ALL INPredictions
Last updated Nov 29, 2025
Prediction
Friedberg
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Friedberg @ 01:15:47Inconclusive
governmenteconomy
If US office commercial real estate values fall by roughly two‑thirds as implied (from about $3T to $1.8T), resulting in large losses to pension and retirement funds, then within the following few years the US federal government and/or Congress will implement a material structured support or bailout program specifically aimed at cushioning retirees and pensioners from these office‑related losses (rather than allowing those write‑downs to fully hit beneficiaries).
You're not going to see governments let that happen. You're going to see the federal government. There's going to be some action at some point, and it's unlikely the office market is going to suddenly rebound overnight. If this stays the way it is, who's going to fill that hole for retirees and pensioners? Because we're not going to let that all get written down. Someone is going to step in and say, we've got to do something about this, and there's going to need to be some sort of structured solution to support retirees and pensioners, because that's ultimately who ends up holding the bag in this massive write down.View on YouTube
Explanation

As of November 30, 2025, both the trigger and the time window in Friedberg’s conditional prediction have not clearly been met.

  1. Office values have fallen, but not by “roughly two‑thirds.” Nationally, average U.S. office sale prices are down about 37% from 2019 levels as of the end of 2024, with forecasts of roughly another 10% decline over the rest of the decade, not a 60–70% collapse in aggregate values. (businessinsider.com) Academic work on the “office real estate apocalypse” estimates nationwide office value destruction of roughly $500–550B from 2019 levels—substantial, but far short of wiping out two‑thirds of the asset class if the total stock is around the low–single‑digit trillions. (business.columbia.edu) A Washington Post summary of the same research notes about $557B in office value lost from 2019–2023, again implying a drop on the order of tens of percent, not two‑thirds. (washingtonpost.com)

  2. No targeted federal bailout for pensioners’ office losses has been enacted. Congress has held hearings on commercial real estate stress, where industry representatives explicitly said they were not seeking a bailout and instead asked for regulatory and accounting flexibilities. (marketwatch.com) There has been no new TARP‑style or Butch Lewis‑style program specifically designed to compensate retirees or pension plans for office‑sector write‑downs; existing pension assistance laws (e.g., the Butch Lewis Act’s multiemployer relief) predate this podcast and are not office‑specific. (en.wikipedia.org)

  3. The time horizon (“within the following few years”) is not over. The episode aired in February 2024, so fewer than two years have passed—well short of a typical “few years” reading—and the extreme valuation‑collapse scenario that was supposed to trigger a bailout has not occurred.

Because the prerequisite scenario (a ~two‑thirds collapse in U.S. office values severely hitting pensions) has not fully materialized, and the envisaged multi‑year window for a policy response is still open, Friedberg’s conditional prediction cannot yet be judged right or wrong.