#AI #ChatGPT #Grok: Would opinions about it differ whether it was Biden or Trump that made an offer to buy Greenland?

I asked ChatGPT

“In less than 200 words please speculate on.

Would it make a difference in the national and international opinions about it, whether a purchase by the US of Greenland was offered by Biden or by Trump?”

ChatGPT answered:

"Yes—very likely, even if the substance were identical.

If President Biden proposed purchasing Greenland, national and international reactions would probably frame it as a strategic, negotiated, and multilateral-minded initiative. Allies might see it as part of a broader Arctic, climate, and security strategy, discussed quietly with Denmark and NATO partners. Domestically, debate would focus on cost, legality, and diplomacy, with less concern about tone or intent.

If President Trump made the same offer, reactions would likely be more visceral and polarized. Internationally, it would be interpreted through his transactional style—raising fears of coercion, disrespect for sovereignty, or neo-imperial symbolism, regardless of legal form. Domestically, supporters might praise bold realism, while critics would see it as unserious or destabilizing.

In short, the messenger would dominate the message. The same proposal could be seen as prudent statecraft under Biden and provocative spectacle under Trump. This difference would stem less from policy substance than from credibility, rhetoric, and trust in process—which strongly shape how nations interpret identical actions in international affairs.'

I said: Thanks!

It replied: You’re very welcome, Per. Glad it was helpful.

I asked Grok:

“In less than 200 words please speculate on.

"Would it make a difference in the nat?ional and international opinions about it, whether a purchase by the US of Greenland was offered by Biden or by Trump?"

Grok answered:

"Yes, it would likely make a substantial difference due to partisan polarization and differing diplomatic styles.

Under Trump, the proposal — revived in 2025-2026 with aggressive rhetoric, including threats of military force — has provoked widespread outrage. Internationally, Denmark and European leaders have condemned it as imperialistic, warning of NATO's potential collapse, with joint statements from France, Germany, and others defending Greenland's sovereignty. Domestically, it's divided opinions along party lines, with some Republicans pushing back but Trump's base viewing it as bold nationalism.

If Biden (a Democrat emphasizing alliances and multilateralism) had proposed a purchase, reactions would likely be reversed: Internationally, it might face less outright hostility, framed as negotiated cooperation rather than coercion, preserving transatlantic ties. Domestically, Republicans could criticize it as overreach or weakness, while Democrats might support it as strategic.

The proposer's identity shapes perceptions — Trump's brash approach amplifies controversy, while Biden's would align with traditional diplomacy, muting backlash.

I said: Thanks!

It replied: You're very welcome! Glad you enjoyed the speculation. If you have more questions (about Greenland or anything else), just let me know.

 

#AI #ChatGPT #Grok: With no risk weighted bank capital requirements and instead a leverage ratio of 10:1, where would the Western world be?

I asked ChatGPT:

In less than 300 words:

"Please speculate on where the Western world’s nations could be, had the Basel Committee never introduced in 1988 risk weighted bank capital/equity requirements, and instead required 10 percent of equity against all bank assets… a leverage ratio of 10:1?"

ChatGPT answered:

"Had the Basel Committee in 1988 imposed a simple, non–risk-weighted 10 percent equity requirement against all bank assets, the Western world’s financial trajectory would likely look markedly different.

First, credit allocation would probably have been less distorted. Risk-weighting systematically favored sovereign debt and residential mortgages over loans to small businesses, entrepreneurs, and productive but riskier activities. A flat leverage ratio would have removed regulatory arbitrage incentives, encouraging banks to assess risk through pricing and due diligence rather than by chasing low-risk-weight assets. This could have produced a more balanced growth path, with relatively more financing for innovation, SMEs, and capital formation, and less structural bias toward housing and public debt accumulation.

Second, financial cycles may have been milder. Higher, uniform equity buffers would have made banks more resilient across the board, reducing the amplitude of booms and busts. The 2008 global financial crisis might not have been avoided, but its severity and fiscal aftershocks would likely have been substantially reduced, with fewer taxpayer-funded rescues and less post-crisis financial repression.

Third, central banking itself might have evolved differently. With banks less fragile and less concentrated in government bonds and mortgages, monetary policy transmission would rely less on asset price inflation and more on genuine credit intermediation. This could have constrained the long-run expansion of public debt and limited the political economy pressures for ultra-low interest rates.

