Jump to content
House Price Crash Forum
Sign in to follow this  
tomandlu

The biggest privatisation you’ve never heard of: land

Recommended Posts

28 minutes ago, bear.getting.old said:

Typical Guardian, its all Thatchers fault. Its 2018 not 1992.

I don't think they're saying she sold it all - just started the trend. Neoliberalism, as a serious approach to economics, started with Thatcher and Reagan - deal with it (the rest of us are having to).

Share this post


Link to post
Share on other sites

The housing crisis is not due to a lack of housing, but to a government-enforced expansion of credit.

Even if there were a lack of housing, the fact is that having to get overlord permission to build anywhere is what is restricting the available stock.

The problem is the government, The solution is therefore not "more government"

Share this post


Link to post
Share on other sites
9 minutes ago, Locke said:

The housing crisis is not due to a lack of housing, but to a government-enforced expansion of credit.

Even if there were a lack of housing, the fact is that having to get overlord permission to build anywhere is what is restricting the available stock.

The problem is the government, The solution is therefore not "more government"

"Government-enforced expansion of credit" is pushing it - I'd say "successful lobbying by banks to have the reins taken off" (although, sure, governments got hooked on the nice GDP it generated). However, the failure is a failure of capitalism, not excessive government.

Aside from that, I agree. We don't have a housing shortage crisis so much as a housing cost crisis. People aren't homeless because of lack of housing.

Share this post


Link to post
Share on other sites
1 hour ago, Locke said:

The housing crisis is not due to a lack of housing, but to a government-enforced expansion of credit.

This.

An expansion of credit fed to the electorate in order to make them feel rich and get the incumbents reelected.

No government will willingly turn off the tap for fear of losing power. The longer they refrain, the bigger the crash, and the longer they will be shunned by voters.

Share this post


Link to post
Share on other sites
4 hours ago, bear.getting.old said:

Typical Guardian, its all Thatchers fault. Its 2018 not 1992.

It is Thatcher's fault - she lit the blue touch paper

 

Screen-Shot-2017-04-21-at-13.53.09.png

Share this post


Link to post
Share on other sites

If new labour had the will, there would have been some room to push back against the thatcherite settlement, for instance renationalisation of the railways would have been politically and economically feasible . However, they pushed the privatisation agenda even further than thatcher, the academisation of most secondary schools, pfi etc. 

In reality, tony blair was just a continuation of thatchersim. The only difference was a friendlier face, by being more socially liberal and using public money to passify labours core vote with tax credits and increased public sector pay. 

 

Share this post


Link to post
Share on other sites
9 minutes ago, nothernsoul said:

If new labour had the will, there would have been some room to push back against the thatcherite settlement, for instance renationalisation of the railways would have been politically and economically feasible . However, they pushed the privatisation agenda even further than thatcher, the academisation of most secondary schools, pfi etc. 

In reality, tony blair was just a continuation of thatchersim. The only difference was a friendlier face, by being more socially liberal and using public money to passify labours core vote with tax credits and increased public sector pay. 

 

Within 24 hours of his election - he went and had tea and cakes with Thatcher. I knew then nothing would change.

Share this post


Link to post
Share on other sites

It's all very well to say now all these years later that Blair was a softened socialist version of Thatcher. But that does not excuse 13 years of a Labour government who in opposition were highly critical of these and other policies of Thatcher to do absolutely nothing to change them. Brown the same. Even Osbourne and Cameron in opposition re the national debt and money printing. Now Corbyn and co are still blaming Thatcher. Cameron also could have changed things, he did were things that fly in the face of the free market - ie help to buy, FLS etc and carried on QE. Thatcher would be turning in her grave as these were many a step further! Yet alone reversing the blue touch paper!

Edited by bear.getting.old

Share this post


Link to post
Share on other sites
11 hours ago, jonb2 said:

Within 24 hours of his election - he went and had tea and cakes with Thatcher. I knew then nothing would change.

Tea and cake with Thatcher on 2 May 1997? Don't remember that. 

Share this post


Link to post
Share on other sites
7 hours ago, bear.getting.old said:

It's all very well to say now all these years later that Blair was a softened socialist version of Thatcher.

It was absolutely clear at the time that Blair was a Thatcherite

http://conservativehome.blogs.com/centreright/2008/04/making-history.html

Quote

Late in 2002 Lady Thatcher came to Hampshire to speak at a dinner for me. Taking her round at the reception one of the guests asked her what was her greatest achievement. She replied, "Tony Blair and New Labour. We forced our opponents to change their minds." But in a very real sense that only happened between 1992 and 1997.

 

Share this post


Link to post
Share on other sites
19 hours ago, tomandlu said:

"Government-enforced expansion of credit" is pushing it - I'd say "successful lobbying by banks to have the reins taken off" (although, sure, governments got hooked on the nice GDP it generated). However, the failure is a failure of capitalism, not excessive government.

The government controls the money and forces us to use it. In an actually capitalist system, you would be able to choose to abandon a currency if the people running it pulled the kind of ******** that the State is pulling.

The banks know that the government will bail them out. They also have government-enforced limited liability. In a capitalist system, the bank managers would be personally fully liable for bank failures and there would be no one to bail them out. They would therefore be much more cautious.

