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Sense of security, my pockets jingling.
I couldn’t help but see a certain amount of irony when I learned that the currently highly fashionable “Make poverty history” white wristbands from Oxfam are being made in a Chinese Sweatshop by workers earning 9p a hour.
We, in this country, in this generation, are phenomenally lucky. We live in a society where the number of people who do not have access to every single material good that any reasonable person could ask for a fulfilled life is vanishingly small as a proportion of population. This is not to say that there aren’t any people who don’t have access to such goods, but I’ll come onto them. My point is simply that pretty much everyone has access to pretty much everything a reasonable person could possibly want. Society and the economy is now at a point wherein we are all so rich that realistically nothing we could reasonably ask for is out of our reach.
It is unarguable that this is due to the long-term triumph of Thatcherite economic reforms. This is demonstrable in the real world simply by observing that after eight years of ostensibly ‘socialist’ government, the mines remain shut, the railways are still privatised, PFI hospitals are springing up like mushrooms in Autumn and the stock exchange is still deregulated. There’s a reason for this – it’s called economic efficiency.
What this means to us is that, despite the cries of the mainstream press, the economy was not a major factor in the last election. It can’t have been, really. Considering that the difference in the manifesto pledges of the two main parties was less than 2% of each other, economic policy could not have been a major factor. So what was the major factor? Once a person has all their material needs satisfied, they start to look for their emotional needs to be addressed and the fact is that Tony Blair is simply better at making people ‘feel good’ about voting for him, and interestingly both the Conservatives and the Liberal Democrats seem to have completely missed this. If who you vote for isn’t going to make much of a difference to what is in your pocket, then other factors come into play, and somehow Tony has got the market cornered in self-satisfaction. He’s done this by lying, admittedly, but frankly what should anyone care about that?* It’s funny foreign johnnies with towels on their heads who are getting the sharp end, and the recent evidence suggests that they don’t really matter when Joe Voter is weighing up his options.
Sadly, this isn’t going to last. There is a theory (quite a convincing one, too) that the Conservatives didn’t make as much political capital as they could have done in the last election because they didn’t actually want to win it. Why not? Because they can see an economic crash coming and they don’t want to be in power when it happens.
And economic crash, you ask? Yep. The evidence is starting to point towards it – and here’s why.
A few years ago, Gordon Brown removed tax relief on pension funds. I reckon that this may have been one of the most evil acts perpetrated by the current administration, mainly because you and me won’t even notice just how much it’s affected us until long after Tony & Gordon have scuttled off to a comfortable retirement in Tuscany. The net effect of this change in the tax rules was to pull £5,000,000,000 a year out of the stock market. This is a cumulative sum, so Gordon has pocketed about an extra £25,000,000,000 as a result of this little wheeze, not that you’ll notice any extra benefits in your life as a result. However, this also means that the UK stock market is about £25,000,000,000 worse off, and that’s a major reason why share prices have been surprisingly depressed in recent years – there is just is less money being invested. This has had two effects, which have compounded each other.
Firstly, as personal pensions are no longer a good, tax-free way for people to plan for the future, the only way people can save money for retirement without the exchequer plundering it is by putting it into property, and so that’s where the house-price boom has come from. If you’re thinking about this, you’ll be amused by the hypocrisy of the government blaming the unaffordability of housing to first-time buyers on property speculators when it is their own economic policies which have driven those speculators from their traditional stock market hunting ground into property.
Secondly, businesses have always used the stock market to raise funds either through share allocations or raising loans based upon their stock value. As stock values are depressed this is no longer a reliable way of doing so, and so low interest rates have become a necessity for raising money efficiently. There’s just one problem with this – individuals borrow cash as well as companies, and low interest rates have fuelled the personal debt boom to in excess of £1,000,000,000,000, fuelling the property speculation boom (above) as well as individual debt.
Of course, this cannot last.
Like all bubbles, it’s got to burst some time and the evidence suggests that we’re getting close. Interest rates are creeping up and look likely to continue doing so. Personal bankruptcies have risen tenfold in the past two years, and repossessions are on the up. If you bought a house in the last three years, I’m very sorry, but the economic indicators are that you’re fucked.
In the last election, Labour used a poster which read “I remember the day they took our house”; a reminder of repossessions in the last property crash in the early 1990’s, and as a warning not to vote Conservative. Well, in a year or two’s time, Tony will have retired, Gordon will be PM, and he’ll be busily shifting the blame for the next housing crash onto the previous incumbent of the role and suggesting he could have done better.
When he does, just remember who took five billion quid a year out of the stock market, and ask him what you’ve got in return for it.
Because it won’t be a pension.
Frankly, if I were Michael Howard, I wouldn’t have wanted to win either.
Some people, usually ones who dribble a lot and use their finger to help them read, seem to think that Gordon Brown is in some way a good Chancellor of the Exchequer. This is preposterous to say the least. He’s done one good thing (the independence of the Bank of England), but he has somehow managed to run up a budget deficit of at least £37,000,000,000 whilst not only raising 99 separate taxes but also robbing your pension, and sucking £22,000,000,000 out of the UK telecoms industry and effectively crippling it as a competitor on the world stage.
