“The Radical Middle is about getting beyond black and white. We challenge assumptions, ask better questions, and look for answers that don’t fit neatly on either side. Common sense shouldn’t be radical.“
In this episode of the Radical Middle Podcast, Thomas McMurtry and Ian Hull, LSM, Hull & Hull LLP, discuss how modern money creation through bank lending has disproportionately favored real estate over productive businesses, particularly due to risk-weighted asset regulations and institutional biases. They explore how government programs like CMHC mortgage insurance have encouraged increased lending against real estate, while simultaneously examining the counterproductive effects of government incentives for housing development that are offset by development taxes. The discussion covers how this credit allocation creates spillover effects including declining GDP growth, reduced productivity, and stagnating business investment, with Thomas referencing research showing that increased real estate lending crowds out business loans at both macro and micro levels.
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Further Reading:
Classical Political Economy
* Adam Smith — The Wealth of Nations
* David Ricardo — Principles of Political Economy and Taxation
* Henry George — Progress and Poverty
Modern Banking & Political Economy
* Michael Hudson — Killing the Host
* Richard Werner (2014) — Can Banks Individually Create Money Out of Nothing?
* Bezemer et al. (2023) — Credit Policy and the “Debt Shift” in Advanced Economies
YouTube: https://www.youtube.com/watch?v=y4ZKLBwdQYc
Spotify: https://open.spotify.com/episode/4hixXoh7qeY36LyztYptXe?si=0f46ecec77ec4ed2
Apple Podcasts: https://podcasts.apple.com/us/podcast/the-radical-middle-podcast-episode-5-does-real-estate/id1895574044?i=1000774075880
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