Gordon Brown has a PhD in history. How strange that on taking power he predicted that his policies would prevent boom and bust. How strange that such an educated person can have learned so little from his studies. We can only assume that GB was captured by such hubris that he could not take proper account of Fred Harrison's careful historical study of property price boom and bust cycles. Harrison, has been writing of the 18-year property cycle and its associated economic boom and bust since the early 1970's and is now probably the world's leading expert on this phenomenon. Having observed the late 1980's price peak and recession he foresaw what was going to happen and approached the top Labour leaders in 1997 either in person or in writing and tried to warn and advise as to what to do to prevent another crash. Gordon Brown in 2006 was described by Ben Macintyre as about to be probably the most bookish Prime Minister since Churchill. With so much publicly known about BG and his fellow top leaders it would be a good study: Enlightenment through education - Discuss.
Harrison's new book is 2010 The Inquest in which he holds these leaders to account. Read my review of it on Amazon and buy the book, with spares for friends. A fascinating book - as ever from Harrison - but what intrigued me in particular was his quizzing of Rachel Lomax, Deputy Govenor of the Bank of England 2003-2008 and member of the BoE's Monetary Policy Committee. She admitted in a speech to the Institute of Directors in 2008 that: 'quantifying the effect of changes in credit conditions...our models still cannot help us very much'. Harrison asked her what equations are missing? Lomax: 'The important ones are the ones that really tell us what the impact of the financial transmission mechanism is.' Harrison says that this shows that the BoE 'is not a reliable guardian of the nation's money supply.' Read on in 2010 The Inquest and be enlightened and frustrated in equal measure (and then add it all to that already generated on reading Richard Werner's work - see elsewhere on this blog- about his understanding of those very mechanisms around credit creation which Rachel Lomax and her collegues failed to find in her 5 years at the BoE).
Fred Harrison identifies land values as the ideal source of public funds - he carefully explores the relationship between public finances and private property rights, and how current tax polices cause great damage to the economy and subvert our wealth. He says that although bureaucratic government waste is high those losses are 'trivial compared to the way revenue is [currently] raised' .
Will leaders of political parties ever understand these things as exemplified in the findings of Harrison and Werner? There is just a glimmer of hope in the current extraordinary turnaround in fortunes of the Lib-Dem party in the UK election (May 6th). The Lib-Dems have proposed an annual Mansion Tax on high value properties. Not as far as we know a tax or levy on actual land value as per Harrison, but a tiny step in the right direction. If such a thing became law and grew in scope it would become the key that Harrison tried to give Brown & Co in 1997 and which they threw away.
Note: Apart from being given a free copy to review, the reviewer has no financial interest in sales of the book mentioned.