Today's threads (a thread)
Inside: How to fix the UK housing crisis; and more!
Archived at: https://pluralistic.net/2025/10/13/castles-not-assets/
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@pluralistic
With all due lots of respect, I utterly disagree. Making more people go into debt is the wrong way. The bank, any bank, evil or good buys on your behalf, you own only on paper -> and *carry all the risk* if your asset loses its value (flood, fire, job lost, need to move, new houses even more expensive in the meantime. Insurance - yay! hold on for a fun example from hereabouts. The solution is and always has been: public housing. Good housing, and lots of it.
“ So what did Thatcher do to make homes so eye-wateringly expensive? The high-level explanation is that the UK – like much of the world – transformed its housing stock: not a way provide the basic human right to shelter, but rather, an asset:”
What Keen doesn’t understand is that the transformation of home ownership into a constantly inflating asset was a deliberate byproduct of a reworked great depression era program.
What the federal government offered to banks in the midst of the great depression was this deal:
They restructure the five year 50% down with a balloon payment loans into a longer term mortgage, which eventually became the mortgage structure we are all familiar with in the US and all over the world. In exchange for offering a mortgage structure, banks could not sustain the federal government offered to buy those loans. In the US this is the origin of Freddie Mac and Fannie Mae.
But across the world securitized mortgages and in the form of lending has been the chief vehicle of bank profits. Because they can sell the loans they create, they can turn themselves into lending factories, because selling the loan off, relieves them of the capital requirement in case of defaults.
This is true in Australia. This is true in the UK you can’t have this kind of lending structure without secondary loan market. Without derivatives those things that caused 2008.
I'm on a tour with my new book *Enshittification*!
Catch me next in #Chicago, #LosAngeles and #Calgary!
Full schedule with dates and links at:
https://pluralistic.net/tour
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How to fix the UK housing crisis: Reconverting homes to human rights, rather than assets.
https://mamot.fr/@pluralistic/115367298140404424
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