If it’s broke fix it with the thing that broke it*
Both my readers (hi Mum) will recall that since the UK election nearly two years ago I’ve often said that the Cobbleition government really doesn’t seem all that different from the Labour government that preceded it. I can’t be bothered to look back and see when it was that I began saying that it was like Labour had never lost the election but I’m pretty sure it wasn’t long. However, I can recall exactly when I said that the country may as well bring back Gordon Brown, which was late last November, my reasoning being that if all politicians who can attract enough votes to win power are hell bent on wrecking the place then real change can’t happen until things have got so bad that the people who voted for them can no longer ignore it, so you might as well have the worst of the bunch in charge so as to get the painful wrecking part of the process over and done with quickly. Not a new argument – Obonoxio the Clown was saying something similar even before the election, and I don’t think he was the only one. But what persuaded me that the current incarnation of the Tories, which at its best has only ever been a party that likes to boss people around about different things from those which Labour likes to boss people around, really are doing nothing more than prolonging the agony was Camermong’s announcement that he was going to fix the economy with the very thing that, in America, fucked the economy right in the eyes.
The Prime Minister and his deputy, Nick Clegg, will unveil proposals to help first-time buyers of new homes by carrying part of the risk of their mortgages.
Dave, Nick, say it ain’t so. Tell us that even you aren’t so monumentally stupid that you can’t see that it’s precisely this kind of policy – using taxpayers’ money to underwrite loans for overpriced housing to people who are at higher risk of being unable to repay them – that led with grim inevitability to the fucking subprime mortgage crisis in the fucking first place. And what did that lead to in its turn? Oh, yes, that’d be adding to an unsustainable bubble with a bonus prize of a banking crisis, wouldn’t it? And you two freak shows are now standing here telling us that you want to fucking do it all over again in the deluded belief it’ll get the economy moving. Folks, I think this year’s Jeff Buckley Award for being the Public Figure Most Hopelessly Out of Their Depth may end up being shared.
But no, they did mean it. And today it turns out to be even worse.
Up to 100,000 people will get Government support to buy homes worth up to £500,000 in a Coalition move to revive the middle-class dream of home ownership, ministers will announce.
I just want to draw attention to the maths here. £500,000 times a hundred thousand people is fifty fucking billion pounds. Fifty billion! Has the country that’s recently fallen behind Brazil in the ranking of world economies actually got fifty billion to spare? Without adding to the already mind-fuckingly huge debt that’ll need to be repaid by future taxpayers?
The guarantee will allow people buying new-build properties to borrow up to 95 per cent of the value of their new home.
Since the credit crisis that began in 2007, most people seeking to buy a newly-built property have been able to borrow no more than 80 per cent of the sale price.
Can someone explain to me why this is necessarily a bad thing? Surely if you’re borrowing less then your ability to repay is easier, giving you either a cushion or the option of early repayment or more disposable income. And if being able to borrow less means you can’t afford it at all, couldn’t that possible indicate that despite adjustments property in Britain is still too fucking pricey by far?
Some estimates suggest that the average deposit required for a mortgage is close to £38,000.
This is telling. When I bought my first house, which was back when the housing market was only silly and not outright batshit insane, I think the rule of thumb was being able to borrow triple your salary. The thing is that a little googling finds that the median UK salary is in the mid £20K area, meaning that a median salary earner needs either to scrimp and save or borrow about 50% of their salary just to get the fucking deposit together. Not the mortgage, the bloody deposit. Surely that screams ‘over priced housing’, and surely this move of Cameramong’s is only going to exacerbate it. I’m no economist but I seem to recall hearing that encouraging too much money to chase too few goods is inflationary.
Though of course it might not be in the longer term if it means loans being made to people who can’t afford to repay them.
… it could also raise fears that the State could end up guaranteeing more risky borrowers.
Quite. Because that’s exactly what happened in the US to spark the whole bloody GFC off in the first place. Put a big government made and taxpayer funded safety net under businesses and eventually some of them will forget to take as much care as they should, and so inevitably banks made bad lending decisions while feeling safe and secure in the knowledge that Fannie Mae/Freddie Mac would take care of things if they went tits up. Can someone tell me how what Cameramong and Cleggie are doing is fundamentally different?
Formally launching the mortgage guarantee today, the Prime Minister will today pledge that the NewBuy scheme will help repair a “broken” housing ladder.
“It’s no good hoping people will climb the property ladder if the bottom rung is missing. Affordable properties and available mortgages are vital,” he will say.
You’re not repairing it, you tool. You’re fucking extending it and weakening the remaining lower rungs still further. Oh, and that name? Sounds a little familiar. Not thinking of yourself as an English Roosevelt, are you? I ask only because among other things FDR’s New Deal created Fannie Mae. If you mention the hand of history I swear I’ll get on a plane, come over there, and twat you heavily about the head and neck with Tony Blair’s autobiography.
And your drones are just as moronic, by the way.
Grant Shapps, the Housing Minister, said the guarantee scheme will help unlock a housing market where for many people, owning a home is “no longer a dream, but a distant fantasy.”
Turning it into a fucking nightmare should fix that.
“We want to help everyone achieve their aspirations, and feel the pride of home ownership. The NewBuy Guarantee will give thousands of prospective buyers the chance to buy a home with a fraction of the deposit normally required.”
Yeah, because you wouldn’t want to let a market of an overpriced good fall to a natural level. Oh, no. Far better to keep those prices unnaturally high by pulling magic money out of your arse with one hand while writing out “IOU – We’ll pay for everything no matter what it eventually costs. Love, the Taxpayers” with the other. Have none of these self described conservatives thought that maybe if they didn’t keep interfering with markets and pushing up prices as well as adding to the taxpayers’ bills then maybe those same taxpayers would have a better chance of being able to afford these things without help?
And this kind of shit is why this blog is beginning to swing towards overt support of Labour. Not because I have any respect or faith for that party, and certainly not in the expectation that they’ll be a significant improvement on with the Cobbleition or either of the parties in it. In fact I expect Labour to be even worse and possibly to have the capability virtually to destroy Britain even more quickly than the other two. And I’m coming to believe that virtual destruction is not only inevitable but is necessary to wake up the majority of the 26,146,419 people who voted for the Big Three for no better reason than their family has always voted that way, or because they didn’t want the other lot to win, or because they’d vote for fortnight dead roadkill if someone dropped the right colour rosette on it. It’d be far better if they’d realise the damage they’re doing by prolonging the paradigm of incompetent and destructive politicians and just start voting for someone else (though I still have concerns about them UKIP is currently my least worst option, but Christ’s sakes, anyone but the Big Three really) but I’m afraid that the majority of those 26,146,419 will carry on as they have been doing until one day dawn breaks on a Britain that is completely bankrupt, probably in more than one sense.
Only then will those destructive political parties be destroyed themselves, or at least made electorally irrelevant, because all will finally be clear and in the wreckage there will be very very few who will ever forgive the Big Three. What will happen then is anyone’s guess, but I’d very much hope it’ll be the beginning of several generations with an inherent distrust of government and big stater solutions. I can’t help but feel that if destruction is indeed a necessary condition for recovery then why put it off by voting for someone marginally less catastrophically incompetent?
That said, if destruction can be avoided altogether it goes without saying that we should, so although I’m pessimistic I really hope an alternative presents itself. Besides, voting Labour would make me want to go home and wash for about a month.
* Title from The Daily Mash.