Spare Houses for the Rich – No Spare Bedrooms for the Poor

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Spare Houses for the Rich – No Spare Bedrooms for the Poor

By CJ Stone, previously published here

There were two items of news this week which seemed to fit uncannily together.

One of them was about the bedroom tax, one of the new raft of welfare reforms which are being brought in by this government to cut people’s benefits. There was a story about it in last week’s Whitstable Gazette: about Ian Salt, who will lose benefits because he keeps a kidney dialysis machine in his spare room.

How selfish of him. Doesn’t he know that in this new world of austerity it is a crime to be sick? After all, we need that money to pay for banker’s bonuses, don’t we?

Effect of Bedrrom Tax CJS

But something occurred to me as I was reading the story. Spare rooms for kidney dialysis machines is one thing, but the very notion of the bedroom tax implies that people on benefits aren’t expected to have any kind of a life at all.

What about a spare bedroom for guests to stay in? What about spare rooms for the kids? Or aren’t the poor allowed friends any more? Aren’t the kids of poor parents allowed to play?

The whole philosophy is based upon the idea that the poor should only have a minimal existence. It is a return to the notion of the deserving and undeserving poor which guided the institution of the workhouse in the nineteenth century.

The second piece of news was about the right to buy scheme of the early 80s. This was the scheme, promoted by Margaret Thatcher, to sell off the nation’s housing stock to tenants.

It turns out that almost half of our old council houses are now owned by private landlords. So it’s all right for the rich to have several spare houses, but it’s not all right for the poor to have one spare bedroom.

The point about this is that a large proportion of our housing benefit over the years has gone to pay a premium to private landlords to pay off mortgages on buy to let properties; as a supplement to the private sector, in other words, rather than as a benefit to the public.

A Modern Jubilee: How to End the Recession.

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A Modern Jubilee: How to End the Recession 

According to Economist Steve Keen

By CJ Stone, previously published on HubPages

As we all know, this was the year of the Queen’s Jubilee. How can anyone have failed to notice?

Have you ever wondered where the word comes from? Obviously it denotes a celebration, a time of jubilation. But the question is, what is it we are supposed to be celebrating exactly?

Originally the word represented the ancient practice of debt forgiveness (1). In the Bible this took place at the end of seven times seven years, that is in the fiftieth year, when all debt was cancelled, all slavery was ended, and all property returned to its original owners.

As it says in Leviticus 25:10 (2): “Consecrate the fiftieth year and proclaim liberty throughout the land to all its inhabitants. It shall be a jubilee for you; each one of you is to return to his family property and each to his own clan.”

The practice was also undertaken by Bronze Age kings (3) and the Roman State. Whenever the debt burden became too great, the kings would declare an end to debt, thus ensuring the loyalty of the people. The debt ledgers would be burned and a clean slate declared.

Often this was done on the King’s anniversary. This was something seriously worth celebrating. No wonder they called it a “jubilee”.

In case you haven’t figured it out yet, this is precisely our problem now. The world is so deeply in debt that it would take several lifetimes to pay it back. Meanwhile, the people we owe it to – the bankers – are so wealthy that it would take them several lifetimes to spend it.

The debt is greater now than at the onset of the Great Depression (4).

We have seen a massive redistribution of wealth, from the less well off to the wealthiest. The people who created the banking crisis have been rewarded, while the rest of us are suffering.

And, meanwhile, nothing is being added to the world’s wealth. Bankers are not engaged in manufacture, in innovation, or in research and development. Really they are little more than administrators who happen to have the keys to the safe.

They are administering our money, and then gambling with it for their own profit. Or as the title of a famous book by William K Black (5) has it: “The Best Way to Rob a Bank Is to Own One.”

There was a story (6) in the Daily Mail recently about self-employed auto-electrician Daniel Bond who converted a double-decker bus into a home.

This is not new, of course. It’s exactly what New Age travellers were doing over thirty years ago: turning buses, lorries, horse boxes, vans, trailers, army trucks and other vehicles into mobile homes. It was one of the reasons the travellers got so comprehensively trashed back then.

