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Archive for the category “Credit Crunch”

Only 10% Cut So Far and still in Recession

It’s not good is it? Officially back into the recession that we’ve barely left for two years, despite the Con?Dems austerity program. A program I might add that has so far only implemented just 10% of their planned cuts to expenditure.

This government, with no real mandate from the people is the most vicious I can ever recall, yes, worse even than Margaret Thatcher and particularly bad because they are utterly incompetent, arrogant, out of touch with reality and unable to listen. They were warned, not just by me and assorted other bloggers, but by many financial experts, that their plans pointed towards disaster. Not of course, disaster for them personally as most are millionaires well cushioned with their tax havens and trust funds but disaster for countless citizens of our lands.

Unemployment and fear thereof in the millions and rising including huge numbers of our young people who now may never get a job, hospital waiting lists getting longer, home repossessions on the increase and poorer tenants being compulsory moved from London and South East to the North, leading towards a North/South divide like never before. Thatcher left little public assets untouched but now even the jewel in the crown, our NHS, is being sold off for private profit along with our schools. It didn’t take a genius to predict all this would happen so it has to be assumed that these are deliberate policies conjured up for the sole benefit of those who have manipulated themselves into power.

The current situation tends to lead the electorate into a depressed condition whereby apathy takes over along with a feeling of individual isolation which in turn leads to a sense of powerlessness. We are not though powerless if we collectively recognise that the power is ours and we can take it back from those to whom we unwittingly lent it. We can demand change and change we will get but only if we work together for the benefit of us all. We must remind those who say they can’t be bothered with politics that politics is health, employment, education, social services, the cost of fuel, pensions or whether your sons or daughters are going to war.

Choices

Let’s face it this country is in a mess! It’s like a ship in a raging storm heading towards rocks and the captain shouts “Hold this course!” His Lieutenant who hopes one day to become captain shouts “Hold this course but slow down a bit.” The little cabin boy can see the rocks but feeling helpless crawls into  his hammock and puts his hands over his eyes and cotton wool in his ears, holding on to a blind trust in the madness of the officers because to do otherwise would require him to DO something.

The UK, along with other Western nations, owes money, a lot of money and so it was rightly decided to reduce this debt and this is where our witless leadership went wrong. They had no one with vision or moral integrity and so they set about taking money from those who had little, those without, they believe, power, attacking the sick, the pensioners, students, the lower paid workers who actually produce the wealth that makes us the 6th richest nation on Earth. They chose not to rein in the bankers and financial directors, they chose not to go after those who avoid paying their proper share of taxation amounting to tens of billions each year because they themselves belong to, or aspire to belong, to that elite band. They chose not to save up to £200billion by cancelling the Trident nuclear weapon system which will never be used and deters no one simply because this would deprive them of a seat at the top table of the United Nations. Instead of strutting they may have to walk like the rest of humankind.

They chose not to invest in a massive social housing programme that is desperately needed for millions of our citizens and would create and safeguard hundreds of thousands of jobs. In it’s wake this would generate spending power for the workers thus creating more employment and in addition, tax revenues. A bi product would also be a likely reduction in ever increasing housing rental costs which (some) greedy landlords are reaping in such places as London where tenants are now to be evicted because of government cuts to housing benefit. Instead they chose borrowing even more to fund rapidly increasing unemployment which is a tried and tested method of keeping wage increases to a minimum. Not such a surprising choice either when many of those currently in power like Chris Grayling, are indeed wealthy property owners.

We too though have choices. Even in this poor democracy of ours we do not have to be like the cabin boy; the power ‘they’ hold is in reality, our power that we lend to them. They stick together but they are only a few, we are millions and if only we can stick together and demand a new way, a new vision, then we can take back our power and steer our ship away from the rocks, into calmer waters of fairness, justice, democracy, co-operation and peace.

But have we the guts?

Here We Go Again!

The housing market is on the move again of that there is little doubt and of course along with it the cost of buying a home is rising albeit slowly at the present time. The highest level of unemployment in my region stands at 6% which of course is not much fun for those without work but it does mean that 94% have jobs. Car production is rising once more and bankers bonus payouts are still obscene.

All this does not mean that the recession is over but points to it at least bottoming out. The massive bill to stave off the worst of the global economy crash will still have to be paid over the next couple of decades and will have some negative impact on most of us. Most of us being the ones who played no part in the disgraceful financial gambling of the past ten to twenty years although most of us were a part of the rampant consumerism that gripped the developed world.

