Why do blue states keep failing again and again? And why do people keep voting for blue policies despite them never working? Join Ken McElroy, Danille, and political commentator Kristin Tate in a discussion about the future of America and why Democratic-led states are handling this economy horribly.
Ken McElroy:
Hey everybody. It’s Ken McElroy here and I’m excited to have Kristin Tate on the show. So she’s got a number of books we’re going to dig into. Uh, the most recent book is the liberal invasion of red state America, but she’s got others on taxation and certainly on the, how the government has gone wild. So I’m excited because as you guys know, we talk a lot about migration patterns and as I, as I got through the book are on the, um, the movement of the liberal invasion. Uh, most of that is based around migration. We study a lot around migration, so, um, she writes for the hill, she focuses on taxation and federal spending. Kristin, welcome to the show.
Kristin Tate:
Hey Ken, it’s great to be with you. Thanks for having me. Sure.
Ken McElroy:
Let’s well, let’s jump right in. So why did you write this most recent book? Cause I, I think, you know, we talk a lot about migration patterns and how it facts supply and demand on the rental side. And you know, obviously I’m in the, uh, in the real estate space, uh, you attack it from a very different point of view on policy and taxation. And I could not agree more, but something that a lot of people don’t talk about.
Kristin Tate:
Yeah, that’s right. So this is a pattern that I’ve noticed for several years now, essentially people leaving these, these blue states, particularly the blue states that have large metropolitan areas. So, you know, New York, Illinois, and California, and moving to states and the Sunbelt and the south, particularly more Republican led states like Texas, Florida, Arizona. Uh, I actually started noticing this trend a long time ago. I grew up in New Hampshire and back in the eighties and nineties, New Hampshire was a very solid red state. It was actually kind of libertarian to add this, you know, live and let live sort of mantra about it. I mean, for goodness sake, the motto of the state is live free or die. So, you know, it’s a very libertarian place. The people up there have grit. Uh, it’s, it’s just a very cool state or it was back in the eighties and nineties, pretty much a totally Republican state legislature up there.
Kristin Tate:
We had a Republican governor and then starting in the late nineties, early two thousands that all kind of started to change as people left Boston and Massachusetts, and started moving up to New Hampshire, uh, particularly because Boston is just so expensive and it’s been getting more expensive to live there. So families, uh, increasingly started moving out of the city and then eventually up and just saw their New Hampshire and folks actually commute every single day from Southern New Hampshire and to Boston. It’s a long commute that a lot of people do it because it’s just become totally impractical to live in Boston with the high cost of living. Now, that’s been going on for several decades, this migration pattern, and it’s completely changed the state of New Hampshire, uh, in many ways, culturally, politically and economically. So the first thing that the most obvious way this has changed New Hampshire is, you know, New Hampshire used to be a very affordable state.
Kristin Tate:
Uh, housing was, was pretty cheap there. Now the whole Southern half of the state is basically Massachusetts. Part two housing costs have gone through the roof cost of living generally has gone through the roof. Uh, but also what’s kind of sad about that as locals have really been pushed out of the market there. So, you know, much of my family’s still in New Hampshire and many of them have actually had to move more north than the state because they can’t afford anything in Southern, uh, cities in New Hampshire like Nashua. So that’s the first thing that’s happened, but also we’ve seen a really interesting political shift take place up there. So, you know, these Bostonians left Massachusetts where they have high taxes, you know, lots of regulations, these, these sort of policy elements that have made it very expensive. And then they moved to New Hampshire and proceed to vote in favor of the same kinds of policies and politicians that created the disaster in the place they fled. Uh, so New Hampshire went from a pretty solid red state, then it kind of became purple and now it’s pretty blue up there. It’s really becoming a Democrat led state much like Massachusetts. And it’s changing the culture in a number of ways. You know, we’re kind of losing that libertarian spirit. You still get it up in the Northern part of the state, the Southern part of the state. It’s really just Massachusetts, the second part of it.
Danille:
And why do you think that they continue to vote Blue when they’re leaving the blue state because of the policy?
Kristin Tate:
Yeah. You know, that’s really why I wrote the book is to find out the answer to that question and what I figured out by interviewing a lot of people who move states. It’s people aren’t really thinking about politics when they move, right? So I just talked about New Hampshire, but this is, this is kind of a trend that’s spread throughout the country at this point. Like I live in Texas now and we just get hundreds of people from California coming down here every week. And you talk to these folks and they are not thinking about politics when they moved, they’re moving for, for jobs mostly, and also for the cost of living. And they’re not necessarily connecting those dots. So, uh, you know, it kind of takes a few steps for them to realize, Hey, you know, maybe the place I’m moving is more affordable and has more jobs because the regulatory and political environment is more favorable, but I’m not sure that people initially make that connection when they move.
