Child Poverty and the Financial Crisis

Last weekend Trafalgar Square, London, was the venue for a protest aimed at holding the Labour Government to its election pledge to reduce child poverty. What? You couldn’t be arsed turning up? You heartless bastards, how could you ignore the plight of those poor children?

I missed it too actually, not through indifference or inertia but by design. I refuse to subscribe to the notion that child poverty can be separate from adult poverty. All poverty is relative of course so how do we define child poverty? Are those who do not have the latest trainers, games consoles etc.. poor? Or are the onces who are decked out in the latest designer clothes and equipped with the latest toys and gadgets but starved of attention really the ones living in poverty? If everybody was given £1000 a week to live on then the people who smoke, drink, do drugs, live in over-mortgaged houses, drive Chelsea Tractors and eat only in restaurants would be impoverished while those who live on lentils, drink home made elderflower wine and drive a pair of raffia sandals would be in the money. Little Nicky’s Theory of relativity.

I digress however, so getting back on topic, a protest about the government’s failure to reduce child poverty is really nothing but a protest against hypocrisy. While this NuLab government is in power a protest against hypocrisy seems futile. Why did they single out child poverty? It is, is it not, hypocritical for a government that has devoted so much time and effort to increasing poverty among the lower paid, disabled and old and raising the bar below which people cannot afford to keep a roof over their heads, eat and keep warm to talk about reducing poverty when what they mean is performing conjuring tricks with economic statistics?

We should not heap all the blame on NuLab of course; Brown, Blair, Mandelson et al have made matters much worse than they need have been but the foundations of our broken society were laid by Margaret Thathcher’s Conservatives. The blueprint was drawn up long before them however.

The English speaking world, Britain, America, and to a lesser extent Australia and Canada suffers from a disease that though know in other parts of the globe does not periodically reach epidemic levels. The most visible symptom of this disease is an uncontrollable urge to buy houses. This obsession, once established, quickly becomes all consuming. People will sell comfortable homes that are well within their means to trade up to something bigger / in a better area / nearer to a good school (the list of excuses given by people about to plunge themselves into financial hardship is almost endless. At the bottom end of the market even people for whom anything but renting a home seems like insanity will clamour to get on the “mortgage ladder.”

not so many years ago it would have been impossible for the unemployed or low earners to buy a home but so effective was the great lie of the finance industry that property prices always go up in the long term the lenders in the industry even believed it themselves. They gave mortgages to people who should not even have been allowed to borrow the bus fare home. Thus demand was maintained in the market forcing up prices far beyond a level that was realistic and people were persuaded to take on debts they could never hope to service let alone repay even had their stated income been anywhere near accurate instead of just a figment of a cowboy who worked for a bank (The Loan Arranger).

For almost three decades and despite two major bubble / burst cycles the madness has gone on. How can the cycle be broken when even now governments speak of injecting cash into the economy to get the market moving again? The first step towards breaking the mould and alleviating poverty would be the most painful for politicians who have nailed their colours to the mast of Free Market Economics and would have to admit they were wrong. There needs to be a campaign to reverse the propaganda to the markets madness decades and destigmatise rented homes. People who rent their homes are not of less worth, it is simply the case that their circumstances are different, they have made different choices.

The next big step, painless for politicians but agonising perhaps for us ordinary punters, is a process of reeducation in individual responsibility. We cannot live on debt, we cannot simply keep borrowing more. That Cowboy Banker The Loan Arranger might tell us we can but it only works so long as we can keep earning more to service the debts. As soon as our interest payments default, good bye lifestyle, hello poverty. Borrowing more than on can afford to repay is insanity but only the individual can decide what proportion of income is available to service debts. Only you can decide how much you have to send on CDs, books, wine, gadgets, designer clothes etc. to maintain an acceptable quality of life. Only you can decide whether you want to live in a mansion, eat only bread and soup and sleep on the floor or live in a dump and go go to lots of gigs, parties, clubs etc.

The Loan Arranger says “If you will just be the same as everyone else you will be happy, trust me?” And you do because he is so likeable and really seems like your new best friend.

The very very first thing people need to learn to get themselves out of their personal mess is never trust anyone who says “trust me.”

If we get our heads round those simple things we are well on the way to alleviating poverty.

As The Housing Crisis Deepens Is This An Answer?

In this article
A home run for housing
Liberal Democrats finance spokesman Vince Cable suggests a policy aimed at reminding people houses are homes to live in not investments to be bought and sold for profit would be a positive move. The idea is that as repossessions increase in number, funds that have been locked for years are released to enable Housing Associations and other social housing organisations to buy the properties from mortgage providers, enabling people who were mis-sold mortgages they could not afford to remain in their homes as tenants.

Cable is, as far as I am aware, the first promient politician to say we must rid our society ofd this obsession with the fallacy that owning property makes us rich or “middle class,” and talk for reminding people that houses are not investments to be traded and there is no real stigma in renting one’s home.

