Suggestions for controlling house price rises

Thrugelmir

jamesmorgan wrote: »

GDP is closely correlated with size of population,

Productivity per head has been falling for some years. So the UK needs to switch from a consumption based economy to an investment led one.

TickersPlaysPop

This report is a very good summary of the detail of the rental sector, with ages, incomes, people per rental property etc....

http://england.shelter.org.uk/__data/assets/pdf_file/0009/587178/A_better_deal_report.pdf

It paints a clear picture of the situation.

If we allow property to increase in an attempt to discourage immigration it would be a very socially divisive policy. It would leave property available only to the rich, leaving the poor a very difficult life indeed trapped paying their hard earned money to landlords. Widening still further the gulf between the rich and poor, which my friend Mark Carney spoke about yesterday.

Whether MC does anything about this rather than keep talking is another thing!

CLAPTON

Thrugelmir wrote: »

Productivity per head has been falling for some years. So the UK needs to switch from a consumption based economy to an investment led one.

how does that happen?

does that mean that people like you will start investing rather than consuming?


if that happened, why would industry start new investment if people stopped buying their products?


or does it mean that industry should start sacking lots of people and make the remainder work harder ?

so what exactly?

antrobus

CLAPTON wrote: »

how does that happen? does that mean that people like you will start investing rather than consuming?....

Basically, yes. Or at least saving so that someone else can make the investment.

CLAPTON wrote: »

...if that happened, why would industry start new investment if people stopped buying their products?....

Well, that's the catch 22 ain't it? The solution appears to be to get industry to flog things overseas. The Germans appear to manage it - they have a high household savings rate which drives investment, increases productivity and, incidentally, results in a whacking great current account surplus - so it can't be that difficult.

CLAPTON wrote: »

..or does it mean that industry should start sacking lots of people and make the remainder work harder ?....?

It is one way of boosting productivity. Which has been somewhat stagnant in the UK of late. However investment seems to be a much better bet.

jamesmorgan

TickersPlaysPop wrote: »

If we allow property to increase in an attempt to discourage immigration it would be a very socially divisive policy. It would leave property available only to the rich, leaving the poor a very difficult life indeed trapped paying their hard earned money to landlords. Widening still further the gulf between the rich and poor, which my friend Mark Carney spoke about yesterday.

I agree entirely - I don't think there are any easy options! Global over-population is going to cause lots of very complex problems. It is actually quite difficult to envisage the avoidance of major wars/revolutions.

CLAPTON

antrobus wrote: »

Basically, yes. Or at least saving so that someone else can make the investment.



Well, that's the catch 22 ain't it? The solution appears to be to get industry to flog things overseas. The Germans appear to manage it - they have a high household savings rate which drives investment, increases productivity and, incidentally, results in a whacking great current account surplus - so it can't be that difficult.



It is one way of boosting productivity. Which has been somewhat stagnant in the UK of late. However investment seems to be a much better bet.

exporting per se makes the exporter poorer.

we can achieve that by having a high overseas aid budget.

to the extent that we need to import a lot of stuff them it makes sense to export a lot of stuff as well.

exporting is poor way of creating higher productivity- we could build more houses here or improve our roads and transport instead.

It's interesting to note that in terms of exports per capita, that Ireland and Iceland rank higher than Germany.

antrobus

CLAPTON wrote: »

exporting per se makes the exporter poorer....

That's right. Those US dollars and Euros ain't real money are they.

CLAPTON wrote: »

....we can achieve that by having a high overseas aid budget....

Er no. Overseas aid involves giving money away. Exporting generally involves not giving things away.

CLAPTON wrote: »

...to the extent that we need to import a lot of stuff them it makes sense to export a lot of stuff as well.....

The problem we have in the UK is that we are currently good at importing stuff; not so good at the exporting bit.

CLAPTON wrote: »

....exporting is poor way of creating higher productivity-

Why?

CLAPTON wrote: »

....
we could build more houses here or improve our roads and transport instead.

But that would be investment. You'd need an investment led economy to do that sort of thing. You were earlier questioning the validity of such an approach.

CLAPTON wrote: »

....
It's interesting to note that in terms of exports per capita, that Ireland and Iceland rank higher than Germany.

So that's why they're poorer than Germany you mean? They must be absolutely destitute in Norway, Switzerland, and Qatar then.

CLAPTON

Exporting per se makes us poorer as we are producing goods and services but not consuming them
China was a good example where the command economy made the west rich but kept their own people in poverty. They have changed tack now and are consuming a lot more of their own production and the people are becoming much richer.


As I've already said, to the extent we need imports we need to pay for them and exports is a good way of doing this.


Simply having high levels of exports itself doesn't make us richer. It's simply means to an end which is to consume more.


It haven't questioned the need for necessary investment; just the mindless rubbish that says things like switching from a consumer led economy to an investment led economy: as if consuming is 'bad' and investing is 'good' per se.
Investing is simply delayed consumption : you hold back today so you can consume twice as much tomorrow.




My comment about Iceland and Ireland was meant to show that 'exporting' doesn't of itself make you rich.


I don't dispute that having a lot of oil and gas that you can produce very cheaply can make you rich and can allow you to consume lots for goods and services you haven't produced yourself.


There are no easy or obvious answers to becoming rich barring being lucky enough to have load of gold under your feet.

antrobus

CLAPTON wrote: »

Exporting per se makes us poorer as we are producing goods and services but not consuming them
......

It's a wonder then, that anyone ever bothers to produce anything and go to all that trouble of selling it to someone else, when they could simply just consume it themselves and be so much richer.

Claptonomics is getting even more bizarre than Devonomics.:rotfl:

CLAPTON

antrobus wrote: »

It's a wonder then, that anyone ever bothers to produce anything and go to all that trouble of selling it to someone else, when they could simply just consume it themselves and be so much richer.

Claptonomics is getting even more bizarre than Devonomics.:rotfl:

Starting from the wrong premise often leads to the wrong conclusions.

The premises from which I was referring say:

a. 'we need to move from a consumer led economy to an investment led economy'
b. 'we must move from an import led economy to an export led economy'

I am querying the logic of both those statements.

That does not mean that I don't believe that trade can bring benefits to both parties via their ability to specialise or from natural advantage.

nor

does it mean I don't recognise that investing now can bring big rewards later

nor

does it mean I don't understand that if we buy things from abroad that those things don't need to be paid for.

It is indeed likely that if we could easily produce all the goods and services we need by ourselves, then we probably wouldn't bother to trade.

However, our desires are many and it is clearly beneficial to both trade with others and to defer consumption to invest for later consumption.


That seem straight forward to me. Why do you disagree?