RFK Jr. vs. BlackRock

Reclaiming the American Dream from Big Investors

Just as his uncle, President John F. Kennedy, took on the US steel industry when it reneged on promises to JFK and the Steelworkers union not to raise steel prices, Robert Kennedy Jr. has thrown down the gauntlet against big investment firms. 

The leading firm in Kennedy’s sights  is the largest in the world—BlackRock. While deriving 50 percent of its profits from real estate investments, BlackRock is making the dream of homeownership impossible for an increasing number of Americans.  

In a recent interview with Brian Sullivan of CNBC, Kennedy explained that working and middle class families are now being outbid on homes by big investment firms which can offer cash for their purchase. He said BlackRock is targeting single family homes and thereby competing with our children; for the investment firm, the cost of mortgages is minuscule. 

“Thomas Jefferson said American democracy has to be based on independent freehold ownership….by tens of thousands of American citizens, each with a stake in our system of government,” Kennedy said. “We’re now moving back to a feudal system.” Kennedy put BlackRock at the top of a list of firms buying up private property.

Not surprisingly, BlackRock has tried to defend itself against such accusations by claiming that it doesn’t buy or own any single family homes. However, this defense falls apart under the slightest scrutiny. For while BlackRock itself may not own homes directly, it is heavily invested in other firms that do.  

In addition, one can refer to the US capitalism's own paper of record, the Wall Street Journal (WSJ), to learn this. Indeed, the WSJ named BlackRock back in 2021 as one of “more than 200 companies and investment firms in the house hunt” that “are snapping up single-family homes, competing with ordinary Americans and driving up prices.” The WSJ pointed out that BlackRock  took advantage of opportunities created by the chaos of the pandemic. Millions being forced to work at home “sparked a race for home-office space and yards” so,  BlackRock and other firms redoubled their efforts to make a killing on real estate. 

Fox News put a finer point on all this when it explained:

The New York City risk and investment management titan BlackRock is among several high-powered firms pushing working families out of the housing market and into rentals, therefore depriving them of capital and the opportunity to build credit and equity. [...] BlackRock–led by billionaire Laurence Fink–is purchasing entire neighborhoods and converting single-family homes into rentals; while in cities like Houston, investors like Fink account for one-quarter of the home purchasers. [...] BlackRock's actions are leading 40% of American renters to believe they will never be able to purchase a home. 

An article in Slate explains that while the absolute numbers of single family homes being bought up by investment firms like BlackRock may not be that large, “investors are depleting the inventory of the precise houses that might otherwise be obtainable for younger, working or middle-class families. This is happening in the cities where those workers can easily find good-paying jobs, like Atlanta (22 percent of home purchases according to Redfin data), Charlotte (22 percent), and Phoenix (20 percent). More importantly, the big firms and their agents are able to scour those markets scientifically and systematically to make cash offers on the most attractively priced properties. While normal people buy houses when they actually need to move somewhere, (savvy) investors buy houses several years before a bunch of people need to move to an area.” 

RFK Jr. has a solution to this problem. As he explained in his CNBC interview, he will first “change the tax code to make it more difficult for large corporations to accumulate thousands of houses . . . .”  In addition, he will offer critical support to individual and family homebuyers to allow them to compete with investors in purchasing their homes. As Kennedy explains, “If you have a rich uncle who will cosign your mortgage, you can get a much lower rate because the bank is basing it on his credit rating rather than yours. So I’m going to give everybody a rich uncle, which is Uncle Sam, who will guarantee mortgages at, for … first time single family home buyers at 3% interest. That will reduce the average price of a mortgage by $1,000 a month. I will finance that not by increasing our debt, which I’m not going to do, but rather by selling tax free 3% bonds to finance it.”  

In other words, under Kennedy’s plan, the “rich uncle” for homebuyers will be Uncle Sam.

It will take a political outsider, someone like RFK Jr.–-who is not owned or controlled by Wall Street interests—to carry through with such a plan to save the American Dream of homeownership. Because firms like BlackRock currently use their giant assets not just to buy up homes, but also to wield extraordinary political power and influence. 

As reported in DailyFetched.com, in a story which explicitly backed up RFK Jr.’s claims about BlackRock, Serge Varlay, a BlackRock recruiter, gloated that BlackRock “prefers to remain hidden,”while using its 20 trillion dollars in assets to influence politicians. Varlay bragged that “[i]t’s not who the president is –  it’s who’s controlling the wallet of the president . . . .”  Referring to investment firms like BlackRock that control the wallet of the president, Varlay quipped, “[t]hese guys run the world . . . .”

These guys do indeed “run the world.” For example, BlackRock–never willing to let a good crisis go to waste–has positioned itself to make huge profits in Ukraine once the war there is over. As the Financial Times (FT) reported back in June, BlackRock has been in conversations with President Zelensky himself to set up a “reconstruction bank” to attract billions of dollars that will be needed for post-war reconstruction. According to FT estimates, Ukraine reconstruction will cost nearly half a trillion dollars and counting. As the FT explains, BlackRock’s control of the “reconstruction bank” would give the firm “an early look at possible investments in the country” just as BlackRock has a strategic look at home buying throughout the United States.  

Of course, if the war in Ukraine does not go the “right way” for firms like BlackRock–that is, if Russia were to achieve complete victory over Ukraine–this multi-billion dollar investment opportunity could be obliterated. Therefore, BlackRock has an incentive to use its political influence in the US to push the government to aggressively prosecute the war in Ukraine until the bitter end, regardless of the interests of the American people or the Ukrainian people for that matter. This situation presents a moral hazard like no other.

All of this underscores the importance of RFK Jr. 's run for the White House. Not only is he willing to take on investment firms like BlackRock, he is also dedicated to finding a quick, negotiated solution to the conflict in Ukraine in the interest of sparing the US and Ukraine alike from further loss of blood and treasure. Just as JFK brought down the wrath of big business after taking on the steel industry, RFK Jr. is provoking outrage on Wall Street through such policies. 

Thankfully, Robert Kennedy Jr. is more interested in defending the American people against corporate greed than in currying favor with Wall Street oligarchs. This is the type of courageous leadership America needs right now.