From City AM:
Thatcher's property-owning democracy needs to be rescued...
ONE of Lady Thatcher's greatest legacies was to increase home ownership, allowing families to buy council homes at a discount. Her right to buy policy, while only one of several reasons why homeownership jumped in Britain in the 1980s and 1990s, (1) nevertheless played a central role in changing the aspiration and culture of the UK public, as well as enabling many more people to own assets...
But these are absolute figures: since [Thatcher's day], the total number of households has gone up substantially. The latest figures show that the share of owner occupiers fell to 65.3 per cent in 2011-12; this is down from a historic peak of 70.9 per cent hit in 2003. The last time home ownership was this low was in 1987.(2)
The situation is still not as bad as it was in 1980, when just 56.6 per cent were homeowners, but the trend is ominous for those who believe that property ownership should be widely dispersed (3) to ensure that as many people as possible own a stake in our economic system.(4)
1) RTB was only a short term boost and a last hurrah. The biggest absolute and relative increases in owner-occupation rates were in the 1960s and 1970s (when our economic system was much more Georgist than it is now, or certainly a lot less Home-Owner-Ist).
2) As I've said before, the real but hidden agenda of Home-Owner-Ism is to concentrate land ownership into as few hands as possible and enable the smallest minority to collect the maximum in rent. For sure, I'll never qualify for social housing, but I'd rather house lower income people in social housing at virtually no cost to the taxpayer than hand over money as RTB subsidies or as Housing Benefit and rent payments to private landlords.
3) That totally contradicts his opening claim. Who owns council housing and Housing Association housing? All of us, the whole nation, the "democracy" that's who. We all own a 1/62 millionth stake in it. So selling it off reduces the spread of ownership and concentrates it in fewer private hands, thus achieving the hidden agenda, see (2).
4) Woah! More DoubleThink on several fronts.
i) Quickest way to give people a bigger stake in the real economy is to cut taxes on what they actually earn and spend.
ii) Home-Owner-Ism's stated aim - to increase the spread of owner-occupation is in itself A Good Idea, you'd have to be heartless or blind not to agree - but what that means in practice is that there'll be fewer landlords collecting less in rent (which sounds a bit Socialist, which is why they never say it). Simply stampeding people into swapping high rental payments into high mortgage payments does not really change anything.
iii) When the Homeys say "a stake in our economic system" what they must mean is "a share in the total land rents", which ultimately can only be achieved by giving people... er... a share in the total land rents, i.e. a Citizen's Dividend/personal allowance funded out of a tax on the rental value of land. If that goes hand in hand with method (i) so much the better. You can't end slavery by allowing slaves to buy their own freedom.
Sounds as if he's been reassured
7 hours ago
14 comments:
If you read Ownership Society on Wikipedia it is fairly clear that it is an American development of British Tory Policy as regards the primacy of property ownership; specifically Bush catching up with
Thatcher on the property-owning democracy lark. So Bush's fatuous Fact Sheet America's Ownership Society which was posted on the Net all the way through the sub-prime crisis and Credit Crunch is all down to British Tory influence. One of the best bits : "Expanding Opportunities Expanding Homeownership . The President believes that homeownership is the cornerstone of America's vibrant communities and benefits individual families by building stability and long-term financial security. In June 2002 President Bush issued America's Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap between homeownership rates of minorities and non-minorities." Made fatuous by the dates
Bush had some egalitarian counter sectarian reason for this iniative: what was the Tories excuse?
I suppose you didn't need to say it was written by Allister Heath.
DBC: " building stability and long-term financial security"
They made a right success of that, didn't they?
B, yes, he's Homey-In-Chief at City AM.
Fact sheet "America's Ownership Society" is still up on the Net (after circa 9 years) ,featuring George Bush as President and a picture of the White House with all the-hostage-to-fortune rhetoric about the long-term financial security of homeownership. Either someone is very proud of it or someone wants to pin a lot of slow-burn blame on Bush.
DBC, it is indeed.
One day, I will teach you how to do hyperlinks to the source material to save readers the hassle of Googling it themselves.
Bonus 1: it was available "En Español"
Bonus 2: Clinton is as much to blame for this as anybody else, although he still ranks up there with John Major in the pantheon of "national leaders who were better than those before him and those after him".
agreed on 2 and ii.
Banks are the only growing class of land lords, via mortgages as interest (rent)
BTL's are mere tenants of the banks, their nominal tenants, sub tenants.
Mortgage debtors are straight forward tenants to the bank.
And mortgage defaults are increasing by 3% annually so fewer not more people actually are owning their homes
Disagreed on Citizens Welfare. Far better they keep their proper wages at source than need IllFare later by whatever means. True, that requires an LVT which will never happen.
True, without LVT, which is what we are committed to forever, Citizens Welfare is better than means testing.
RS, basic maths tells us that
a) with a full-on LVT and no other taxes, people would keep all their earned income (that's easy).
b) if the government defrays the minimum cost of actually running a first world country (five or ten per cent of GDP or something) and dishes out the rest as CD, then
c) By and large the average or median household in the average or median home will pay very little in net tax and receive very little in net welfare...
d) which is as close to a "tax and welfare free" economy as it is possible to get.
@MW
Yes indeed with Clinton because all the more recent, and some of the not so recent Presidents were battling structural racism ,especially in the mortgage and housing markets .There is a whole treatise on Redlining on Wikipedia (which in an old dog new tricks way people will have to Google themselves.) It is well worth reading and George W Bush does emerge from this imbroglio with some credit: unfortunately his ownership initiative did not so much knock redlining on the head, as set off sub prime shenanigans.
As I said though the Americans had good verging on noble reasons for extending ownership of property- not so the Brit Tories who had not an anti-racist thought in their alleged minds.
DBC, that's another thing about GWB, as excruciatingly awful as he was, in terms of throwing large amounts of money at the bankers, he was a choir boy compared to Obama. Frying pan, fire.
@MW
George W Bush responded to the impending crisis in 2008 by giving people a tax rebate ,or dividend you could say. Unfortunately not enough people spent it: more people saved it or used it to pay off debt. Here is the problem of Citizens Dividends/Income in a nutshell. Better the credit you have to spend: stamped money (now revived in S.Germany)or whatever.
DBC Reed "or used it to pay off debt"
Which presumably implied removing in whole or in part something which was limiting the amount of 'free cash' they had to spend?
DBC, I know that stamped money is one of your favourites along with RPM, but I am thoroughly unconvinced of either.
As Bob E says, what's wrong with using it to pay off debts?
Would have thought paying off debt means you are not buying something new with it so not stimulating production.
RPM is a thoroughly respectable system since the American Supreme Court made it legal in 2007.The Chinese now deal with RPM on a per se basis : case by case. Only the EU has a per se ban which is one of two reasons why I am not keen on
it. Helen Mercer's LSE paper on the Abolition of RPM is pretty definitive: she says the effects of abolition were "calamitous" on British industry (not just retail).
Stamped money sounds ridiculous but it has worked whenever its been tried: the present Chiemgauer scheme in S. Germany is doing fine.
There is no point in stimulus demand by distributing dividends etc if people are going to sit on them ( at the moment they just bump
up their mortgage ,or pay it down= equally useless but we've got that covered with LVT).
Hi Mark
Can you direct me to where you have discussed the Citizen's dividend in more detail?
Excuse my economic ignorance, but what ensures it ends up in people's pockets, and doesn't just subsidise lower wages/higher prices?
Also, if the dividend and LVT cancel each other out for the most part, how do we support those who genuinely cannot find work (even when the disincentives to work have been removed by the new system)?
Thanks
Stewart
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