After the very small upward revision of GDP figures on Friday there were the usual cautious comments about "recovery" and examination of indicators which might, or might not, suggest the health of the economy was improving.
These diagnostic metaphors made me think of the American television series House. I don't usually watch anything to do with medicine; I disliked General Hospital, Casualty and Holby City, and recoil in horror from blood-soaked documentaries with titles such as Your Spleen In Their Bucket. But I quite like House.
If you've never seen it, I can easily summarise it because - though it ran for what seemed like thousands of highly successful series - every episode was exactly the same. A patient is wheeled in with life-threatening symptoms which baffle the other doctors but spark the interest of brilliant, misanthropic, tormented Gregory House, MD (Hugh Laurie), the world's greatest medical mind.
He and his colleagues, a team of mismatched stereotypes grappling with their interpersonal relationships, fix on a diagnosis. The patient recovers, then gets worse. They revise the diagnosis. The patient goes into cardiac arrest. The team breaks into his apartment, looking for clues. Dr House insults everyone. The diagnosis is revised again. The patient recovers, until he starts bleeding from every orifice.
This process is repeated as many times as it can be fitted into 45 minutes, until House has a brainwave, identifies some previously unsuspected factor and administers the appropriate treatment, whereupon the patient instantly walks off completely cured.
The reason I was reminded of this programme was, I at first assumed, because the economy so often resembles House's patients, seeming to get better every so often, before crashing into some unanticipated crisis. The difference between the economy and the programme is that there's never any sort of an ending, let alone a happy one. But then I realised that the subliminal reason House popped into my mind was the title of the series, because the principal hidden cause of this fluctuation in the economy's health is houses.
One of the things which George Osborne, nobody's idea of a brilliant diagnostic mind, has fixed upon as an indication of economic recovery is a rise in property prices. This shows not only that he has misunderstood the infection which caused our current financial ill-health, but also that he is unaware of the problems being created by his medicine.
House prices are not rising everywhere, but in areas where they are already too high. While London and the south-east of England are seeing a recovery, most of Scotland is still stagnant or falling. Those places, such as the expensive bits of Edinburgh, Glasgow and Aberdeen, which are seeing improvement, are also those whose residents are least affected by the current economic climate.
You'll remember that its proximate cause was the American sub-prime market; speculation in bundled debt secured on houses which had been bought, with borrowed money, by people with no prospect of paying it back. The houses themselves, because of the availability of absurd levels of credit, rose in price to a value which bore no relationship to their intrinsic worth. The credit crisis, or the "asset price bubble" which sparked it, was, in other words, a housing bubble. American property values have fallen by one-third since the crisis began.
The underlying cause, and the reason the British economy has been so badly affected, was that the last Government had been engaged in much the same sort of economic sleight of hand, borrowing far beyond its means. Mr Osborne, despite his rhetoric, hasn't really addressed that. For all his talk of austerity and cuts, public spending is still rising, as is our debt.
And the impact being felt by the poor and middle-earners is that incomes are stagnant, and the costs of living are spiralling. Food, fuel and - above all else - housing are a highly significant proportion of the outgoings of everyone except the very well-off. For some of us, those outgoings are more than what's coming in.
When the economy is really growing, when real incomes are rising or taxes falling (which usually, of course, contributes to the first two), inequalities matter less. A rising tide, as free-marketeers like to point out, raises all boats. But the Chancellor's policies have not, to any useful extent, pursued that genuinely fiscally conservative and economically liberal model.
He has failed to cut public spending even on obvious waste (the MoD, it emerged last week, has spent £40,000 ringing the speaking clock over the past two years). And his spending is misplaced. The enormous sums squandered on quantitative easing have done nothing for anyone other than the banking industry. HS2, the proposed high-speed rail link between London and Midlands and beyond, will further centralise the economy in the capital, and drain money from the rest of the network. Nothing is being done to reduce the benefits bill where the majority of its expenditure is - among pensioners.
Of all these missed opportunities, his worst blunder has been to hope for - and even encourage with the idiotic "help-to-buy" scheme - an increase in house prices. The British public's mania for putting its money into bricks and mortar, and expecting a huge return, is rather like National Insurance, which is to say it's a Ponzi scheme that's bound to collapse sooner or later.
The consequence of planning to cash in when you sell your house, or to borrow against some nominal increase in its value, is to keep prices rising so that future generations are priced out of the market. This has already happened in many parts of the UK, and is something the Chancellor should be discouraging. But "help-to-buy" policies encourage further unaffordable borrowing, underwritten by the government. The effect won't be to help low-income purchasers, but to increase prices, to the enrichment of those who already have a stake in property.
Similarly, housing benefit, currently a scheme to line the pockets of buy-to-let landlords and a huge cost to the taxpayer, artificially raises rents and prices the poor out of many areas. Reform cannot be effective unless more housing is available. The fact that it isn't is what makes the otherwise reasonable plan to cut subsidies to those who have more rooms than they need a silly policy.
The solution is to encourage more house-building, which would do several things. It would create jobs. It would reduce prices. It would enable housing benefit to be cut. It would let more poor people buy or rent. It would encourage relocation for work. It would reinvigorate run-down cities. And it needn't be done by the state or involve any public spending. It could all be achieved by sweeping away planning, offering tax incentives and selling off government-owned brownfield sites. That's the proper medicine.
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