Where did this money go?
Well, at least the coming economic black hole means that Brown stands precisely no chance of winning a general election when he takes over from Tony, but that, unsurprisingly, is small consolation.
Anyway, earlier I said I’d talk about the people who don’t have access to the goods and services of a civilised society. As a proportion of society, there aren’t very many of these people, and they’re comprised of two sorts – 1) The people who can’t interact with society meaningfully, and 2) the people who won’t.
As a civilised society, it is our responsibility to give group 1) all the help they need. As far as group 2) go, society is governed by rules of give and take, and if someone who is capable of 'giving' to society refuses to do so then they can whistle for the 'take' part as far as I care. There’s the difficulty of a hazy dividing line between the two groups, I admit, but at least one acquaintance has told me that she only works one day a week as she doesn’t want to ‘engage with the system’. Or rather (more accurately it seems), she doesn’t want to ‘engage with the system’ inasmuch as it involves working, but she’s happy to engage with it when it comes to claiming benefits.
I wonder why I bother at times, I really do.
*![[livejournal.com profile]](https://www.dreamwidth.org/img/external/lj-userinfo.gif)
wicked_wish has a good old rant about this today as well, which is what kicked me off.
We, in this country, in this generation, are phenomenally lucky. We live in a society where the number of people who do not have access to every single material good that any reasonable person could ask for a fulfilled life is vanishingly small as a proportion of population. This is not to say that there aren’t any people who don’t have access to such goods, but I’ll come onto them. My point is simply that pretty much everyone has access to pretty much everything a reasonable person could possibly want. Society and the economy is now at a point wherein we are all so rich that realistically nothing we could reasonably ask for is out of our reach.
It is unarguable that this is due to the long-term triumph of Thatcherite economic reforms. This is demonstrable in the real world simply by observing that after eight years of ostensibly ‘socialist’ government, the mines remain shut, the railways are still privatised, PFI hospitals are springing up like mushrooms in Autumn and the stock exchange is still deregulated. There’s a reason for this – it’s called economic efficiency.
What this means to us is that, despite the cries of the mainstream press, the economy was not a major factor in the last election. It can’t have been, really. Considering that the difference in the manifesto pledges of the two main parties was less than 2% of each other, economic policy could not have been a major factor. So what was the major factor? Once a person has all their material needs satisfied, they start to look for their emotional needs to be addressed and the fact is that Tony Blair is simply better at making people ‘feel good’ about voting for him, and interestingly both the Conservatives and the Liberal Democrats seem to have completely missed this. If who you vote for isn’t going to make much of a difference to what is in your pocket, then other factors come into play, and somehow Tony has got the market cornered in self-satisfaction. He’s done this by lying, admittedly, but frankly what should anyone care about that?* It’s funny foreign johnnies with towels on their heads who are getting the sharp end, and the recent evidence suggests that they don’t really matter when Joe Voter is weighing up his options.
Sadly, this isn’t going to last. There is a theory (quite a convincing one, too) that the Conservatives didn’t make as much political capital as they could have done in the last election because they didn’t actually want to win it. Why not? Because they can see an economic crash coming and they don’t want to be in power when it happens.
And economic crash, you ask? Yep. The evidence is starting to point towards it – and here’s why.
A few years ago, Gordon Brown removed tax relief on pension funds. I reckon that this may have been one of the most evil acts perpetrated by the current administration, mainly because you and me won’t even notice just how much it’s affected us until long after Tony & Gordon have scuttled off to a comfortable retirement in Tuscany. The net effect of this change in the tax rules was to pull £5,000,000,000 a year out of the stock market. This is a cumulative sum, so Gordon has pocketed about an extra £25,000,000,000 as a result of this little wheeze, not that you’ll notice any extra benefits in your life as a result. However, this also means that the UK stock market is about £25,000,000,000 worse off, and that’s a major reason why share prices have been surprisingly depressed in recent years – there is just is less money being invested. This has had two effects, which have compounded each other.
Firstly, as personal pensions are no longer a good, tax-free way for people to plan for the future, the only way people can save money for retirement without the exchequer plundering it is by putting it into property, and so that’s where the house-price boom has come from. If you’re thinking about this, you’ll be amused by the hypocrisy of the government blaming the unaffordability of housing to first-time buyers on property speculators when it is their own economic policies which have driven those speculators from their traditional stock market hunting ground into property.
Secondly, businesses have always used the stock market to raise funds either through share allocations or raising loans based upon their stock value. As stock values are depressed this is no longer a reliable way of doing so, and so low interest rates have become a necessity for raising money efficiently. There’s just one problem with this – individuals borrow cash as well as companies, and low interest rates have fuelled the personal debt boom to in excess of £1,000,000,000,000, fuelling the property speculation boom (above) as well as individual debt.
Of course, this cannot last.