A few minor inconveniences have been put in place to curb some of the excesses of the financial traders but by and large as the recovery gets under way it will be business as usual and so setting us up for a repeat performance in another decade or so down the line. Bankers will be making fortunes out of the future labour of ordinary people not even born yet, houses will be purchased as investments and not as homes to live in, industry will again expand and add to the climatic pollution that is already out of control.

This global catastrophe presented the World and I suggest, the UK in particular, with a golden opportunity for change. That chance has already been squandered and we are doomed to repeat the mistakes of the past and the next time may not contain within it opportunity for change.

What Now for New Labour?

It’s anyone’s guess at the moment whether Gordon Brown will be able to survive the current political crisis although I suspect that he may hang on until the bitter end next year and the end will indeed be bitter.

When New Labour with Tony Blair were elected in 1997 the electorate would have given power to anyone rather than the Tory’s and at that point a golden opportunity was lost. With a huge majority Blair, with Brown as Chancellor, could have transformed the UK into a far better nation. Together they wasted the first two years by sticking with the economic plans put in place by the previous administration and then proceeded to expand the ‘free market economy’ and embraced and encouraged the money grubbing, me first culture of  profit before people. They increased the gap between the rich and the poor by deviously cutting the taxes of the wealthy and increasing the taxes on the less well off. They believed their own spin that the City of London could go on creating money from thin air and that house prices would increase exponentially for ever. They took us into an illegal war costing billions of Pounds and tens of thousands of lives and into another futile and expensive escapade in Afghanistan from which we have yet to be extradited. They have progressively introduced draconian state control of our citizens by way of surveillance, police powers and data linkage. Yes, they have done some good things and improvements to the NHS and Education spring to mind but even they are tarnished by the Public/Private Finance Initiative which will result in a huge outpouring of money into the private sector over many, many, years.

So what now for Gordon Brown and New Labour? The next election is lost so with nothing to lose why not make some real change in the time that is left. The MP’s expenses must of course be sorted out and pushing through some form of PR in time for the General Election would be mostly popular and have the advantage of limiting Labour’s losses. Abandon the ridiculous and unpopular ID Card Scheme along with Trident replacement and huge aircraft carriers, thus saving tens of billions of pounds. Recognise that killing Afghan tribesmen and devastating villages is an unwinnable war and in any case will do nothing to protect us from terrorist attacks here and in fact will make such attacks more likely. Some of the cash saved could be used to increase pensions towards the poverty line (£165) per week as pensioners are more likely to spend it and so help in the recovery of  industry and employment.

All of this could be done prior to the General Election and may go some way to ensuring a wiser Labour re-election in maybe five years rather than our nation suffering once again under a Tory government for ten or fifteen or more years.

The Budget

There can be little doubt that the Government should have seen the crash in the banking system and the housing market along with the approaching recession long ago. That though is now history and yesterdays budget was probably about the best that could be done in the circumstances.

There does seem to be however, a failure of government to recognise fully the seriousness of the situation and therefore a failure to make savings where they could easily be made and a failure to look at the bigger picture. For example, they could have cancelled the ridiculous I.D. Card scheme which is estimated to have a price tag of £15billion. This nation does not need two gigantic aircraft carriers at a current estimate of £6billion and defence estimates usually double by their completion. Equally we do not need to replace Trident nuclear submarines at even more billions of Pounds. We do not need either, to be fighting a futile war in Afghanistan at vast cost in cash and lives.

Virtually every household in the UK will be looking at where savings can be made and Government should do nothing less.

P.O. & E.U.

I recently wrote to my (Lib/Dem) MP to clarify their position on support for selling off part of the Post Office and Royal Mail.

We can agree that the Post Office needs a cash injection to maintain and improve what is actually a brilliant service but according to my MP it is likely to against EU law for the Government to supply this finance which leaves selling off a part of it the only viable option.

If this is indeed the case (I have written to my MEP for confirmation) there is something seriously wrong with a law that denies supporting an efficient national service while at the same time allowing huge sums to be given to bail out private banks.

G20 March

_45611601_g20protest_gettyToday at the G20 march in London the police estimate 35,000 people braved the cold winds and warnings that there might be ‘trouble’ to make clear what the people want from this meeting. By the way, going from my experience of marching with CND you can probably double that number.

Various groups issued statements and the most impressive for me was the one issued by ‘The British Muslim Initiative’ which I am happy to copy below. It is clear, precise and encompasses all the wishes expressed by the other groups.

