The more you can increase fear of drugs and crime, welfare mothers, immigrants and aliens, the more you control all the people. — Noam Chomsky
If any of you have ever looked at your FBI file, you discover that intelligence agencies in general are extremely incompetent. That's one of the reasons why there are so many intelligence failures. They just never get anything straight, for all kinds of reasons. Part of it is because of the information they get. The information they get comes from ideological fanatics, typically, who always misunderstand things in their own crazy way. If you look at an FBI file, say, about yourself, where you know what the facts are, you'll see that the information has some kind of relation to the facts, you can figure out what they're talking about, but by the time it works its way through the ideological… — Noam Chomsky
One might even say that it's one of the scandals of capitalism that most capitalist firms, internally, operate communistically. — David Graeber
Cuba has probably been the target of more international terrorism than the rest of the world combined and, therefore, in the American ideological system it is regarded as the source of international terrorism, exactly as Orwell would have predicted. — Noam Chomsky
The government of an exclusive company of merchants is, perhaps, the worst of all governments for any country whatever. — Adam Smith
Let us convince ourselves once and for all that laws are merely useless and dangerous; their only object is to multiply crimes or to allow them to be committed with impunity on account of the secrecy they necessitate. Without laws and religions it is impossible to imagine the degree of glory and grandeur human knowledge would have attained by now; the way these base restraints have retarded progress is unbelievable; and that is the sole service they have rendered to man. — Marquis de Sade
Of course, everybody says they're for peace. Hitler was for peace. Everybody is for peace. The question is: "What kind of peace?" — Noam Chomsky
Wanton killing of innocent civilians is terrorism, not a war against terrorism. — Noam Chomsky
The invasion of Iraq was simply a war crime. Straight-out war crime. — Noam Chomsky
Society has good reason to fear the Radical. Every shaking advance of mankind toward equality and justice has come from the Radical. He hits, he hurts, he is dangerous. Conservative interests know that while Liberals are most adept at breaking their own necks with their tongues, Radicals are most adept at breaking the necks of Conservatives. — Saul Alinsky
Nov 132012
 

Going hungry and unsheltered is an unpleasant prospect; we all seek to avoid that situation. Honest but simple people can think of no other way to get their meal ticket but to earn it through some useful work.  Poor fools!  Clever people realise that work is just as unpleasant as going hungry and unsheltered.  Clever people conjure up scams to extract the wealth created by those that work so they can get their meal ticket without doing anything useful for anyone and have a good laugh at the poor boobs they swindled.  No one excels at scams more than those clever clever people in government.  Early governments were unsophisticated in their scams practically the only one they had was the Mafia’s favourite the protection racket.  You know the gag, round up some thugs, go round the working people and offer to ‘protect’ them in return for a fat slice of their hard earned wealth and if they refuse show them why they need protection…  Government has come a long way since those days!  In addition to the old favourite the protection racket, government now has the permission racket.  The routine goes like this, find something people want or need to do and then sell them the permission to do it.  If they refuse then just send the thugs round to show them why they need permission…

Unlike the protection racket the permission racket is infinitely versatile; there is no human activity that doesn’t have the potential to be pillaged for permission by the powers that be.  In the future us peasants can look forward to being coerced into paying for permission to start a family, eat, use the toilet and even breathe.  Right now we need to buy our lord’s permission to travel, use a car, work, trade, keep a means of self-defence such as a gun and build a shelter from the elements.

Permission to build is a racket that offers an additional income stream for our bureaucratic overlords besides the price of permission.  By restricting permission the market in housing is artificially distorted making prices and rents rise over time and therefore make great fortunes for the landlords, mortgage lenders and other friends of the state.  A measure of how far property prices have been artificially inflated by the permission racket compare the market price of land without permission, land with permission to build but nothing yet built and land with something built.  In the UK currently land without permission sells for around £5000 an acre, land with permission but nothing yet built sells for £200,000 an acre and with something built around £400,000 an acre…  We can easily see that the permission racket has inflated land by nearly £200,000 an acre and in consequence doubled the total build cost.  A fancy price for thin air!  Absent the ‘need’ for permission the price of a house would in general be half what it is or even less.  In 1952 you only needed £1500 to get on the property ladder now you need £160,000.  Think that rise is just from the devaluation of currency, another government scam, otherwise known as inflation?  Think again £1500 is equivalent to £39,000 today accounting for inflation which is a long way short of £160,000.  What is a house really?  It is nothing too fancy really; a heap of bricks on a patch of dirt, some simple wiring and piping, in no way can it cost a substantial portion of a lifetimes’ earnings without some serious market manipulation.

This side effect of the housing permission racket amounts to a ponzi scheme.

Ponzi Scheme -
A fraud disguised as an investment opportunity, in which initial investors and the perpetrators of the fraud are paid out of funds raised from later investors, and the later investors lose all funds invested.

The perpetrators of the fraud being in this case the government and the initial investors being those that bought property early on in the racket.  The later on you buy in the more inflated that the price you pay will be and the more you will have to lose if the scam comes undone.  In this way the propertied are co-opted into supporting the scam; no one wants to see their ‘investment’ demolished neither in value nor in its physical existence by means of a council bulldozer.  It is an especially invidious ponzi scheme because unlike most such schemes you can’t practically avoid being ensnared in it.  People need buildings and unless you are willing to be homeless you must have or use at least one building to be your home.  Renting instead of buying offers some distance from the risk of collapse but before the collapse you are still paying much more for shelter than you would without the racket.

Can it collapse? Better ask when will it collapse?  The air inflating the house price bubble comes from nothing more substantial than government legislation and the bureaucracy that implements it.  Governments are paper tigers they look fierce but are soon burnt to ash when the spark of common discontent is put to them.  That discontent is rising in temperature steadily inflamed not least by the artificially ballooning cost of living of which the housing bubble is but one of many causes.

UK house prices adjusted for inflation


Permission Rackets and the Property Ponzi Scheme.
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