There’s a grown-up version of that conversation as well. For the first time in nearly four years, mortgage rates have dropped below 6%. But just how many Americans have home-buying money right now?

Half of us struggle to pay our monthly mortgage or rent, according to a recent survey. More than 80% of prospective buyers said last year that difficulty coming up with a down payment plus closing costs was holding them back.

For folks who can buy a home, the falling mortgage rates are great news: Even just one percentage point can represent tens of thousands of dollars over the life of a mortgage.

However, when nearly a quarter of Americans report living paycheck to paycheck, the recent mortgage rate news only highlights the growing disconnect between America’s economy and its people. It’s like hearing the Dow Jones industrial average has crossed the 50,000-point threshold when the wealthiest 10% of Americans own more than 90% of the stock and nearly half of all private-sector workers don’t have access to an employer-sponsored retirement plan.

Democrats are right to point out the shortcomings of President Trump’s economic policies. But what are the policies they are pushing to address the expanding chasm between the haves and the have-nots? Campaigning on the principles of democracy — free speech, peaceful transfer of power, due process — is a response to what Republicans are doing wrong. But those aren’t the issues that motivated voters and brought Trump back to power.

Trump won his second election in part because he sold a vision of wealth — and the promise of wealth acquisition is also part of the American dream. George Washington, John Hancock, Thomas Jefferson … the founding fathers were among the richest men in the colonies. Yes, the American Revolution was a fight for sovereignty. And that was not all philosophical. The American dream was always a material one, with wealth and ownership as centerpieces.

Modern progressives, especially elected officials in office, do not like to talk about money in that way, but the reality is that protecting democracy requires more than upholding the Constitution. It includes making sure people feel as if democracy is working for them. People will assess that in part by whether it’s hard to get by and whether it’s imaginable to get ahead.

That’s one of the reasons the Biden administration sounded so out of touch when it came to the economy in 2024. Far too often, the pain that the have-nots were experiencing during his time in office would be met with metrics that mostly benefited the haves. Same economy, different impact. Case in point: While grocery prices had soared for four years and inflation-adjusted wages were flat, corporations pulled in a record $4 trillion in profit just in the last quarter of 2024. CNN noted that the top five U.S.-based oil and gas companies pulled in profit of more than $250 billion during the first three years of the Biden administration, an increase of 160% compared with the same period of the first Trump administration.

The U.S. economy was breaking records while simultaneously breaking hearts.

Although Trump campaigned on that disconnect, since returning to the White House his policies have only served to exacerbate the issue. So far more than 90% of the tariffs he imposed have been paid for by U.S. consumers and U.S. businesses. We have rising healthcare costs. Trump’s first year back in office was the worst for job growth in a nonrecession year since 2003.

Trump certainly has a lot to answer for, and his response to Americans’ economic pain has been almost word for word the same as President Biden’s.

All of this means that Democrats have plenty to blame on Republicans during the midterm election campaigning this year. However, from a messaging perspective, Democrats have not wowed anyone with an alternative platform — thus the party’s historically low approval rating. Party leaders continue to talk about the fight for democracy, sounding like law professors consumed by theory. Rallying around key economic policy proposals that will help the work force bring home a bigger paycheck is equally important and demands more of the party’s time.

Trump’s critics need to stay on message regarding his attacks on democracy, and sure voters would like to be choosing candidates based on good governance. But when you can’t save money or see a way to buy a house before turning 40, “good governance” becomes a distant second to having money in your pocket.

The message that will resonate most is the one that makes voters feel that in America, you can still have both.

The post There are two Americas. Falling mortgage rates matter only to the wealthy one appeared first on The Hemet & San Jacinto Chronicle.

According to the Wall Street Journal on the 10th (local time), California billionaires have created a group chatroom called “Save California” on the private messenger “Signal” to prevent the introduction of the billionaire tax.

The state of California is pushing forward with the so-called “billionaire tax,” which would impose a one-time tax of 5% on assets held by individuals with a net worth of over 1 billion dollars (1.46 trillion Korean won). It has been reported that unrealized gains, such as stock valuation profits, could also be subject to taxation. If the measure proceeds as planned following a public referendum, the tax will apply to California residents as of January 1st.

