Politics Thread!

[merman]

You may not of noticed but I’ve been as critical of some of the Tories’ measures as of Labour’s. Subsidies to people able to afford £100,000+ for a new home, or to those with well-paying jobs in London, are hard to justify and will just raise costs for others elsewhere where the subsidies don’t apply, cancelling out any benefit.

I should point out that although they won’t reduce house prices overall the subsidies probably won’t raise prices measurably overall either. The UK housing market’s worth a couple of trillion pounds. A few hundred million, even a billion pounds of subsidy is under 0.1% of that, and will hardly move the market. Other things might, such as making things more difficult for landlords so some choose to give up renting their properties out – these might make a difference by limiting supply.

Both parties have plans to build more houses. We’ll see how that works out. Every government seems to announce bold plans every few years to address the housing shortage, but these plans always seem to get bogged down.

I do have particular criticism for how Labour will say they will fund their plans. And apart from raising money from landlords they seem to have announced yet another ways to target rich foreigners. As well as abolishing nom-dom status, and introducing mansion tax, they now want to extract more stamp duty just from them. But there’s a limit to how much you can tax small groups without them changing behaviour to avoid the tax, especially groups without strong ties to the UK. Ed Balls said in January that abolishing nom-dom status would "end up costing Britain", and these extra taxes on the same people are likely to just multiply that effect.

Thanks to the Tories and their housing bubble, you can't get a house in London for less than £300,000 - so no-one there is being subsidised.

Oh, and rent controls WORK in Germany - their house prices and rent have been very stable.

And remember, Ed Balls' comment was a straight answer to the question IN JANUARY. Since then the actual policy has been costed and audited and developed, so it won't cost the country money.

[pogo]

TORY housing bubble?? Lol, no. After the early 90s slump prices started rising around 1995/96, just before Labour came to power. And never stopped rising, for over a decade, until the start of the crisis in 2007/08 when they fell sharply. They have recovered a little since but are still below the peak in 2007/08. Except in London which is even more disconnected from the rest of the UK than before the crisis. Houses are cheaper in many places, but it’s nothing to do with price controls, just better supply.

And if it’s “costed and audited and developed” they must know how much it will raise. Except they don’t, they just say it will raise “hundreds of millions”, which could be anything from £100m to £900m or more, meaning they don’t know with any precision.

All these things are related. The ridiculous levels London prices are reaching are nothing to do with the UK economy and buyers, especially as the banking sector is no longer the money making machine it was under Labour. The Sunday Times rich list has been transformed by rich foreigners coming to live here, mostly in the last decade, who don’t have strong roots here. That’s why I’m sure that abolishing non-dom status will raise even less than the hundreds of millions Labour now claim from rich foreigners. If they can’t find some way to keep their riches from the taxman they can just leave. And this is just considering non-dom status, not the other changes to the mansion tax and to stamp duty which gives them even more reason to make their home outside the UK.

[gravy]

We're in a tory housing bubble now yeah?



Or do you think London property was undervalued?

[pogo]

Prices are still below their peaks, at least outside London. Prices are far too high yes, as prices did not fall anywhere near as much as you would expect during a crash. But it’s wrong to characterise it as a Tory housing bubble when prices increased under Labour, and have fallen since under the Tories (except in London).

It’s worth pointing out too that this is £ valuations. As well as prices falling in 2008 the pound fell even further, by 30 - 40%, and more suddenly. This probably explains the sudden appeal of London property to foreigners; prices basically halved and must have looked like a bargain compared to prices a couple of years before. The pound hasn’t risen since so prices in London are still well below their peaks, at least in dollars, euros and most other currencies.

[VNVObit]

It’s worth pointing out too that this is £ valuations. As well as prices falling in 2008 the pound fell even further, by 30 - 40%, and more suddenly. This probably explains the sudden appeal of London property to foreigners; prices basically halved and must have looked like a bargain compared to prices a couple of years before. The pound hasn’t risen since so prices in London are still well below their peaks, at least in dollars, euros and most other currencies.

In what way is affordability in other currencies is good news for uk residents/voters/taxpayers looking to acquire a home?

[pogo]

The lower pound meant more expensive things for us, so the inflation we all remember, but means things here are cheaper for foreigners, both traditional exports in goods and services and things they consume here such as tourism, investment in UK businesses and property. The low pound is one reason we have recovered so well, compared to other countries stuck in a currency union.

My point was that the arrival of rich foreigners does seem very recent, if you look at London house prices, or the Sunday Times rich list, or the burst of foreign ownership of UK businesses (including Football clubs). More recent even than the surge of EU immigrants that started under Labour.

If they’ve only arrived here in the last few years they could leave as quickly, and Labour have to realise this when they make plans to fund all their schemes off raising taxes on them, as seems to be the case (having ruled out the obvious taxes on everyone else). There’s a real danger Labour raise little to no money from them, or even lose money. In which case they may be forced to break their promise not to raise income tax, VAT or NI.

[VNVObit]

The lower pound meant more expensive things for us, so the inflation we all remember, but means things here are cheaper for foreigners, both traditional exports in goods and services and things they consume here such as tourism, investment in UK businesses and property. The low pound is one reason we have recovered so well, compared to other countries stuck in a currency union.

My point was that the arrival of rich foreigners does 1 seem very recent, if you look at London house prices, or the Sunday Times rich list, or the burst of foreign ownership of UK businesses (including Football clubs). More recent even than the surge of EU immigrants that started under Labour.

2If they’ve only arrived here in the last few years they could leave as quickly, and Labour have to realise this when they make plans to fund all their schemes off raising taxes on them, as seems to be the case (having ruled out the obvious taxes on everyone else). There’s a real danger Labour raise little to no money from them, or even lose money. In which case they may be forced to break their promise not to raise income tax, VAT or NI.

