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In Yellow Peril | Why won't Lynne Featherstone admit the truth? they want to know, amongst other things...

On her "blog" (actually just a website - what sort of blog is it that doesn't allow comments?)

Er, actually, yours, most of the time. I would say that three quarters of my attempts to post a comment on Yellow Peril I get some kind of error along the lines of:

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But you know, over there at Yellow Peril they seem to have an unhealthy obsession with Lynne. It's pretty tiresome really. What's it all about? Glynis not give you enough attention as a child Kinnockkid?

They've been rumbled. The very shaky foundations of the entire house of cards have been exposed. The vast fraud against lower and middle income households that is the financial system, and, ultimately, government has been laid bare. Surely everyone can now see that? No? That doesn't surprise me. Just as there was very little outcry in this country when former Governor of the Bank of England Eddie George revealed that their commission on independence in 1997 was not just to maintain an inflation target but also to see to it that house prices continued to rise by keeping money as cheap as possible for as long as possible.

In my opinion, whatever the consequences in the short term, it would be better if Fannie and Freddie were allowed to die gracefully even as their lives have been a disgraceful deceit. What have they done that is so bad that a normally forgiving person like me would be calling for the corporate equivalent of the death penalty? The seemingly innocent practice of underwriting mortgages is in fact a key factor in the creation of the property price bubble and in the transfer of wealth from poorer to richer.  Yes that's right, redistribution the wrong way!  Without that underwriting the front line lenders would have been more cautious in their lending stabilising prices and not stretching households to the financial limits just to have a home over their heads.

Oh, what a clever idea, you still say perhaps - after all, it surely helps more people buy a home. And that's what Fannie and Freddie were supposed to do, by offering an implicit government guarantee people who would previously not have been considered for a mortgage got to join in the jamboree. And that's the problem - a government guarantee. They, the state, have pledged an eye-wateringly close to unlimited amount of money, that's *our* money of course, to make us have to pay more for our homes to the banks who effectively create the credit in the first place and line the pockets of landowners. And this in a nation that is still so relatively empty as to have marginal land in abundance so other land values should still be relatively stable other things being equal.

But those other things are not equal, the cycle of lending inflates the broad money supply so over time reducing the value of the asset that very system conspired to make you pay so much for in the first place. And all this is only possible because of the enclosure of land, the privatisation of the entitlement to and collection of the value that the whole of the community creates at any particular unique location.

At best, Fannie and Freddie are shining witnesses to the power of unintended consequences - I am sure the New Dealers whose brainchild they were earnestly believed they were helping: at worst, they can be seen as part of a conspiracy between government and those who own the financial system and its institutions to transfer vast amounts of wealth from Average Joe to the richest few. Add the evidence of Eddie George that in the UK the past ten years' property price boom was deliberate though unannounced political policy and it's harder to rule out conspiracy over cockup.

Either way, Fannie and Freddie should go, and go quickly, and, as they say, be buried in a closed casket to boot. It will unleash financial turmoil of unprecedented ferocity I am sure. But it will be the herald of death to a fundamentally flawed, corrupt and downright fraudulent system that continues to benefit a tiny few at the expense of the vast majority. I was introduced to a new, to me, term at the weekend, the Kondratiev wave. Looking at the vast amounts of money involved in the current potential crisis, the fact that the asset bubble is bursting as production is also slowing and there's ever decreasing amounts of money available to maintain existing economic activity, and I'm beginning to wonder if Kondratiev wasn't on to something.

This is a huge opportunity. An opportunity to reinvent a stable monetary system more suited to a globalised world of trade and increasing aspiration amongst a whole new world of consumers, a world in which, of necessity, economic activity is shifting relatively away from the west, from the existing reserve currency and its close followers and towards the east and the global mass of population.

And that, dear reader, is why I am likely to die waiting. An opportunity those who wield power would prefer us to miss.

There was an horrific accident on the notoriously bad Oxford to Banbury road which recently came to court in Oxford. A 19 year old, driving without a license or insurance, in a borrowed car at 80mph on a 50mph stretch of road, hurrying, ironically, to get to court to answer other charges killed a young recently qualified doctor coming the other way as he overtook on a blind brow of a hill.

The mother's Witness Impact Statement moved the judge in the case to tears last week and now the Oxford Mail reports that she backs calls from a road safety group (I think it might have been RoSPA as I'm sure I saw something on TV last week about it) that young people should have lessons for at least a year before they are allowed out on the road alone in a car: Mums Backing For Road Plan.

Why? Why is a year a magic arbitrary number? Why, in fact, is 17 a magic arbitrary age for driving. Well, 18 now. Yet in the US it's still 15 isn't it? The most car conscious country on earth. Now, in fact, that it is 18 here, what will a year achieve? Well, it will prevent anyone from getting a job more than a bus ride away I guess.

Does everyone even have to take formal lessons from an accredited instructor nowadays? I know when I was at school and many of my friends were farmers, the fact that they could drive the old banger around the fields in the holidays meant they were quite good drivers by the time some of them had left prep school at 13! I don't suppose they took any lessons from an accredited instructor unless they found they failed their first attempt at a test and needed to know why and what to fix.

Now, our sympathies do lie with Mrs Davidson, and yes, using the available penalties when something like this happens might well act as a deterrent - this boy was a reckless criminal who probably would not have given any more of a damn had he held a license, but fourteen years inside might have made him think. But penalising all young adults who just want to get on with what the rest of us take for granted is utter knee-jerk nonsense.

If you want some additional check, perhaps you could have a second test for everyone after a year of having passed their first test. To make sure they haven't slipped into bad habits and so on. But there again, I don't see many teenagers hogging the middle and outer lanes of the motorway that regularly.

UPDATE: I've just seen the young doctor's fiance on TV tonight in Oxford campaigning for the crime of "death by dangerous driving" to be dropped and for all such incidents to be classed as "Manslaughter". I seem to remember this was argued at the time the then new crime was enacted, and I can't quite remember the arguments against, but I agree with him.

Why should killing someone with a car, recklessly, be prejudged as somehow less blameworthy or bad as anything else? It gives the trial more flexibility. Whilst there is, I think, no minimum if it is proven to have been a tragic unforseen accident, you can be put away for life for more egregious incidents.