Saturday, September 6, 2008
What SOS ???
In the unlikely event that I am ever on a sinking ship with Gordon Brown, I will remember not to rely on him to throw me a life jacket. The Prime Minister's much-heralded “rescue package” for the housing market announced this week was the equivalent of sending a canoe to save the Titanic. Yet much of the debate focused not on the inadequacy of the plans, but whether the Government should do anything at all. There are people who believe that Mr Brown should simply allow house prices to fall to a more affordable level. While this is superficially appealing, it ignores the relationship between the housing market and the wider economy and the awful spectre of negative equity.