Inflation? House Price BOOM?
vngelis | 10.06.2002 08:49
For a decade or so government propaganda apart from describing the endless boom workers are all experienceing in their lives also talk about the battle against inflation having been won. Depending of course on your situation, whether you live in a New Labour fantasy or the real world a closer look at the economics of the situation shows that the average median wage has not been able to keep up with rising costs - in an era of 'little or no inflation'. How could this be possible?
In the early 1980's whole groups of workers were paid around 300 a week if in mining or shipbuilding or carmaking. The average cost of houses then was only around 30,000. Millions worked in secure full time jobs, in an environoments where their parents had probably worked. The de-industrialisation of Britain and the closing down of thousands of factories and the decimation of millions of jobs was coupled with a 'property boom' engineered on the backs the non-building of council homes, the right to buy of council homes and the creation of flats some of which are literally the size of toilets.
It became increasingly hard for workers to have either a house or a full time job. A massive trasfer of wealth from the poor to the rich occurred and whereas in 1979 only 9% of kids growing up lived in poverty now more than 25% do. Shift work, increased hours for those employed became the norm and wages remained essentially static over a twenty year period, but with average house prices trebling. This has the knock on effect on rents which have increased as a proportion of income earned.
The deregulatory effects of global capitalism has meant that whilst parts of the world are disintegrating rapidly, currencies in freefall, local ruling class have been spiriting their money away and investing it in the city, which awash with cash ahs been obliged to create a debt fuelled 'boom' buying up property for rent or building massive office blocks. London is now spiralling out of control with prices more than 30-50% than the rest of Britain, yet with most public sector wages on a national norm.
British inflation has been 'curbed' at the expense of everything else that has been going on. WHilst manufacturing has been re-located overseas for llo labour costs, services in the UK have been by and large deregulated and the savings accrued by the state for not paying pensions or inflation linked wages as well as the fact that an oversupply of investors and tenants has led to an undersuplly of housing has created a bizzare situation that whilst house prices rise, people are actually getting poorer, the longer house prices rise.
The propaganda is that if you stay in your house long enough and if it goes up in value as it has been you will then be able to sell it and buy a castle somewhere else, preferably abroad as castles in Britain are few and far between. But this takes out of the equaiton everything else that is going on. Schools can no longer accomodate rising numbers of children, hospitals dont function proper any more more and trains do not generally arrive in their destination, so for everything esle that is collapsing around everybodys very eyes at least 'inflation' has been tamed and there is a 'property boom'.
But has it been tamed. As the collapse of currencies in the outer periphery of capitalism, from Argentina, through to S. Korea etc will have a knock on effect eventually here. The deregulatory effects of global capitalism implies that unnatainable goals are permanently introduced, wages which do not match prices, both here and abraod, banks taking more and more control of everybodys lives with the appearance of 50-100 year mortgages in other words a new era of serfdom without the guaranteed benefits ie pensions or healthcare.
A decline of a world system cannot be arrested or stopped. It can only be overthrown and replaced with something better. The only group in society who doesn't belive in either the official propaganda regarding the taming of inflation or the boom and bust cycle of economic development are the workers. As they feel it in their bones that things aint going right and the 'boom' the state talks about is the boom of the City not of working people...
vngelis
In the early 1980's whole groups of workers were paid around 300 a week if in mining or shipbuilding or carmaking. The average cost of houses then was only around 30,000. Millions worked in secure full time jobs, in an environoments where their parents had probably worked. The de-industrialisation of Britain and the closing down of thousands of factories and the decimation of millions of jobs was coupled with a 'property boom' engineered on the backs the non-building of council homes, the right to buy of council homes and the creation of flats some of which are literally the size of toilets.
It became increasingly hard for workers to have either a house or a full time job. A massive trasfer of wealth from the poor to the rich occurred and whereas in 1979 only 9% of kids growing up lived in poverty now more than 25% do. Shift work, increased hours for those employed became the norm and wages remained essentially static over a twenty year period, but with average house prices trebling. This has the knock on effect on rents which have increased as a proportion of income earned.
The deregulatory effects of global capitalism has meant that whilst parts of the world are disintegrating rapidly, currencies in freefall, local ruling class have been spiriting their money away and investing it in the city, which awash with cash ahs been obliged to create a debt fuelled 'boom' buying up property for rent or building massive office blocks. London is now spiralling out of control with prices more than 30-50% than the rest of Britain, yet with most public sector wages on a national norm.
British inflation has been 'curbed' at the expense of everything else that has been going on. WHilst manufacturing has been re-located overseas for llo labour costs, services in the UK have been by and large deregulated and the savings accrued by the state for not paying pensions or inflation linked wages as well as the fact that an oversupply of investors and tenants has led to an undersuplly of housing has created a bizzare situation that whilst house prices rise, people are actually getting poorer, the longer house prices rise.
The propaganda is that if you stay in your house long enough and if it goes up in value as it has been you will then be able to sell it and buy a castle somewhere else, preferably abroad as castles in Britain are few and far between. But this takes out of the equaiton everything else that is going on. Schools can no longer accomodate rising numbers of children, hospitals dont function proper any more more and trains do not generally arrive in their destination, so for everything esle that is collapsing around everybodys very eyes at least 'inflation' has been tamed and there is a 'property boom'.
But has it been tamed. As the collapse of currencies in the outer periphery of capitalism, from Argentina, through to S. Korea etc will have a knock on effect eventually here. The deregulatory effects of global capitalism implies that unnatainable goals are permanently introduced, wages which do not match prices, both here and abraod, banks taking more and more control of everybodys lives with the appearance of 50-100 year mortgages in other words a new era of serfdom without the guaranteed benefits ie pensions or healthcare.
A decline of a world system cannot be arrested or stopped. It can only be overthrown and replaced with something better. The only group in society who doesn't belive in either the official propaganda regarding the taming of inflation or the boom and bust cycle of economic development are the workers. As they feel it in their bones that things aint going right and the 'boom' the state talks about is the boom of the City not of working people...
vngelis
vngelis
Comments
Display the following 3 comments