A Rant

I was out last night watching Dara O’Briain at the Bristol Hippodrome and he was very entertaining, but it did mean I missed the big television debate between the party leaders. No great loss I now realise having caught up with the recording but it’s angered me enough to make me commit this rant to my blog.

During 2007/8 the banks suddenly lost a lot of money, that mostly wasn’t theirs to lose, due to the failure of a series of schemes that sold excessive unsecured debts from over-inflated property prices in America. They subsequently had to be bailed out by governments with tax payers money.
Clearly someone had to pay and in the UK the 2010 general election result decided it would be ordinary British households, with the highest burden placed on the most vulnerable through a policy known as austerity. Meanwhile the banks were given billions of pounds of magic money, through quantitative easing, with the intention that they invest in enterprise to boost the economy. Real enterprises, actually making novel things and creating new markets, were however too risky and long term for the now risk averse banks and the credit agencies (more self appointed bankers), so the enterprises they invested in were mostly more of the financial gimmicks that directly caused the credit crunch as banks and financial big players shared all this magic money amongst themselves. This forced up commodity prices (oil, copper, energy etc), stock markets and the total wealth of the top 1%, which in turn contributed to a new UK property price bubble centred on under-taxed international mega-rich buying London.
George Osborne justified austerity on the basis that without it the credit agencies (the self appointed bankers and economists with a vested interest in maintaining current economic orthodoxy) would remove our AAA* rating that was essential to keep the economy on track – of course as we all know now there was no actual growth until after he lost it.
The only growth industry witnessed by the majority of UK households during this phase of George Osborne’s “recovery” was copper theft and the attendant disruption to public transport and utilities. We have also had a trickle down of London’s property price bubble by giving the slightly better off cheaper ways to borrow money for further property purchases they can then rent to the ever increasing numbers who will never be able to get a foothold in the property ladder.
In the last 18 months we have finally started to see some consumer lead growth in the UK allowing Osborne, Cameron and Clegg to declare the success of their policy. In reality this is almost entirely down to a US/Saudi policy to collapse oil prices and thereby destabilise the Russian economy. As a result many households saw some reduction in costs of essentials through deflationary pressures that allowed them to spend a bit more elsewhere. As subsequent oil price rises are absorbed back into the economy this temporary mini-boom will undoubtedly disappear after the next election. Real growth in the economy will only come when the majority of consumers have rising incomes and more money to spend, and this will only happen through investment in them and the companies that make the things they want or need, rather than the current policy of making the top 1% increasingly cash rich with unproductive money hidden in tax havens.

Posted from WordPress for Windows Phone