Adair Turner Begs the Question on Credit Growth

Adair Turner back in March

 “We seem to need credit growth faster than GDP growth to achieve an optimally growing economy, but that leads inevitably to crisis and post-crisis recession.”

Very true but why?

Simple much credit growth goes on assets not covered by GDP.

Another way of stating R>G.

What Parties in the 2015 General Election Manifestos need to Say About #YestoHomes

Very simple really, what works is well tried and tested around the world but seems on no major parties agenda

Yes to Homes – ensuring we work towards building 300,000 new homes a year to clear the housing backlog.

Yes to Homes in the Right Place – Smart planning – regenerating brownfield sites, avoiding attractive countryside, in places accessible to public transport and where growth opportunities are highest,  in well planned urban extensions and Garden Cities where Brownfield Sites arnt enough.  Review Green Belts where too tight but ensure that there is enough good locations outside them to ensure there long term protection.

Yes to Big Thinking on Where Housing Should Go – Ensure Cities and there neighbors work together by setting up structures to decide where housing should go which wont fit in our largest cities and most sensitive areas.

Yes to Affordable Housing – Subsiding bricks and mortar for affordable homes rather than high rents.

Yes to Infrastructure for Homes  – Using the uplift in land values from getting planning permission to lever in long term private investment for schools, roads, and transport etc.

Yes to Quality Housing – Ensuring all major housing sites have an approved master plan first of the highest quality and all new homes are sustainable and meet minimum size and other standards.

Yes to Fast Tracking Homes – Where new housing meets the above conditions ensuring a  12 month gaurentee from drafted master plan to approved shovel ready consent.

Yes to Housing for All – Ensuring 20,000 plots a year are gifted to families of all incomes to build their own homes, with government backed loans for building works by low income families.

How many organisations could sign up to a charter like that?

Savills – Garden Cities Must be in Addition to not Instead of Urban Extensions

Savills UK

The Garden Cities programme will not help solve the housing crisis unless the number of homes planned for locally is large enough to meet true housing need, according to property adviser Savills.

The Government prospectus for  “Locally-led Garden Cities” states that these new settlement should be ‘at or above 15,000’. Analysis by Savills Research shows that at this level it would require one new Garden City a year –  the equivalent of the proposed Ebbsfleet development – simply to accommodate the London overspill.

In Garden Cities, Breaking new ground, Savills reveals that the housing shortage is failure on two counts: not enough homes are being built and Local Authorities are failing to plan adequately for housing need in the first place.  Local authorities need to cooperate more to meet local housing need particularly around cities where there is acute shortfall.

Even if existing planning targets are achieved, Savills research suggests that southern England faces a shortfall of 160,000 homes over the next five years, of which some 80 per cent in London.  Savills argues that Garden City proposals  should be in addition to and not a replacement for existing urban extension plans and new homes already allocated in local plans.

“There is no single solution to the housing crisis,” says Susan Emmett, Savills residential research director.  “The creation of new Garden Cities is not a panacea but a piece in a much bigger jigsaw.”

How it could work

The Government’s Garden Cities prospectus emphasises that the proposals need to attract private capital and make use of land value uplift to finance necessary infrastructure.  It also states that projects must be locally-led, brought forward by local authorities with the support of the community.

Savills proposes that a New Town Development Corporation could be the vehicle that helps delivery a long-term vision.  Land needed to accommodate 15,000 homes will cross local authority borders and involve multiple landowners.

“This is a tall order on all counts,” says Emmett.  “To achieve the scale necessary in locations where people want to live at a realistic cost to the landowner, developer and end user, requires a solid and accountable framework.

“The suggestion that the required infrastructure can be funded from land value capture is heroic.  Contributions from landowners and developers would supplement, rather than replace, central and local Government funding.”

Encouraging land owners to bring forward their land is a key consideration.  A balance must be struck between encouraging landowners to bring forward land willingly and achieving the right price to ensure schemes are delivered.