There are currently 214 billionaires in California. In the chatroom, billionaires are voicing opposition to the tax and proposing alternatives. It has been reported that some have even argued for weakening the relationship between California and the tech industry compared to previous levels.

It has been reported that dozens of tech billionaires, including Palmer Luckey, co-founder of Anduril, David Sacks, former cryptocurrency official in the Trump administration, and Chris Larsen, co-founder of Ripple, have participated. The WSJ reported, “The billionaire tax has united Silicon Valley giants.”

David Sacks criticized, “The billionaire tax takes 5% of the entire net worth,” arguing that the structure of taxing the entire asset rather than income is unfair. Criticisms such as “communism” have also emerged.

Billionaires’ exits from California are also accelerating. Larry Page, co-founder of Google, relocated his related corporation out of California last month. Peter Thiel, co-founder of PayPal, has also leased an office in Miami. Gary Tan, CEO of Y Combinator, stated, “If the wealth tax passes, we are considering relocating to Austin or Cambridge.”

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The proposed California Billionaire Tax Act has plutocrats saying they are considering deserting the Golden State for fear they’ll have to pay a one-time, 5% tax, on top of the other taxes they barely pay in comparison to the rest of us. Think of it as the Dust Bowl migration in reverse, with The Monied headed East to grow their fortunes.

The measure would apply to billionaires residing in California as of Jan. 1, 2026, meaning that 2025 was a big moving year month among the 200 wealthiest California households subject to the tax.

The recently departed reportedly include In-n-Out Burger owner and heiress Lynsi Snyder, PayPal co-founder and conservative donor Peter Thiel, Venture Capitalist David Sacks, co-founder of Craft Ventures, and Google co-founder Larry Page, who recently purchased $173 million worth of waterfront property in Miami’s Coconut Grove. Thank goodness he landed on his feet in these tough times.

The principal sponsor behind the Billionaire Tax Act is the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), which contends that the tax could raise a $100 billion to offset severe federal cutbacks to California’s public education, food assistance and Medicaid programs.

The initiative is designed to offset some of the tax breaks that billionaires received from the One Big Beautiful Bill Act recently passed by the Republican-dominated Congress and signed by President Trump.

According to my colleague Michael Hiltzik, the bill “will funnel as much as $1 trillion in tax benefits to the wealthy over the next decade, while blowing a hole in state and local budgets for healthcare and other needs.”

The drafters of the Billionaire Tax Act still have to gather around 875,000 signatures from registered voters by June 24 for the measure to qualify on November’s ballot. But given the public ire toward the growing wealth of the 1%, and the affordability crisis engulfing much of the rest of the nation, it has a fair chance of making it onto the ballot.

If the tax should be voted into law, what would it mean for those poor tycoons who failed to pack up the Lamborghinis in time? For Thiel, whose net worth is around $27.5 billion, it would be around $1.2 billion, should he choose to stay, and he’d have up to five years to pay it.

Yes, it’s a lot … if you’re not a billionaire. It’s doubtful any of the potentially affected affluents would feel the pinch, but it could make a world of difference for kids depending on free school lunches, or folks who need medical care but can’t afford it because they’ve been squeezed by a system that places much of the tax burden on them.

According to the California Budget & Policy Center, the bottom fifth of California’s non-elderly families, with an average annual income of $13,900, spend an estimated 10.5% of their incomes on state and local taxes. In comparison, the wealthiest 1% of families, with an average annual income of $2.0 million, spend an estimated 8.7% of their incomes on state and local taxes.

“It’s a matter of values,” Rep. Ro Khanna (D-Fremont) posted on X. “We believe billionaires can pay a modest wealth tax so working-class Californians have Medicaid.”

Many have argued losing all that wealth to other states will hurt California in the long run.

Even Gov. Gavin Newsom has argued against the measure, citing that the wealthy can relocate anywhere else to evade the tax. During the New York Times DealBook Summit last month, Newsom said, “You can’t isolate yourself from the 49 others. We’re in a competitive environment.”