Kristin Tate:
Uh, and you know, this trend, it’s very vindicating to Republicans in certain ways because Republicans have been preaching fiscal conservatism for years. And now we’re seeing a ton of businesses, for example, leaving Silicon valley and coming to Austin, Texas, and you know, banks leaving New York city and going down to west Palm beach. It’s great for Republicans who have been preaching these policies, but the workforce is that come with these companies and go for the jobs are not necessarily again, connecting those dots. So they tend to vote in favor of Democrats overwhelmingly, which is what I found in my book. And it’s really having a significant political impact on these receiving states. I mean, people used to laugh when I said Texas could go blue, but this is a real possibility. Now, if you look at the counties in Texas that are absorbing, absorbing the highest number of domestic migrants, it’s mostly the suburban areas right outside the biggest cities. And these are the places that had the biggest jump from red to blue and the last few presidential elections. So this is having serious political consequences in the states that are eating the domestic migrants. And I tell Republicans all the time, you know, I tell them, you guys focus on immigration. They talk about immigration on the border constantly. It’s actually domestic migration that they should be more worried about, at least in the short-term because look, if Republicans lose Texas, it’s over for that and they’re never going to win another national election again.
Danille:
So when you say, um, blue policy, can you explain to our audience what that means? Like what policies are creating that environment?
Kristin Tate:
Of course. Yeah. So high regulations, high taxes, anything that makes it less friendly for a business to essentially exist in these places, but it’s more than that too, right? It’s also quality of life policies. So you have places like San Francisco that are essentially tolerating, mass homelessness and, uh, you know, violence on the streets and making it scary for residents and particularly families to live in these places. I have some friends who live up in San Francisco and they tell me all the time. I mean, I realize these are just anecdotes, but people can find, you know, you can see hundreds of these anecdotes online that, you know, you have people shooting up drugs, right in the streets, you have, uh, crimes happening right there. You know, in flagrant view of people just walking by trying to get to work or school it’s become unsafe.
Kristin Tate:
It’s become not as nice to live there as a new SU. And that’s not just because of economic policy, it’s things like policing and, uh, having a greater tolerance for crime. And, uh, you look at the public school systems, that’s another blue policy. Uh, you know, these, these blue states tend to have big cities that have failing public school systems in New York city. Uh, you know, the majority of the schools, the public schools there have something like a 90% exam failure rate and at least one class, I mean, schools, I mean, that is unacceptable. And in large part, I would argue that’s because the teacher’s unions have kind of created a situation where it’s become impossible to fire the bad teachers to promote the good teachers and essentially to hold them accountable for standards. So, you know, it’s all, it’s kind of a perfect storm of anti-business regulation and quality of life sort of policies that have made people want to leave these Democrat led states.
Ken McElroy:
This is, uh, you know, so what you witnessed obviously up in New Hampshire with the Boston example, I also witnessed, uh, I grew up in Seattle and I saw that kind of pour into, you know, a lot of the Northwest. Um, and I have a home in Coeur d’Alene Idaho. And so I, uh, which it also is happening there. And so what’s happening is kind of small town. America is now starting to, you know, uh, you know, oh, here, at least on the west coast, people are saying, you know, no more California is no more California. Um, but, uh, what’s happening is I think a lot of, to your point. And th this affects a lot of things, certainly real estate pricing, which is what everyone’s feeling at the moment next is rent pricing, but then the policies are going to come. And, uh, you know, and I think what people need to understand as they start to invest is they have to stay ahead of the stuff.
Ken McElroy:
And, and there are going to be cities like, uh, my good friend is the governor of Arizona. And, uh, he was a hardcore entrepreneur, his whole life. He started Coldstone Creamery. He is our current governor. Um, and you know, that, you know, we’re now basically purple and, and, uh, you know, under his leadership and there all kinds of reasons that I don’t want to get into that. But even in Arizona, we’re kind of taking a look at, you know, what is that going to mean now, you know, uh, from a, from a policy standpoint, certainly from an education standpoint, from a tax standpoint, what have you seen on the, on the taxes? You know, because when I, what I do know is I w w we were just in Seattle, uh, Portland and, uh, in Los Angeles last week. And obviously we see it and, you know, we see the homelessness, we see all these things, but the governments aren’t gonna, they’re not going to cut back on their budgets. You know, you know what I mean? Like, they’re not going to say, oh, you know, people are leaving taxes or, uh, you know, we’re not, we don’t have the income base that we did cause that’s actually the next piece I think, is they’re all kind of spreading around, into, you know, into call it these red states. Um, what do you think is going to happen? You think the taxes are gonna go up in those areas? What happened in Boston?
