Man’s a cretin

The McKinsey report on wealth:

Net worth has tripled since 2000, but the increase mainly reflects valuation gains in real assets, especially real estate, rather than investment in productive assets that drive our economies.

OK, yep. Residential housing it is then.

The message is simple. It is that we live in a world where supposed wealth does not come from value creation any more. It does, instead come from financial engineering. Revaluing existing assets – aided enormously by the introduction of International Financial Reporting Standards in 2005 – has permitted a boom in the notional value of wealth from which only those who already owned that wealth and those who advised them have really benefitted.

Well, acturly, it’s fuck all to do with that, is it?

It is as if feudalism had not ended: this is a world where land backs wealth.

Nope, it’s not land. It’s planning permission to be able to build on a piece of land.

Eighth, if tax and subsidised savings built this edifice so too can it build something better.

The last is my focus. Thus report makes for grim, and deeply worrying reading given the obvious instability and inappropriate focus within financing that it reveals. And yet it shows incentives work. So, we need to change the incentives.

Nope, it’s the planning system so it’s the planning system that needs to be changed. Liberalise that and watch the problem disappear.

6 thoughts on “Man’s a cretin”

  1. Bloke in North Dorset

    I thought “incentives matter” was neo-liberal, or is it orthodox, in his eyes and therefore something that can’t possibly work?

  2. Plus ça change. Weren’t the authorities concerned about the amount of wealth invested in housing back in the 70s, 80s, 90s etc?

  3. BiND

    If incentives matter, as you say, probably about 50% of his blog (at least) is invalidated. Just hilarious. He doesn’t know what he is doing from one day to the next

  4. Ninethly:

    Why the fvck Murphy’s last ex-wife did not have him committed to an existence in a padded cell in a straitjacket is beyond me or is perhaps just more evidence of the general uselessness and laziness of GPs.

  5. BraveFart : Incentives Matter.

    (Hey! May be we could get some T-shirts printed up and then find something to set fire to!)

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