He has a point, as do others who contend that the proposed tax may hurt California rather then help.

Sacks signaled he was leaving California by posting an image of the Texas flag on Dec. 31 on X and writing: “God bless Texas.” He followed with a post that read, “As a response to socialism, Miami will replace NYC as the finance capital and Austin will replace SF as the tech capital.”

Arguments aside, it’s disturbing to think that some of the richest people in the nation would rather pick up and move than put a small fraction of their vast California-made — or in the case of the burger chain, inherited — fortunes toward helping others who need a financial boost.

The post California made them rich. Now billionaires flee when the state asks for a little something back. appeared first on The Hemet & San Jacinto Chronicle.

In honor of Labor Day, my trusty spreadsheet delved into some curious federal statistics that track the pay ladder, so to speak, across the 50 states. The latest edition of the report tracks pay for key segments of the workforce in May 2024.

The figures reveal a key pay boost that enables many Californians to afford a costly lifestyle. Yet that same cash flow also inflates the price of many California goods and services – most notably, housing.

Let me explain, starting with the annual pay for the typical worker using the median wage. That’s the midpoint between what the top-paid workers earn and the half who earn less.

California ranked No. 9 among the states at $56,900. That’s 18% above the 50-state median of $48,400. That’s not very impressive pay, considering the Golden State’s expensive living.

Top pay? Massachusetts at $62,300, Washington state at $61,600, and Alaska at $59,400. Lowest? Mississippi at $39,100, Arkansas at $41,000, and West Virginia at $43,300.

Additionally, California’s economic rival, Texas, ranked No. 30 at $47,500. Another competitor, Florida, ranked No. 35 at $46,900.

The upper half

To have a shot at personal economic viability in the Golden State, your paycheck could be in the ballpark of what statisticians call the “75th percentile” – or the median of the top half of wages.

California’s 75th-percentile income of $96,300 was 29% higher than the nation’s $74,400 and ranked No. 4 among the 50 states.

Where are the biggest paychecks for this pay grade? Massachusetts at $99,900, Washington state at $99,500, and New York at $96,400. Lowest? Mississippi at $58,900, Arkansas at $60,400, and South Dakota at $62,100.

Texas ranked 23rd at $75,600. Florida was No. 28, at $73,300.

Secret sauce

Focus on the gap between the median wage and the loftier 75th percentile.

Think of this spread as the premium pay given to high-skill jobs, highly coveted industries, or top-performing workers. It’s the secret sauce to balance the cost of living for numerous Californians.

This pay bump for California workers – the gap between the median ($56,900) and the 75th percentile ($96,300) – amounts to a 69% bonus. That’s the largest among the states and easily surpassed the 54% bump across all 50 states.

Just behind California were Maryland, New York and New Jersey, all with premium pay at 65%. The smallest gaps were in South Dakota at 36%, followed by Iowa and Kentucky at 40%.

Texas ranked 10th-biggest at 59%. Florida was No. 17 at 56%.

Mixed message

You can cheer California’s premium pay as one measurement of the state’s economic opportunity.

At the same time, it serves as an example of how income inequality makes California a challenging place for many people to thrive.

Ponder how this wage gap creates pricing pressures. Think about the size of a mortgage a worker could theoretically obtain.

For example, the median-wage worker in California who’d spend 30% of their salary on a house payment with a 6.5% mortgage rate could borrow $223,000. However, a 75-percentile paycheck gets a Californian a $377,000 loan.

Yes, both wage levels fall short of what’s needed for the common home purchase. In early 2024, the median-priced single-family home in the Golden State cost $814,000, according to the California Association of Realtors. The typical condo ran $655,000.

Well, is it any surprise that the Realtors’ “affordability” math showed just 17% of all California households could qualify to buy a single-family house? And only 24% for condos?

These gaps help explain why two-income families are the norm in California – with 1.34 jobs per household, the fifth-highest among states. Housing statewide is also densely populated, with 2.95 people per household, ranking No. 4 nationally.

Additionally, the wage gap is behind the choice of many individuals to live in inland areas or outside major job hubs. That’s where the cost of living, especially housing, can be slightly less stressful.

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