Banks

[amateur51]

I'd point you in the direction of this article which seems to give a very balanced overview as to what caused the recession and why. http://en.wikipedia.org/wiki/2008%E2...obal_recession

No mention of banking deregulation in the Thatcher/Lawson years and no mention of the deliberate cranking up of personal debt in the same period.

Surely it is negligent to increase the credit available to someone who does not pay off his/her monthly balance and yet this is what the banks did. Yes card customers were naive, some were greedy, but we were also being told that house price rises would sort it all out for us.

Also, you cannot also leave out the obsession with home ownership of British and American administrations from Thatcher/Reagan onwards.People were being sold mortgages that ultimately they could not pay off and that was way before the house price crash period.

Young people in financial literacy programmes are told that they should always read the small print in financial documents so that they are aware of what they're taking on. But what is the largest financial investment that most people are gouing to sign up for? A mortgage, where you don't know how much the loan will ciost until the last payment is made. Crackers

[ahinton]

No mention of banking deregulation in the Thatcher/Lawson years and no mention of the deliberate cranking up of personal debt in the same period.

But it wasn't just personal debt; what about SME debt? corporate debt? local and natio0nal government debt?

Surely it is negligent to increase the credit available to someone who does not pay off his/her monthly balance and yet this is what the banks did. Yes card customers were naive, some were greedy, but we were also being told that house price rises would sort it all out for us.

It certainly doesn't seem especially sensible on the face of it but, given that no one today can have any idea of his/her personal financial circumstances or of relevant interest rate fluctuations in advance for the term of any loan that they might need to take up and therefore no idea as to how easy or difficult it might be or become to service it throughout, one might as well argue that no one should take up any loan because it might prove too risky - and, once again, we're not just talking personal loans here.

Also, you cannot also leave out the obsession with home ownership of British and American administrations from Thatcher/Reagan onwards.People were being sold mortgages that ultimately they could not pay off and that was way before the house price crash period.

Whilst it is indeed true that this happened to a lot of people, others managed to work the market to their advantage in the early days and make profits out of it. All that said, however, someone has to own the housing stock, be it the residents or the landlords and, since that someone usually has to assume a risk by borrowing to purchase it, this wasn't just a problem that emerged from and as a direct consequence of the practical application of Thatchereaganomics. The big problem is that, like anything else, markets in homes are affected by supply and demand and, because of this, prices rose vastly and far too many people found themselves in a situation (as indeed many of them still do) where the relationship between their salaries and their mortgage commitments became a nonsense; if the average UK gross annual salary is around £26k and the average UK house price some 7 times that figure, having one's own home seems like no more than a pipe-dream but, since rents usually reflect and are otherwise affected by house prices, it's almost as difficult for some people to be able to afford their homes as it is for them to finance mortgages on them.

Young people in financial literacy programmes are told that they should always read the small print in financial documents so that they are aware of what they're taking on. But what is the largest financial investment that most people are gouing to sign up for? A mortgage, where you don't know how much the loan will ciost until the last payment is made. Crackers

But what's new about that? Even if you can obtain a mortgage with a fixed rate for its entire term, how can you tell in advance how well you might be able to afford the repayments? The other side of the problem, however, is that were everyone, every business, every local authority and every national government to decline to take borrowing risks, borrowing would be cut at a stroke which, whilst that might sound OK on the surface, it would mean that the economy would grind to a halt. Furthermore, when one's country is in hock to the extent that Britain is, the old Bardic homily in praise of the perceived virtues of being neither a borrower or a lender is clearly put out to grass...

[amateur51]

Some European and Scandinavian societies meet the housing needs of their citizens through a predominantly private-rented sector, so why can't UK?

And remember that this Coalition Government plans that social housing rwents will be ratchetted up to a point where they will be 80% iof market (ie private-rented) rents. This is a recipe for disaster and a massive rise in homelessness and poverrty. The private-rented market is unregulated so the Housing Benefit (HB) bill will escalate. But the HB budget is being capped so rentersd will have to spend more and more of their income on housing. And remember that the bulk of HB already goes to people in work whose earnings do not enable them to rent wuthout assistance in the private-rented sector, hence their need for HB.

As the man said, crackers

[MrGongGong]

And remember that this Coalition Government plans that social housing rwents will be ratchetted up to a point where they will be 80% iof market (ie private-rented) rents. This is a recipe for disaster and a massive rise in homelessness and poverrty. :

Surely the young folks could ask granny to sell a couple of paintings and then buy a house with the profit ?

[ahinton]

I think they could get you for the score though

http://www.schirmer.com/default.aspx...kId_2874=33579

Ouch! I'll bear that in mind next time I find that I have no option but to fly Aeroleary!

[ahinton]

Some European and Scandinavian societies meet the housing needs of their citizens through a predominantly private-rented sector, so why can't UK?

