Saturday 9 February 2008

The Brown Bubble

I have stared at the chart showing the ratio of house prices to average disposable income per household that I posted yesterday, and something else strikes me; the rapid increase in house prices in the early 1970s coincides with Anthony Barber's "Dash for growth" * and the rapid increase in the late 1980s coincides with the Nigel Lawson's "Lawson Boom" **. And we all know what happened next ...

May I hereby coin the phrase "The Brown Bubble", to refer to the periods from 1997 to 2007, when house prices marched seemingly inexorably upwards, and from 2008 to 2010 when we suffered from the corresponding debt-hangover?

* Scroll down. Not to be confused with Reggie Maudling's 'Dash for Growth' a decade earlier, obviously.

** See previous link, scroll down a bit more.

4 comments:

Anonymous said...

Agreed, but I prefer "The Greenspan folly".

This isn't in any way letting the awful Blair/Brown duo off the hook, although the success of their strategy to blindly follow the USA in all areas whilst simultaneously destroying our institutions, our culture and our nation was remarkable in its effectivness.

Simon Fawthrop said...

Mark,

It might be interesting to see this overlaid with house starts. I suspect the decline from 48 could well be driven by the increas in building.

I've had a quick look but can't find any stats. I'm just about to go out and will have a look further when I get back.

Mark Wadsworth said...

GS, in the 1950s and 1960s Labour and the Tories competed with each other to see who could build more houses, homebuilding was seen as a good thing back then, it was nearly half-a-million a year for a decade or two, a lot of council housing, down to about 150,000 a year for the past decade or two. I have trawled Ye Interwebbe but cannot find the stat's you mean, altho' I have seen them dozens of times. Ah well. But there are so many other factors, e.g. rent controls and availability of council housing, restrictive lending practices by building societies that also had a dampening effect.

Anonymous said...

In a way labour in the 70s printed money, in the late 90s and early 2000s they could not print money so they imported people.

The newbies,need food, housing, ect ect and so GDP increased, but importing people is not productive growth is it? (the vast majority ar e here to do the jobs our underclass cannot be bothered getting out of bed for) the long term effects of all this is to devalue the money, and now they are in a jam and so they have with the help of their all new interpretations of the true inflation figures reduced interest rates, or in other words they are trying to print money their way out of the problem BUT we are not productive enough to pay our bills.

To be fair the USA at least they understand that they have to cut taxes, something that will not pass Goblins mind at all, 150 billions worth next Septembers as I seem to remember.

We need people to save and invest in productive growth in order to maintain the value of the currency.
true value flows from trust in money, Goblin king and his nulab numptys have devalued trust.

yep their or other issues, such as the increase in the size of the state, over reliance on the financial sector, but if we had properly controlled immigration from the start (which we cannot as we are a Provence of the EU) they we would have had to confront our problems much sooner, instead of sweeping them under the carpet.