It’s exactly what gypsies and Irish travellers are still doing, only their preferred type of live-in vehicle is a highly polished trailer with glittering cut-glass windows and hundreds of knick-knacks all over the place.

Irish travellers and gypsies are also still being comprehensively trashed to this day (7).

Daniel Bond’s double-decker home cost £11,000 to convert and has all the mod-cons, including a fitted kitchen and a fully-functioning bathroom. He did it because of the ridiculous house prices, he said.

 

Everyone knows that house prices are grossly inflated. Between 1998 and 2007 house prices went up, on average, by 168%. Much of the reason for the current recession has to do with the banks’ aggressive lending over this period, driving up house prices to many times average earnings and fuelling a speculative bubble.

Meanwhile the banks continue to reap the benefit of their irresponsible lending in the form of interest on over-priced mortgages. A mortgage, which once took only one person’s income to service, now often takes two.

Our whole world is creaking under the weight of debt. As economist Michael Hudson (8) said: “Debts that can’t be paid, won’t be paid”. Expect to see more live-in vehicles on our roads as the recession begins to bite and people start to lose their jobs. Not all of the vehicles will be as nice as Daniel Bond’s home.

Famously, at a briefing by academics at the London School of Economics (9) on the credit crunch of 2008, the Queen asked: “Why did nobody notice it?”

Actually, some people did.

One of the most notable amongst them was Steve Keen (10), professor of economics at the University of Western Sydney (12). Professor Keen predicted the credit crunch as early as 2005 but was ignored. He was known as “the prophet of gloom” because of his consistent warnings that levels of debt were getting unsustainably high and that this would inevitably lead to depression.

“Depression” note, not “recession”. Professor Keen argues that we are in a depression now, which is as great, if not greater, than the Great Depression of the 1930s. He also says that if current policies continue it will take at least fifteen years for us to get out of it again.

The reason that conventional economists failed to predict the crisis was that their models of how the economy works are false.

Specifically they have ignored the role of the banks. According to these economists, banks merely transfer the savings of one part of the population, which then become the borrowings of another. Thus savings become debts and cancel each other out.

This is untrue. In fact the banks drive up debt, multiplying the amount they lend by many times the original savings. People borrow because rising asset prices make it seem that they cannot lose; but in fact prices are only rising because demand is rising, pumped up by borrowing.

This is what is known as a bubble, and bubbles always burst in the end. It was the end of the housing bubble in the United States which brought about the credit crunch.

Now, here is the strange thing: Steve Keen wasn’t listened to when he predicted the financial crisis, and he isn’t being listened to now. The very same people who failed to predict the crisis are the one’s prescribing the solution, in the form of austerity.

In fact austerity only serves the banks, as the economy shrinks and companies go out of business, allowing the banks to buy up their assets at rock-bottom prices. In case you haven’t noticed yet, the shift in wealth is all heading in the same direction. The rich are getting richer, while the rest of us are getting shafted.

Currently the government is propping up the banks by creating money out of thin air – “quantitative easing” (12) – and then handing it to the banks in the hope that they will lend it to us. In other words, the government wants us to take on even more debt.

Debt is the fuel that feeds the banking system. Recent revelations (13) have shown us just how corrupt and self-serving the banks are. We don’t want more debt, we want less. If the government can create money out of thin air to give to the banks, then it can create money to pay off people’s mortgages and to build affordable housing instead.

This is Steve Keen’s solution, what he calls a modern Jubilee.

He says that rather than government creating money and then giving it to the banks, it should be giving it directly to us, the people.

We would then pay down our debts, the banks would go out of business, and we could end the depression overnight.

We’ve tried conventional economics and they have failed us.

Isn’t it time we tried unconventional economics instead?

Videos:

 Steve Keen on Hardtalk

Steve Keen on Capital Account:

Links: 

Steve Keen’s Debtwatch

Analysis of the global debt bubble and the prospects for a Great Depression

William K. Black

Bill Black is an Associate Professor of Economics and Law at the University of Missouri – Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007.

