It appears to be widely accepted that the price of all buildings - and in particular private homes - has been the breaking point setting off the present crisis. This has very simple origins: irresponsible governments and banks who have for popularity and financial reasons let house prices increase much more than the rest of inflation. Offices, shops and factories were allowed to become overpriced to help pension funds to succeed in the short term. House price increases was very popular with those who owned houses: their wealth increased without any action being required on their part.

One set of “experts” blame “low interest rates” which made houses “too affordable”. This is immoral. The reason is that governments felt that it would have been unpopular to not allow house pricing to run ahead of inflation by not taking preventative action (for example by putting high capital gains tax on excessive house sale gains).

Banks gave firm financial encouragement for their staff to lend high amounts without any thought that this might be in the long (or as it happens) medium term bad not only for their customers but also for the banks themselves. We know that in the UK, for example, for many bank branch managers the sale of mortgages at almost whatever cost to customers was considered more important than using prudent banking practices.

All that was needed was simple ethical thought, a study of the past, and a little common sense.

(see further “Housing“)