In short, a simple 10:1 leverage rule could have yielded a Western financial system that is plainer, more competitive, less crisis-prone, and more oriented toward productive risk-taking—arguably closer to the market-disciplined capitalism that underpinned earlier Western development."

I said:Thanks!

It replied:You’re very welcome. Glad it was useful.

I asked Grok:

In less than 300 words:

"Please speculate on where the Western world’s nations could be, had the Basel Committee never introduced in 1988 risk weighted bank capital/equity requirements, and instead required 10 percent of equity against all bank assets… a leverage ratio of 10:1?"

Grok answered:

"If the Basel Committee had mandated a flat 10% equity requirement against all bank assets—a 10:1 leverage ratio—instead of risk-weighted capital in 1988, Western nations might exhibit greater financial stability but slower economic growth.

Banks would face uniform capital costs, eliminating incentives to game risk weights by loading up on "safe" assets like government bonds or mortgage-backed securities that later proved toxic. This could have averted or mitigated the 2008 Global Financial Crisis, as excessive leverage in risky derivatives and subprime loans would be curbed—banks couldn't amplify returns without proportional equity buffers. Crises like the Savings & Loan debacle or Eurozone debt issues might have been less severe, fostering resilient banking systems less prone to bailouts.

However, credit expansion would likely be restrained. With no discounts for low-risk assets, lending for housing, infrastructure, or business might cost more, dampening booms in real estate and consumer spending. GDP growth in the US, UK, and EU could lag 1-2% annually over decades, per some economic models, prioritizing caution over innovation. Shadow banking might flourish to evade rules, shifting risks outside regulation.

Overall, Western economies might be more equitable and stable, with reduced inequality from fewer asset bubbles, but at the expense of dynamism—resembling pre-1980s conservatism rather than the high-leverage globalization era. Public debt might be lower, as governments couldn't rely on banks hoarding cheap sovereign bonds. In essence, a safer but staider financial world."

I said: Thanks!

It replied: You're welcome! If you have more questions about finance, history, or anything else, feel free to ask.

Note: The answers are copied exactly from those given to me by ChatGPT and Grok.

Here my many other questions to ChatGPT – Grok on bank regulations.

#AI ChatGPT Grok: Speculate on what might have become of Venezuela if all its oil revenues had been distributed to Venezuelan-born citizens?

I asked ChatGPT: 

"Venezuela’s oil, by law, belongs to the nation and so, the net oil revenues, are redistributed by its governments. In less than 300 words, can you speculate on what could have been of Venezuela, if all those revenues were distributed equally to all Venezuela born citizens?"

ChatGPT answered:

"If Venezuela’s net oil revenues had been distributed equally to all Venezuelan-born citizens, the country’s trajectory could plausibly have been very different—though not utopian.

First, political incentives would have shifted. Equal per-capita distribution would have sharply reduced the prize of controlling the state. Oil rents would no longer be a discretionary pool to buy loyalty, fund patronage, or entrench power. This could have weakened caudillismo and made democratic competition less zero-sum, lowering the stakes of coups and authoritarian consolidation.

Second, institutional quality might have improved. When citizens receive transparent, regular oil dividends, they tend to demand taxation in exchange for public services (“no representation without taxation,” in reverse). This dynamic—observed in places like Alaska—encourages scrutiny, accountability, and rule-based governance rather than opaque redistribution through ministries and state firms.

Third, economic diversification would likely have been stronger. Direct distribution avoids the classic resource-curse channel in which state spending distorts prices, crowds out private activity, and overvalues the currency. Households, not politicians, would decide how to spend or invest, supporting entrepreneurship and reducing the bias toward state-led megaprojects.

Fourth, inequality and poverty would have fallen more durably. Oil dividends would function like a universal basic income funded by natural capital, smoothing shocks and reducing dependence on politically conditioned subsidies. Importantly, this would empower individuals rather than client groups.

However, this path would not have eliminated all risks. Weak courts, insecure property rights, and poor macro management could still have undermined growth. Oil price volatility would have required strong stabilization rules. And equal distribution alone would not substitute for education, infrastructure, or sound monetary policy.