1) Seem, so perception not a fact
2)big if, after all you don't have to be physically in the country to invest in property here http://www.insidehousing.co.uk/just-19- ... 69.article

still doesn't answer the question

In what way is affordability in other currencies is good news for uk residents/voters/taxpayers looking to acquire a home?

[pogo]

Where did I write it was good news?? My point, AGAIN, was it part explains the recent influx of rich foreigners. If they are not even living here but are just buying property as an investment it will be even harder to tax them. Despite its name a mansion tax is not actually a tax on mansions but their owners. Hard to collect if the owners are property speculators based in Qatar.

[(o)(o)]

Brand is often slighted but his influence is extremely broad

Now he's bagged an interview with Ed Milliband !

Ed is looking more and more willing to get in the ring whilst Cameron is making snidy comments from the sidelines and skulking away.

Couldn't help notice; Brand is notorious for entering others personal space and causing their inhibitions to show. Milliband here is completely unphased, if anything Brand is displaying submissive body language failing to get a rise from Ed and folding his arms and making hismself smaller



A lot of people doubted Ed. Largely because he whistles through his nose.

But he's got ZEN Power !

[tufty]

http://www.nytimes.com/2015/03/23/opini ... ourse.html

discuss.

For those who can't be bothered to read it all...

The narrative I’m talking about goes like this: In the years before the financial crisis, the British government borrowed irresponsibly, so that the country was living far beyond its means. As a result, by 2010 Britain was at imminent risk of a Greek-style crisis; austerity policies, slashing spending in particular, were essential. And this turn to austerity is vindicated by Britain’s low borrowing costs, coupled with the fact that the economy, after several rough years, is now growing quite quickly.

Simon Wren-Lewis of Oxford University has dubbed this narrative “mediamacro.” As his coinage suggests, this is what you hear all the time on TV and read in British newspapers, presented not as the view of one side of the political debate but as simple fact.

Yet none of it is true.

...

If this counts as a policy success, why not try repeatedly hitting yourself in the face for a few minutes? After all, it will feel great when you stop.

[VNVObit]

A longer piece in the Guardian The case for cuts was a lie. Why does Britain still believe it? The austerity delusion by Paul Krugman

For whatever the politics, the economics of austerity are no different in Britain from what they are in the rest of the advanced world. Harsh austerity in depressed economies isn’t necessary, and does major damage when it is imposed. That was true of Britain five years ago – and it’s still true today.

Well worth a read

[venusian]

I'm not much of a Milliband enthusiast but based on that Brand interview he'd do himself a favour to get away from the spin doctors and argue properly more often. He comes across as somebody who believes what he's saying as he says it in contrast to Cameron's smug script recitals.

I still won't be voting labour though.

There's a guy in my office. He's 26 and works as a social media manager so he's not earning shitloads. His wife is an NHS nurse. He says he's going to vote Tory because he thinks Cameron is the best man to fix the economy. He has no reasoning for this, he just thinks it. He says his wife will vote for whoever he says she should. WTsufferingF is wrong with some people?

[pogo]

For whatever the politics, the economics of austerity are no different in Britain from what they are in the rest of the advanced world. Harsh austerity in depressed economies isn’t necessary, and does major damage when it is imposed. That was true of Britain five years ago – and it’s still true today.

Read that yesterday. Yes, just as predicted in 2010 by 50 economists (including Mr Wren-Lewis), austerity:

At a time when recovery is delicate it could even affect confidence to the degree that we are tipped back into recession – with much larger job consequences.

But it didn’t happen. There wasn’t a second recession, there wasn’t major damage to the economy, the job market is doing well, by some measures (e.g. the % in employment) the best ever. The disastrous damage austerity was predicted to do didn’t happen. What’s surprising is some on the left, rather than admitting they were wrong, are doubling down and trying to find damage that isn’t there.

The narrative I’m talking about goes like this: In the years before the financial crisis, the British government borrowed irresponsibly, so that the country was living far beyond its means. As a result, by 2010 Britain was at imminent risk of a Greek-style crisis; austerity policies, slashing spending in particular, were essential. And this turn to austerity is vindicated by Britain’s low borrowing costs, coupled with the fact that the economy, after several rough years, is now growing quite quickly.

And most of this is correct. The one thing that is wrong is that we were not at risk of a Greek-style crisis (though we thought so at the time); not only is Greek one of a kind but with our own currency we are not in danger of the sort of problems faced by eurozone countries. Instead though if the government had kept on spending and borrowing at such a rate it would have put further pressure on the pound, causing markets to shun it causing further rises in inflation, having a greater impact on standards of living. And the debt would keep rising, requiring even steeper cuts to bring it under control later. That’s something we can learn from Greece: rolling over and putting off repaying debt just means more debt, higher repayment costs down the road.

[tufty]

Worse, this bogus narrative has infected supposedly objective reporting; media organizations routinely present as fact propositions that are contentious if not just plain wrong.

s/media organizations/people like pogo/

[pogo]

He and you can assert that, but it does not make it right. I invite you to explain how I am wrong if you think it evidently so.

I have thought in the past that Paul Krugman seems a little out of touch with what was going on here. A few years ago he was writing something along the lines of "austerity, no, the fools, they don’t know what damage they’re doing!" and applying it to the whole of Europe, including the UK. But while his predictions have turned out to be correct on Europe they have turned out completely wrong on the UK, which has recovered, with employment growing rapidly to record levels and the best GDP growth in the G7.

But rather than update his predictions he and others have doubled down, saying the damage they predicted actually happened, though no-one else can see it. I guess it’s what you expect from partisans this close to an election but that’s how you have to consider it: it’s a piece of propaganda, not a careful piece of analysis.