Could this be the first positive step towards repairing the society Thatcher trashed so deliberately and disastrously and Blair pulverised.

More on the impending failure of the housing market

The problem weith vastly expanding a blog’s readership as we have done recently, is that once the blog starts to register on the radar it attracts comments that are really nothing to do with anything the bloggers have written.

Take the recent post The Receding Prospect of Happiness which ended on a tongue in cheek comment about a family friend who has just set up as a manufacturer of bespoke Yurts.

Sure enough, along came one of the “I-take-myself-very-seriously-and-so-will-everyone-else” brigade, ranting on about how far we have come since the medieval era when people faced a daily struggle to survive and how people with a utopian view of medieval life are living in cloud cuckoo land. Everyone is entitled to their opinion of course but readers of this blog know Little Nicky Machiavelli is a proponent of technical progress tied to social need rather than the unbridled market forces that are truly driving us back towards the medieval sewer.
Two years ago this blog was predicting the cynically enginerered housing boom would all end in tears as people found themselves in near – slavery to their mortgage providers (how medieval is that?)
Well the rest of the world is just catching up. Read this view from and economist: Mortgaging Our Future – Neal Lawson

I tend to agree with uberblogger Andrew Keen who often complains that one of the great nonsenses of the web is that people do not read before commenting.

The Receding Prospect of Happiness (unless you live in a Yurt)

What do human beings need to live comfortably? Shelter, adequate food and clean water, warmth from clothing and fire and companionship (we are herd animals)
Add to that meaningful occupation to hold boredom at bay and everything is covered really.
What do human beings crave most? Not any of the essentials but happiness. Well the importance of essentsils only becomes apparent when we are deprived of them.
So what do we need to be happy? The essentials, freedom and security maybe?
Things we do not need to be happy are wide screen TVs, cars, MP3 players, designer labels and most of all unaffordable mortgages taken out to buy very modest houses that offer accommodation far too cramped for comfort.
So why did we ever fall for the great housing con?
We ask this question as news reports talk of a big rise in house repossessions as people fall behind with mortgage repayments, the financial markets brace themselves for further increases in interest rates and many homeowners try to rebuild their lives after devastating floods, caused in part by unrestricted building on flood plains and wetlands.
Little Nicky Machiavelli predicted two years ago that the seemingly irreversible rise in property prices would all end in tears. In Japan, where people tend to be even crazier and more sheeplike than in the west, the hundred year mortgage is already a reality. Are we really mad enough to let things go that far?

To find the roots of the obsession with owning a home we need to go back to the early part of the Industrial Revolution. As the poor were driven of the land by the social evil of enclosures, they found themselves entirely in the hands of the property owning bourgeoisie. People who did not own a property of sufficient value did not have the vote.

Laws change more quickly than attitudes of course and the feeling that someone who owned a house (or to be precise, owned a debt) were somehow morally superior to those who rented a home either from the municipal authority or a private landlord.

The social revolution of the sixties did a lot to change that. Suddenly people who had been brought up in modest, rented homes were becoming politicians, authors, members of professions. The old order was being challenged, home owners were often revealed as small minded, grasping and reactionary.

The answer was a spate of conservative terrorism. Starting in the mid nineteen – seventies, first municipal housing was stigmatised and later most of it was sold off. It became almost impossible for a couple who could not rely on parental help to find an affordable home offering good quality accommodation. Young people were forced to buy tiny, poorly built houses often thrown up on unsuitable land. This led them to attempt to trade up as soon as they could stretch their double income to an even bigger mortgage.

The Terrorists of Conservatism saw their policies were succeeding and cranked up the machine, making money easier to borrow, they promised everybody would get rich by buying and selling houses, they preached of family values but practised and promoted the values of personal greed thus putting families under pressure and causing may partnership break-ups and unhappy childhood experiences.

And they have almost succeeded in their aim, having created a new urban poor who, deprived of employment protection laws are vulnerable to abuse by unscrupulous employers.

You may remember John Prescott’s promise of the £60,000 home. It turns out these homes will actually cost £225,000 to buy. The promised price excluded land. How can young people, just out of university with a big debt hung round their necks afford that. So my g-g-g-generaation who were told to be thrifty and save for a comfortable retirement find ourselves having to dig into those retirement funds to give our children a start.

Someone recently told me I cannot blame all of societies ills on Margaret Thatcher. It may seem that I am determined to prove that person wrong. Nothing could be further from the truth, Little Nicky Machiavelli is on a mission to save the Conservative Party. Not that I support or even like them of course, but lack of a credible opposition is a very bad thing for democracy. So as I see the Tory old brigade starting to turn on Cameron and undermine his leadership I must send out the message to them, “Forget Thatcher, that bloody woman’s crackpot idealism has done nothing but harm to the country.”

Before anyone comes steaming in to tell me what a wonderful job she did for us all, remember it might be someone close to you who is next to have their job exported to a low labour cost nation by a “Private Equity” buyout (possible thanks to Thatcher) lose their home because social security does not cover second mortgages, be rehoused in a B&B because all the council’s housing stock has been sold off, suffer a break-up of their relationship and following the stress of a bitter divorce battle descend into depression, drug dependency or alcoholism.