Michael Hudson

Michael Hudson’s official website on finance, real estate and the powers of neoliberalism. A critical interpretation of global economic trends through the eyes of Classical Economy.

 Notes and links:

(1)  http://en.wikipedia.org/wiki/Jubilee_(biblical)

(2)  http://www.biblegateway.com/passage/?search=Leviticus+25%3A10&version=NIV

(3)  http://michael-hudson.com/wp-content/uploads/2010/03/HudsonLostTradition.pdf

(4)  http://www.rapidtrends.com/private-debt-is-much-higher-now-than-during-the-great-depression/

(5)  http://www.huffingtonpost.com/william-k-black/

(6)  http://www.dailymail.co.uk/news/article-2166028/Property-developer-spends-11-000-turning-double-decker-bus-new-home-priced-housing-market.html

(7)  http://www.guardian.co.uk/uk/dale-farm

(8)  http://en.wikipedia.org/wiki/Michael_Hudson_(economist)

(9)  http://www2.lse.ac.uk/home.aspx

(10) http://en.wikipedia.org/wiki/Steve_Keen

(11) http://en.wikipedia.org/wiki/University_of_Western_Sydney

(12) http://cjstone.hubpages.com/hub/Useless-Idiots

(13)  http://www.bbc.co.uk/news/business-18847180

The Empire of Things

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The Empire of Things

On The Social Psychology of Looting

Previously published here:

By C J Stone

They hang the man and flog the woman,
Who steals the goose from off the common,
Yet let the greater villain loose,
That steals the common from the goose.

Seventeenth Century English protest rhyme

Riots

It was Margaret Thatcher who said there was no such thing as society. “There are individual men and women, and there are families… It’s our duty to look after ourselves and then… to look after our neighbour,” she said. “People have got the entitlements too much in mind, without the obligations. There’s no such thing as entitlement, unless someone has first met an obligation.”

She said this in an interview with Women’s Own magazine published in October 1987. Six years before that, in 1981, riots had ripped through Britain’s inner cities. There were riots in Brixton in London, in Toxteth in Liverpool, in Handsworth in Birmingham and Chapeltown in Leeds. There were further riots throughout the 80s, including Broadwater Farm in 1985, and Peckham that same year.

On coming to power in 1979, on the steps of Downing Street, Margaret Thatcher had quoted from St Francis of Assisi: “Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith. And where there is despair, may we bring hope.”

Never have a set of words proved to be less appropriate, or more vain, or less honest, or more ignorant of the truth.

The central idea behind Thatcherite policy was an economic theory known as Monetarism. The aim of Monetarism was to break the post war consensus which had given working people unprecedented wealth – a welfare state, a national health service, free education, participatory democracy – and to redistribute that wealth to where its proponents believed it should go: back to the very rich. It did this by deregulating the banks, by breaking the trade unions, by selling off public assets, and by a form of social engineering in which traditional Labour voters were lured into property ownership by selling their council houses to them at drastically reduced rates, and in this way, getting them into debt. Debt became the driving force of the new economy.

Within one year of this we had the first riot: in St Pauls in Bristol.

The Enemy Within

In 1984 Thatcher took on and defeated the Miners. She called the Miners “The Enemy Within”. They were the bastion of working class solidarity in the United Kingdom, fiercely socialist in their outlook. This came directly from their work. Mining is a dangerous job. People who work underground have to watch each other’s backs. This creates a form of solidarity which they then bring back to the surface with them, into the over ground world.*

It is out of adversity that socialism arises.

It is out of love. Solidarity is another word for love.

The National Union of Mineworkers was an organisation of love. You listen to any old Miner talking about their union, and you will hear it. You will hear it in the tone of their voice and in the words they use. It was  their  organisation, forged out of their solidarity, out of the bonds created in the terrible conditions they encountered in their work, out of their history of struggle, out of loyalty to  their class and their fierce independence. The NUM actively stood against the kind of world that Thatcher was promoting. It had to be destroyed.

We had love, and they had greed, and greed won. The defeat of the Miners lead directly to the kind of world we live in now.

