Yes, yes, tl:dr. But if you can be bothered, I think he raises some interesting issues and ideas. Not sure I agree with them all.
Bob Ellis, in classroom mode:
Quote:
With world recession looming, the US is fixing things by bringing interest rates down. Australia is fixing things by putting interest rates up. Discuss.
With housing costs one third (probably) of what they are in America, China's economy is taking over the world. Discuss.
My father Keith Ellis bought a seaside block of land for £10 in 1946 that is now worth $795,000. This price rise is good for everyone. Discuss.
Normal inflation over the past sixty years would have made the price four hundred and fifty dollars by now, but it's nearly two thousand times that much -and this price rise is good for everyone. Discuss.
When are economists going to open their eyes and acknowledge the shadowy elephant in the room, which is housing prices? Most Australian breadwinners are each week shovelling banknotes into the furnace of their mortgage, money that might otherwise fund a pleasant lifestyle and no economist thinks there is an alternative to this. Why?
If a hovel in Sydney's beachside suburb, Coogee, with a backyard cost $180,000 instead of $880,000, many, many people would be happier, better fed, better educated, better clothed, less overworked, less stressed and see more of their children, who then wouldn't grow up drug addicts. Why can't this be arranged?
Every day we waste on this millionairist fantasy of higher and higher house prices is one more day that China pulls ahead of us economically. Why keep doing it? Why keep taking daily spoonfuls of economic cyanide in this fruitless, ruinous way? Housing prices are killing our civilisation, turning us into a Third World country like a quarter of the US, and we know it, we actually know it. How do we fix things before it's too late?
Well, it's not easy; we have to do some thinking here, some Big Picture thinking and some careful counting. We have to realise that 96 per cent of Australians either want to bring house prices down, or they want it for their children; and we have to realise the other four per cent, who are bankers, real estate agents or grannies maddened by dreams of gold, will not swing an election any more. And we have to consider, at least consider, some of the following options.
(1) That we pass laws amending the constitution that give back to the States a right they had once, to control rents. Then pass a law in New South Wales that says no dwelling with a backyard can be rented for more than five hundred dollars a week.
This would force rents down everywhere, and house prices down. If the current rule of thumb prevails, no Sydney mansion in Point Piper would cost more than $500,000 after a while, and your average hovel in Coogee with a backyard, probably, no more than $120,000. Wouldn't that be nice.
(2) That we put the GST up to 11 per cent and with the extra money establish a State Bank that lends at five per cent, and only five per cent, unvaryingly, to first home buyers, couples married for three years, or couples with at least one child, or, yes, same-sex couples who have been together for three years, up to $200,000 and no more.
This would force other banks into similar offers or out of business. It would mean they didn't make record profits any more, just big ones, and their CEOs might get less than $5m a year. Tough.
(3) Or that we nationalise land, as the Chifley minister Eddie Ward always wanted to do. Declare all land at point of sale to be government-owned, and rented thereafter to the buyer of the house on top of it at, say, $500 a year, for the land under the Coogee hovel, or $1,500 a year for the land under the Point Piper Mansion. This would bring their respective prices down to $175,000 and $500,000, money that I and Malcolm Turnbull could easily afford. Or I think it would.
If I'm wrong, I'm wrong. If what I'm saying is cranky, innumerate and phantasmal and stupid, I'm sorry. But if we don't do something about this carcinoma of addictive debt, this boundless addiction to comfortable dwellings, we're in terminal trouble as an economy and as a civilisation. I mean, we limit wage rises because we fear what could happen to our economy if we didn't. Why don't we limit house prices for the very same reason? And why don't we find out a way to do it?
Labor floated an idea last year that said the government might pay forty percent of the price of a newlywed couple's first house, and when they sold it, get back 40 per cent of what they sold it for. It's a really good idea I think but it doesn't ultimately solve the central problem - that house prices are too high, and they must come down.
Regulatory watchdogs keep an eye on petrol prices and grocery prices, why not house prices? Vast bureaucracies are set up to keep the cost of health care down, because health care is an eternal human need. A house, a dwelling, is an eternal human need.
There are precedents for this kind of thing. After WWII the Chifley government bought up land and put fibro cottages on it and, for very low rents, let families live in them, and later on for very low prices buy them. The baby boom generation came out of such dwellings, educated themselves and prospered.
Without such dwellings, they would never have been born. Because of such dwellings the cost of houses across Australia was wonderfully affordable, everywhere. Because Government got into the housing business and made some wise decisions. Ask anyone over 50 if this is so.
And it's because there are no such dwellings now, small houses with small gardens and tiny lawns and microscopic rents, it's because of this the baby boomers' grandchildren are not, or not any longer, being born.
If this is all to the good I want to know why. We're working longer hours. We're in constant mortgage stress. We hardly see our children. Children hardly see their mothers. They grow up angry, neglected, suicidal, disillusioned. If that hovel in Coogee cost $120,000, this would not be so.
The purpose of an economy is not to pay a CEO $25m a year for impoverishing and wrecking the emotional health of every second suburban Australian breadwinner or their spouse. That's not what an economy is for. An economy like that is a failed economy. A bankrupt economy. A morally bankrupt economy.
It's an economy like the one America has now: one quarter of it Third World, one half of it stressed and barely coping, divorced, face-lifted, working a second job to pay the alimony, one quarter of it millionairist or billionairist, smug and power-crazed and swindling anyone it can.
Unless house prices are fixed, we'll go that way too, into terminal, debt-driven frenzy. And China, which has lower house prices and therefore lower wages, will take over the world; buy up all our houses and rent them back to us.