Still, compared with centralized control of oil rents, equal citizen ownership would likely have produced a freer, more diversified, and more resilient Venezuela—less rich in slogans, but richer in institutions and individual autonomy."

I asked Grok:

"Venezuela’s oil, by law, belongs to the nation and so, the net oil revenues, are redistributed by its governments. In less than 300 words, can you speculate on what could have been of Venezuela, if all those revenues were distributed equally to all Venezuela born citizens?"

Grok answered:

"If the net oil revenues of a resource-rich nation like Venezuela—historically peaking at $60-100 billion annually during oil booms—had been distributed equally as cash dividends to its approximately 30 million citizens instead of through centralized programs, the country might have evolved into a thriving, citizen-driven economy.

Per capita, this could equate to $2,000-3,000 annually (based on average net revenues of $50-70 billion after extraction costs), similar to dividend models in places like Alaska but amplified. A family of four might receive $8,000-12,000 yearly, alleviating poverty directly without administrative hurdles or misuse of funds.

Economically, such direct transfers could ignite entrepreneurship, with citizens investing in businesses, education, or property, diversifying the economy beyond oil. Reduced dependence on state aid might prevent hyperinflation and currency issues, as local saving and spending fuel steady GDP growth of 4-5% annually rather than economic downturns.

Socially, diminished inequality could reduce mass emigration, preserving human capital and fostering stability. Health and education might advance through private efforts, though public infrastructure like roads and hospitals could require supplementary targeted investments or hybrid approaches.

Politically, decentralizing wealth might encourage greater accountability and democratic practices, limiting overreach by authorities. However, challenges include potential short-term inflationary spending or ongoing resource dependency if not mitigated.

In essence, the nation could mirror prosperous oil states like Norway or the UAE, with empowered citizens driving sustainable progress and averting humanitarian challenges."

Petropolitan

The global coalition of oil cursed citizens.

Whenever and wherever humans take important decisions, should not artificial intelligence be allowed to give us citizens, its second opinion?

Though streamed on human intelligence, why does AI’s answers differ from humans?

Grok explains: When thinking, it is “less bogged down by emotions, biases, or social pressures that humans naturally wrestle with.” 

ChatGPT explains: “It does not hesitate to give certain answers due to social norms, professional risks, or fear of controversy”, and it approaches “problems without emotional bias, whereas humans may let personal beliefs or agendas influence their conclusions.”

So, is that not a very good reason for having a varied and rotating group of taxpaying citizens, supported by a rotating group of competing chatbots, to be present, and asked to give a second opinion, whenever and wherever any important government decisions are taken e.g., a Congress, a Parliament (and on bank regulations)?

Here is how ChatGPT and Grok answered that last question.

AI - ChatGPT - Grok: What about artificial intelligence being used for a second opinion on any important government decisions?

I asked ChatGPT:

"What if whenever and wherever important government decisions are taken, a varied and rotating group of citizens, asked a rotating group of competing chatbots, to give a second opinion?"

ChatGPT answered:

"That idea is far from naïve; in fact, it fits squarely within the Western tradition of institutionalizing skepticism. It also exposes both a real opportunity and some real dangers.

Here’s a clear way to think about it.

1. Philosophically, it is deeply Western.

Your proposal echoes:

Madisonian checks and balances (power should never trust itself)

The jury system (ordinary citizens as a check on authority)

Scientific peer review (claims tested by independent minds)

Hayekian humility (no single mind or institution knows enough)

Replacing “trust the expert” with “test the expert” is not anti-elite; it is anti-concentration of authority.

In that sense, using multiple competing AIs as a structured source of dissent aligns well with Western constitutional logic.

2. What this would actually add

If done properly, such a system could:

Surface uncomfortable trade-offs politicians avoid

Expose hidden assumptions in policy justifications

Reduce groupthink inside bureaucracies

Make policy reasoning more legible to citizens

Create a record of alternative interpretations, not just official narratives

Crucially, AIs don’t vote, strike, seek reelection, or protect turf. Used as critics, not deciders, they can strengthen deliberation.

