Voting Against Your Own Interests

I note from your pervious editions of your circular, that you, even by sideways references, take a dim view of rising house prices. So, to call a spade a spade rather than a hand-operated digging tool. Come out with it, why do you think rising house prices are bad?

Many thanks,

A Danaswammy, Leyton

In 2014, Russia annexed Crimea. The reaction of the western nations was viewed now, like it was then, as being without vigour. Statemen there and here scrambled for response in the style in which a boxer who’d been knocked to the canvass scrambles for his gumshield – desperately.

No Glamour In Arms

These folk with their vacuous words and pusillanimous phrases, practicing their practised ways of talking a lot and saying nowt, were, partly because they saw no glamour in association with arms, on the horns of a dilemma - they were torn between a cheap reaction and an effective reaction, but we should be thankful they knew could have one or the other, not both, they knew the cost of an effective counter was to be counted in blood and treasure, the cost of an effective counter was to be reckoned in soldiers limbs and lives overseas and rising prices at petrol station forecourts and supermarket tills at home.?

Of course, we all know that politics, from the municipal and local at one extreme, to the regional and intercontinental at the other, has always been the art of who would bear the pain.

Tu Quoque

In those days the Queen’s Chief Minister was David Cameron. Mr Camron at some EU meeting suggested a suitable sanction for Russian revanchism would be for France to refuse delivery of the two aircraft carriers for which the Russians had entered into a contract with the French defence equipment manufacturers Naval Group in 2011.

The French, tu quoque, retorted with a statement scarce noted in these parts at the time, that they’d breach their contract to sell the vessels if the British sacked all the Russians who’d bought property in Britain especially in London with money that could most politely be described as being of dubious provenance.

Some other delegation declaimed that we merrily sold our footie clubs and railway stations to, and educated the offspring of, folk who paid in obviously looted lucre. Yet another party sneered that our royalty consorted with crooks and pointed out how universities in Cambridge and London took kleptocrats’ cash.

Stilts & Scaffolding

The response of the British delegation is not noted, perhaps because it was silence.

Embarrassed silence.?

The Brits knew instinctively, after all, it is economics so elementary even the least intellectually endowed market stall holder would grasp, that if the Russians who bought up London with stolen money were sent packing, house prices would tumble. The Britishers at the talks divined their local house prices would not merely fail to rise, but would wobble as gracelessly as an ill schooled skier who took to the slopes apres ski, slide comically then tumble disastrously such that the best that could be hoped for would be a minor concussion while all witnesses feared a several-year, perhaps terminal, comma.

Thus a not so tacit acknowledgement that cash thieved from Russian and several overseas treasuries formed the stilts and scaffolding holding up British house prices.

We of these lands have been conditioned to regard rising house prices as an unalloyed good. We alas have been brought up to use... house-price inflation as a barometer of economic growth, be certain, it’s a false measure, thus as in Proverbs 11:1, an abomination to the Lord.

Witness the 2020 Stamp Duty Holiday—a deliberate and cack-handed attempt at inflating house prices if ever there was one. I’m old enough to remember similar holidays in 1991 and 2008—economically illiterate attempts to shore up house prices.

We’re Cursed

Subject to attribution, those in a position to inform us on these matters or regulate these things contrive to keep you in the dark and encourage you to want something that is against your own interests, just to win golden praise from the vicious and the vulgar by playing to popular prejudice.

Rising house prices mask stagflation. It’s elementary economics.

Rising house prices makes it difficult for young folk to buy their own homes. You know this as well as I do.

Rising house prices are kindling to general inflation… need you need me remind you of the increase in the cost of your household shopping?

Permit me an exemplar. If Mrs Smith died and her only asset were her ￡500,000 house, her child would inherit the property intact [one is allowed to give a house free of tax to one’s children if the value does not exceed half a million pounds – tax is ordinarily payable on every pound in the estate beyond ￡500,000 at the rate of 40%]. But, imagine shortly before Mrs Smith’s death, her child might have rejoiced at the intelligence that the house was worth ￡750,000. A tax of ￡100,000 would be levied on the inheritance – the house couldn’t be inherited intact. Mrs Smith’s child would raise a loan or sell the house to pay the tax. In sum, Mrs Smith’s child wouldn’t inherit the house intact.

Thus by the con trick of house price inflation, the price tag on the house has been changed from ￡500,000 to ￡750,000 and the treasury takes a nice cushy 13% of the value of the house. And you know better than I do, what they don’t waste [to be charitable, waste is like beauty, it is in the eye of the beholder], they steal.

Why would you or I want something that condemned our youth to rent rather than own their own homes? Why would I or you want something that kindled inflation? Why would we want a phenomenon that reduced our family’s wealth?

It’s an unpopular view, but if you sat and thought about it for two minutes, you’d realise rising houses prices aren’t the joyous happening they’re painted as.

Regards, Ade

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