Like Global Warming, it has to be sorted soon.
Or we're all in very, very big trouble.
Discuss.
With housing costs one third (probably) of what they are in America, China's economy is taking over the world. Discuss.
My father Keith Ellis bought a seaside block of land for £10 in 1946 that is now worth $795,000. This price rise is good for everyone. Discuss.
Normal inflation over the past sixty years would have made the price four hundred and fifty dollars by now, but it's nearly two thousand times that much -and this price rise is good for everyone. Discuss.
When are economists going to open their eyes and acknowledge the shadowy elephant in the room, which is housing prices? Most Australian breadwinners are each week shovelling banknotes into the furnace of their mortgage, money that might otherwise fund a pleasant lifestyle and no economist thinks there is an alternative to this. Why?
If a hovel in Sydney's beachside suburb, Coogee, with a backyard cost $180,000 instead of $880,000, many, many people would be happier, better fed, better educated, better clothed, less overworked, less stressed and see more of their children, who then wouldn't grow up drug addicts. Why can't this be arranged?
Every day we waste on this millionairist fantasy of higher and higher house prices is one more day that China pulls ahead of us economically. Why keep doing it? Why keep taking daily spoonfuls of economic cyanide in this fruitless, ruinous way? Housing prices are killing our civilisation, turning us into a Third World country like a quarter of the US, and we know it, we actually know it. How do we fix things before it's too late?
Well, it's not easy; we have to do some thinking here, some Big Picture thinking and some careful counting. We have to realise that 96 per cent of Australians either want to bring house prices down, or they want it for their children; and we have to realise the other four per cent, who are bankers, real estate agents or grannies maddened by dreams of gold, will not swing an election any more. And we have to consider, at least consider, some of the following options.
(1) That we pass laws amending the constitution that give back to the States a right they had once, to control rents. Then pass a law in New South Wales that says no dwelling with a backyard can be rented for more than five hundred dollars a week.
This would force rents down everywhere, and house prices down. If the current rule of thumb prevails, no Sydney mansion in Point Piper would cost more than $500,000 after a while, and your average hovel in Coogee with a backyard, probably, no more than $120,000. Wouldn't that be nice.
(2) That we put the GST up to 11 per cent and with the extra money establish a State Bank that lends at five per cent, and only five per cent, unvaryingly, to first home buyers, couples married for three years, or couples with at least one child, or, yes, same-sex couples who have been together for three years, up to $200,000 and no more.
This would force other banks into similar offers or out of business. It would mean they didn't make record profits any more, just big ones, and their CEOs might get less than $5m a year. Tough.
(3) Or that we nationalise land, as the Chifley minister Eddie Ward always wanted to do. Declare all land at point of sale to be government-owned, and rented thereafter to the buyer of the house on top of it at, say, $500 a year, for the land under the Coogee hovel, or $1,500 a year for the land under the Point Piper Mansion. This would bring their respective prices down to $175,000 and $500,000, money that I and Malcolm Turnbull could easily afford. Or I think it would.
If I'm wrong, I'm wrong. If what I'm saying is cranky, innumerate and phantasmal and stupid, I'm sorry. But if we don't do something about this carcinoma of addictive debt, this boundless addiction to comfortable dwellings, we're in terminal trouble as an economy and as a civilisation. I mean, we limit wage rises because we fear what could happen to our economy if we didn't. Why don't we limit house prices for the very same reason? And why don't we find out a way to do it?
Labor floated an idea last year that said the government might pay forty percent of the price of a newlywed couple's first house, and when they sold it, get back 40 per cent of what they sold it for. It's a really good idea I think but it doesn't ultimately solve the central problem - that house prices are too high, and they must come down.
Regulatory watchdogs keep an eye on petrol prices and grocery prices, why not house prices? Vast bureaucracies are set up to keep the cost of health care down, because health care is an eternal human need. A house, a dwelling, is an eternal human need.
There are precedents for this kind of thing. After WWII the Chifley government bought up land and put fibro cottages on it and, for very low rents, let families live in them, and later on for very low prices buy them. The baby boom generation came out of such dwellings, educated themselves and prospered.
Without such dwellings, they would never have been born. Because of such dwellings the cost of houses across Australia was wonderfully affordable, everywhere. Because Government got into the housing business and made some wise decisions. Ask anyone over 50 if this is so.
And it's because there are no such dwellings now, small houses with small gardens and tiny lawns and microscopic rents, it's because of this the baby boomers' grandchildren are not, or not any longer, being born.
If this is all to the good I want to know why. We're working longer hours. We're in constant mortgage stress. We hardly see our children. Children hardly see their mothers. They grow up angry, neglected, suicidal, disillusioned. If that hovel in Coogee cost $120,000, this would not be so.
The purpose of an economy is not to pay a CEO $25m a year for impoverishing and wrecking the emotional health of every second suburban Australian breadwinner or their spouse. That's not what an economy is for. An economy like that is a failed economy. A bankrupt economy. A morally bankrupt economy.
It's an economy like the one America has now: one quarter of it Third World, one half of it stressed and barely coping, divorced, face-lifted, working a second job to pay the alimony, one quarter of it millionairist or billionairist, smug and power-crazed and swindling anyone it can.
Unless house prices are fixed, we'll go that way too, into terminal, debt-driven frenzy. And China, which has lower house prices and therefore lower wages, will take over the world; buy up all our houses and rent them back to us.
Like Global Warming, it has to be sorted soon.
Or we're all in very, very big trouble.
Discuss.
Edited, Feb 4th 2008 9:57am by Aripyanfar