One route proposed in the report, is to hold a national competition for sites to come forward.  The competitive element would test the potential for lower land prices so that gains from value uplift  could be used to fund infrastructure.  A complementary approach would be for the landowner to retain a share in the project, thus benefitting from rising land values over the longer term.

Mapping the potential

The report identifies locations around London, beyond the Green Belt, with the potential to deliver large scale development.  These include:

– Northamptonshire and Peterborough: good availability of land around towns such as Northampton, Kettering and Corby; proposed extensions to Rugby and Wellingborough

 ‘The Arc of Prosperity’ around London’s Green Belt from west to north east, where transport infrastructure improvements to road and rail could open up new areas for development, including Milton Keynes, Bedford.

– M11 and East, along the M11 corridor, with potential to take overflow from North London, currently constrained by Green Belt

– M3 and M4 corridors, around towns such as Reading, Bracknell, Basingstoke and Wokingham

– Around Ashford

– Surrey and Sussex – a small strip between the South Downs and High Weald area of outstanding natural beauty could help depressurise Brighton

Yorkshire Police on Tour de France – Dig a Trench to Keep out the French

I thought it was called the English Channel

Daily Mail

Stunned locals have been warned that the Tour could bring with it a crime wave at the hands gangs of thieves. Residents are being urged, among other measures, ‘to consider digging a trench’ across their driveway to stop criminals with vehicles gaining access to their land.

The warning, circulated on the internet and by email, also claims the area’s low crime rates could be ‘decimated over a couple of days’ unless action is taken.

The first two stages of the Tour de France – dubbed the Grand Départ – are being held in Yorkshire on Saturday and Sunday before the race moves on to London, bringing in millions of pounds of extra revenue for local businesses.

However, the controversial email – attributed to Harrogate neighbourhood watch chairman Keith Roberts and Sergeant Bob Chambers of North Yorkshire Police – warns that ‘with the significant increase in numbers of visitors and enthusiasts there is evidence that there will be many criminals amongst them’.

It continues: ‘Our enviable record of the lowest level of criminality could be decimated over a couple of days unless we can support our police.

‘The amateur thief can gain access to your property if doors or windows are left unlocked or open – keep them locked even if you are at home.’

 And ‘rural members’ have been told thieves with vehicles could steal quad bikes and other valuables. ‘If it is feasible do consider digging a trench across points of entry or creating other obstructions,’ the email advises.


UK Universities Dubai Branches Falling Short on Quality

There are 26 foreign universities in Dubai but only four including Britain’s Heriot Watt and Middlesex University have local campuses with all facilities, the same academic and research standards as their home branches and free interchange of staff.  Some such as the London Business School and Strathclyde Business School simply rent local offices and undertake no research.

Dubai’s regulator, the Knowledge and Human Development Authority (KDHA), makes no distinction between such cases and in any event has no control over universities operating in freezones, like Dubai International Academic City, which are not regulated and being freezones ironically mean that the degree is recognized in every country in the world apart from in the UAE itself.  This has led the UK Quality Assurance Agency to criticise standards of courses run by some UK institutions promising standards of campus life similar to the UK in their advertisements. Report Here.

The QAA states a campus “must run like one with the full range of supports including pastoral, careers and social facilities. Institutions should consider the expectations they are raising in promising a global campus experience.”The review noted “institutions can do more to introduce a UK academic culture” and “encouraging a culture of scholarly inquiry”.

If Bank Creation of Money Lowered Interest Rates What does it Tell Us About the Causes of Interest?

Anne Pettifor has an interesting article criticizing positive  money/full reserve banking. I don’t wish to dwell on that – I have published similar criticisms here.  But one passage made me slap myself for missing something obvious.

As Douglas Coe and I explain in a recent PRIME report,[4] the UK monetary system – complete with the power to create money ‘out of thin air’ – was established back in 1694 with the goal, among others, of facilitating commercial transactions and the financing of the king’s wars. But there was an additional and just as important goal: to mimic the Dutch in reducing the rate of interest facing commercial interests. British firms, households and individuals were keen to bring rates down and into line with those that prevailed in the financially more advanced Netherlands.