*Anyone who doubts this should consider the Chilean Miners. During their first 17 days underground – before they were contacted, when they were nearly starving, and fearful that the probes might not find them – they had instituted a form of democracy, a form of socialism, which many of them say saved them from a descent into barbarity.

There was an irony here. Thatcher appealed to a form of cod patriotism. She promoted patriotic values, waving her rhetorical flag for the assembled audience. And yet she helped destroy this most British of institutions, the National Union of Mineworkers, and to undermine trade unionism as a whole – a British invention – while encouraging an invasion of international corporations in the service industry, such as McDonalds, in which trade unionism was actively banned.

Waving the patriotic flag while inviting a foreign invasion. There’s a word we normally use for this. Under other circumstances we would call it “treason”.

McWages

If the young are not initiated into the village, they will burn it down just to feel its warmth.

African proverb.

Roll on 30 years, to a new Tory government, to a new Monetarism, to a new austerity, a new Thatcherism.

And don’t be in any doubt that this is exactly what it is. When George Osborne told MPs that his deficit-cutting plan had made Britain a “safe haven in the global debt storm”, what he meant was that the financial institutions, to which he is obligated, have approved of his policies. They don’t have to loot the British economy, because Osborne is already handing the loot to them.

It’s a form of protection racket. The world has already seen what a financial mugging looks like. They’ve already broken the backs of governments in Ireland and Portugal and Greece. Give us your wealth, they say, or this is the fate that lies in store for you too. Give us your public property. Privatise, privatise, privatise, and no institution – not even the Health Service – is sacred.

That is what deficit reduction means. It means privatisation: not by the back door, but by the front door. Financial looting. It means taking British capital, currently held by the British state, and handing it over to financial institutions at a reduced rate. “Waving the patriotic flag while inviting a foreign invasion” again.

We are in the midst of an age of unprecedented structural change in our world, a return to feudalism. Feudalism arose out of the collapse of the Roman Empire. It involved a robber class living off the back of a servant class, using rent as its means. The new Feudal Lords use financial rent – indebtedness – in the same way. What we are watching is the collapse of the New Roman Empire into a new Dark Age of institutionalised plunder, a takeover by the banks.

The austerity measures are already being implemented, and it is the young who are being targeted. So tuition fees are going up to £9,000 a year, while the Education Maintenance Allowance for 16-19 year old has been scrapped. Inflation is rampant, while real wages are declining. There is no future for the young. No jobs, no education, no skills, no apprenticeships. These were mostly scrapped by Thatcher 30 years ago. A nation built on skill has been reduced to a service economy, to McJobs and McWages in a McSociety.

You can call it “muck” if you like.

As Above So Below

“When your most elite, most powerful members of society adopt a strategy of plundering…. they will develop a morality that doesn’t simply permit plundering, but valorises it. When that happens the moral structures of a society will inevitably deteriorate. In the upper classes that leads to polite looting. In the underclass it leads to street looting.”

Bill Black on the Keiser Report, 16/08/2008  

The illusion that’s been created is that we are separate beings. We are not. We are social beings. Margaret Thatcher was entirely wrong when she said there was no such thing as society. Society is the very essence of who we are. We are tied together by bonds of language, by bonds of morality, by bonds of loyalty, by bonds of family, by bonds of society, by bonds of love. You break those bonds and the social world begins to fall apart.

Society is the individual write large. The individual is society in microcosm. As above, so below. The unconscious is not underneath us, it is around us. It is not inside of us, it is outside of us. The unconscious is that part of ourselves that lies in other people. It is in the obligations we owe to the people around us, in our human interactions, only barely recognised, as we negotiate our way around our social world.

In the individual personality, rampant, out-of-control egotism is a form of mental illness. Commonly called psychopathy, it is a mental state in which the individual only concerns himself with his own gratification. So if a psychopath gets pleasure from murder, than he will murder, free from conscience, because personal gratification is his only concern. Not every psychopath is a murderer, though. There are psychopaths all around us, and everyone is capable of psychopathic behaviour. Everyone who seeks personal gratification at the expense of his fellow creatures is a psychopath to some degree.