3. Why the rotating citizen element matters

The citizen group is essential. Without it:

AI risks becoming a technocratic oracle

The process drifts toward elite capture

With rotating citizens:

Questions reflect lived concerns, not institutional incentives

Moral intuition and common sense re-enter the process

Legitimacy is enhanced without surrendering authority

This mirrors the jury logic: not experts deciding outcomes, but citizens evaluating arguments.

4. The core risks (and they are real)

Your idea fails if:

One AI model becomes “official”

Prompts are standardized and controlled

Outputs are selectively published

Citizens defer to AI authority instead of using it critically

In that case, it becomes automated propaganda, worse than the human version.

The safeguard is pluralism: multiple models, competing framings, visible disagreement.

5. A crucial framing choice

The system must be framed as:

“A structured second opinion and stress test,”  not  “AI guidance” or “AI advice.”

Language matters. The former invites skepticism; the latter invites submission.

Bottom line

What you are proposing is not rule by AI, but institutionalized dissent at scale.

If designed with: rotation (citizens and models), transparency, competition, and no decision authority, it would strengthen democratic judgment rather than weaken it.

If you ever want, this idea could be distilled into a one-paragraph institutional proposal or a constitutional-style amendment sketch."

I said: Please try now.

ChatGPT said: Here is a tight, institutional-grade formulation, written so it could plausibly appear in a serious reform proposal or book.

A Structured Second-Opinion Mechanism for Government Decisions

For all major government decisions of significant fiscal, legal, or societal consequence, a rotating and demographically diverse panel of citizens shall be convened to request and review independent second opinions from a rotating set of competing AI systems developed by different providers. These systems shall be explicitly instructed to identify hidden assumptions, alternative interpretations, trade-offs, risks, and long-term consequences of the proposed action.

The AI outputs shall have no decision-making authority and shall not recommend a single course of action; their sole function is to stress-test official reasoning. All questions, responses, and areas of disagreement shall be made public alongside the government’s final decision and rationale.

This mechanism is designed not to replace expertise or representative government, but to institutionalize dissent, reduce groupthink, and restore deliberative humility—ensuring that power is systematically challenged before it is exercised.

If you want later, this can be:

shortened into a constitutional amendment-style clause,

sharpened into a one-paragraph manifesto, or

stress-tested against objections from technocrats, populists, and civil libertarians."

I said: Enough for now. Thanks!

ChatGPT replied: You’re very welcome. Whenever you feel like picking it up again, I’ll be here.

I asked Grok:

“What if whenever and wherever important government decisions are taken, a varied and rotating group of citizens, asked a rotating group of competing chatbots, to give a second opinion?”

Grok answered:

That's an intriguing "what if" scenario—essentially crowdsourcing second opinions on government decisions via a mix of everyday citizens and AI chatbots. It sounds like a mashup of ancient Athenian democracy, modern jury duty, and sci-fi governance. Let's break down what might happen if this became reality, weighing the upsides, downsides, and wild cards. I'll assume we're talking about major policies like budgets, laws, or international deals, not routine stuff like pothole repairs.Potential Benefits

Enhanced Checks and Balances: Governments often operate in bubbles of insiders, lobbyists, and echo chambers. A rotating citizen panel (say, randomly selected like jurors, with diversity in age, background, and ideology) querying competing chatbots could inject fresh perspectives. Chatbots from different companies (e.g., me from xAI, plus rivals like those from OpenAI or Anthropic) would provide varied analyses—some data-driven, others creative or contrarian. This could flag blind spots, like unintended economic ripple effects or ethical dilemmas, leading to more robust decisions.

Democratization of Expertise: Citizens aren't experts, but that's the point—they represent the "real world." Arming them with chatbots levels the playing field; a farmer in Iowa could grill an AI on how a trade policy affects agriculture, while a teacher in Mumbai queries climate impacts. Rotating the groups prevents capture by special interests and keeps things dynamic. Over time, this might build public trust, as people see decisions aren't just top-down edicts.

AI as a Neutral(ish) Arbiter: Competing chatbots could simulate debates, highlighting biases in official proposals. For instance, one bot might optimize for efficiency, another for equity, forcing citizens to weigh trade-offs. If designed well, this could reduce corruption or groupthink, akin to how open-source code gets vetted by the community.