Of course it did,the Amsterdamsche Wisselbank (Bank of Amsterdam) though starting off as a pure full reserve bank only for bills of exchange, and as an alternative to Italian credit based fractional reserve banking, soon found it could leverage its vault to lend money to the Dutch East India Company at much lower interest rates than full reserve ‘loanable funds’ type lending.

There were complex reasons for this. In part because specie was often clipped and depreciated and cost money to transport and insure against loss at sea.  Therefore paper money attracted an ‘agio’ over specie – a premium on price.  But researchers have found this premium is less than the interest rate differential.  There has to be another cause of ‘agio’.

What this shows very starkly is that the pure-time preference theory of interest, favored by Austrians, cannot be a full and complete theory of interest.  There has to be an additional cause.  One which Bohm Bawerk , adopting the term, called Agio.

That cause is that creating money ‘out of thin air’ finances real economic activity – potentially real growth – potentially asset speculation – than in turns finances the amortiziation of loans and increases the profits of banks.  Bank lending is profit constrained not reserve constrained.  This is the ‘banking agio’ the additional real production created by the fractional reserve system.

Therefore the pure time preference theory of interest is false, it cannot explain this lower interest rate under the fractional reserve system.  It is a partial not a pure theory of interest.  For those that argue that even physical productivity increases must have a subjective expression where is the cause and effect?  It is not like the 17th C Dutch woke up one day and simultaneously changed there subjective preferences, rather it reflected a deep structural change in capitalism.

Put more formally the supply of ‘lending power’ increased through the factional reserve system, lowering the equilibrium price of lending (interest) see my paper here.


The BANES Inspector on Strategic Green Belt Releases

118. A number of parties opposed to the allocations in the Green Belt highlight the advice in the PPG (which repeats a Ministerial Statement in 2013, CD9/H11)
that unmet housing need is unlikely to outweigh the harm to the Green Belt and other harm to constitute the very special circumstances justifying inappropriate development on a site within the Green Belt. However, the strategic allocations would be on land that is removed from the Green Belt, so would not be inappropriate development when a planning application is considered. The above guidance is not applicable. The relevant test for changing Green Belt boundaries (to remove land from the Green Belt) is that of exceptional circumstances (Framework, paragraph 83).

119. Parties also refer to the exchange of correspondence between the Planning Minister and the Planning Inspectorate in March 2014 concerning Green Belt reviews. I note that the Minister’s comments are not intended to be a change of policy. Furthermore, within the context of the need to provide around 13,000 homes, the allocation of five sites in the Green Belt has been the Council’s choice, which it consistently defended at the hearings in March/April 2014. That correspondence is not relevant to assessing the soundness of these proposals.

Ann Coulter – US Interest in Soccer a Sign of Moral Decay and Excess Immigation

She may be one of the world’s most reactionary pundits but this really takes the breath away.Unintentionally hilarious, especially the bit that the same people who like soccer are pushing light rail.

The Clarion Ledger

If more “Americans” are watching soccer today, it’s only because of the demographic switch effected by Teddy Kennedy’s 1965 immigration law. I promise you: No American whose great-grandfather was born here is watching soccer. One can only hope that, in addition to learning English, these new Americans will drop their soccer fetish with time.

• Individual achievement is not a big factor in soccer. In a real sport, players fumble passes, throw bricks and drop fly balls — all in front of a crowd. When baseball players strike out, they’re standing alone at the plate. But there’s also individual glory in home runs, touchdowns and slam-dunks.

In soccer, the blame is dispersed and almost no one scores anyway. There are no heroes, no losers, no accountability, and no child’s fragile self-esteem is bruised. There’s a reason perpetually alarmed women are called “soccer moms,” not “football moms.”

Do they even have MVPs in soccer? Everyone just runs up and down the field and, every once in a while, a ball accidentally goes in. That’s when we’re supposed to go wild. I’m already asleep.

