Some people - many more than we should be comfortable with - will complain bitterly about markets. They allow people to do what those complaining think they shouldn’t be, d’ye see? This being rather the point of having a market, so that people are free to do what others think they shouldn’t be. Subject to those usual Millian constraints about fists and noses of course.
This complaint is therefore rather missing the point:
Urgent action is needed to tackle discrimination against benefit claimants by mortgage providers, according to the Residential Landlords Association (RLA), which has found lenders representing 90% of the buy-to-let market refuse a loan where a tenant is on housing benefit.
On Saturday, the Guardian revealed how NatWest told one landlord that she would either have to evict her tenant of two years, or take her mortgage business elsewhere, after a blanket ban by the bank on benefit claimants.
The bank’s stance came to light after Helena McAleer, who lets out a home in Northern Ireland, approached NatWest to remortgage her loan.
She refused to evict her tenant, a vulnerable older woman who always paid the £400-a-month rent on time for more than two years, and instead moved her loan to another provider.
NatWest is lending out depositor's’ money - for those of an MMT persuasion, funding the creation of new money - with shareholders on the hook if it isn’t repaid. How it decides to do that is up to NatWest, that’s what the shareholders have hired that management to do after all.
It’s possible that there are some risks, costs, to lending to buy to let landlords who rent to benefits recipients. At which point that discrimination makes sense. Or perhaps there are no such costs, in which case NatWest shareholders are losing that business and thus money. Which is their cost and their fault for hiring that management which made that bad decision. This being the point of this capitalist idea, that you lose if you get your investment decisions wrong, win if you don’t.
The point of the market part being that everyone gets to make different decisions and that’s how we zero in on what actually does work, being able to thereby discard all those myriad options which don’t. This being the point, the market is our discovery process.
So, capitalism and markets working just as they should. For do note the final part, someone else has a different opinion and the loan was financed. So, it’s all working. What the heck is anyone supposed to do about it?