Horror ahead
by
Marcel Van Silfhout |
Parties like the Party for Freedom are out of touch with political reality
There’s a saying that one has to strike the iron when it’s hot. But this sounds a bit strange in the aftermath of the global financial meltdown, a severe euro-crisis and an on-going deep economic crisis in The Netherlands. In other words, the iron these days is ‘too cold to handle.’
I’ve used the expression exact two years ago when, at last, the biggest Dutch political taboo was broken: experts dare to speak about the perverted system in which people who own a house (the rich ones) are subsidised with a mortgage reduction. The ones who hire a house don’t get similar amounts back from the state. It’s a reversed Robin Hood-situation in which the poor subsidise the rich.
I was a bit wrong back then although it’s nowadays possible to discuss such a precious thing as the ‘H-word’ (a synonym for ‘hypotheekrente-aftrek’ - which is Dutch for mortgage interest reduction), the system is still running. The ruling right-wing parties (the liberals and Wilders’ ‘Party for Freedom’) in The Hague act as if they can go on by cultivating an old taboo. They fear angry voters because they’ve said that the mortgage-interest reduction-system will remain as long as they are in power.
For decades it has been said that the political party which will end the ‘holy’ mortgage-system, will commit political suicide. The hilarious situation though is that a majority of the people in Holland - the voters indeed - are fully ready to get rid of the mortgage system. So, political parties like the liberals and the Party for Freedom are out of touch with political reality. The public knows what was known by experts for a long time: the bizarre Dutch mortgage-system created a situation of massive debt for households and is, in the long run, impossible to go on with. In fact there’s no country in the world in which the estimated debt of house-owning households is this high. The famous solid Dutch economy, therefore, is at stake.
In 2005, when I and a colleague worked on an investigative TV-reportage (titled ‘The Holy Hypotheekrente-Aftrek’), we travelled to Sweden to interview Kjell Olof Felt, the former minister of finance who personally ended a similar mortgage-system in the Scandinavian country. Felt told us that he was happy that he had put an end to the ‘perverted system.’ He also acknowledged that he did it at the wrong time. As a result of ending the system, house prices in Sweden dropped by 50 per cent. No one wanted to sell his house and live with a massive, un-payable debt. As a consequence of this, people saved their money in order to survive. No one moved. This deepened the Swedish recession even further because public spending fell dramatically.
Felt told us: “It’s good that we put an end to the mortgage interest relief, but I would have preferred to do such a thing years before when our economy was in better shape. The problem is: such a perfect moment is hard if not impossible to come by.” Asked for his advice to The Netherlands he had a wise message: “Take your time. Let people get used to the idea and try to avoid such a measure during harsh economic times.”
So, what to do now that the public is ready to change the mortgage-system, but without being aware of the bad timing? Of course, experts will be happy to end it. They might think: “if we don’t do it now, it will never happen.’’ The recent crisis taught me one thing: don’t believe experts, they didn’t forecast all the misery, nor did they know how to handle the economic catastrophes’ they themselves helped to create.
The economic consequences of ending the mortgage system at this moment, spring 2012, will be felt severely by Dutch households. Back in 2005, when I did the TV-reportage, it was still a good moment to change the system without too much collateral damage. I didn’t move an inch here: it’s good to end the perverted mortgage-system. And the right moment is hard if not impossible to find. But to do it this time is like openly choosing economic horror. The iron, as I said, is cold as ice. The only way out is to change the system slowly (within between 20 and 30 years from now). But above all, it should be done at the right temperature!
Oman Tribune |
Other comment for Marcel Van Silfhout
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