Kristin Tate:
Well, oh, you mean in the areas that are losing residents? Yeah, yeah, yeah, exactly. Well, what we’ve seen happen in New York city and what bill de Blasio said, he was, he didn’t even try to hide this as look, we’re going to have to raise taxes because they have huge budget holes now, because more people are leaving than they anticipated. So the suckers who stick around to simply pay more taxes, they’re very open about this. And I, you know, my second book was called, how do I tax me? And that actually covered all of the non-income taxes that people pay every day. And what I think a lot of people don’t realize if these so-called hidden taxes make up more than half of your individual tax burden. So nearly every activity you do in a place like New York city, Boston, Chicago, or LA is taxed. If you go to a movie that’s tax, you buy a plane ticket that has taxes on it.
Kristin Tate:
You go to a restaurant, that’s tax. I mean, name anything besides breathing basically. And you’re paying taxes on that. And that really adds up. And what essentially happens is you have the middle-class fleet first, then you have the real hire nurse who could kind of pay that at first. And then they start to get annoyed. They leave. And then what happens? You just have the lower classes, the people who really can’t afford to just move up and leave. Those are the people who get stuck in these cities that essentially are at risk. Now becoming just burned out health scapes, like destroyed like Detroit. It’s really sad. And you know, New York city, I still think is one of the best cities in the country, the best city in the country, probably it’s, it’s a special place, but it’s becoming hollowed out. And if they continue on this track, I’m very concerned about the future of New York city, especially with technology. Now, you know, these companies do not need to be there anymore. Their works a couple forces can increasingly either be remote or relocated elsewhere. So, uh, you know, I am not sure it will have a bounce back like it did under Rudy Giuliani
Danille:
Don’t have to be there. Right. I was wondering about that. You know, I mean, everyone says new, York’s always going to come back, right. Cause it’s New York, but now de Blasio with these mandates and like the, you know, making it harder and harder to be in business and all these lockdowns. I I’m wondering if New York city welcome back because you know, California, you have the weather and it’s appealing, but you know, New York, if it’s unsafe and the businesses leave to your point, then what, why is it so great anymore?
Kristin Tate:
Yeah, that’s exactly right. We can’t take for granted that New York city is always going to be, you know, the place, the hub in the U S especially as those big businesses leave. I mean, every day it seems like I’m opening the newspaper. And another big bank is opening an office in a place like west Palm beach or Dallas. It’s, it’s incredible. And the workforce is increasingly want to be in those offices, not in, especially, I mean, if you have kids living in Manhattan, it’s just, it’s horrible on multiple levels right now. I mean, you can’t put them in the public school system. So you’re looking at $30,000 a year for private school. You have the crime that’s exploding. You have a long commute. If you have to live out in someplace like Larchmont or, you know, west these, these various, uh, these various suburban areas. So I think this is a trend that will just continue to accelerate in less New York city turns things around very quickly, but I just don’t see that happening because one of the unfortunate trends that I noticed in my book is often when, when these cities and states start losing residents, they just double down on our policies that created the problems in the first place, you know, increasing taxes on the people who remain or to funding the police more than they did the first time. It’s just, it’s ridiculous. They just don’t want,
Danille:
Or they did, you know, for their preliminaries, the democratic party, they did elect a more moderate Democrat, which was interesting.
Kristin Tate:
That’s true. And, and, and the new incoming mayor seems to be more pro-police, which I think is a good side. You know, one thing that I do think is true, and I don’t have data on this. This is just something that I’ve kind of noticed talking about. People’s when it comes to people’s kids, all of a sudden, you know, people seem to have less tolerance for this, for this law was Snus. And we’re getting to the point now, especially in New York, where you have previously very safe family-friendly neighborhoods like the upper west and east sides that now have, um, serious crimes going on. I mean, I read a story a couple of weeks ago, about a 20 something year old woman, just in the train station. I think it was, uh, the upper east side waiting to go to work, you know, 10:00 AM or something, and just gets viciously attacked for absolutely no reason, just, you know, this brazen sort of unprovoked attack. So I think the more that things like that happen in these areas where families do live, uh, you know, we are hopefully going to see more candidates who are more pro law enforcement get voted in, but, you know, on a macro level, I’m not sure that I have as much confidence, especially at the state level. You know, I can guarantee you that whoever replaces, uh, Andrew Cuomo is probably going to be more left wing than he was good
Ken McElroy:
Question though. So I grew up in Seattle and I have family that’s hardcore liberals, you know, which is totally fine. Uh, and, um, you know, I’m not sure they even get it, like, you know, as, as the police are leaving and the homelessness are sitting on the, um, you know, on the sidewalks and a town that I grew up in and, you know, and 5,200 police leave the New York police department last year. And, you know, all of these things are happening and they still are holding tight. Right. Yeah. It’s, it’s interesting to me. And then they’re moving to these other two, these other areas, and they’re kind of holding those same positions and kind of creating the same issues. What do you think it’s going to take to, to make the, have them and understand that some of the policies that they stood for and I, I listen, I kinda, uh, you know, I’m on both sides of the fence, I’m on some of the social matters and things like that.
