Klein: Government Protection of Housing Wealth Incentivizes Excessive Borrowing
Matthew C. Klein · They Called The Trade Wars & China's Housing Crash | Nikhil Kamath | WTF is Finance Ep 4 · Nikhil Kamath · Jul 28, 2026 · at 49:24
Matthew C. Klein, macroeconomist and co-author of Trade Wars Are Class Wars, discusses why housing bubbles occur across various economies with Nikhil Kamath.
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“Because so many people have the majority, if not the vast majority of their wealth in housing, there is a very reasonable motivation for governments to not want housing prices to go down. I mean, maybe you don't want it to go up a lot, but you certainly don't want to go down because You know, screwing over a lot of your constituents, and so that, the problem is, as you said, if everyone believes it's not going to go down, that creates incentive to borrow more to go up, right, because then your downside risk is capped, so you're going to borrow more to make it go up”
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