Like all bubbles, it’s got to burst some time and the evidence suggests that we’re getting close. Interest rates are creeping up and look likely to continue doing so. Personal bankruptcies have risen tenfold in the past two years, and repossessions are on the up. If you bought a house in the last three years, I’m very sorry, but the economic indicators are that you’re fucked.
In the last election, Labour used a poster which read “I remember the day they took our house”; a reminder of repossessions in the last property crash in the early 1990’s, and as a warning not to vote Conservative. Well, in a year or two’s time, Tony will have retired, Gordon will be PM, and he’ll be busily shifting the blame for the next housing crash onto the previous incumbent of the role and suggesting he could have done better.
When he does, just remember who took five billion quid a year out of the stock market, and ask him what you’ve got in return for it.
Because it won’t be a pension.
Frankly, if I were Michael Howard, I wouldn’t have wanted to win either.
Some people, usually ones who dribble a lot and use their finger to help them read, seem to think that Gordon Brown is in some way a good Chancellor of the Exchequer. This is preposterous to say the least. He’s done one good thing (the independence of the Bank of England), but he has somehow managed to run up a budget deficit of at least £37,000,000,000 whilst not only raising 99 separate taxes but also robbing your pension, and sucking £22,000,000,000 out of the UK telecoms industry and effectively crippling it as a competitor on the world stage.
Where did this money go?
Well, at least the coming economic black hole means that Brown stands precisely no chance of winning a general election when he takes over from Tony, but that, unsurprisingly, is small consolation.
Anyway, earlier I said I’d talk about the people who don’t have access to the goods and services of a civilised society. As a proportion of society, there aren’t very many of these people, and they’re comprised of two sorts – 1) The people who can’t interact with society meaningfully, and 2) the people who won’t.
As a civilised society, it is our responsibility to give group 1) all the help they need. As far as group 2) go, society is governed by rules of give and take, and if someone who is capable of 'giving' to society refuses to do so then they can whistle for the 'take' part as far as I care. There’s the difficulty of a hazy dividing line between the two groups, I admit, but at least one acquaintance has told me that she only works one day a week as she doesn’t want to ‘engage with the system’. Or rather (more accurately it seems), she doesn’t want to ‘engage with the system’ inasmuch as it involves working, but she’s happy to engage with it when it comes to claiming benefits.
I wonder why I bother at times, I really do.
*
wicked_wish has a good old rant about this today as well, which is what kicked me off.
no subject
Yeah, I'd noticed. I'll just bend over now, shall I?
(Though to be honest, I'm hoping that I won't lose as badly as I could - my house was astonishingly cheap because of the area's bad rep, but houses are getting more popular there as the rep disappears...)
no subject
Did you know that from next tax year, the regulations on pension funds are getting relaxed, and people will be able to save money in a pension and instruct the pension fund to investing in things like buy-to-let property?
So there's going to be even more speculators buying up property...
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I'd venture to say a lot of that money went to subsidizing the ever increasing private/public partnerships. BBCi and Network Rail are two very good examples ways to waste a shitload of money.
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Where did you learn this? I just checked the oxfam site.
This product is made in China in line with Oxfam's ethical purchasing plan
http://shop.sandbag.uk.com/MakePovertyHistory/Store/DisplayIndividualItem.html?ID=207&CatID=
That policy can be found at: http://www.oxfam.org.uk/about_us/suppliers/ethicalpurchasing.htm
It includes; Wages and benefits paid for a standard working week meet, at a minimum, national legal standards or industry benchmarks, whichever is higher. In any event wages should always be high enough to meet basic needs and to provide some discretionary income.
OK, that can be read in a number of ways but I do get the feeling that Oxfam may well be a fairly employee frendly orginisation.
I'm to tired to propperly read the rest of this post, see you later! :)
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You want free(er) trade?
Re: You want free(er) trade?
Re: You want free(er) trade?
Oh dear
Three points to start:
Between 1 January 2003 and 31 December 2003 the market value of the Stock Market increased by £213 billion to £1,368 billion, representing a rise in value of 18.5 per cent.
http://www.statistics.gov.uk/cci/nugget.asp?id=107
So £5bn extra tax p.a. represents only 2.3% reduction in that increase.
Interest rates are expected to go down, not up.
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2005/06/05/urates.xml&sSheet=/portal/2005/06/05/ixportaltop.html
The Poverty and Social Exclusion Survey of Britain is also the first national study to attempt to measure social exclusion, and to introduce a methodology for poverty and social exclusion which is internationally comparable.
Britain has become an increasingly polarised nation in the last two decades. The report shows that the proportion of households living in poverty increased from 14 per cent of households in 1983, to 20 per cent in 1990 and over 24 per cent in 1999.
http://www.bris.ac.uk/poverty/pse/welcome.htm
More later - once I've done some more work!
Re: Oh dear
Re: Interest rates and house prices
Re: Interest rates and house prices
Re: Interest rates and house prices
Re: Interest rates and house prices
Re: Interest rates and house prices
Re: Interest rates and house prices
To quote myself, not half an hour ago:
Re: Interest rates and house prices
Re: Pensions
Re: Pensions