All our most popular articles on the website this week are on two subjects: Jeremy Corbyn and the buy-to-let business. You might think that these things are unconnected. They are not. Read the comments (we love your comments by the way – keep them coming) and you will see that their popularity is down to much the same thing, a sense that the world just isn’t as fair as it once was.
John Stepek looked at Corbynmania last week. He pointed out that the 2008 financial crisis came as a horrible shock to most people. They found out that the financial world is utterly insecure. Money in the bank isn’t safe. Countries can go bust. Wealth accumulated over a lifetime can vanish in an instant.
They also found out that money isn’t a tangible thing. Instead it is just an idea, something you can digitally print more of as and when you like (assuming you are the governor of the Bank of England). It is “insubstantial and illogical”. Finally, they found out that the establishment answer to the financial crisis – going mad with money printing – works better for the few than
Income inequality may not be a problem in the UK, but thanks to the asset booms created by quantitative easing (QE), wealth inequality is. Those who own assets (barring mining assets) have become significantly richer in the last seven years. Those who do not, have not.
It is all a recipe for insecurity and bitterness, the combination of which create the perfect environment for the rise of a hard-left leader who wants to cancel efforts to deal with the UK’s debt problem, to nationalise everything in sight, to take from those perceived as rich and give to those perceived as poor.
Now look to the buy-to-let row. It is a symptom of exactly the same thing. Investors, terrified of everything else, have turned to property (“you know where you are with bricks and mortar”) to give them a sense of security. Cheap credit and easy loan criteria have allowed them to buy in, at the expense of young first-time buyers, and to create ‘Generation Rent’. Some 19% of the UK’s houses are now privately rented. In the 1990s, a mere 10% were. Those who own are doing well. Those who can’t own are getting angry.
The 250 comments under Dominic Frisby’s article on buy-to-let could be read as five pages of bickering about the technicalities of tax relief on mortgage interest. In fact, they are about the redistribution of the UK’s wealth during this period of crisis-driven monetary policy. So, I think, is the popularity of Jeremy Corbyn. Politicians should take note. There will be more instability ahead.