Beware: Mindbenders at Work
First, there was disinformation about the looming collapse of the housing market. It wasn’t going to happen, then it would be a soft landing – all to maintain a mythical “confidence” on which the property market is supposed to be built.
Now, disinformation about the recovery: housing wasn’t the cause of the UK crisis, and prices will bottom next year – and they won’t lose 40% of their value. What’s more, there’s no way to avoid a re-run of the boom/bust cycle, so get a life and stop moaning.
That’s according to Yolande Barnes, one of the keepers of the secrets of the property market. As head of research at Savills, the up-market property agency, you would think she understood the economics of housing. Believe her at your economic peril.
A Blinkered Foresight
Writing in The Times (Nov. 14), Ms. Barnes reveals that she has adopted my theory of the 18-year cycle. But her learning is evidently selective, because she says “it is hard to see how we will stop the housing market crash of 2027”.
It was not many years ago that she and I were guests at a dinner party where I explained the economics that would stop such crashes. Was Ms. Barnes asleep, or was this a case of selective amnesia?
In any event, she insists that “the roots of Britain’s downturn lie in the credit crisis and the withdrawal of funding by lenders, not the other way round”. This is the kind of disinformation that allows politicians off the hook. If the so-called professional specialists believe in arrant nonsense, can we really blame those who rely on them for advice?
Myth of the Fundamentals
People like Ms. Barnes misled the house-buying public in the run-up to the crash by claiming that something called “the fundamentals” were such that Britain would escape a housing crash. She persists with this perverse way of viewing the world by claiming that the UK housing market “is a different country” from the US.
In terms of reality economics, there are no differences between the UK and US housing markets. But it doesn’t suit some mind-benders to face the truth, for reasons that must be left to others to speculate about.
We can change the rules to prevent the next housing boom/bust. The experts won’t tell you what this would take, however. Why not, is explained in our next documentary – Renegade #2: Messing with our Minds. Watch out for next week’s premiere!
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My favourite mindbender is the repeated claim that anyone, such as you, who dares to question the “fundamentals” is “talking the economy down” and therefore responsible for all our woes. (As if we could keep recession at bay by the power of positive thinking alone!).
This myth / meme has been deliberately propagated by the vested interests and has taken hold of wide swathes of the population – I have heard it from friends of mine from across the political/socioeconomic spectrum. It suggests to me that we have become so used to spin that we’ve forgotten what dissent, discussion and critical thinking look like.
So thanks for being a voice, however lone, against the constant barrage of disinformation.
My favourite mindebender has to be “all this started in America”, although now Bush is on his way out Brown is choosing his words a little more carefully. Its now: “this problem, which started somewhere else”.
I also like the “it’s ok for the government to borrow now as we can then pay off the debt during the good times”. Unfortunately its the decade of good times that caused this mess.
“What’s more, there’s no way to avoid a re-run of the boom/bust cycle”
That is the single most powerful argument there is for LVT. All the others are secondary IHMO.
Thanks Fred,i look forward to next weeks insights.I read bb2100 and was fascinated.The liars and spin merchants are probably unaware of the misery caused worldwide by their words.There’s great beauty in truth.