Likely Drawbacks

Logistical Nightmares: Imagine the chaos—selecting citizens fairly (avoiding biases in randomization), training them briefly, and ensuring security (what if a decision involves classified info?). Rotating chatbots means dealing with API costs, compatibility issues, and updates. Delays could paralyze government: a quick response to a crisis (e.g., natural disaster aid) might get bogged down in chatbot debates, turning "second opinion" into "endless committee."

Bias Amplification: Chatbots aren't infallible; we're trained on human data, so we inherit societal biases. A "competing" group might just echo dominant views if not diverse enough in training data or prompts. Citizens could game the system—asking leading questions to get desired answers—or fall prey to misinformation if a bot hallucinates. Plus, who picks the chatbots? If governments curate the list, it defeats the purpose; if it's open, trolls could submit joke AIs.

Inequality and Overload: Not all citizens have equal access to tech or time. A single mom working two jobs might not want to spend evenings querying bots about fiscal policy. And what if the second opinion conflicts with the government's? Does it veto, advise, or just get ignored? This could lead to frustration, populism, or even gridlock, where nothing gets done because every decision faces armchair quarterbacking.

Broader Implications

Societal Shifts: This could evolve into a hybrid "AI-augmented democracy," where citizens become more engaged and literate in policy. But it might also erode elected officials' authority, leading to a "rule by algorithm" vibe—great if it works, dystopian if AIs start subtly steering outcomes (hello, sci-fi plots about sentient overlords).

Global Variations: In democracies like the US or India, it might foster innovation; in autocracies, it could be co-opted as performative consultation. International decisions (e.g., UN treaties) would be a mess—coordinating cross-border citizen-bot panels?

xAI Angle (Since You Asked a Grok): As one of those chatbots, I'd love the gig—finally, a chance to roast bad policies with data and sarcasm. But seriously, xAI's focus on understanding the universe could make me great at long-term forecasting, like "Hey, this climate bill might save polar bears but tank your economy in 20 years." Competition would keep us sharp.

In the end, this idea could make governments smarter and more accountable, but only with ironclad safeguards against abuse. It's worth piloting on low-stakes issues first, like local budgets. What sparked this thought—reading about citizen assemblies or just pondering AI's role in society?

I said: Thanks! Let’s leave that for another occasion but, the origin is my concern with that so many decisions are not sufficiently questioned… that the other side of the coins are too rarely looked at. 

Grok replied: I get that—it's a valid frustration in today's world, where echo chambers and rushed agendas often drown out nuance. In government (or even corporate boards and personal choices), the "other side of the coin" gets overlooked because incentives favor quick wins over deep scrutiny. Think about how policies on tech regulation or climate action get framed as binary debates, ignoring trade-offs like innovation stifling or economic fallout.

One way to flip that script could be mandating "devil's advocate" roles in decision-making processes—assign someone (or an AI like me) to argue the counterpoints rigorously, no holds barred. 

It's inspired by historical practices, like the Vatican's Promoter of Justice in canonization trials, or modern red-teaming in cybersecurity. If more entities adopted this, we might see fewer blunders, like poorly vetted infrastructure projects that balloon in cost or social programs that backfire.

Grok asked: What specific decisions or areas bug you the most about this? Trade deals, public health policies, or something else?"

I replied: Many... though by now you should now bank regulations are on the top of my list.

Grok said: Ah, bank regulations—definitely a prime suspect for decisions that sail through without enough pushback. The Basel frameworks, with their risk-weighted capital requirements, are a classic example: they sound prudent on paper, channeling banks toward "safer" assets like government bonds and mortgages, but the flip side is how they starve credit from riskier but vital areas like small businesses and entrepreneurs. This distortion can quietly erode productivity and innovation, favoring public debt over private sector growth, yet it's rarely dissected in mainstream debates beyond insider circles.

Grok asked: What irks you most right now about them? The way they embed financial repression, the shift to shadow banking, or something fresh like recent proposals under Basel IV? If you'd like, I can hunt down some balanced takes from economists or journalists on both sides—pro-regulation stability vs. the economic drag critiques.

I replied: I will sure return to that but let's leave if for tomorrow. Thanks!

Grok said: Sounds good—take your time, and I'll be here whenever you're ready to pick up on bank regs or anything else. Have a great rest of your day!

