This week marks the 10th anniversary of the event that triggered the 2007/8 crisis and the ensuing Great Recession. But it need not have happened. In November 1997 Fred Harrison, author of Boom Bust and The Power in the Land, wrote to Prime Minister Tony Blair and his Press Secretary, Alistair Campbell, to warn them about a ‘housing crisis that would end up in a depression’. No notice was taken. Chancellor of the Exchequer, Gordon Brown, even boasted in each of his Budget speeches, including April 2007, that “we will never return to the old boom and bust”.
The conditions that gave rise to the 2008 crash are still with us. Unless the tax reform outlined in Boom Bust and The Power in the Land is implemented soon, 2026 is on schedule for another spectacular crash. The problem is that economists who advise governments are either unaware of the cause or protecting vested interests. They too will be shame-faced when faced with the question the Queen asked at the London School of Economics following the collapse of Lehman Brothers: “If it’s so big, why did no one see it coming?”
The Power in the Land warned in 1983 of the 1990 property crash, Boom Bust warned in 2005 of the 2008 property crash. The regularity of the 18-year property cycle with reference to the United States is dealt with in The Secret Life of Real Estate and Banking.