It’s Time To Call The Housing CRISIS What It IS-The LARGEST Transfer Of WEALTH In LIVING HISTORY!

Posted By Luther Blissett – By Laurie Macfarlane-OpenDemocracy.net 11/21/17

One of the basic claims of capitalism is that people are rewarded in line with their effort and productivity. 

Another is that the economy is not a zero sum game. 

The beauty of a capitalist economy, we are told, is that people who work hard can get rich without making others poorer.

But how does this stack up in modern Britain, the birthplace of capitalism and many of its early theorists? 

Last week, the Office for National Statistics (ONS) released new data tracking how wealth has evolved over time. [https://www.ons.gov.uk/releases/uknationalaccountsthebluebook2017]

On paper, the UK has indeed become much wealthier in recent decades. 

Net wealth has more than tripled since 1995, increasing by over £7 trillion. 

This is equivalent to an average increase of nearly £100,000 per person. Impressive stuff. 

But where has all this wealth come from, and who has it benefited?

Just over £5 trillion, or three quarters of the total increase, is accounted for by increase in the value of dwellings – another name for the UK housing stock. 

The Office for National Statistics explains that this is “largely due to increases in house prices rather than a change in the volume of dwellings.” 

This alone is not particularly surprising. 

We are forever told about the importance of ‘getting a foot on the property ladder’. 

The housing market has long been viewed as a perennial source of wealth.

But the price of a property is made up of two distinct components: the price of the building itself, and the price of the land that the structure is built upon. 

This year the ONS has separated out these two components for the first time, and the results are quite astounding.

In just two decades the market value of land has quadrupled, increasing recorded wealth by over £4 trillion. 

The driving force behind rising house prices — and the UK’s growing wealth — has been rapidly escalating land prices.

For those who own property, this has provided enormous benefits. 

According to the Resolution Foundation, homeowners born in the 1940s and 1950s gained an unearned windfall of £80,000 between 1993 and 2014 alone. [http://www.resolutionfoundation.org/app/uploads/2017/06/Wealth.pdf]

In the early 2000s, house price growth was so great that 17% of working-age adults earned more from their house than from their job. [http://www.resolutionfoundation.org/app/uploads/2017/06/Wealth.pdf]

Last week The Times reported that during the past three months alone, baby boomers converted £850 million of housing wealth into cash using equity release products – the highest number since records began. [https://www.thetimes.co.uk/article/baby-boomers-splash-more-property-cash-with-equity-release-plans-2c9c9v7gb]

A third used the money to buy cars, while more than a quarter used it to fund holidays. 

Others are choosing to buy more property: the Chartered Institute of Housing has described how the buy-to-let market is being fueled by older households using their housing wealth to buy more property, renting it out to those who are unable to get a foot on the property ladder. 

And it is here that we find the dark side of the housing boom. [http://www.cih.org/news-article/display/vpathDCR/templatedata/cih/news-article/data/Young_people_and_people_on_lower_incomes_paying_the_price_for_our_broken_housing_market]

As house prices have continued to increase and the gap between house prices and earnings has grown larger, the cost of home ownership has become increasingly prohibitive. 

Whereas in the mid-1990s low and middle income households could afford a first time buyer deposit after saving for around 3 years, today it takes the same households 20 years to save for a deposit. 

[http://www.resolutionfoundation.org/app/uploads/2017/01/Audit-2017.pdf]

Many have increasingly found themselves with little choice but to rent privately. 

For those stuck in the private rental market, the proportion of income spent on housing costs has risen from around 10% in 1980 to 36% today. [http://www.resolutionfoundation.org/app/uploads/2017/09/Home-Affront.pdf]

Unlike homeowners, there is no asset wealth to draw on to fund new cars or holidays.

In Britain, we have yet to confront the truth about the trillions of pounds of wealth amassed through the housing market in recent decades: this wealth has come straight out of the pockets of those who don’t own property.

When the value of a house goes up, the total productive capacity of the economy is unchanged because nothing new has been produced: it merely constitutes an increase in the value of the land underneath. 

