Does State expenditure inflate the market?

Charles Moore comments on Jonathan Ross' £18m 3-year deal with the BBC:

... even if it is a wonderful idea to pay Mr Ross roughly 30 times more (annualised) than the Prime Minister and 20 times more than the Governor of the Bank of England out of what is, after all, tax, it is obvious rubbish that this does not push up the market. If the BBC were not competing in this field, Mr Ross’s price to commercial channels would plummet.

Deplorably, Mr Ross is unbelievably coarse, which sends a message to his (relatively) young audience. Peter Hitchens suspects that this crassness is a cynically avaricious pretence:

Ross talks on TV in an arrogant sort of loutspeak.

I wonder if he talks like that when he’s dealing with his lawyers and his accountants.

Now that would be a fly-on-the-wall documentary to screen next to Ross' show.

So, celeb wages inflated and manners undermined by spendthrift public services.

Meanwhile, Liz Jones takes a very laudable interest in the young, especially those rotting away in the complex trap of social security benefits. And again, a market may be distorted by public money:

Her room is damp, sparsely furnished, has a stinking, threadbare carpet, and Paris mostly sits on her bed, terrified to walk to the shared bathroom in case one of the boys who slouches around outside harasses her.

Drugs are dealt openly in the corridors. Each week, ‘the council’ (I’ve never heard her use the words ‘government’, ‘Labour’ or ‘Gordon Brown’) pays the £330 rent (yes, that is £1,430 a month, more than my mortgage repayments) for her box room direct to the private landlord; on top of that, Paris is given £47 a week to live on.

That is, she was, until the council got wind she had got off her backside and found a job, just three days a week, in a clothes shop in Oxford Street (she would have loved, she told me once, to have been a fashion designer).

Although her pay is less than her rent, she has been bombarded with letters and forms, too complicated for anyone, let alone someone with dyslexia, to fill in, demanding six months’ back rent.

She is now being threatened with eviction.

The negative reinforcement is too obvious to summarise, but look at this young girl's rent as a proportion of her total "income": 87.5%!

Compare that with this, from the Guardian in December 2007:

The CML said a typical first-time buyer paid 20.6% of their income to service their mortgage in October, up from 20.4% in September, while for those moving house it rose to 17.6% from 17.5%. The figures are the highest recorded since 1991 and 1992.

There are now very many people (about 4 million) on some form of housing benefit. Is it not possible that rents, and consequently housing valuations, have been grossly distorted by such interventions? Isn't there some other way to house people without creating opportunities for modern Rachman types?