Monday, 22 October 2012

Housing Benefit in the UK: A subsidy for the rich and inflation disturbance in the free market

In the midst of austerity for the majority, it seems that the majority in the UK and other countries, will continue unabaited to support the minority.

BBC article on Subsidised Poverty Wages

This is of course the massive and growing housing benefit cost. Time for a hair-cut.
Housing is not a free market in the UK: there is a fundamental and coercisive, clandestine restriction in the availability of land for development and the
type of housing which is made on that land. The beaurocracy of local council planning authorities is merely a smoke screen of innefficiencies for the underlying
issue that supply not only does not meet demand, it does not cater for demand. Supply makes to what investors expect- maximum profit rabbit hutches or the new type of semi fortress luxury villas
stuffed in like 1960s council estates in a bizzarre noveau-riche ironic visual oxymoronic collectivism.
Just like financial measures do need to be taken to bring public spending and PSBR into a reasonable short to mid term proportion of GDP, so is the time ripe for legislation which will cap the amount that landlords can
earn from publically funded tennancies.
This will lead to homelessness you say ? What it will lead to is either that the more wealthy in the country who live well from these capital assets, take a hair cut. Alterntaively r if they decided to evict tennants, then they know that most of them will be cutting not only their income resources
but also their access to investment and expansion : in the current leverage environment. In effect any government in this sitaution can play russian roulette with property owners in the chair and five bullets in the chambers. The time to act is very much now, because inflation in the housing market must not be fuelled
by housing benefit.
It is not until families in employment are on living on the street in the UK, that wealth will be shamed enough into doing something and we can return to a society where a mixture of paternalism and socialism reigns as checks and balances to ensure social inequality does not reach the levels where revolution becomes an inevitability.

There are two inevitabilities of a total free market with small, weak government. One is populace violent revolution and the other is fascism.
The first has developed throughout history because by its nature the free market centres wealth with those who already own the capital means of production and the means of supply of
daily necessities, especially housing and food. In an ideological paradise, then supply would be unlimited and all people would be born with no wealth and thus be required to make wealth by economic activity. This is not the situation of course because the rich "elite" in most lands have at some point stolen their wealth by violence in their murky pasts. For every Bill Gates and Steve Jobs, there are 100 heirs to old wealth in the USA. The situation in the UK is worse, because we actively attract oligarchs to invest in property and land without any net benefit to the general economy. To the contrary, foriegn oligarchs have no paternal interest in the population in the UK and no entreprenerual vested interest in developing provision to anyone more than their own type. This is the danger that not only does wealth disconnect from creating new wealth in the economy, but also it becomes more subsidised by governments through the housing benefit bill.
 Any market becomes open to abuse as the power becomes concentrated in the wealthy and even with a monopolies police mechanism, price parity is established in order to maintain shareholder return on investment in positive growth.
Such was life in the 19th century: large sections of the population starving while a total free market built a two sided Britain. The effect of the uneven distribution of wealth in the UK has lead to a permanent situation of poverty.
We must stop subsidising wealth, we must win back family values and freedoms for families and individuals. We must win back the right to set fair laws- speed limits on the excesses and anarchic, unorganised nature of capitalism

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