UK business writer Faisal Islam shows serious, pro-social journalistic intention with his soon-to-be-released book Default Line: the Inside Story of People, Banks and Nations on the Edge. He calls out the crazy rises in house prices, the reckless lending, the brainwashed borrowing and sickening bail outs of deregulated private banks with public money as the social cyanide that it is. He joins a precious few other voices decrying the economic macro mess that has been made, not just in Great Britain but in many other places, by a gold rush ethic of home ownership for all.
Mr. Islam’s book was excerpted today in the Guardian. He doesn’t mince words:
“The recent history of property in Britain is wrapped up in notions of freedom and the social mobility of owner-occupation and right-to-buy. Yet right now, Britain faces a return to a more traditional relationship with the land, in which property is the principal agent for holding back opportunity for all. There are other options, as stable house prices, large high-quality flats and secure rental tenure have delivered in Germany, for example. The property ladder was a one-off opportunity for a lucky generation-and-a-half. Now we are back to a kind of neo-feudalism, in which your quality of life depends on who your parents are, and what they owned,” says Faisal in the final paragraph of the excerpt.
From Ireland to the UK to California and beyond, the real estate monster scorched working people and entire economies with its wrath. A trebling of house prices in the UK has sprayed quick-drying cement on the aspiration of social mobility for many people in that country. Other Britons find themselves significantly worse off for having entered the home ownership game at all. A major redistribution of wealth has taken place thanks to the madness of real estate gaming in the UK and it would seem to be a very unhealthy thing on top of other economic, social and environmental challenges.
This beast, the home ownership dream-turned-to-terror model, also ravaged the United States. Some features of Britain’s blow out, especially the shoddy and dishonest documentation behind a lot of the mad mortgaging, is just a smaller-scale carbon copy of shenanigans this side of the Atlantic. Canada finds herself yet to really bottom out 2008-style. The media here juxtaposes the latest soaring sales and price statistics with predictions of doom. Our federal government has tightened mortgage regulations, again. Do we still have a window to avoid the worst aspects of American and British experience?
Default Line is on suburban-poverty.com’s priority library acquisition list. We’d like to see if it has some wisdom Canadians can use to protect themselves a little from the craziness. Everywhere you turn in this country it seems like there is a sense that something is going to happen with interest rates and house prices and that it will not be pretty. Hopefully, Canadians will look back and see what Mr. Islam is talking abo.ut as a warning sign that was heeded, that inspired corrective measures and long term planning for a sensible national economic life.
Home ownership: how the property dream turned into a nightmare