Cretinous fucking stupidity by the Tories

David Cameron is to announce plans to build as many as 450,000 mainly affordable homes between now and 2015.

A long-awaited, and much delayed, housing strategy paper is expected to give details of how state-owned brownfield sites will be released for construction.

The prime minister is also expected to back plans, supported by the Confederation of British Industry, for a government-backed mortgage indemnity scheme for first-time buyers.

Ministers regard a fillip to housebuilding as one of the best ways of securing growth.

Under the mortgage indemnity scheme the government would cover the risk for the lender, which should enable first-time buyers to take out larger mortgages relative to the value of the home.

Dear Lord, we know they\’ve not got many decent economists in there but we might at least hope for a historian or two. Hell, someone capable of remembering the papers from a couple of years back would do.

They\’re proposing a Freddie Mac, Fannie Mae. You know, the two institutions that lost hundreds of billions of dollars and are still losing tens of billions?

Shit, Willy Hutton proposed just this, insisting we must have a Gordon Mac (amusingly, just weeks before Frannie went bust) and yes, it is still true that anything proposed by Willy is a howlingly awful idea and we should do exactly the opposite at once.

What are they doing in Number 10, smoking crack?

11 comments on “Cretinous fucking stupidity by the Tories

  1. “build 450,000 mainly affordable homes ”

    What will happen to the ones that aren’t affordable?

    (yes, I know, but I like to point out the absurdity)

  2. It’s an absolutely bonkers idea. Might have something to do with propping up house prices though – given the effect that falling house prices have on an already fragile economy?

  3. I can kinda-sorta see a logic in it. Inflate away public and private debt, hold down wage increases until affordable housing is built, release the pressure on wages gradually, and with a bit of luck and a following wind, house prices can come back to their historical average multiple of earnings, and we end up with a much more flexible and mobile workforce.

    Will it work out this way in reality? What negative consequences will result? Is it a good idea to even try? I dunno, I’m just an amateur economist.

  4. This is all part of the Home-Owner-Ist agenda.

    They peddle mantras such as “the [bad] effect that falling house prices have on an already fragile economy…” when all the evidence shows that low house prices are actually very good for the economy, so it’s best to get the “falling” bit with over ASAP.

    So what you or I might view as “cretinous stupidity” is carefully calculated and planned in advance. In their terms, this is actually very clever.

    All the Homey foot soldiers will gloat about their unearned “capital growth” while the Big Boys (bankers, politicians, large landowners etc) an continue cream it all off at the top, and this is how Home-Owner-Ism perpetuates itself.

  5. This is how Tories do corruption.

    Look very, very, closely at the plan when it comes out, and start asking ‘cui bono’, then ask how cui will send money back to Tories, and all will become clear.

  6. It looks cretinous because TW is a sensible, reasonable, rational man who knows something about economics. But does he understand politics?

    I would guess there is a sensible political reason for this – and the likely one is that Cameron knows the only way to reduce house prices is to reform the Planning laws. Release more land from the Green Belt. Prevent the Nimby tendency blocking everything.

    But that is not going to happen. The Telegraph has been running a campaign against it. The Tories natural voter base is appalled by the threat to their property prices. So Cameron can’t do that because it would be, in Sir Humphrey’s words, courageous.

    So better to introduce this absurd scheme which is a de facto subsidy to those who already own their own houses – and vote Tory – because if Cameron Mae fails, it will be in twenty years time when he is sitting on a fat EU sinecure.

    He simply lacks the spine to do the right thing.

  7. Mark Wadsworth

    So glad you noticed the underlying cynicism of my comment about falling house prices in a fragile economy…..

    If this was really about helping first time buyers then the Government would simply allow prices to fall to levels that first time buyers could actually afford, wouldn’t they – which would naturally happen with a house building programme in a tight credit environment. And they might help the process a little by acting to reduce the premium that planning permission adds to development land.

    But they aren’t actually helping first time buyers at all. They are subsidising the construction industry, which has a vested interest in building more houses while keeping prices high. It’s no surprise that this poisonous idea has been cooked up by the CBI.

  8. If we’re going to emulate demented US mortgage market ideas like Freddie Mac and Fannie Mae, let’s do it properly; set up a structured product on “Cameron Mac” with the leading 5% tranche fully funded by the House of Commons pension scheme. All the initial mortgage defaults come out of their funds first; only once that’s exhausted is the taxpayer on the hook.
    To quote MW, “what’s not to like?”

  9. If only, Hopper…

    “But it’s a sure-fire return as the housing market can only go up, right? Right?!?”

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