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Archive for the tag “industry”

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.

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.

Insane World

Financial institutions are crashing around the world and governments are using taxpayers money to prop up private companies whose greed got the better of them. Not so long ago public money was again being used to ‘save’ investors in company retirement plans that crashed. Houses are being repossessed (UK) at the rate of 100 per day with worse in the USA and unemployment is steadily rising.

Roughly there is still the same amount of money in the world, there are still people needing homes to live in and people willing to engage in employment. So what has changed? The dominant global system of which we in the UK are a part, is capitalism and for that to survive it depends on a number of factors. It requires continual ever increasing production and therefore an ever expanding market to buy the products. It also needs investors to make future profits and increasingly these investors want quick short term profits.

Money, the paper and coins stuff, are all but worthless in themselves, they represent labour, work, something done by someone somewhere. Investors have money but themselves produce nothing and therefore exist by virtue of someone else’s labour. The global industry can easily supply everyone’s needs but would leave little if anything for those who wish to grab more than their share. So it follows that needs fulfilled are not enough and wants must be stimulated hence, apart from anything else, the emergence of the huge, multi ¬£billion advertising and marketing industry. Wants become acquisitiveness which becomes greed the essential fuel of capitalism. Instead of simply enjoying living with our needs fulfilled we spend our time planning for the future, buying on credit what we cannot afford now, on the assumption that we will be able to afford the repayments way into the uncertain future. We’ve even got to the ridiculous state where mortgages are crossing over from one generation to the next!

As stated earlier money can only represent labour of some kind so when that earning power becomes so far into the future that a return on investment becomes currently worthless something has to give. The erratic cycles of ‘boom and bust’ are an inevitable part of the capitalist system but it is the ‘ordinary’ global citizen who pays the price, every time.

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