Ecno's Blog

I was going to set up my own site with a blog and everything but apathy and a general hatred of doing anything mildly complicated with computers which doesn't involve porn led me to start it here.

 Being an econ grad (but not a great one it took be about four goes to spell economics) and having a general interest in the worldwide political economy makes me feel like I have a semi reasonable opinion of world events that should be listened to.

Anyway to get start I've just finished watching Newsnight on BBC2 and found the We'll get Britain Building piece particularly interesting because it involved 3 people trying to spout party lines whilst trying to keep their grinning faces under control because they realised the fallacies they were spouting out and then one reasonably astute journalist occasionally interrupting with a point of semi-wisdom. (For more information on the topic look here http://www.bbc.co.uk/news/uk-politics-15810966)

Lets start with the current housing minister Grant Shapps  who had some kind of resemblance to Robert Webb (Sorry Robert). Basically when asked by the Pax whether he felt house prices were too high (they are but that's another story) he insisted on bringing out an obviously rehearsed line of that price stability was needed where house prices increase in line with inflation but below average earnings (lets ignore that inflation is currently increasing faster than average earning) so that eventually the price to earnings ratio would return to the long term average trend. The smirk on his face was priceless as he was trying to mix what should happen with the party sensibility that the property owning class (and  the core conservative voter) should no way suffer. Later he went on to say that the policy was constructed with consultation with house builders (whom what could be wrong about that).

As usual they had some member of the Labour party. All that I took note of  was that she'd end up with a D in A-Level Economics. "An increase in govt spending would lead to an increase in Aggregate Demand (consult your Keynesisn Economic textbooks) which would increase economic growth)" Well unfortunately that's only a partial answer. You forgot to evaluate your point e.g what would be the result on government debt? inflation? aggregate supply? etc...

This brings me to the third person they had taking part in the discussion "man from the CBI". I would hazard a guess that the CBI are supposed to at least be appear to be apolitical but apparently "man from the CBI" didn't get the message as at every opportunity he hammered down the Conservative Party line so much that a..... (I couldn't think of anything funny but you get the idea).  "This isn't a Plan B it's a plan A+" he cried. Last time I checked an A+ was better than an A so maybe if we started with plan A+ instead of wasting time with just regular plan A we wouldn't be in this mess. Anyway this brings me to an earlier point in which Grant Shapps defended his government's plan by saying that it had been drawn up with the help of house builders. Now last time I checked asking an industry if they would like government money to increase demand for their product and therefore profits isn't exactly going to lead to lots of condemnation and discussion. 

Now what I feel is wrong with this plan 

1)The government has decided that it's better at choosing who's able to afford mortgages than the people whose job it actually is to decide whether people can afford loans. If the people who were willing to lend 120% mortgages to people with no money a few years ago say you can't have a loan in the majority of cases I'd say they were right. People go on about how the banks caused the 2008 recession through irresponsible lending. Now when  they're showing at least a modicum of restraint you say they're not lending enough well I don't know what.

2) I'm all for people having a place to live and have nothing against people having subsidised rental housing if they truly need it but this is subsidising people buying assets. To be honest I don't really want my taxes to go to people to buy houses 1) because your just giving people money without them really needing or deserving it and 2) now is probably a really bad to buy a house and if someone is going to buy one I don't want it to be with my money,

And to be honest that's all I've really got for now. I feel that my points have got less eloquent as I've been writing and that's all that really sprung to mind as I'm watching for the Chiefs Patriots Game.

Also shameless plug if you're a UK citizen sign my e-petition please http://epetitions.direct.gov.uk/petitions/4969