About those tins of beans...

...I think I'd add a tin helmet to the shopping list. My favourite source, Der Spiegel strikes again:

This October was the third straight month Chinese exports decreased. Along with it, the hopes of German manufacturers that Asia's growth market might help lift them out of the global crisis as it did in 2008 are also evaporating. This time China faces enormous challenges of its own -- a real estate market bubble and local government debt -- that could even pose a risk to the global economy.

The Germans can't borrow, and Chinese growth is about to hit the skids. *Gulp*

It's worth reading that article in full. In world terms, this is the crisis spreading from the financial sector into the real economy of manufacturing: coupled with a massive balance of trade gap. Remember, China holds much of the dollar debt in the world, and it has been China that has helped prop up the debt bubble in America in order to keep its markets going.

I also note the mention of the ghost cities -- so reminiscent of Ireland's boom/slump situation (and, I believe consistent with David Harvey's model of capitalist crisis).

Part of what this shows is that even state capitalism and pump priming isn't enough to end the crisis: we've seen austerity here and spending for growth there, eventually, someone has to admit that a market economy just doesn't work for the majority of humanity. In the meantime, get tying kitchen knives to broomsticks and start a pike practice squad in your street:you may be needing it soon.

You know you're evil when...

The Telegraph can take the moral high ground against you

However, figures from the building industry suggest that developers are holding large numbers of plots where they have been granted planning permission but have not started construction.

The National Trust estimates the total land bank with planning permission to be around 330,000 plots.

Of course, this is an effect of the Telegraph representing the landowners keen to keep the value of their land by preventing development spoiling their views or undermining the value of greenfields. Private eye has made much the same point this week.

The real villain, of course, is the property market. Landowners have an asset in land-with-permission irrespective of if they build on it: and, of course, if they do build, they fix its value; whereas if they leave it fallow it rises continually with rising land prices. Land itself grows in value - roughly - in line with economic growth (modified by precise pressures on farming, industry and housing need in specific locales).

In short, the incentive is not to meet housing need, but to hold onto large chunks of land. Now, this could be easily remedied - a tax on land-with-permission would stop them getting permission, but could be an incentive to move where permission exists. A land value tax would hit everyone with land, especially the greenfield nimbys. It could, though, be done within capitalism.

The problem is the politics. Generations of politicians have committed us to private home ownership, which people treat as an investment. So long as house prices continue to rise faster than inflation+interest, that's a goer. It does, though, commit politicians to ensuring house prices rise, which means supply must always fall behind demand, else it wrecks everyone's asset value.

So, a large company/housing co-op that relied on rental income for its profits could probably see everyone adequately housed, but only if the interest of land owners were adequately eliminated; but that would be almost impossible to do since it would have to hold land as well. To work, we'd all have to end up renting, and at the mercy of market rental rates.