Tuesday, 20 May 2014

Reader's Letter Of The Day

From The Evening Standard (20 May 2014, page 40):

It's disappointing that so many newspapers have allowed the Governor of the Bank of England to get away with blaming the UK house price bubble on lack of new supply and holding up his home country Canada as a counter-example.

Yes, per capita, Canada is building three times as many new homes as the UK, but they are suffering a house price bubble every bit as bad as ours - one which he presided over until his move to the UK.

Mark Wadsworth, Young People's Party.

11 comments:

Sackerson said...

Canada has a much smaller population and a much larger land area. If they can manage to have a house price bubble there's something wrong.

Mark Wadsworth said...

S, land area is nigh irrelevant. Ireland, USA, Australia also have lots of land per inhabitant but had price bubbles.

Just like anywhere else, in those countries, 98% of total land values are in and near towns and cities.

DBC Reed said...

In this interview ,Cameron abdicates from any responsibility for managing the Economy completely.
I'm beginning to wonder whether the BoE should have been given the last say on interest rates. Seems to me the old stop/go days when Chancellors manically stoked up booms with low interest rates and then dealt with ensuing busts by raising them in panic worked better in practice, especially when house prices were well under control by Schedule A and Domestic Rates.
What in practical terms is the difference between a Gold Standard
and set, unresponsive Interest Rates?
(This is just speculation:please don't blow a gasket)

DBC Reed said...

This comment above should have been appended to the Cameron alert piece below. Sorry.

Steven_L said...

Nice one :)

Mark Wadsworth said...

DBC, actually house prices were kept under control with rent controls + mortgage restrictions.

They were a crude but effective alternative to or substitute for LVT. (Domestic Rates and Sched A mopped up some of the left overs).

Mark Wadsworth said...

SL, thanks.

DBC Reed said...

Looks like the whole impetus of government(s?) now is to run away from these hard decisions and rely on the banks to re-impose mortgage restrictions. I would have thought as land taxers we would deplore this as LVT is the simpler and more effective solution as regards altering the Homeownerist psychology and also engages with the formal politics of the situation.

Bayard said...

"Looks like the whole impetus of government(s?) now is to run away from these hard decisions"

That's very much in the spirit of the zeitgeist. Nowadays everyone in public life strives to avoid taking responsibility for anything, in case it goes wrong and they get sued, or their political career goes down the pan.

The Stigler said...

Bayard,

"Looks like the whole impetus of government(s?) now is to run away from these hard decisions"

The problem is that they're just a bunch of careerist nobodies nowadays. Neoliberalism basically won, which means that the battle for grand ideas in politics is over. Sure, there's a few hard socialists around still, but the public mostly support Labour when it goes about as far left as Tony Blair (and Miliband really isn't any further left despite all the Indian Bicycle Marketing about "Red Ed").

That neoliberalism isn't over yet. We still have old relics of former eras like the NHS but over time that will become a load of private contractors. And of course, we need things like LVT, but that's going to come eventually because you can't keep on with the current level of insanity about housing (and I think that right now the only thing stopping Labour from doing it is that their party is run by a new landed gentry in North London).

Bayard said...

"The problem is that they're just a bunch of careerist nobodies nowadays"

Yup, you just have to look at what they did before becoming MPs. Nearly all of them did something connected with politics.

"and I think that right now the only thing stopping Labour from doing it is that their party is run by a new landed gentry in North London"

Back in the '90's I saw a newspaper article (probably the Grauniad, but I forget) saying how the urban rentiers had taken over being the power behind the Tory party from the rural landowners. It just took them a little longer to take over the Labour party too.