One thing we urgently need to do is reorient our economies - not just in the West but across the globe - away from the idea that assets, particularly housing, are worth storing huge amounts of unproductive “wealth” up in.
Permanently higher energy costs would not be so much of a problem if we had kept housing costs at a historically normal level, and instead of selling houses to each other at ever increasing prices, had used some of our capital to facilitate better transfer to different energy sources.
We had a golden opportunity in the early 2000s to use the long boom cash and globalisation dividends to invest in new energy technologies and human skills and wellbeing, and instead we ploughed all our excess money into unproductive land/housing assets, now valued at many times more than they are really worth, many people with mortgages tying up large parts of income for years into the future. We could not have been more stupid.
Just think of where we could have been of instead of running up a massive housing bubble and then spending fifteen years trying to prop it up, we had instead kept the housing market at historically normal levels, and collectively invested that money into education, healthcare, manufacturing, energy technology, transitioning to more sustainable homes, consumption patterns and lifestyles. All it would have taken was to have some actual leadership and knowledge about these things in central banking and government. It’s not like many many economists, scientists and forecasters haven’t been telling us what is coming for twenty to thirty years now.
Shame that colossal greed and stupidity — from the derivatives market all the way down to ordinary people copying Homes Under the Hammer — ruled the day instead, as we’ll never get that chance back again, AND there is going to be a coming economic shock that is going to be very bad indeed, including a housing market collapse. (Who’s going to be buying U.K. houses at five times their historical median value when the energy bills to run them are astronomical, especially with all those patio heaters, inflatable hot tubs, bifold doors leaking energy and marble flooring everywhere?)