We have known since the days of Adam Smith and David Ricardo that land is not a source of wealth, but of economic rent — a means of extracting wealth from others. 

Or as Joseph Stiglitz puts it “getting a larger share of the pie rather than increasing the size of the pie”. [https://www.vanityfair.com/news/2012/05/joseph-stiglitz-the-price-on-inequality]

The truth is that much of the wealth accumulated in recent decades has been gained at the expense of those who will see more of their incomes eaten up by higher rents and larger mortgage payments. 

This wealth hasn’t been ‘created’ – it has been stolen from future generations.

House prices are now on average nearly eight times that of incomes, more than double the figure of 20 years ago. [https://www.theguardian.com/money/2017/mar/17/average-house-price-times-annual-salary-official-figures-ons]

It’s unlikely that house prices will be able to outpace incomes at the same rate for the next 20 years. 

The past few decades have spawned a one-off transfer of wealth that is unlikely to be repeated. 

While the main beneficiaries of this have been the older generations, eventually this will be passed on to the next generation via inheritance or transfer. 

Already the ‘Bank of Mum and Dad’ has become the ninth biggest mortgage lender. [https://www.ft.com/content/0bd5e826-2e49-11e7-9555-23ef563ecf9a]

The ultimate result is not just a growing inter-generational divide, but an entrenched class divide between those who own property (or have a claim to it), and those who do not.

Misleading accounting and irresponsible economics have provided cover for this heist. 

The government’s national accounts record house price growth as new wealth, ignoring the cost it imposes on others in society – particularly young people and those yet to be born. 

Economists still hail house price inflation as a sign of economic strength.

The result is a world which is rather different to that described in economics textbooks. 

Most of today’s ‘wealth’ isn’t the result of entrepreneurialism and hard work – it has been accumulated by being idle and unproductive. 

Far from the positive sum game capitalism is supposed to be, we have a system where most wealth is gained at the expense of others. 

As John Stuart Mill wrote back in 1848:

“If some of us grow rich in our sleep, where do we think this wealth is coming from?  It doesn’t materialise out of thin air. It doesn’t come without costing someone, another human being. It comes from the fruits of others’ labours, which they don’t receive.”

Britain’s housing crisis is complicated mess. 

Fixing it requires a long-term plan and a bold new approach to policy. [https://www.opendemocracy.net/neweconomics/solve-housing-crisis-need-fix-broken-land-economy/]

But in the meantime let’s start calling it what it really is: the largest transfer of wealth in living memory.

https://desultoryheroics.com/2017/11/21/its-time-to-call-the-housing-crisis-what-it-really-is-the-largest-transfer-of-wealth-in-living-memory/

Advertisements

Jon Rappoport's Blog

Opioids are mind-control drugs: MKULTRA is alive and well

by Jon Rappoport

November 21, 2017

Wikipedia: “[MKULTRA was] the code name given to a program of experiments on human subjects, at times illegal, designed and undertaken by the United States Central Intelligence Agency. Experiments on humans were intended to identify and develop drugs and procedures to be used in interrogations and torture in order to weaken the individual to force confessions through mind control…MKUltra used numerous methodologies to manipulate people’s mental states and alter brain functions, including the surreptitious administration of drugs (especially LSD) and other chemicals…”

A worldwide population enslaved to mind-control drugs—this is a dream that exceeds the fantasies of the old CIA MKULTRA warriors. And it’s here.

A few “adverse effects” of opioids: sedation, psychological dependence, physical addiction, hallucinations, delirium, brain fog, lowered level of consciousness, and thus, increased suggestibility.

Opioid effects may not be as overtly…

View original post 950 more words

Jon Rappoport's Blog

Exclusive: Dr. Paul Connett interview on shocking new fluoride study

by Jon Rappoport

November 19, 2017

Explosive: new mainstream study concludes fluorides are lowering children’s IQ.

The study referred to in this interview was published in Environmental Health Perspectives, in September 2017. It is titled: “Prenatal Fluoride Exposure and Cognitive Outcomes in Children at 4 and 6-12 Years of Age.” It is often referred to as the Bashash study, after its first listed author.