Ken McElroy:
Like we do need section eight, we do need help for the homeless. We do need people that need a handout, but now with this unemployment and all this stuff, you know, it’s now flipped the other way. These people, the new people don’t want to work. You know, uh, all of a sudden I was paying 1560. I have, uh, almost 300 employees. I was paying 15, 16, 17 an hour. Then all of a sudden that jumped in the mid twenties because of, you know, these people were getting $20 an hour just to stay home. Right? So, so these are, these are Pall. It’s created all this, uh, inflation and this kind of run on inflation.
Danille:
That’s the thing, you know, the employees are happy, right? Cause they’re saying finally, we’re getting more money. We deserve it. But what they’re not understanding on the backend is that makes everything go up, you know, that makes their rent go up. That makes, you know, food go up. That makes everything go up when you’re paying more for your staffing. So it really isn’t good for them in the long run. But in the short term, it looks like a win.
Kristin Tate:
And I would also add the employees who are lucky enough to have their jobs or keep their jobs are happy, but there’s an opportunity cost here, right? Because fewer people are getting hired right now because the cost of labor is so high. Um, the cost of retaining and hiring talent. So, and you’re absolutely right. You know, inflation always hurts the most vulnerable for higher earners paying three to $5, a gallon of gas. It’s kind of annoying, but not a huge deal. Paying 10% more on your groceries, again, kind of annoying, not going to kill you, but it’s the, it’s the low income workers. It’s the most vulnerable who really get killed with that stuff. These people still have to fill their cars up with gas. They still have to go to the grocery store and inflation is truly the word just hidden tax on the poor.
Kristin Tate:
And I would add, uh, you’re absolutely right about, uh, about, you know, these small businesses just being walloped by this on ending stream of unemployment bonuses at the federal level. Uh, my stepmother owned several small restaurants up in Boston. She can barely keep her doors open. I mean, the demand is there. So, so people want to go out again. They want to go to restaurants, but she can’t keep her doors open consistently because it’s impossible to keep labor. And, you know, in a, in a business like the restaurant business where your, your margins are razor thin, increasing the cost of labor from like $15 an hour to $19 an hour, that can really kill you in the business world. And, uh, she always mentions too. It’s not just what you’re paying per hour, but you know, there are taxes on every dollar that you pay for each employee when you’re paying $15 an hour, you’re really paying 20 an hour with all of the various regulatory and tax costs. So
Ken McElroy:
I watched your video on YouTube, uh, the recent one on the labor shortage. Uh what’s I really enjoyed, cause you basically said w we have, uh, uh, we, you know, the issue is obviously we have enough workers that the employers are just competing with the chat
Kristin Tate:
Vastly. We’re in a situation now where we have the private sector competing with the federal government, uh, and that is not going to end well. And it’s people who know what’s going on and have capital, I think will increasingly move out of the U S dollar. I think that’s why we’re seeing cryptocurrency skyrocket over the last few years, even precious metal, why we were seeing real estate, you know, part of why we’re seeing real estate go up in cost so much. And again, not to be like a broken record, but again, it’s just, it’s the most vulnerable people who don’t know how to do that, or can’t do that, or just don’t have the means to do any of that who are just in the worst situation, because they are stuck in this failing currency and being effected drastically by inflation. So the best thing that could happen right now is to get rid of these unemployment bonuses, because I do think, you know, things would bounce back pretty quickly if that happened, but it just doesn’t seem like there’s any appetite for not at all in Washington DC, especially we saw yesterday, the president announced another multi-trillion dollar infrastructure package that they’re hoping to pass.
Kristin Tate:
And I use air quotes there because we all know that’s a, misleadingly named bill. A lot of that bill has nothing to do with infrastructure. Uh, but it’s just, it’s, it’s, we’re heading for a disaster. And unfortunately by the time, a lot of average folks who are most vulnerable, realize it and get angry about it. It will probably be too late to turn things around quickly.
Danille:
Is there some more stimulus in that infrastructure bill? Do you know? Um,
Kristin Tate:
So I don’t believe there’s direct stimulus unemployment payouts, although they could continue that with a separate measure, but there’s a lot of what they call human infrastructure, which is essentially more welfare. So, uh, you know, things like the child tax credits and, uh, you know, it’s basically a lot of handouts for these big government programs that have nothing to do with infrastructure. But I do not believe that it does prolong the, uh, unemployment benefits, at least on the federal level. Interesting.
