The desperation of Labour's attacks on George Osborne is readily apparent in THIS very strange article by blogging Labour MP Tom Harris. He thinks that wizened old Thatcherites like me will have apoplexy at Osborne's suggestion that the Bank of England should intervene to stop rampant house price inflation.
Harris's logic is at best warped and at worst just plain mischievous. He appears to think that Thatcherites are all in favour of a totally free market without any form of intervention from anyone. He needs to read up on his economics. If that were the case there would be no case or need for a Bank of England whatsoever. That way lies madness.
Most people support the Bank of England's role in using its powers to help control inflation. It has always been slightly anomalous that house price inflation has been ignored. All George Osborne is suggesting is that the Bank should now give priority to preventing house price inflation getting out of control, in the way that it did in the late 1980s and over the last ten years. Perhaps if it had had those instructions, we wouldn't be in the dire straits we find ourselves in now.
What Tom Harris is suggesting is that we should "do nothing" (copyright Gordon Brown). Funny that.
6 comments:
"He appears to think that Thatcherites are all in favour of a totally free market without any form of intervention from anyone. He needs to read up on his economics. If that were the case there would be no case or need for a Bank of England whatsoever. That way lies madness."
Nonsense. The Bank of England by centrally manipulating interest rates (and always holding them too low) has caused this crisis. Interest rates should be decided by the free market, not a body with government privileges.
I wouldn't worry about Tom Harris and his post Iain. Notice that he's already being corrected by his own. Bluff and bluster on his behalf methinks.
ps If you have access to HolyroodLive tomorrow pm, have a look at the tory shadow finance laddie, Derek Brownlie. I'm impressed - aye even as a Scottish independent supporter.
Iain, am I incorrect in thinking that Gordon Brown dropped House prices from the inflation index measurement.
If this had been included wouldn't the inflation figure have been consistently higher than it was shown to be and therefore interest rates would have been raised thus damping the credit boom?
Can someone confirm that it was our great leader who did this?
That would be the same Tom Harris who could not understand why we were moaning last year?
I notice he keeps rather quiet about that now...
As someone who started out as an artist, it has always amused me that the commercial value of art bears no relation to its intrinsic quality or its resemblance to anything I would call "Art".
Art is a harmless paradigm of unfettered free marketeering. And of course, the only people who get their fingers burnt with it, by and large deserve it. It is wise, as Oscar Wilde would remind us, not to "know the price of everything and the value of nothing"
Woudn't it be awful if the price of what is most peoples' biggest financial asset, a house, was allowed to float in a similarly subjective fiscal pool?
Well until recently, it did.
I would suggest therefore that a radical re-think of the way people buy and sell houses is long overdue. Why did it get to the point where anybody with a computer could get a mortgage on line or fluff up his assets (Mandy, we know wwhere you live) and over step the bounds of prudence? Why did the Building Societies turn into banks? Why do people think their is a God-given right to buy?
The sort of top-down tinkering with the housing market that George is proposing is like picking a little spot that has a gallon of pus under it.
What needs to happen is a radical rethink. You could start by making it difficult to get on the ladder in the first place. You used to have to have saved some money. You used to have to have been with a building society for years before they would even see you. Why not bring back mutual societies?
In order to keep the heat out of the housing market, the best thing is not to build it with straw and matchwood in the first place.
He appears to think that Thatcherites are all in favour of a totally free market without any form of intervention from anyone.
Wasn't that, in essence, the policy of Gordon 'Light touch' Brown?
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