“While the world looks with horror at the hundreds of billions of pounds being thrown at shoddy financial establishments to bail them out and to cover for huge executive bonuses, very little mention is made of the hundreds of billions that continue to be pumped into the global war machine that claims thousands of lives every day.

“Unless occupation in all its forms is seen as a repugnant manifestation of human greed and desire to over-power… and unless we see to it that poverty, disease, illiteracy and social injustice are properly and responsibly addressed, we will never be able to resolve the crisis that engulfs the world through the failure of its major financial policies and institutions.”

Financial Commonsense

With the Government spending countless billions of Pounds on rescuing banks from their excesses and the financial costs of the economic downturn, it is surely time for them to look at some of their own excesses and look to make savings.

Biometric Identity Cards for a start. The excuse for these is that they are an essential tool in protecting the UK from terrorists. Anyone but a fool can see that against a probably ‘home grown’ terrorist or any other, who is quite happy to die for his/her beliefs they are absolutely useless. As a means of adding to the control and surveillance of us all though, they are quite effective when linked with all the other systems that have crept in during the last decade. The cost is likely to be around £15billion. Well, that’s a good savings starter.

Two new aircraft carriers have been ordered complete with aircraft at an estimated £6bn and we all know that when it comes to most government projects the estimate usually doubles.

Replacement of the Trident nuclear submarines and their nuclear missiles comes in at £78bn for their 23 year life. We know we will never use them against a nuclear armed country and bring about the end of civilisation and neither will we use them against a non nuclear country in violation of International Law to be condemmed by the whole world.

We must learn that the UK is now just another small country in Europe, we stole an Empire in the past but now must move forward in a different and peaceful role. The aircraft carriers and nuclear submarines may make the admirals and air marshalls and politicians feel powerful but they are costing our nation far, far too much.

Taken from British American Security Information Council

“…cancelling the [Trident and aircraft carrier] programmes would
allow the Government to:-
•Take 1.2 pence off the basic rate of income tax; or
•Pay the capital and running costs of around 200 new hospitals; or
•Pay the capital and running costs of around 1,000 new secondary
schools in moderate /high cost areas, with 1,000 pupils each; or
•Pay £10-11 per week real increase in the basic state pension.”

Opportunity to be Lost?

The Government is doing all that it can to re-finance the banks in order to get them lending more and to help this along the Bank of England is steadily lowering interest rates which are heading towards zero. Other governments around the world are taking similar actions and Obama expected to announce a massive cash injection into the US economy.

In order for the banks to lend, someone must borrow which is pretty self evident. People and business borrow in order buy something, again pretty self evident. The more people buy and the more that they borrow in order to buy more then the faster industry works and the economy, national and global, expands . Again, it is self evident that this cannot go on indefinitely. Economic growth must hit the buffers sometime. OK I know this is Marxist theory but it is also commonsense. The global economy has hit the buffers and the political engineers are now doing all that they can to move the buffers further down the track, build up a credit based head of steam once more in order to hurtle down the same track heading for the same result at an indeterminate date in the future.

The housing market is used by many as a yardstick for the health of the economy but it’s the same story here. House prices cannot increase above inflation ad infinitum but while they do rise to dizzying heights their buyers are saddling themselves with huge debt, meaning that they have to work longer and harder and often put off having children just so they can pay the mortgage. Is this the life that we want for ourselves and for our children, if we manage to have some? Some mortgages are already crossing over to the next generation.

We have an opportunity with the current crisis to pause and take stock of what is best for our health, mental, physical and spiritual. Houses are losing their value and easing to a more sane level but have a way to go yet. Good! If government could but grasp the nettle and decree a return to mortgages being granted on the basis of 2.5 times the annual earnings of the highest earner in a partnership, life would be far more pleasant for those making the purchase. State investment in social housing would keep the building industry active and aid recovery too.

The fat cats would squeal in anguish of course but I don’t think I would lose any sleep.

Working for Nothing

A report out today by the Trades Union Congress (TUC) shows that more and more employees are working more and more hours for nothing. Some workers are giving over £5000 a year in lost overtime payments to their employers.

It is understandable that during the current financial crisis some may wish to do a little extra to perhaps help keep their company going and so secure their jobs but working long hours be it paid or unpaid is not good for health in the long run. In addition long hours inevitably reduces the productivity capability and so is counter productive.

Union members fought for over a hundred years to achieve employment rights and better conditions so it is sad to see so many employees throwing away these hard won benefits. Many workers of course don’t even join a Union having swallowed the ‘Thatcher’ line of divide and rule, got a mortgage around their necks and too scared to protest as they work longer hours for less remuneration.

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