The greatest asset bubble in world history was created through a combination of greed, cheap credit, ignorance and incompetence. As it was housing-based, it impacted every sector of our economy, from Wall Street to Main Street. Whereas middle class families used to share a car, cheap credit put three cars in the driveway, plus a Jet Ski and maybe a new pool in the backyard just for fun.
James Boyce
Let's Stop Enabling The Bubbleholics.
and who (should) control the volume of credit in an economy?
ReplyDeleteHINT: It's not the banks.
Nope, it's a job for Land-Value-Tax-Man.
ReplyDeleteSome people were actually paying for these jet skis and extra cars up front, you know.
ReplyDeleteLarge numbers of people in Britain have been earning serious amounts of money. I expect that their success caused others to try to keep up, "Well I'll be damned if the electrician next door is driving a new Landcruiser while I potter around in my old Rover !" said the office administrator.
In truth sub-50k annual salary is pretty mediocre really and the biggest Nu Lab lie has been the rate of real inflation. A lot of people who took on debt weren't being particularly greedy - they were just trying to maintain their traditional social status.
I can assure that here at Dearieme Towers there's no pool in our garden, nor do we have multiple cars. The lake leaves no room for a pool, and the servants' cars no space for us to park a second Rolls.
ReplyDeleteOn the other hand, dear Mr Jetski has proved a most reliable handyman.
ReplyDelete