Alternatively you could advise people to stay off the mortgage ladder by buying a weatherproof, warm and spacious Yurt from our daughter’s friend Big Al. Well we are all off to look at Big Al’s show yurt now, as he gears up to launch his new business venture. Join us in wishing him luck, he could have found a way to solve the housing crisis.

We’ll bring you more news as soon as Al’s Yurts are on the market.

The Truth Monster Bites The Broon Myth

You mortgage owners will suffer over the next few monthe, years maybe. The truth of our “most successful chancellor since WW2” and his mismanagement of the economy is starting to bite.
Interest rates, held artificially low by squeezing wage settlements in the public sector and promoting a debt based economy, are set to rise several times. This first increase will come just after the local elections and will drive into poverty people who stretched themselves to take on massive mortgages, behind the interest rate monster will come others, uspeakable horrors that could come from the pages of an H.P. Lovecraft story. Credit Squeeze, unemployment and negative equity. But most fearsome of all, The Truth Monster cannot be containded much longer.
The chancellors success is a lie. The economy, far from being successful under Brown has been driven into deep poo.
Inflation has not been under control, the books have been cooked, first by switching the quoted measure from the Retail Price Index the the Consumer Price Index which always gives a lower rate. When that ploy ran out of steam, thev simple expedient of excluding the most inflationary items, housing and fuel costs, from the calculation was used.
So when we hear of the Bank of England getting a snottogram from the Chancellor because the inflation rate had gone to 1% above target and now stands at 3% we all think “oh that’s pretty good really.”
But the real figure, when all those nasties Mr Broon does not bother to count are factored in is a savings eating 6%
To exclude such major and essential costs as housing and fuel from the figures is fraudulent. But fraud and mendacity are the hallmarks of this shoddy government and nothing will change once Blair is gone.

Get The Strength of the Fraud Companies Around You

You don’t have to be as old as I am to remember the advertising slogan “get the strength of the insurance companies around you.” That ad campaign and the images it conjured up of dry, pallid people sitting in brown, dusty offices counting money and doing endless little calculations in huge ancient ledgers persisted well into the nineteen eighties. The accompanying image of an insurance policy rolled and folded to look like a castle keep protecting a happy family of carefree parents and their two point four children also reeked of prudence and probity. Surely these people could be trusted to protect us from the consequences should we ever be foolish enough to abandon conformity and try to think for ourselves.
I’m sure it was once all true and valid but somewhere along the line, probably soon after Maggie Thatcher deregulated the financial markets the insurance companies changed and their moralistic advertising was revealed as a hypocritical sham. Your money would have been safer if you had invested in the 2:30 at Newmarket.
Chances are if you had invested in a with profits endowment policy with any of the leading providers any time in the last twenty years you would be looking at a loss. Ms Dwenna Georges knows Little Nicky speaks true for she did just that and is now out of pocket.
Let’s get this straight, the case is not that the lady will not get back anything like the sum she was led to believe the policy would return but that she will not even get back what she has paid in. On paper the loss is only £298 which if you say it quickly sounds like peanuts on a £60,000 investment but when we allow for inflation over a decade it is really quite substantial. Had Ms. Georges put her cash, £500 per month in a fuddy-duddy old Post Office savings account at two and a half per cent interest, the kind of investment that was derided by the brave new financial advisors of Maggie’s Brave New World she would now be looking, according to my very quick calculation at a lump sum of £68,900 rather than £59,700. And yet the insurance company involved has traded for years on its reputation for honesty and prudence, not to mention some intriguing ads featuring the rather attractive daughter of 007 Roger Moore, effing hell why am I being coy, its Scottish Widows although the excuses and citation of vague clauses in the very small print offered by its smarmy spokesman might sound more typical of the Mutual And Friendly Insurance Association. “Investors should be aware that their investments can go down as well as up,” or “cashing in a policy can often lead to getting back less than has been paid in,” the usual bullshit. The thing is Ms Georges thought she was buying a ten year policy, the sales literature which she still has talks of a ten year policy yet she signed up for a twenty year policy. It was a worse deal for her but a better one for the salesman.
Scottish Widows, like Norwich Union, Prudential and most of the others would like us to believe that we are all to stupid to understand money so we should not forget the endowment mortgage scandal and the pensions scandal. While these thieving scum are advertising their “ethical trading policies” they are simultaneously encouraging sales people to go out and LIE to the punters. Why? Little Nicky, having been a victim of legalised insurance fraud himself in a previous incarnation, will tell you why. Because if government and regulators made them tell the truth about their “financial products” we would all be bunging our money in Post Office Savings accounts (which pay considerably more than two and a half percent these days.

Let’s remember folks that while it was Maggie’s neo-cons who deregulated the fraud industry, the People’s Party have had nine years to change things but have only piled fuel on the fire.