Running On Empty Money

The country is running on empty.

Forget what you’ve heard about the English classes being defined by culture and leisure-time pursuits.

The classes in England are defined by money.

If it was hidden by a smoke-screen in earlier generations, it is naked now.

The solid middle class might have to pull their belts in a notch in times of economic austerity, but they will be able to sail to safety in the lifeboat of their cash savings. Not that I blame them – let’s be clear. This is just about people surviving as best they can in a fragmented society.

Available cash is what marks the middle class from the lower-middle class below them.

The lower-middle class has the aspirations and some of the jobs, but they don’t have the cash. They exist on borrowed money. Their greatest fear is to lose their house. Their mortgages are what keep them compliant.

I didn’t mention the working class. There isn’t any working class any more. As soon as the Margaret Thatcher’s ‘Right To Buy’ scheme gave Council tenants the right to buy their rented property, the working class disappeared. They are now the lower-middle class.

Well of course there are true working class people – people with nothing to protect and only their labour to give. But they don’t constitute a class now because they are too marginalised even to recognise one another.

Mark Carney On Bank Stress Tests

Shortly after the EU Referendum vote the Governor of the Bank of England, Mark Carney, sat on a panel and explained the stress tests that British banks were dealing with in the aftermath of Brexit. I listened to the whole thing – an hour of it.

If you want to listen to it, it’s on the Bank Of England website under Publications/Financial Stability

He said the banks are able to deal with twice as much stress as they faced in the days following Brexit. And they can deal with any future shocks.

A bit previous, as you might say, is what I thought. Let’s see what the situation is in six months or a year. Brett might be a slow burn.

He also said that banks needed to make credit available.

And now I have just read the August paper from the National Institute of Economic and Social Research. It starts with a quote about the blues from Gil Scott-Heron, so it can’t be all bad.

It concludes that these are risky times, but financial markets worldwide continue to have an appetite for holding UK debt. And it says that banks need to make credit available.

As I said, we have a pseudo-middle class living on borrowed money. Mark Carney didn’t argue when one of the audience asked what he meant about banks extending credit given that the ratio of average debt to available income in the UK is 132%.

And if the average is 132%, think how high it must be for some people.

That can’t go on forever. I mean, seriously, how can it just trundle on?

And if you are in the ‘poor’ sector of the population, how can you even think about getting credit from a high-street source?

Mortgage Relief On Buy-To-Let Properties

Did you see how the Government took away the tax relief on mortgages on buy-to-let properties? That’s going to put the squeeze on those landlords who can only make their sums work when they get that relief.

They will have to sell the properties, and then those with real free cash will buy up the properties. Meanwhile, slowly but surely, those who bought their Council houses will lose their properties and the gap between the rich and the poor will widen yet more.

It really is the Enclosure Acts for the twenty-first Century.

Meanwhile the new Prime Minister talks about making this a society that is fairer and includes us all. Well I shouldn’t bitch before I see how it plays out, but I have my doubts.

My Take On This

You know the story of Nero fiddling while Rome burned? Well it seems to me that the one thing that is not taken into account in these bank stress tests is when the pips start speaking for enough people to do more than just complain.

I really shouldn’t go on about this much more, because remember that we (the UK, that is) voted for the Conservatives a second time after complaining for five years that they were terrible.

We railed against their inhumanity. We asked how they could tip invalids out on the street and deny them benefits. We said it was an attack on the three pillars of the Welfare State – health, education, and housing.

And then we (the UK, that is) voted for them again.

And what did we learn? We learned that when push came to shove, we voted for ‘I’m alright Jack and let someone else suffer.’ And all that complaining was just hot air.

So maybe Britain is genuinely immune from any action to adjust society to a fairer, more inclusive version.

United By Faith and Informed By Science

My wife pointed out that Theresa May is the daughter of a vicar and Angela Merkel is the daughter of a theologian. What insights they must have into each other – something that not a lot of other politicians can share.

And did you know that Angela Merkel was a research scientist before going into politics. She holds a Doctor of Natural Sciences for her thesis on quantum chemistry, and worked as a researcher and published several papers.

I am a sucker for education.