In the social sphere, the financial sector is a kind of collective psychopath, destroying the health of the economy for its private gratification. We honour the psychopath in our current world. It is the world of private gratification of private power. We give power to the psychopath, while denuding and deriding the common good that arises from our common world.

All private wealth is won at the expense of the commons. What we are witnessing right now are the new enclosure acts, the new clearances. We are beings born of the commons and not only our economic, but also our mental and emotional health, is measured by how much we bring to the common good.

Democracy

“If you don’t find God in the next person you meet, it is a waste of time looking for him further.” Gandhi

I saw a BBC reporter interviewing a community activist in one of the riot areas. The activist compared what was happening to the Arab Spring. “But this is a democracy,” the reporter said, in a slightly hurt tone.

Is it though?

There are four pillars to a functioning democracy. We need an effective police force, a free press, rational political institutions and an efficient financial system. All of them must be regulated and free from corruption. What we have instead is a corrupt police force in hock to a corrupt press, with corrupt politicians serving the interests of a corrupt financial elite. Corruption from top to bottom. Corruption in every avenue of our public life. Top policemen taking bribes, politicians on the make, an intrusive and bullying press, distracting us with trivia and gossip, while covering up its own illegal practices, and a City of Londonwhich is entirely out of regulatory control, and which is plundering the nation’s resources for its own private gain.

And you wonder why the young riot?

The kids are looting the shops.

The banks are looting the nation.

Then we have the Labour Party – the Party created by the working class in the early part of the last century to institute socialist policies through democratic means – being seduced by high finance, and taking part in the financial rape of this country. Tony Blair amassing a personal fortune by taking us to war. Gordon Brown bailing out the banks and indebting the nation, borrowing money from the banks to give to the banks, imposing dangerous levels of debt on future generations. Peter Mandelson declaring: “We are all Thatcherites now.” What hope for us when even our own party stands against us?

The Empire of Things

“These people are living in a financial prison, and this is a prison riot.”

Max Keiser on the Keiser Report, 16/08/2008   

We’ve had over 30 years of rampant individualism, of consumerism, of me-ism and the devil take the hindmost; 30 years of mortgaging our future to pay for our present consumption; 30 years of selling off our birthright for a mess of consumerist pottage; 30 years of corruption and greed, of the worship of Things. It is an Empire of Things. So we have our technology and our consumer durables, our computers and our mobile phones, our technical baubles. Well some of us have. Many of us don’t have these Things. The young in particular, don’t have these Things. The young from the sink estates, the second and third generation underclass.

So we’ve set these Things up in place of our values. We’ve substituted them for the social ties that used to bind us together, and we’ve told the young who can’t afford these Things, that they are the only measure of value, that you don’t count unless you can flaunt these Things in the faces of your peers. That only Things count. And then society starts to break down under the pressure of the new Feudal arrangements, in which we are becoming economic vassals paying homage to debt, and the kids take to the streets in a blind fury of acquisitive excitement. And what do they do? They steal. They loot. They plunder. They obey the rules laid down on them by the Empire of Things. They collect the very Things we told them to, declaring fealty to the Things that are our Lords in the new fiefdom of debt.

They do what we tell them to do and then we punish them for it.

The bankers have plundered the economy, and they have been rewarded. The politicians have plundered their expenses, and they still sit in Parliament. The Murdoch Press have corrupted our values, and yet they are still allowed to own newspapers. The police have taken bribes, and yet they talk brazenly of the criminality of the streets.

Young people are put in gaol for the theft of a bottle of water, while bankers are given bonuses for the plunder of nations. People are losing their homes because their children are suspected of rioting, while politicians, who claimed for multiple homes on their expenses, are allowed to bleat on about rioters and looters from their privileged position in the House of Commons.

It’s at this point that I would like to agree with Margaret Thatcher. As she said: “People have got the entitlements too much in mind, without the obligations. There’s no such thing as entitlement, unless someone has first met an obligation.”

To whom do we owe the obligation? To society, of course.

Previously published at ( http://cjstone.hubpages.com/hub/The-Empire-of-Things )

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