Ken McElroy:
Some of these bigger cities, like New York have kind of gone through this before and then kind of come back. So, you know, uh, we’re seeing this now, we’re seeing what I saw in the Northwest and what you saw up in the Northeast kind of happening and, and things turning purple. Do you, do you think that at some point people are going to go, you know, oh, we’re losing population, our taxes are going up, we can’t afford here. Um, do you think that some of that will flip back around,
Kristin Tate:
Um, you know, it might in certain pockets of the country, but the, the macro trends that I’ve seen, at least when I was researching for my book, seem to that, no, uh, that in fact, the place is losing residents are going more hardcore to the left. Uh, simply there’s another thing going on here, which is that, uh, the people are leaving are unhappy with the direction that things are going in. And then the ones who remain, uh, may, many of them are so wealthy that they don’t really care about a few extra taxes or whatever. And they just keep voting in favor of the Progressive’s that are putting in place, these regressive policies. Um, another interesting aspect to this story that I found while researching it, it’s, it’s not necessarily just a red state blue state divide. It’s also an urban world divide. So if you actually look at each of these states, whether it’s the state’s losing people or the states gaining people, if you look at each state, you look at the suburban and urban areas, those places are trending to the left generally.
Kristin Tate:
So they’re becoming more blue. Even if you look at Texas, Florida, you know, or the places losing residents, the suburban and urban areas are turning very blue, but within those same states, if you look at the less populated suburban areas or the rural areas, in many cases, those places are trending red. So I think what’s happening here is that you have these blue Staters swing to the red states, driving up crisis in, in the urban areas, including housing crisis, and essentially squeezing out a lot of the local population that all of a sudden becomes priced out of these markets who are moving to the more rural areas where things are more affordable. And essentially people are sort of like self-segregating in a sense. So we are seeing increased polarization across lines when it comes to whirl versus suburban and urban as well. So that’s another part of the story that gets missed, I think, but could have all kinds of impacts within states that could create very interesting little political battles and landscapes moving forward. So, um,
Ken McElroy:
Thank you. Uh, so we, I know in 2020, you know, everybody was very, very surprised at all these migration patterns. You know, I certainly was, I was, you know, during the pandemic, we had all these people moving and I was studying like a north American van lines and Ryder trucks and you haul, you know, they have all this data, you know, it was like, and of course out-of-state, driver’s licenses and all these things. Um, but what’s interesting is 2021 is actually 20% higher. So now we have this work from home and I have a friend in New York city, his rent is a hundred thousand a month, you know, and he’s like, he’s like, yeah, my people aren’t even coming to work. Right. And so what’s happening from a commercial real estate standpoint is a lot of these guys are making decisions. They’re saying, listen, you know, I can, I can relocate my whole company or work from home.
Ken McElroy:
Um, and I can be, I can, I can, I can basically go anywhere I want. And, um, so that’s kinda to your point, I don’t know that like New York and some of these bigger urban, even though that’s kind of where they’re kind of getting gutted right now, and they’re going to be left with, you know, all those little businesses that are sitting on down, uh, you know, around at the bottom of those office buildings and people go out for happy hours and for, for lunches and all that kind of stuff, they’re going to be in big, big trouble. And that’s kind of the second wave, but it feels like as these big, big corporate behemoths, you know, are moving and that’s just going to create, I think, an additional wave in 2021 and 2022. What do you think?
Kristin Tate:
I agree with that. Uh, I think that, you know, certain businesses had to be in, like, let’s just use New York, you know, banking had to be a New York. Uh, and now that’s really just not the case, uh, just because of technology. And also, I think a lot of these companies are realizing their workforces don’t want to be located there. Right. So, uh, yeah, I think you’re absolutely correct. And, and, you know, you’re right to point out that it’s, it’s sad that all of these other industries that are supported by these larger industries, like banking, um, are going to really suffer as those workforces increasingly move out. Um, I will say that I think at some point, many Americans and businesses are going to say, okay, enough of this, you know, remote working, we need to be, face-to-face at least a few days a week to network and create a team ethos. And, uh, you know, we can’t all just live in pods for the rest of time and just never see anybody. But I think that, uh, the trend shows the new office buildings, the new spaces are all happening in these sort of Sunbelt Southern states. Um, and that’s probably where we will see most of these companies sort of moving towards when they do go back to at least part time in person.
Danille:
I agree with that. I think that it’s going to be more of a flex schedule and people can live farther from the city center because they’re not going to have to be at the office every single day, but they will have some kind of focal point. Yeah. A few times a week. What’s interesting
Ken McElroy:
Though, is that, you know, we’re, I’m, I’m doing a, uh, we’ve, I’ve been doing a couple of vets. So I spoke at an event in Miami. Uh we’re we’re doing another one in, in Arizona. And then, uh, we’re I’m right now trying to book a venue in Florida, which is an almost impossible, like this is in February. So, you know, we’re just trying to get a hotel with a convention center and the same thing is actually happening in Texas. So what’s happening is the people that want to get together to your point, whatever they are. They’re trying to, they’re going to these states that actually, um, aren’t as restrictive. And, and so, you know, there’s a tremendous amount of pressure on convention space and meeting space in Texas and Florida right now for net all the next year, because in employers, to your point, they’re saying, listen, we can, we’re all working from home. Let’s all get together, but where do they want to get together? They’re not booking Seattle. They’re not booking San Francisco. They’re not going to New York at the moment. And so I think that what’s going to happen is this, I think the, I think it’s tipped. And I think to your point, I don’t know that a lot of these urban cities like like Seattle, uh, you know, San Francisco, even New York are going to rebound for a long, long time.