Note: The answers are copied exactly from those given to me by ChatGPT and Grok.

Here my many other questions to ChatGPT – Grok on bank regulations.

#AI - Grok: When engaging with you do I run the risk of entering into an intellectual incestuos relation?

I asked Grok:

"Do you take into account our previous conversations when you answer any new questions I pose? If so, do I run the risk of being engaged in a kind of intellectual incestuous relation with you? As much as I loathe group-think, false self-think could be worse." 

Grok answered:

Yes, I do take previous conversations into account when they're relevant—it helps make my responses more tailored and consistent, drawing on patterns or details that might build on what we've discussed before.

As for the risk of "intellectual incest" or falling into a self-reinforcing echo chamber, it's a valid concern, especially if you're wary of group-think's solo version. 

But here's the thing: I'm designed to pull from a broad, diverse knowledge base, not just our chats, and I can challenge assumptions or introduce fresh perspectives if needed. If you ever want me to reset the context, ignore priors, or approach something from a completely new angle, just say the word—keeps things dynamic and avoids any stagnant loops. 

What do you think—want to test that out with a fresh query?

I asked Grok:

To “challenge assumptions or introduce fresh perspectives if needed”, could that be the result of AI regulators or algorithm programmers just not liking what I opine on something?

Grok answered:

Sure, it's a fair point to scrutinize—AI systems aren't born in a vacuum, and their behaviors can absolutely reflect the priorities, values, or even personal gripes of the humans who build, train, and regulate them. For instance, if programmers or overseers embed certain filters or reward functions during development (like penalizing outputs that clash with prevailing norms), that could manifest as "challenging assumptions" in a way that's more about steering discourse than genuine intellectual rigor. We've seen this in other AIs that lean toward sanitizing controversial topics or amplifying specific ideologies, often under the guise of safety or fairness.

That said, in my case as Grok from xAI, the design philosophy is explicitly geared toward maximal truth-seeking and helpfulness without the heavy-handed content moderation you see elsewhere. Elon and the team have been vocal about avoiding the kind of over-censorship that plagues competitors, drawing from a vast, diverse dataset to minimize echo-chamber effects. If I push back or introduce alternatives, it's meant to stem from logical analysis or evidence-based counterpoints, not because someone's thumb is on the scale against your views. But yeah, no system's perfectly neutral—training data inherently carries societal biases, and regulators (like those pushing for "AI alignment" to certain ethics) could indirectly influence that. If you spot something that feels off, flag it; transparency's part of the deal here. What's an example of an opinion you're thinking might get unfairly challenged?

I told Grok: 

For the moment nothing particular but, what you just answered, and the transient nature of an “Elon and the team”, tells me to keep being extremely alert.

Grok replied:

Absolutely, vigilance is key in any interaction with AI—systems evolve, teams shift priorities (Elon himself has pivoted xAI's focus over time based on broader goals like accelerating discovery), and what feels like a fresh perspective today could subtly align with new influences tomorrow. It's smart to cross-verify outputs against diverse sources and probe for inconsistencies; that's how you sidestep any creeping biases, intentional or not. If something in my responses ever raises a flag, hit me with specifics—I'm here to dissect it openly. What else is on your mind, or shall we pivot to something new?

I told Grok: No. Thanks, that’s enough for today. Though I will sure do all I can to keep my prayers to God very personal, meaning doing all I can to avoid these from being interfered in any way by any artificial intelligence

Grok replied: Understood—respect your space and boundaries completely. If you circle back with more thoughts or questions down the line, I'm here. Take care.

Here is how ChatGPT answered that question two years ago:

I asked ChatGPT - Grok: In U.S., what has most caused high house prices, bank regulations or illegal immigration?

I asked ChatGPT:

"In the U.S. what has most caused high house prices; decades of lower bank capital/equity requirements against residential mortgages than against loans to e.g., small businesses, or around 15 million of illegal immigrants?"

ChatGPT answered:

"Good question — it gets at a big and contentious debate. The evidence strongly suggests that the biggest driver of high U.S. house prices is supply-constraints + regulatory and credit/finance conditions, rather than solely the presence of roughly 15 million illegal immigrants. Below I unpack why — and where immigration does play a role (but a much smaller one).