• Liberal moms like soccer because it’s a sport in which athletic talent finds so little expression that girls can play with boys. No serious sport is co-ed, even at the kindergarten level.

• No other “sport” ends in as many scoreless ties as soccer. This was an actual marquee sign by the freeway in Long Beach, California, about a World Cup game last week: “2nd period, 11 minutes left, score: 0:0.” Two hours later, another World Cup game was on the same screen: “1st period, 8 minutes left, score: 0:0.” If Michael Jackson had treated his chronic insomnia with a tape of Argentina vs. Brazil instead of Propofol, he’d still be alive, although bored.

Even in football, by which I mean football, there are very few scoreless ties — and it’s a lot harder to score when a half-dozen 300-pound bruisers are trying to crush you.

• The prospect of either personal humiliation or major injury is required to count as a sport. Most sports are sublimated warfare. As Lady Thatcher reportedly said after Germany had beaten England in some major soccer game: Don’t worry. After all, twice in this century we beat them at their national game.

Baseball and basketball present a constant threat of personal disgrace. In hockey, there are three or four fights a game — and it’s not a stroll on beach to be on ice with a puck flying around at 100 miles per hour. After a football game, ambulances carry off the wounded. After a soccer game, every player gets a ribbon and a juice box.

• You can’t use your hands in soccer. (Thus eliminating the danger of having to catch a fly ball.) What sets man apart from the lesser beasts, besides a soul, is that we have opposable thumbs. Our hands can hold things. Here’s a great idea: Let’s create a game where you’re not allowed to use them!

• I resent the force-fed aspect of soccer. The same people trying to push soccer on Americans are the ones demanding that we love HBO’s “Girls,” light-rail, Beyonce and Hillary Clinton. The number of New York Times articles claiming soccer is “catching on” is exceeded only by the ones pretending women’s basketball is fascinating.

I note that we don’t have to be endlessly told how exciting football is.

• It’s foreign. In fact, that’s the precise reason the Times is constantly hectoring Americans to love soccer. One group of sports fans with whom soccer is not “catching on” at all, is African-Americans. They remain distinctly unimpressed by the fact that the French like it.

• Soccer is like the metric system, which liberals also adore because it’s European. Naturally, the metric system emerged from the French Revolution, during the brief intervals when they weren’t committing mass murder by guillotine.

Despite being subjected to Chinese-style brainwashing in the public schools to use centimeters and Celsius, ask any American for the temperature, and he’ll say something like “70 degrees.” Ask how far Boston is from New York City, he’ll say it’s about 200 miles.

Liberals get angry and tell us that the metric system is more “rational” than the measurements everyone understands. This is ridiculous. An inch is the width of a man’s thumb, a foot the length of his foot, a yard the length of his belt. That’s easy to visualize. How do you visualize 147.2 centimeters?

• Soccer is not “catching on.” Headlines this week proclaimed “Record U.S. ratings for World Cup,” and we had to hear — again about the “growing popularity of soccer in the United States.”

The USA-Portugal game was the blockbuster match, garnering 18.2 million viewers on ESPN. This beat the second-most watched soccer game ever: The 1999 Women’s World Cup final (USA vs. China) on ABC. (In soccer, the women’s games are as thrilling as the men’s.)

Run-of-the-mill, regular-season Sunday Night Football games average more than 20 million viewers; NFL playoff games get 30 to 40 million viewers; and this year’s Super Bowl had 111.5 million viewers.

Remember when the media tried to foist British soccer star David Beckham and his permanently camera-ready wife on us a few years ago? Their arrival in America was heralded with 24-7 news coverage. That lasted about two days. Ratings tanked. No one cared.

If more “Americans” are watching soccer today, it’s only because of the demographic switch effected by Teddy Kennedy’s 1965 immigration law. I promise you: No American whose great-grandfather was born here is watching soccer. One can only hope that, in addition to learning English, these new Americans will drop their soccer fetish with time.