Kristin Tate:
If ever if ever we might not even have a future where there’s, you know, one or two major American cities that just sort of dominate in terms of American cities. It could be, you know, 10 tier two city that kind of boom. And, uh, the population of urbanites throughout the country is more spread out. Uh, but yeah, that’s, to your point. That’s another thing we haven’t really touched on here, which is I wrote my book, the liberal invasion of red state America before COVID hit, it has totally taken this to the next level. And, and the restrictions that some of these states are putting in place in localities has, has really sped up this trend. I think you need a part two.
Ken McElroy:
It was like, even like governor DeSantis is he, you know, he’s actually on the offense, you know, the stuff that he’s doing right now, whether you believe it or don’t believe it. Um, you know, I think that if, if you want to, if you’re an entrepreneur and you’re trying to run your business and you’re, you know, you’re, you’re looking at those things, you know, if you’re an employee, you’re looking at cost of living, but if you’re, if you’re a small business owner, which I know you support, and you know, your, your podcast certainly supports a lot of your writings support, uh, you know, we’re trying to figure out what’s, what’s the best state to operate it.
Danille:
Well, when we even see it in here in California, you know, when they’re trying to be controlling, you know, the businesses here, they shut them down three different times during the pandemic. And they were telling us on the third time, a lot of the businesses just didn’t comply, you know, cause they were just over
Kristin Tate:
It. Oh yeah. And, and I mean, these poor, small business owners, some of them have just seen their dreams and livelihoods just go up in flames. Um, my stepmother going, she owns these restaurants. And for a while in Boston, several times they did the outdoor dining thing. And it’s like, well, you know, some people don’t have the ability to do that. Some people don’t have space outside of their restaurants or, you know, it’s just, well, what do they do? I guess they’re just out of walk, right? Good luck paying your rent for the next house for the next, however many months, they decide to keep these, these orders in place. And some of them make no sense, right? Like in New York when they were doing outdoor dining or you couldn’t eat in the restaurant, but you could eat in these tents outside, which it turns out, make COVID spread even faster, right. Because you’re in an inclusive enclosed space, we were taking your mask off eating and there’s no air flow at all. So I think people are just really fed up with this, all of it. And, um, but either way here
Danille:
In California, where, you know, they’re supposed to be all for it, you know, we went to a volleyball tournament this weekend, big outdoor event. Well there’s mass signs everywhere. And I think we saw three people actually wearing one, you know? So I think that it’s not just the conservative states that are over it. I think the liberal states are over it too, but their governments aren’t over it,
Kristin Tate:
Especially with the vaccine. You know, I think a lot of people were willing to put up with those and go on lockdown until the vaccines came out. And then, you know, once you get the two jobs, if you look at the data and you think, well, you know, I’m not living. If I sit in my house, then I just don’t go out. And you know, I don’t see anybody. You’re not really living life. And at this point with the vaccine, you have such a small percentage of a chance of actually getting hospitalized to really sick. So people are making that risk calculation to resume life. And I think a lot of small business owners are making the same risk calculation. Um, it’s really just, I just think it’s really sad that so many small business owners have just been, you know, destroyed in the last year and a half. And ironically it’s Amazon and Walmart and these big box, big box companies that love the lockdowns. I get so mad whenever I see statements or emails from Amazon saying, you know, we care about safety, you know, stay home and take precautions. They love the lock down. They go on forever.
