HOW OFTEN must I say it? Falling house prices are a good thing, not a bad thing. It was property madness that got us into this financial mess in the first place, and the credit crisis will not be resolved, will not begin to be resolved, until house prices start to become more rational. That means house prices must come down.

Average UK house prices of over eight times average earnings are unsustainable, morally and financially. Most home owners, sitting on large paper gains, know and accept this; many have the decency to be embarrassed about it. The government knows it too but can't face up to what it means. Ministers prattle about the need for "affordable housing" and then introduce more measures designed to keep prices from falling, ie becoming affordable.

It was last week's announcement by the Halifax that UK house prices had fallen by 2.5% in March that led to the latest housing panic. The editorials cried out for dramatic cuts in interest rates "to prevent a housing meltdown". The prime minister insisted, like some real-estate Canute, that the fall was "containable". Alistair Darling then threw a token £1500 at first-time buyers (which sounded suspiciously like the SNP's £2000 bung-that-never-was) and set up a mortgage review under the former boss of HBOS.

Brown then leant on the governor of the Bank of England to cut interest rates by announcing, falsely, that "Because we've got low inflation we can cut interest rates." Mervyn King dutifully obliged, cutting base rates to 5% in what was described as a "desperate bid to halt the slide", even though the slide has hardly started and the cut will have no impact on mortgage rates, which continue to go up.

Brilliant! When central bankers start setting interest rates to placate politicians, you know that we really are doomed. It was low interest rates that inflated the housing bubble, so let's have another dose! One last puff of air in the £3 trillion balloon.

To repeat: a housing "collapse" is necessary and unavoidable if the economy is to be restored to anything like equilibrium. You cannot have a stable financial system while property prices are so high that people on average earnings and higher cannot afford to enter the market.
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The only problem was that this was the most reckless economic mismanagement in modern history. The housing bubble, and the consumer boom based on it, was a deliberate act of policy, as former Bank governor Eddie George admitted to a Commons committee in March last year.
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But they have created an economy in our own image. Our greedy and grasping materialism is what allowed the financial services sector to destroy the stable society of low house prices, secure pensions, social welfare and public housing that the post-war generation built. It came apart in the 1980s with council house sales, the biggest bribe in modern history and the moment our collective obsession with property began. Now, after a tripling of house prices, Britain is the most indebted country in the developed world.

The property market has made a fool of anyone who has tried to run a business. Why slave for years to build a firm when, just by sitting in a house in London, or even parts of Edinburgh, you could turn into a millionaire?

Property madness has made fools of anyone who has ever saved for their old age. Why bother when all the tax advantages go to houses, which are free of tax? The government encouraged us to pour more and more money we didn't have into houses because they stupidly believed that high house prices equalled prosperity.

Gordon Brown likes to pretend that the credit crunch begins and ends in the US. It isn't, and it won't. House prices have risen far higher here relative to earnings than they ever did in America and have a lot further to fall - 30%, according to the International Monetary Fund. The only compensation is that it is likely to destroy Gordon Brown's place in history.

But would you listen? .......... oh, no!