Sunday, 28 September 2014

You'd Really Think That Someone, Just Someone, Would Have Cottoned on by Now...

Same same old

11 comments:

DBC Reed said...

It was perfectly obvious when house prices spiked in the early 1970's that something was seriously wrong with the economy since when some kind of shut down of the collective thinking process has taken place; some kind of psychic plague? The country has gone into Matrix pods from which reality is excluded and only a selective version is piped in.Anybody with any memory of what life was like before or has the independence of mind to fight through the fog is now totally alienated in ways which not even Marx could have predicted.His version of alienation is naĂŻf compared with the situation we have to face where the reality is in plain view but everybody has gone blind.
(HG Wells "The Country of the Blind" still does the business,)

Mark Wadsworth said...

The Homeys cottoned on long ago, this sort of taxpayer funded investment provides great speculative opportunities.

Lola said...

MW. Precisely. But why does everyone else, who pay the bills, stand for it?

Piotr Wasik said...

So - why not buy there actually? For purely selfish reasons, to ride on public investment? Are the only dangers in this "investment" (1) that the railway line is already priced in and (2) that mortgages will be more expensive in few years than current market assumes (if the market was assuming more expensive mortgages later when you have to remortgage, the house prices would be lower).

Bayard said...

It's only news to journalists and probably even they are putting on an act. Most people who care one way or the other already know about this effect and most of those who don't know aren't interested.

Of course you can say that the state should do something to recapture these gains to private individuals arising from the state's expenditure, but that's missing the point of the expenditure, which is to enable private individuals to gain at the state's expense.

Lola said...

B. ..which is to enable private individuals to gain at the state's expense. Strictly speaking it's one set of taxpayers making a gain at another set of taxpayer's expense.

Mark Wadsworth said...

L, Ok, how about "to enable one very small group of taxpayers to make huge profits at all other taxpayers' expense"?

Lola said...

MW. Better. Much better.

Lola said...

I've just thought. Perhaps the 'factors of production' could be changed to 'Labour, Capital and Rent'? Or, as we know that 'Capital' is really just accumulated Labour, 'Labour and Rent'. Then ask the question of everyone, 'where would you prefer the State gets its income - Off your labour of off someone else's rent'?

Mike said...

Lola - "Off your labour or off someone else's" rent" is a nice way of putting it. Truth is, LVT would tax your rent too, but it would be "off" in the sense of "out of", not "on top of".

People would struggle to understand how taxing rent won't make the rent they pay more expensive. Likewise, homeowners don't understand that their mortgage payments are rent too, the only difference being they have a bank for a landlord.

Mike said...

I wonder if there's any mileage in selling LVT as a tax on house prices. After the financial crisis, many people asked "Where's all the money gone?". In failing to tax land rent, or apply any other regulation to the housing market, higher rents accumulating to landowners have been capitalized into higher selling prices. In a real sense, that is where all the money's gone.

Many people would agree that house prices are ridiculous these days, including many homeowners. If house prices were presented as the answer to the question of where all the money is, might they start thinking about ways to get it back?