Danille:
They’re making a bunch of money, blue states. What I can’t understand do they just not want to support the small businesses? I mean, you know, these lockdowns clearly hurt the small businesses, which hurts their taxation, which hurts, you know, people living there and do they just not care. I
Kristin Tate:
Mean, clearly they don’t care. And you know, you know, what’s so frustrating about it is these people making the orders, the politicians and the bureaucrats, guess what? They haven’t missed one paycheck. They will never miss a paycheck. You know, the, the tax money keeps flowing. They keep getting their checks. Their whole staff are getting their checks. They’re doing fine. It’s the people who are working hard in the private sector who are getting destroyed. And, and, uh, you know, all I can say is these, these, these areas that are killing small businesses, they are, they’re destroying their own cities because these, these innovative entrepreneurs and business owners, they will move elsewhere. They will vote with their feet. They will inject capital into the places that actually value their small business communities. And I think that’s exactly what we’re, what we’ve seen happen over the last year and a half, especially. But again, this is a trend that started even before COVID,
Ken McElroy:
I think what’s going to happen. Next is a lot of these folks are on fixed income. So, you know, especially if they retired and, you know, inflation kills the person on a fixed income and, um, it rewards the people on fixed debt. So if, if, if you’ve got a fixed income, my mom who, you know, retired and, you know, has a pension, or my brother, let’s say who’s a hardcore liberal and his wife, you know, they’re, they’re going to start to see, uh, when, when, when we’re, when we’re going to see inflation that I think is when hopefully there are woke, you know, like there has to be, it’s going, it has to hit them hard. Somehow they’re going to see higher taxes and they’re going to see an erosion of their purchasing power on some of these, on some of these fixed, but it’s, it’s, it’s going to be a lag. And it’s probably going to be a good year to two years from now, before they start to see some of that. W
Kristin Tate:
I agree. And I just worry that by the time a lot of folks do wake up, it might be a little too late to, to turn things around quickly. Um, obviously we can still turn things around at that point. It just might take a while and a lot of people could suffer, you know, between now and then. Um, and, and the other thing that I find interesting is a lot of times, uh, when people see these, these numbers, and then they see the inflation, they demand more government spending or more programs, or, you know, more unemployment like, like there’s just this backwards way of thinking where they, they just seem to want to double down on the policies that created it in the first place. So part of me is afraid that, you know, the folks who you’re referring to by the time they acknowledged the inflation, the fix for it will just be more government checks. And, uh, that will just compound the problem. Obviously
Danille:
I know because every time Ken mentioned his mom, you know, being on a fixed income, Ken does help out his mom and will always help out his mom. So we always, we always get, whenever you’ve mentioned your mom on a fixed income, we always get 50 YouTube comments of Ken’s going to help his mom
Speaker 4:
Come on. Oh, by the way,
Ken McElroy:
I love this. I, my Mo my mom got hurt during COVID. She broke her leg. And so we had to, you know, get her help. And so what I did is I, uh, my sister and I, and my brother, we, we, we got our house rented, which covered all of her, all of goes passive income. Uh, anyway, so it was this, uh, luckily I’m in the real estate business. So I was able to, but, but she almost completely is covering that. But of course, guys, to take care of my mom, that’s my mom, uh, let’s chat. Before we wrap up up here. Can we talk a little bit about the education system? Because one of the things that we look at from a real estate investing standpoint, and it helps people actually source out good public schools when they’re making decisions. Now, not everyone can afford private schools.
Ken McElroy:
So this is a big kind of undercurrent topic where like, like, uh, I have a lot of property in Texas and, and, um, like we have properties, uh, in Plano, Texas, which is, I think still might not be still, but was at one point the top public school system. And we would have, so we were actually buying properties in that market because families, to your point earlier, they, you know, they seem to bend the rules a little bit around, you know, around their kids. So, so what do you see, uh, you saw some erosion, obviously, uh, you quoted the know the 90% failure rate in New York. What do you see is going to happen with some of the, some of the education systems as we start to see, you know, uh, things turn
Kristin Tate:
Purple? Um, well, I mean, from what I can tell, just from people that I know who have kids in the, in the school systems, they are pulling their kids out of the inner city school systems and putting them into suburban school systems, assuming they can’t afford private schools. It seems like the schools that are really failing students right now, or those that are in the big cities. And again, this is all going to impact the sort of brain drain out of the big cities as people move out and go to other places, school systems are one of those things they consider. Um, I also have spoken to a lot of families for all my books who, uh, have a lot to say about school choice. And this is a very interesting political issue for people, uh, because what you find is even on the left people in lower income brackets, overwhelmingly support school choice, they want the option to send their child to the best school possible.
Kristin Tate:
And, uh, it, unfortunately in many of these big localities, like New York and San Francisco and LA they’re very hostile to charter schools where the results tend to be much better than the, than the private schools. So this is just another factor pushing people out of these large cities. And I will also say in the immediate future that, uh, the COVID restrictions have and continue to really damage education, uh, you know, public education. I actually live next door to a guidance counselor at a large public school. And, uh, the stories she has told me from the last year, year or so sad, you know, these kids had almost a year of just zoom education and often they don’t even turn on their cameras. So she told me the kids will just sit in bed all day with their cameras off, not even listening to the zoom class while they play video games or something.
