conclusion, rejecting failed approaches of the past and embracing practical, market-oriented reforms can pave the way for genuine progress in addressing economic and social disparities. By prioritizing opportunities over divisive narratives, the Trump administration can empower individuals to pursue the American Dream equitably.

Tobias Peter and Edward Pinto serve as co-directors of the AEI Housing Center, advocating for policies that promote housing equality and economic advancement.