EDITOR'S LETTERMerryn Somerset Webb
What the McStrike tells us
The modern state is all about the transfer of wealth. Flick through this week’s magazine and you will see what I mean.
There is the council house right-to-buy scheme, under which the current tenants are allowed to buy their homes at a 50% discount to the market price, then flog them at the full market price after three years.
This is a slightly bemusing transfer of wealth from the long-suffering taxpayer – who will have to pay for more social housing to be built at some point – to a few chosen tenants. And the actual capital transfer is, of course, only the half of it: the houses will be bought with mortgages made artificially cheap by quantitative easing (QE).
Then there is ‘Help to Buy’ (a transfer from the taxpayer to home buyers). Then we mention quantitative easing and the ongoing low interest-rate environment. This transfers money from savers to borrowers. It keeps people in houses they can’t really afford. And it pushes up asset prices along the way.
But if you look at a good number of the transfers across the economy, it is clear that most of them are trying to compensate for the same thing – low wages.
• Read the full editor’s letter here: What the McStrike tells us