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Keyboard worrier
Sunday, January 18, 2009
"End lending altogether" - Waldman
I've been wondering why we shouldn't bust our criminal banks immediately and replace them with a system that simply transfers money. For a half-serious proposal to end lending altogether, see Naked Capitalism on Steve Waldman.
whilst there are some reasonable points made clearly it is rubbish because
[1]:young people need houses today, not in 25 years time.
[2]companies need working capital. you need to be able to pay your employees and suppliers to make whatever it is you are making then you can sell whatever it was you made and use part of the proceeds to pay off the debt before repeating the cycle.
so credit is the oil in the machine but naturally too much oil causes a fire in the engine.
I'd be more favourably inclined to limit the income multiples for house purchase, and to reduce to that level by fiat, any mortgages taken out since 2003.
doesn't seem unreasonable to me. i'd make planning far easier so that we can replace the houses we have got more easily and at reasonable price thus keeping prices down to a sensible level. at the moment we just have an artificial market in land with planning permission attached forcing up prices to ridiculous levels as soon as easy credit comes available. meanwhile the state of our national housing stock is atrocious and would disgrace southern italy.
4 comments:
Radical.
whilst there are some reasonable points made clearly it is rubbish because
[1]:young people need houses today, not in 25 years time.
[2]companies need working capital. you need to be able to pay your employees and suppliers to make whatever it is you are making then you can sell whatever it was you made and use part of the proceeds to pay off the debt before repeating the cycle.
so credit is the oil in the machine but naturally too much oil causes a fire in the engine.
I'd be more favourably inclined to limit the income multiples for house purchase, and to reduce to that level by fiat, any mortgages taken out since 2003.
doesn't seem unreasonable to me. i'd make planning far easier so that we can replace the houses we have got more easily and at reasonable price thus keeping prices down to a sensible level. at the moment we just have an artificial market in land with planning permission attached forcing up prices to ridiculous levels as soon as easy credit comes available. meanwhile the state of our national housing stock is atrocious and would disgrace southern italy.
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