How and to what extent do they do this and where? It seems to me that, unless tax concessions are successfully and usefully applied to rents received by private landlords, borrowing to buy property to rent out is likely to remain problematic and this problem has to be viewed from the landlord's perspective as well as from that of the tenant; even in today's comparatively depressed residential property market, there's no shortage of landlords considering selling the properties that they let on the grounds that they expect to do better financially by channelling the net proceeds into other investment vehicles and, when this happens on any scale, rents start to rise because there's less property available for rental (supply and demand again). If you have information on workable schemes that are in operation in other European countries, however, do let us know about these.

I'm only too well aware of the fact that HB's being provided to people in work because their net salaries are insufficient to fund their rent; profoundly unsatisfactory as I've no doubt we agree that this situation is, what's the solution? Not withdrawal of such benefit, that' for sure, since that would only exacerbate the problem and create new problems.

And remember that this Coalition Government plans that social housing rwents will be ratchetted up to a point where they will be 80% iof market (ie private-rented) rents. This is a recipe for disaster and a massive rise in homelessness and poverrty. The private-rented market is unregulated so the Housing Benefit (HB) bill will escalate. But the HB budget is being capped so rentersd will have to spend more and more of their income on housing. And remember that the bulk of HB already goes to people in work whose earnings do not enable them to rent wuthout assistance in the private-rented sector, hence their need for HB.

As the man said, crackers

Well, this much is hopelessly unworkable as a "solution", even if it might fall just short of actually being "crackers", but what do you think that the government should instead do in the hope of addressing these issues effectively?

[amateur51]

The Joseph Rowntree Foundation (JRF) in York is always a good starting point for this sort of information.

This is a research report and a summary:

British social rented housing in a European context

http://www.jrf.org.uk/publications/british-social-rented-housing-european-context

Sadly I see that it is now 10 years old.

[ahinton]

The Joseph Rowntree Foundation (JRF) in York is always a good starting point for this sort of information.

This is a research report and a summary:

British social rented housing in a European context

http://www.jrf.org.uk/publications/british-social-rented-housing-european-context

Sadly I see that it is now 10 years old.

Interesting material (not that I've time to read the entire paper right now!) but, as you observe, it's almost 11 years old now and whatever changes that have taken place in the housing market both purchased and social/private rented since its publication, whilst they may not have brought about general improvements, have certainly been substantial. Much surely depends on the extent of available housing stock and its prices for both purchase and rent. I repeat that all housing has to be owned by someone and that someone usually has to assume the risks attached to purchasing and maintaining it and acting reasonably and in accordance with landlord/tenant laws, whatever system is adopted.

[Resurrection Man]

.............

Well, this much is hopelessly unworkable as a "solution", even if it might fall just short of actually being "crackers", but what do you think that the government should instead do in the hope of addressing these issues effectively?

A good question and I look forward to the reply. All well and good berating Govts etc but much harder to come up with a viable alternative.

[Serial_Apologist]

Ah, so that's it! I don't fly with Ryanair very often but, when I do, I ought perhaps to be thankful that I am a composer rather than a performer and I've certainly never been charged extra for carrying a score that falls within their baggage allowance. Mon Dieu! - what do they do about conductors' batons, one wonders?...

Oompa oompa ooompa
Stick it oop ther joompas
Oompa oompa...

etc etc

[MrGongGong]

A good question and I look forward to the reply. All well and good berating Govts etc but much harder to come up with a viable alternative.

err
They DO set themselves up as the folk who know

They don't ask me how to find the zero crossings in an audio file or to make a live processing setup in audiomulch

so much for the wonderful experience that dave and his chums supposedly have then

[ahinton]

err
They DO set themselves up as the folk who know

They don't ask me how to find the zero crossings in an audio file or to make a live processing setup in audiomulch

so much for the wonderful experience that dave and his chums supposedly have then

As one who has asked (but yet to receive a viable reply to) a question broadly similar to that posed by Resurrection Man, my concern is with "Dave and his chums" only to the extent that they're the ones in power now; it is, however, a question that could as easily have been posed in respect of any of their predecessors and would have been of no less importance. "Dave and his chums" and their predecessors do not so much "set themselves up as the folk who know" as they're put in place by the majority of the electorate in the hope of their acting as such. Anyway, that is to some extent beside the point in that the mere matter of who sets them up to be what and why does not provide an answer to what they should do to resolve the problem; I'm still waiting to hear some ideas on that.

[amateur51]

A good question and I look forward to the reply. All well and good berating Govts etc but much harder to come up with a viable alternative.

I have not set myself up as having the answer but Government has . I have offered my criticism of their answer, that's all.

However a good ol' fashioned Keynes local authority/housing association building programme would provide a huge stimulus to the economy in several forms and it is something that this pairing knows how to do. A much-needed review of housing tenancies would be required too.We have to get away from this madness of the only serious housing choice being home ownership that for so many people has proved to be the road to serial unhappiness & poverty.

I used to work for a charitable organisation that derived its income from a mix of investments in the stock market, bonds, etc (we even looked at hedge funds) and investments in commercial property. I was on the board of a homelessness housing assiciation developer for eighteen years up to 2004 too.

