As Safe as Houses

Mark Barrett marknbarrett at
Fri Aug 20 15:32:36 BST 2010

IN case anyone missed this the "as safe as houses" episode of the "ascent of
money" I caught it late last night on repeat and thought to post a link

Channel 4 series: The Ascent of Money
by Niall Ferguson (highly iffy analyst - see below - ed.)

It sounded so simple: give state-owned assets to the people. After all, what better foundation for a property-owning democracy than a campaign of privatisation encompassing housing?

An economic theory says that markets can't function without mortgages, because it's only by borrowing against their assets that entrepreneurs can get their businesses off the ground.

But what if mortgages are bundled together and sold off to the highest bidder?

Jump! by Dan Hind, 11 February 2009
A Time for Finger-Pointing? 
.........‘We can spend a lot of time talking about how it happened and how we got here. But we have to get through the night first.’ With these words Hank Paulson launched his tax-payer funded bailout of the United States financial sector in September 2007. So what if this was the man who, in the wake of the Enron scandal, had warned against losing perspective and rushing towards ‘harsh regulations that are unnecessary’ ? This was no time for effete analysis and soul-searching. The fiercely independent Wall Street financiers needed vast sums of public money and they needed it immediately. 
Nick Clegg has adopted a similarly statesmanlike tone. Staring at the chaotic disaster that is the finance sector he announced that ‘when a ship is sinking, you send out the lifeboats. You don't argue about who has steered it into an iceberg. That can wait for another day.’ Clegg clearly hasn’t been on a sinking ship. As the passengers on the Titanic would recognized, there’s no better moment to start the blame game than when a ship is sinking. Especially if there aren’t enough lifeboats to go round..........
NIALL FERGUSON assures us that financial markets can’t help but be unstable because of our ‘innate inclination to veer from euphoria to despondency’ and ‘our perennial failure to learn from history’ .
Crises, in these kinds of accounts, become one with the awesome majesty of the physical world. They emerge from our nature and can never be avoided. Such claims may seem historically sober, they may be delivered in tones of donnish authority, but they depend on our historical ignorance for any plausibility they have. The global financial system was much less crisis-prone in the period between the Second World War and the early seventies. Regardless of our innate qualities, we act within institutions, bounded by legal and social inhibitions. These can be changed to make financial and economic crises more or less likely. As we shall see they can be changed in ways that lead to catastrophe.......

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