There was a nice article in today's Evening Standard, written by one of The Priced Out Generation, which in turn refers to a book by David Willetts MP (and I'm hardly his biggest fan) entitled "The Pinch: How the Baby-boomers Took Their Children's Future — And Why They Should Give It Back".
As we all know, the Tories are happy to complain about the massive public sector debts that the government has run up - despite not having any clear commitment to doing anything about it - but are usually silent about the fact that the extra personal debt that a young family has to incur to 'get on the property ladder' are far, far higher than their pro rata share of that government debt. What might be especially galling for the Tories is that they invented Home-Owner-Ism as an economic philosophy, but a Labour government did it so much better.
Anyways, his book got a fair write-up in The Torygraph (of all places!):
... pensions schemes and property booms have concentrated wealth and power in the boomer generation, and encouraged by the government and banks, “they borrowed as if there were no tomorrow”. However personal saving rates – the amount saved as a percentage of disposable income – have gone into the negative.
“[That is] almost unprecedented for any large western economy — and that in turn now imposes a heavy burden on their children,” Mr Willets said, “A young person could be forgiven for believing that the way in which economic and social policy is now conducted is little less than a conspiracy by the middle-aged against the young... I do not believe that this is because the boomers are unusually bad and selfish,” he said. “I think it is rather that we have lost sight of the importance of the contract between the generations that holds any society together. The breaking of this contract is above all what is broken about our society.”
This all supports my thesis that when arguing with a Home-Owner-Ist, the best strategy is to point out that the nice £x00,000 paper capital gain they are sitting on:
a) Is not worth much to them in practice (unless they keep MEWing, but that is a self-defeating strategy, saving up in advance is usually a better way of financing things), and
b) Means that their children would have to shell out an extra £5,000 or £10,000 a year in mortgage repayments just to be able to keep up with (let alone overtake) their parents, they'll be stuck in a one-bed flat until they're forty and there'll never be any grandchildren. It's not just a zero-sum game, it's a negative-sum game, taking the family as a whole, and we would have the first economy deliberately designed so that disposable incomes actually go down over time, rather than going up (which has been the overall trajectory for the past century or two).
Further, it's all well and good the NIMBYs yapping on about "garden grabbing" and "the hallowed greenbelt", but somewhere else some other NIMBY is preventing a house being built for your children, so how do you feel about that? Are your children really the sort of people you'd want to exclude from your own neighbourhood, and it not, why should they be excluded from somebody else's?
Putting it another way
40 minutes ago
6 comments:
I think it's a little unfair to say that the Tories invented Home-Owner-ism. They certainly supported the extension of home ownership, but I don't think that was as some kind of spurious investment. It was more the observation that people who owned their own homes looked after them better (on average), and also that they felt themselves to have a stake in society.
All three main parties have been guilty of supporting the "ever rising prices are a good thing" nonsense - and they've been egged on by the media of course, as well as vested interests like estate agents and building societies.
AC, the Tories scrapped Schedule A taxation and Domestic Rates; the Tories are instinctively more NIMBYish than the other parties; the Tories started selling off the council housing (a shit deal for the taxpayer); and the Tories 'liberalised' the banks and building societies.
Admittedly, Labour have taken this to extremes (and there are plenty of other guilty parties) but in the name of all that is unholy, if a wider spread of homeownership is A Good Thing, then surely we should be building more and trying to keep prices down?
The philosophy of Home-Owner-Ism is in fact directly opposed to the idea of a wider spread of homeownership, it's complete DoubleThink.
It's like saying 'an apple a day keeps the doctor away' but then restricting imports and production of apples. And then subsidising the few farmers who still have a licence to grow apples.
Why should childless people be allowed to have homes rather than flats?
In view of the demography problems proven pregnancies should get rewards in many directions including appropriate housing.
"Tories started selling off the council housing (a shit deal for the taxpayer); and the Tories 'liberalised' the banks and building societies."
But didn't selling off council housing weaken the unions? I can't see a Labour council making a striking miner pay his rent arrears but a bank or building society would?
"In view of the demography problems proven pregnancies should get rewards in many directions including appropriate housing."
You jest surely? The problem is not just the number of babies but the quality. Giving more money to chavettes is crazy.
To adamcollyer, "It was more the observation that people who owned their own homes looked after them better (on average), and also that they felt themselves to have a stake in society."
This is a lovely "apparently self evident truth" that is really a myth with no supporting evidence. See here for more:
http://gco2e.blogspot.com/2009/05/apparently-self-evident-truths-asets-of.html
Why do you need exclusive private property in the land to make you use it better ? You only need secure possession to do that. Its when large classes have no access to secure possession at all that things go pear shaped evidently. You have it the wrong way around.
When people had private property in slaves they used them extremely inefficiently too.
@AC - come on, the motive behind selling of the council houses was purely political and was acknowledged as so at the time. They were viewed, possibly quite rightly, as Labour fiefdoms.
It was mainly the relaxing of credit restrictions that pushed up demand for housing, which put up prices, which started the housing bubble, which generated the view that your home was an investment and hey presto! Home-Ownerism was born. So yes, it was the Tories wot done it.
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