[handsomefortune]

(JRF) in York is always a good starting point for this sort of information.

tis! it's the basis for a lot of high quality sustainable community development.....(what's left of the latter, under tory rule in a global recession)

let's hope that jrf research hasn't been affected in the same way as other research foundations have been stripped back to the bone, in terms of resources, and just at a time when info updates are crucial in terms of emphasising the facts, broader context, surrounding the disaster of wide scale economic and social exclusion, and 'property wars'.

hopefully, the foundation is currently working on an update soon to be published? obviously, the picture ten+ yrs ago is completely different to now...

meanwhile, private landlords not only ramp up hb to the max, but also seem to be allowed to have year upon year of debris, and other anti social problems if they let to students.

i regularly watch a local landlord screaming off in his huge white van, leaving his many properties strewn with garbage...even on jubilee weekend, and when the olympic torch procession was passing just a street away. you'd think he makes enough money renting at extortionate levels to his student tenants, to go to the tip with the rubbish from his tenants....but no!! the local authority responds by very occasionally labeling fly tipped sofas, mattresses etc which is just a bit lame ....considering the inconvenience on pavements, and eye sore factor.

seemingly, many landlords are currently a rule only unto themselves. it's this that is the root of so many problems in 'fractured' neighborhoods, both politically, and economically as well as socially. meanwhile astonishingly, central govt rarely look at how other countries approach their housing issues!

but then evidently politicians, themselves, are busy 'buy to letting' too - which might explain the increasingly peculiar approach here in 'tiny' blighty.

now that local authorities are taking homes from 'disobedient' social housing tenants, the social divide and unfairness is an increasing problem ....though torys seem to enjoy bringing this 'competitive' approach about, it seems to be inherent to their policies as (supposed) 'politicians'. surely practically anyone can cause chaos and hardship...the question is would they want to?! it's this spirit of unfairness which is interpreted by local authorities as a license to 'experiment' : ... accessing european funds on behalf of neighbourhoods to do up whole streets, and supposedly 'improve things': only to divide refurbished buildings up into many teeny tiny shops ....AND allow a multi national supermarket to also buy a huge chunk of land for a store, undercutting small shops price wise.

presumably this is just so that local authorities can grab as much business rates on divided shops & property hyped to the maximum?

odd then, that existing businesses don't move in to these 'fantastic' properties, only new migrants are naive enough to swallow the hype, and start up a new business under these conditions. yet this section of communities have the least access to support from inflexible, unresponsive local banking professionals. if long term traders find this development shocking, and wouldn't dream of moving trade to the same cramped 'shoplets' ....what does this imply? minus the relevant non biast research such as jrf provides....we'll just have to guess, wait, and see presumably. perhaps sustainable projects aren't actually desirable at all....? sustainability itself is just a whim.... apparently!

[Serial_Apologist]

Well, this much is hopelessly unworkable as a "solution", even if it might fall just short of actually being "crackers", but what do you think that the government should instead do in the hope of addressing these issues effectively?

As so often the case, you pick up a small symptom of a problem that is systemic to capitalism and run with it to the exclusion of its... systematicy.

It can't be solved under the present system is the short and long answer because capitalism has the intrinsic need to grow written into the intersticices of its modi operandi, my Latin being a far-off memory and probably incorrect.

Any solution would I feel have to pose at least the following sine qua non questions

Why is growth intrinsic to capitalism and what are its consequences?
What drives the cycles of boom and recession, and need they be endemic to any economic and political system?
Is greed inevitable or are we being conditioned into believing it so?
If so, by whom, to what ends, and why?
If not, how is it possible to mistrust our own nature without being in contradiction?
What makes competition allegedly thought by most the driving motivator of human activity and is it inevitable?
Would we all automatically sink into indolence and moral degeneracy without competition?
If not, how could Alpha Male/Female behaviour be more positively redirected than now, and by whom?
How would who is in charge be decided, how much paid and be made accountable?
What is the role and function of reproduction - biological, ideological, by virtue of historical amnesia etc - under capitalism?
Why build on flood plains or in earthquake zones? Population explosion?
What is the function of product obsolescence?
What is the function of the fashion industry?
Is it not possible that, unpressurised, we could decide on material possessions when enough is enough?
What is the function of blame under capitalism?
Why is grass always said to be greener on the other side of the wall/fence, hedge... you choice of barrier?
What if everyone saw through the "truths" of religion right now?
Would there be any need for a need to go on living?
Which way would the US populace vote in the forthcoming presidential election?

I'll probably think up many more after posting this...

Each one is either deserving or not at all of a thread of its own.

I was watching an old video of a programme titled "Spend spend spend" last night in which various pundits, sociologists, psychologists etc declared that we were all hooked on consumption, and that only a major catastrophy within the system would force us to think, nay feel differently about ourselves, others and our place in the world and act accordingly. It's potentially the first time in my life certainly since 1968 that opportunities for deep questioning have been so acutely posed, and I would think, more acutely, since capitalism wasn't really on the barbecue back then.