Onwards to knowledge
We have suggested, already, that the Onward groupuscule might benefit from a little more knowledge before planning the economy for the rest of us. Doing that job of reading their report so that you don’t have to we find this:
Too much speculation has turned housing into a tradable asset, inflating the market and pricing families out of ownership. Britain’s liberal M&A regime enables predatory asset-stripping, and our regulatory and tax regime combined with loose monetary policy have promoted debt financing and leveraged buyouts to the detriment of investment. Weak corporate governance rules have allowed executive pay to rise far above average salaries regardless of performance, and a fashion for share buybacks has sucked capital into inflating share prices rather than business growth.
A fine collection of wibbles as more usually graces The Guardians opinion columns.
A house is an asset - housing is the consumable - and it is possible to buy and or sell a house. A house is therefore a tradeable asset. That the bet has been pretty much one way for some decades now is due to an idiot planning system, not to the nature of the asset nor the ability to trade in it.
Predatory asset stripping is not actually a thing. Moving an asset from a lower to a higher valued use is the very definition of wealth creation. Debt financing is investment, as also is a leveraged buyout. People are paying real money for an asset - this is investment. CEO pay is set in the international market for CEOs, not in relation to pay in this country. We could, of course, always stop foreigners from coming and working here, that would have an effect, but there seems a remakable resistance to that idea at present. And share buybacks are how we move money out of one line of business so that it can be invested in another - more investment in new things being something the groupuscule at least says that it desires.
They’re running with a collection of currently fashionable soundbites, not actual knowledge. And as we’ve suggested before knowledge, then thinking and only then the plan, please.
Sure, to err is human, but to fail at that very first stage isn’t a good start to an economic plan.