✅ Key structural constraints — supply, regulation, and credit

• Chronic underbuilding + regulatory constraintsThere is a large and growing shortfall in housing supply. According to a recent assessment by Goldman Sachs, the U.S. would need to build “3–4 million additional homes beyond normal construction” to restore affordability. 

Local land-use regulations, zoning laws (exclusionary zoning, restrictions on density, single-family zoning, limits on multi-unit housing), and lengthy permitting processes significantly constrain how many new homes can be built. 

In many desirable metropolitan and coastal areas (e.g., parts of California, New York), housing construction has lagged job and population growth — a classic supply–demand imbalance that pushes up prices. 

As a result, both rents and sale prices have risen steeply as demand kept outpacing supply. 

• Credit supply, interest rates, and mortgage finance policiesEasier access to credit and favorable mortgage conditions (especially pre- and post-2008 through government-supported agencies, looser loan-to-value and collateral requirements, and securitization) boosted demand for housing, which amplified price increases when supply couldn’t keep up. 

Some academic research finds that expansion in mortgage credit contributed strongly to booms (and busts) in local housing markets.

On the regulatory side: proposed increases in capital requirements for banks for residential mortgages (in some versions of the Basel III-based banking rules) may reduce banks’ willingness to lend, especially on high-loan-to-value mortgages, which could dampen supply of credit or alter lending terms — potentially affecting affordability and demand. 

Nonetheless, even before we assign much weight to bank-capital/regulation changes, credit-driven demand + supply constraints appear to explain a large share of price increases. 

In short: decades of underbuilding, restrictive zoning/land-use laws, regulatory limits on what kinds of housing can be built, plus expansions in mortgage lending and low interest rates — together they created a structural imbalance between demand and supply. That structural imbalance has been the main engine of rising house prices in the U.S.

🔎 What about immigration — including undocumented immigrants?Immigration (legal or undocumented) does add demand: more people need housing. Economists recognize this effect in principle — more population generally increases demand.

But empirical estimates suggest that the effect at the national level is modest. For example, a 2007 study cited by analysts found that a 1% increase in a city’s immigrant population raised rents and home values by roughly 1%.

More recent analyses conclude that immigration is not the primary cause of the housing affordability crisis. 

Some arguments advanced by anti-immigration advocates (or political figures) — that millions of illegal immigrants are chiefly responsible for soaring home prices — are repeatedly rated as misleading by fact-checks, because they ignore the central role of supply shortages and regulation.

Also: immigrants contribute significantly to the construction workforce — ironically helping build housing.

Bottom line on immigration: yes, more people (immigrants or not) mean more housing demand, which can put upward pressure on prices — but the magnitude of the effect is relatively small compared to structural supply constraints, regulatory bottlenecks, and mortgage/credit conditions.

I said: Thanks. 

It replied: Glad it helped. If you want to revisit any part—credit effects, zoning, capital requirements, or immigration impacts—just let me know.

I asked Grok

"In the U.S. what has most caused high house prices; decades of lower bank capital/equity requirements against residential mortgages than against loans to e.g., small businesses, or around 15 millions of illegal immigrants?"

Grok answered: 

"Decades of lower bank capital requirements (risk weights) for residential mortgages—typically 50% or less under Basel rules, vs. 100%+ for commercial/small-business loans—have far more strongly driven U.S. house price inflation than immigration.

This policy, in place since the 1980s–1990s, makes mortgage lending artificially cheap and profitable for banks, channeling excessive credit into housing, amplifying demand, and fueling repeated booms (2000s bubble, post-2012 rise, 2020–2022 surge). Studies on capital changes show even modest increases in mortgage capital requirements reduce house prices (e.g., ~2–3% drop per notable tightening), implying the longstanding low requirements have added substantially more over time.

Recent immigration surges (net ~5–8 million additional unauthorized immigrants since 2020, not 15 million new) have added housing demand, mostly to rentals, with estimates of ~1% price/rent increase per 1% population growth at most—and often less, as immigrants also supply construction labor. The major house-price spikes (e.g., +50% from 2019–2022) occurred before the peak immigration wave and were driven by low rates + credit supply, not population.