The study concluded: “…higher prenatal fluoride exposure, in the general range of exposures reported for other general population samples of pregnant women and nonpregnant adults, was associated with lower scores on tests of cognitive function in the offspring at age 4 and 6–12 y.”

In short, pregnant women exposed to fluorides give birth to children who later show up with lower IQ.

I interviewed Paul Connett, PhD.

From his CV: “Paul Connett is Professor Emeritus…

View original post 1,472 more words

Suburbia, 35mm

Posted: November 12, 2017 in Uncategorized

Natalie Breuer

31960011.jpg31960006.jpg31960014 (1).jpg2126001031960010.jpg31960018.jpg31960022.jpg31960019.jpg31960023.jpgIMG_0563.jpg31960012.jpg

California suburbia, photographs taken by me on a Minolta SR-T 101, 35 mm film.

XX, Natalie

More of my film photography here ❤

Social Medias

Instagram  ~  Twitter  ~  Facebook Page     ~   Tumblr   ~   Bloglovin   ~   Pinterest

View original post

Jon Rappoport's Blog

Dear Mr. Trump: here’s something you can do to defend America’s heartland: attack Monsanto

By Jon Rappoport

Something is happening in America’s heartland, Mr. Trump, and you don’t know what it is. Or if you do know, apparently you don’t care.

Because Monsanto’s favorite killer pesticide, Roundup, isn’t destroying farmers’ weeds, as promised, the company has gone to a stronger and even more toxic solution: dicamba.

Zero Hedge has the story: “…[dicamba] spray drifts from those liberal herbicide applications began to wipe out the crops of neighboring farmers who didn’t plant Monsanto’s dicamba-resistant seeds.”

“Now, as the Wall Street Journal points out today, after allegedly wiping out millions of acres of farm ground across the Midwest. [with dicamba], Monsanto once again finds itself in a familiar spot: the courtroom.”

Wall St. Journal: “Arkansas has been a flashpoint in the dispute: About 900,000 acres of crops were reported damaged there, more…

View original post 231 more words

The CIA Flips Off America

Posted: November 10, 2017 in Uncategorized

Desultory Heroics

Photo credit: Adapted by WhoWhatWhy from sarang / Wikimedia and CIA / Wikimedia.

Open Letter from JFK Assassination Expert Dan Hardway

By Dan Hardway

Source: WhoWhatWhy.org

A 1964 CIA memo spells out clearly how James Jesus Angleton, the agency’s famous counterintelligence chief, wanted to deal with inquiries from the Warren Commission:

Jim would prefer to wait out the Commission.1

History seems to be repeating itself. The events of the past two weeks have shown that the CIA is still running a disinformation campaign against anyone who questions the “lone-nut” theory that, according to historian David Robarge, constitutes the agency’s “best truth.”

I recently published an article about the delay in releasing records under the 1992 JFK Records Collections Act. In that article I explained the CIA’s play to discredit those who question the agency’s lone-nut theory,2 and suggested that Robarge, its historian, has told us what to look…

View original post 2,288 more words

Desultory Heroics

By Patrick Martin

Source: WSWS.org

The political crisis in the Democratic Party, brought to the surface with the publication Thursday of excerpts of a campaign memoir by the former interim chairman of the Democratic National Committee (DNC), Donna Brazile, erupted into mutual denunciations over the weekend.

Brazile made public an unprecedented agreement between the DNC (under previous chair Debbie Wasserman Schultz) and the Hillary Clinton presidential campaign that involved Clinton paying off the DNC’s debts and providing it a monthly subsidy in return for gaining control over the appointment of DNC officials and the right of approval over key operational decisions.

The deal was concluded in August 2015, six months before the first votes were to be cast in caucuses or primaries, when the DNC was required by its own rules to remain neutral in the contest between Clinton, Vermont Senator Bernie Sanders and several other candidates for the Democratic…

View original post 1,184 more words