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Pots and kettles

In today’s Observer, in an article under the title “Mervyn King didn’t grasp the crisis then – and he does’nt now”, Will Hutton refers to Mervyn King’s admission and asserts that “Sir Mervyn cannot bring himself to declare that the Bank was party to the gigantic intellectual mistake that led to the crisis.”

However, Will Hutton, too is a party to the same giant intellectual mistake. In his article, he mentions that the underlying cause was a an explosion of credit for property purchase and then passes on, as usual. For property, read land. This was a classic credit-fuelled land price boom, and banking controls would not have stopped it, because the same thing happened in the early 1970s even though controls were in place. What happened then was that secondary banks were set up to work around the controls.

The preventative measure – the right form of land value taxation – is one that Will Hutton and many others will not entertain, refuse to entertain. Which makes them all party to the same mistake. It is not just Mervyn King. Gordon Brown is part of it too. And so is his former right-hand man, Ed Balls. And then there are those who taught Ed Balls, the Oxford academic economists, and those who taught Hutton at the University of Bristol, those who taught King at Cambridge – it goes on. Much of the academic establishment is involved in this since they have been peddling falsehoods for at least a century, ever since Thorold Rogers retired from the professorship of economics at Oxford.

The worrying thing is that their ideas still dominate the thinking and are getting in the way of genuine solutions.