From today's City AM:
GETTING IT RIGHT
Readers have been writing in to urge me to add names to my list of UK-based monetarists, Austrian and other economists, City analysts and politicians who foresaw the crash.
New entrants to my economic walk of fame include Lord (Howard) Flight, the Tory peer, City grandee and former front bencher who was disgracefully treated by his party (he warned of a coming crunch in his 2005 shadow budget), Jonathan Ruffer of the eponymous fund management firm, and Bernard Connolly, a brilliant economist who worked for AIG at the time but was ignored by his company (he now works for Hamiltonian Associates).
Writing in The Chaos Makers in 1997, Fred Harrison of the Georgist-leaning Land Research Trust, made an eerily accurate prediction:
“By 2007 Britain and most of the other industrially advanced economies will be in the throes of frenzied activity in the land market to equal what happened in 1988/9. Land prices will be near their 18-year peak, driven by an exponential growth rate, on the verge of the collapse that will presage the global depression of 2010.”
I’m not a Georgist and disagree with many of that philosophy’s tenets, but this was pretty spot on.
The HIC is definitely a Home-Owner-Ist and not a Georgist, but he's never actually said why he disagrees with it apart from the usual "attack on wealth" nonsense. Are things like taxes on output and profits, planning restrictions and recurring financial recessions not themselves "attacks on wealth"?
Oh Dear
1 hour ago
5 comments:
Well, I'd like AH to add me to the Hall of Fame. It was abundantly clear 'on the street' that it was all going to go tits up. We could see this from well before 2005. I put the date of revelation at when I cracked what the Financial Shambles Authority was really for (the proto-nationalisation of financial services). This light dawned for me in about 2003.
I'll nominate Bill Jamieson of the Scotsman. I once had a letter published there disagreeing with his prediction that house prices were a bubble destined to collapse. I said that they were being kept unnaturally high by regulations preventing them being built and that prices would only permanently fall substantially when builders were allowed to build houses.
In my defence I can say that we were both right, discussing different phenomena, and that house prices have not fallen to the level they were at when the bubble started let alone what they should be, but I must admit that he was right.
L, lots of people said it, you and me included, but not particularly loudly and with not much but instinct to guide us. The point was that the HIC mentioned Fred H in a not totally unfavourable fashion.
NC, can you track down the original BJ article and your letter and send us links?
As Bayard keeps explaining to us, more supply only affects prices at the margin, which you can take more or less literally (i.e. if they built a hundred yards out into the green belt, then the new houses would be worth a smidge less than the existing ones which currently back onto the green belt, but the value of land and buildings in the centre would go up a smudge).
http://www.scotsman.com/news/bubbling-over-on-the-magic-roundabout-1-516483
http://www.scotsman.com/news/supply-and-demand-1-516928
JJ, good work, thanks. I'm pleasantly surprised to see NC mention LVT.
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