Tuesday, September 16, 2008

Our Methadone Housing Policy

Having overdosed on the pure heroin of leveraged financial excess, the banks, the builders and the Government want to ease the pain of financial cold turkey by taking the policy equivalent of methadone. Hence absurd calls for the Government to introduce schemes to make it easier for people to 'get on the housing ladder' through subsidies to local authorities, builders, banks and anyone else wailing loud enough.

My, how short some people's memories are! Was it not the provision of 'sub-prime' loans to people who shouldn't have been buying houses in the first place that led to the mess we're in? The much touted ninja loans (no income, no job or assets) made a lot of fees for the lenders, it just didn't do the borrowers any good.

Alan Ahearne is advising the Government to ignore the self-serving lobbies - as he puts it:
The use of public funds would be appropriate to help lower earners in danger of losing their homes and to prevent a collapse in a systemically important institution. Large banks are systemically important. Developers and property investors are not.
It was Government intervention and meddling that got us into the current housing crisis in the first place (aided and abetted by the banks and developers to be sure). Maybe it's time to just go through the cold turkey and come out the other side wiser and determined not to do it again.

1 comment:

  1. Well said! Going down that road will wind us up in the same place in a couple of years, worse off. What are the chances though? Crony Capitalism anyone?

    ReplyDelete

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