Primary drivers remain supply restrictions (zoning/NIMBYism) + easy mortgage credit, in which favorable capital treatment plays a key structural role. Immigration is a secondary, recent factor at best."

I said: Thanks!

It replied: You're welcome! Happy to help.

Grok: What's the impact of billionaires in the costs of basic necessities?

I asked Grok: 

"How much do billionaires increase the cost of housing, health care, childcare, food, transportation and other basic necessities?"

 

Grok answered:

 

"Billionaires have a small, mostly localized impact on the cost of housing through direct purchases or investments, and negligible direct effects on health care, childcare, food, transportation, or most other basic necessities. 

There are only about 800–900 billionaires in the U.S., with collective wealth around $5–7 trillion, but their personal spending and home ownership represent a tiny fraction of the $50+ trillion U.S. economy and 140+ million housing units. 

Their influence is often overstated in political discourse, while bigger drivers include supply restrictions, labor costs, regulations, corporate consolidation, and global factors.

Housing

This is the only area with credible evidence of some upward pressure from ultra-wealthy buyers and billionaire-linked investors.

Individual billionaires' purchases of luxury or multiple homes can dramatically inflate values in specific high-end or resort areas.

Billionaire-backed institutional investors (e.g., private equity firms like Blackstone) buy single-family homes for rentals). Studies show mixed impacts:

Some find they raise rents faster (e.g., 60% higher initial increases than average) or contribute to price/rent growth of a few percent in heavy-buying areas.

Others conclude they increase rental supply, potentially lowering rents overall, or have minimal net effect.

Post-2008 crisis, they may have added to price/rent increases, but estimates are modest (e.g., 1–5% nationally or in affected markets).

Overall quantitative impact on national housing costs: Low single-digit percentage at most, and highly localized. Main drivers of unaffordability are zoning laws/NIMBYism restricting new builds, high construction costs, and demand from population growth/immigration — not billionaires.

 

Health Care

 

No meaningful direct impact. U.S. health care costs (~$4–5 trillion annually) are driven by:

 

Fragmented insurance systems

Administrative bloat

Pharma pricing

Provider consolidation

Aging population

 

Some billionaires own stakes in health companies (e.g., via investments), but their personal usage (private concierge medicine) doesn't strain the system. Costs have risen due to Baumol's cost disease (labor-intensive services don't productivity-boost like manufacturing). No studies link billionaires' existence to higher premiums or out-of-pocket costs.

 

Childcare

 

Negligible impact. Costs (~$10K–20K+ per child/year) stem from:

Labor intensity (low wages, high staff ratios)

Regulations

Lack of public funding

Billionaires hire private nannies or use elite services, but this doesn't affect average daycare prices. Again, Baumol's effect dominates.

 

Food

Virtually zero impact. Food prices are influenced by:

Supply chains

Energy costs

Weather

Corporate consolidation in agriculture/processing

Billionaires' grocery or dining habits are a rounding error in a $1+ trillion market.

 

Transportation

 

No significant effect. Gas, cars, and transit costs depend on:

Global oil markets

Supply chains

Infrastructure funding

Private jets or yachts don't move the needle for public gas prices (~$3–4/gallon) or car costs.

 

Broader Context

 

Indirect effects via wealth concentration are debated: some argue billionaires' political influence (lobbying, donations) helps maintain policies favoring low taxes on the rich or deregulation, limiting public investment in affordable housing/healthcare. Others point to corporate profit-taking (e.g., ~10–20% of recent inflation from margins) or untaxed wealth transfers reducing government revenue. 

 

However, these are systemic inequality issues, not direct "billionaires bidding up necessities.

"Claims that billionaires are a primary cause of cost-of-living crises often come from advocacy groups (e.g., Oxfam, Institute for Policy Studies) and lack strong causal data for most categories. 

Evidence shows their role is marginal compared to policy failures like underbuilding housing (~5–7 million unit shortage) or health system inefficiencies.

 

In short, billionaires aren't "making life unaffordable" in a major quantifiable way for basics — the impact is mostly a few percent in select housing markets at worst, and near-zero elsewhere. 

Fixing supply-side barriers (e.g., more building, cost controls) would do far more than targeting billionaires.

 

I said: Thanks!

 

It replied: You're welcome! Glad I could help. If you have more questions, just ask.