The government has set the interest rate at 0 (negative in real terms) by force. This makes debt cheap and would not be possible in an actually capitalist system.

In any case, Banks have become a branch of the government

Share this post


Link to post
Share on other sites
7 minutes ago, Locke said:

The government controls the money and forces us to use it. In an actually capitalist system, you would be able to choose to abandon a currency if the people running it pulled the kind of ******** that the State is pulling.

The banks know that the government will bail them out. They also have government-enforced limited liability. In a capitalist system, the bank managers would be personally fully liable for bank failures and there would be no one to bail them out. They would therefore be much more cautious.

The government has set the interest rate at 0 (negative in real terms) by force. This makes debt cheap and would not be possible in an actually capitalist system.

In any case, Banks have become a branch of the government

The implicit banking guarantee has always existed. What's new is the ability to manufacture credit in almost unlimited quantities in non-depository institutions outside the banking system. That really kicked off in the early 1980s.

Wiki:

Quote

The shadow banking system is a term for the collection of non-bank financial intermediaries that provide services similar to traditional commercial banks but outside normal banking regulations.[1] It should be noted that the phrase "shadow banking" contains the pejorative connotation of back alley loan sharks. Many in the financial services industry find this phrase offensive and prefer the term "market-based finance."[2]

This definition was first put forward by PIMCO (Pacific Investment Management Company) executive director Paul McCulley at FED (Federal Reserve System) annual meeting in 2007.

Former US Federal Reserve Chair Ben Bernanke provided the following definition in November 2013:

"Shadow banking, as usually defined, comprises a diverse set of institutions and markets that, collectively, carry out traditional banking functions — but do so outside, or in ways only loosely linked to, the traditional system of regulated depository institutions. Examples of important components of the shadow banking system include securitization vehicles, asset-backed commercial paper [ABCP] conduits, money market funds, markets for repurchase agreements, investment banks, and mortgage companies"[3]

Shadow banking has grown in importance to rival traditional depository banking, and was a primary factor in the subprime mortgage crisis of 2007-2008 and the global recession that followed.[4][5][6]

 

 

Share this post


Link to post
Share on other sites
7 hours ago, zugzwang said:

The implicit banking guarantee has always existed. What's new is the ability to manufacture credit in almost unlimited quantities in non-depository institutions outside the banking system. That really kicked off in the early 1980s.

Wiki:

 

 

If they are truly "non-bank financial intermediaries" then they cannot actually create money in the sense that a bank does (ie issue credit out of thin air, matched by an obligation to repay which is treated as an asset). An intermediary (unlike a bank) channels funds from one party holder to another (in the textbook version from lenders to borrowers). So how do these shadow entities create credit?

Share this post


Link to post
Share on other sites
On 08/02/2018 at 5:01 PM, Errol said:

So Blair was completely unable to do anything about it during his lengthy time in office?

He had no intention of doing anything of the sort as the article alludes to.

Share this post


Link to post
Share on other sites
4 hours ago, nickb1 said:

If they are truly "non-bank financial intermediaries" then they cannot actually create money in the sense that a bank does (ie issue credit out of thin air, matched by an obligation to repay which is treated as an asset). An intermediary (unlike a bank) channels funds from one party holder to another (in the textbook version from lenders to borrowers). So how do these shadow entities create credit?

There are two forms of money. Outside money which is created outside the banking system by the central bank (that is, cash and reserves) and inside money which is created inside the banking system by commercial lenders (bank deposits). Despite being created by private institutions, inside money serves the same purpose as outside money, acting as a medium of exchange or a store of value it has the same unit of account. It also has the same contractual liquidity i.e. an implicit promise exists that deposits will be available in full for withdrawal at any time.

The asset side of a shadow banking entity like an SPV (Special Purpose Vehicle) looks very similiar to the asset side of a regular bank - a portfolio of illiquid loans of medium/long-term maturity. The liability side, however, is very different. SPVs do not issue deposits, if they did they would be subject to banking regulations. Instead they issue debt in the form of asset-backed securities (ABSs) or the infamous collateralised debt obligations (CDOs). These securities can then be utilised as balance sheet assets in a securitisation chain, or to back the issuance of asset backed commercial paper (ABCP), or as collateral in repurchase agreements (repo) conducted by Money Market Mutual Funds. Repo is a mechanism for transforming loan maturity (generally from long to short). MMMFs are big-time lenders of repo and major buyers of ABCP. To finance their operations they sell shares which are advertised as risk-free and redeemable at par at any time; that is, MMMF shares offer the same divisibility and contractual liquidity as bank deposits. MMMF shares are the deposit contracts of shadow banking, and in fact many MMMFs do also extend payment services to their clients.

Contrary to the creation of money by commercial banks there are no reserve requirements on the creation of MMMF shares. The only real constraint on money creation in the shadow banking system is the perceived credit risk by market participants, as expressed through the size of the equity buffers they maintain, and the haircuts they impose on repo transactions.

Share this post


Link to post
Share on other sites

Thanks, that is interesting. In the UK, though, I believe there is currently no traditional fractional reserve requirement on commercial banks, nor even fractional reserve targets.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 407 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.