Kristin Tate:
And they’re developing severe depression, weight gain, other mental health, and frankly physical health problems. They’re not learning anything. So, so this has been really bad. And it’s obviously, you know, a lot of these same areas that are losing residents that are doubling down on these calls from the schools as well, but have been very harmful to students. Um, and you know, we all love to say follow the science, follow the science, but it seems like many of these school districts in fact, are not following the science because there have been multiple large studies that show that, um, you know, kids really are not at very high risk of getting very sick from COVID. Um, in fact, the, the risk of dying from COVID for kids is significantly lower than that for the seasonal flu. Um, so I think there’s a hunger to get kids back into schools and resume normal learning. And I believe that the school districts that, that, uh, may see some pushback and also many parents pulling their kids out of those schools. And again, it’s going to be the most vulnerable families we’re stuck in these failing and these failing systems, unfortunately,
Danille:
Exactly. Cause I was a former teacher, so I know a lot about the school system and, you know, I don’t understand why Democrats are so against school choice because I think like you said, a lot of the urban districts, um, where they get a lot of their voters are for school choice. Cause they have the worst school system and you know, I’ve taught in those school systems and it’s very, very, very bad. Um, but, but I don’t think a lot of school systems, even then the better areas are necessarily great, like a private school is, but it’s certainly much better than your urban schools and what
Ken McElroy:
I wanted people to, the reason why I brought it up is because people don’t think that this is a migration issue. I believe that it is I’ve watched it. Uh, we bought properties 15 years ago based on school systems because parents always look at how are their kids going to be educated and what’s the best way to educate my kids always. And so it’s often not talked about publicly, but it’s talked about a lot. And, and so now it’s even becoming more of an issue. Now it’s becoming a public issue. And I think that these migration patterns that you kind of talked about in your book, the, the liberal invasion of the red state of America, um, I think this is a big piece. I think people are gonna start making their choices based on where their kids can go to school, the freedoms that they can potentially have because everyone wants their children educated and they don’t want them home.
Kristin Tate:
Oh yeah, of course. And they’re already making these decisions. Um, you know, the, the, the states where everyone is moving right now have essentially resumed normal school and gone back to normal for the kids. Um, and then the places where people are leaving tends to be the kinds of places that are just refusing to do that, frankly, because the teachers unions have so much control and say over how these places are run, um, and the kids are being harmed. It’s also,
Danille:
It’s also the, the athletics too, right? Because if you are a junior or senior and you’re trying to get a college scholarship and you can’t play, you know, you’re going to be looked over. So I know that’s been a big one of people moving to Florida and some of these red states that are back to normal has been the athletics and the, and the school system too.
Ken McElroy:
I had a friend of mine. He is actually a very well-recognized college coach was here last week. And we were talking about this and, you know, he’s, he is in the college ranks before he’s been in the NFL before. But, um, the it’s been, uh, he said the recruiting process from the kids that, you know, think about it, think about if you were a college or high school, senior, and, um, you know, which is supposed to be your breakout year and you got college coaches and all that stuff. So it’s, it’s been super disruptive. And, and I also have friends where they’re, they, they think their kids are going to be, you know, the next, whatever. So they’ve moved, they’ve literally moved, they moved and they put them in the IMG and Florida, or they, you know, or they’ve gone all over the place. So these, these high school athletes are actually have relocated, uh, based on their ability to be able to make it to the next level, whatever that means for the family
Danille:
Point. You know, these are wealthy families or upper middle-class families. It’s the lower-class families that can’t move or can’t, you know, afford for their kid to just not take the bus to the local school down the road. Um, cause they’re working, they’re the ones that are going to be most impacted by these failing school systems.
Kristin Tate:
Yeah. And it’s not just, you know, student athletes too. It’s just lack of movement is really harming students like this guidance counselor. I live next to said their kids’ bones are turning to mush because if their parents aren’t actively getting them outside, they will sit in bed all day in some cases and not even get dressed in the morning. I mean, that is destructive a year of that for a kid. And now potentially more like six more months of that. I mean, it’s, it’s not even just, you know, the star athletes, it’s, it’s even just the average students, not having that, walking around that socialization, that normal experience it’s, it’s harmful on multiple levels. And I just think our society hasn’t even yet grappled with the lasting impacts that this is going to have on this generation of students. It’s really sad. And, and frankly tragic definitely
Ken McElroy:
Is so, so, um, this has been really fun, Kristin. So how, how can people reach you? And what’s the best way for them to learn
Kristin Tate:
More. Thank you guys so much for having me. So you can find me on Twitter at Kristin B Tate and that’s spelled K R I S T I N. Kristin Tate. And my website is just the same Kristin be tate.com.
Ken McElroy:
Awesome, Kristin. Well, thank you again for your time. I appreciate your views. Good luck on your books. I, uh, I love them. I think, uh, they were, what was interesting to me is when I was digging into the, uh, the, the liberal invasion book is that you had started it before. COVID had basically approved all your points. Unfortunately,
Kristin Tate:
I wish it hadn’t, but, uh, yeah, these trends are just accelerating and getting worse. And uh, hopefully the book can serve as sort of an alarm bell for people, but also help them sort of be armed about what’s happening and also teach them how to talk to their neighbors who are moving in from these different states and help them see why certain states are flourishing and others are not. Yeah,
Ken McElroy:
Well, from an investment standpoint, I loved it because people don’t realize that a, that potentially is coming. So if you buy somewhere, you gotta pay attention to these policy changes and these things that are happening, because those are gonna be real expenses that could show up, uh, on your own personal balance. Absolutely. That was Christian. Thanks again.
Danille:
Kristin. Very nice to meet you. That was great to talk with you. Enjoy your week.