Morale at the agency is extremely low, and the situation is dire. But we think there are ways [Lina] Khan can repair the breakdown in trust that has occurred between her and the career civil servants that staff the commission. And she must. The role of the FTC in protecting American consumers is simply too important for lawmakers and the public to watch as its institutional capital rapidly circles down the drain.
Earlier this month, the Office of Personnel and Management released results from its yearly survey of federal employees. Normally, this is an opportunity for FTC leaders to take a victory lap. Over the course of more than a decade and until this year, the FTC ranked consistently toward the top of a list of similarly sized agencies.
This year’s results are quite different. Suddenly, the FTC’s rankings are at or near the bottom. From our perspective, the most concerning results reflect a sharp disconnect between FTC staff (mostly apolitical federal employees) and management (presidential appointees and their hand-picked senior staff). In 2020, prior to the change in administrations, 87 percent of FTC staff answered favorably when asked whether senior leaders “maintain high standards of honesty and integrity.” In 2021, after Khan and her team took over, that number dropped to 53 percent. Similarly, the number of staff who answered favorably to the question of whether “senior leaders inspire motivation and commitment” moved from 80 percent to 42 percent. These declines are substantial and concerning, and they reflect a sharp break from consistent and positive results over a long period.
The economics of the near future of the housing market is not as scary as one might think given the large increase in prices and the coming additional tightening of the Fed. New construction will slow sharply, and the downward pressure on the price of existing homes from new supply will moderate sharply as well. Stagflation is a strange thing in the housing market. The low growth wants to push the price down, but the inflation wants to push it up. If history is a guide, then, one shouldn’t panic about the state of the housing market.
For the recession we are probably entering, the most likely outcome is that home prices decline somewhere between the 1982 rate and the rate from 2008. After a 19.8 percent increase over the past year, the odds are that most American homeowners will end the recession playing with house money.