Woolworths was heaving with bargain hunters yesterday, duped by the news stories of a big sale, and the sign in the window of 50% OFF EVERYTHING. If your eyesight was poor, you might miss the 'up to' hidden in the corner, and then wonder why there were virtually no half-price items in the store. In fact, the standard discount was 10%, some of which was the VAT cut.
Our appetite for deception hasn't been dulled by the debt crunch. If anything it's become even more acute. One seller in the market yesterday called out 'you'll never see these prices again' and I wanted to stop and ask him if he was telling the truth.
The Answer to Debt Is..... More Debt
But this pales into insignificance compared to the rabbit hole that is our economic policy. Here we are in a debt crunch (yes I know it's called the 'credit crunch' but the word 'credit' is marketing sophistry. It's debt) brought on by irresponsible lending, unsustainable levels of consumer debt, a house price bubble, and reckless borrowing at levels never seen before in the UK. So what shall we do? I know:
- The government should borrow at levels never seen before in the UK.
- Reduce interest rates, making it less painful to get into debt, whilst penalising those who've been responsible and saved money.
- As businesses struggle for cash, plough billions into the banks, the same banks who got us into this mess and last year gave bonus awards the size of an African country.
- Pass legislation on sustainability and a reduced carbon footprint, and at the same time yank every economic lever possible to raise levels of resource consumption by the general population
These are the kind of solutions that makes homoeopathy look scientific. Okay, within one story they make economic sense, but is the story the Wealth of Nations or Alice in Wonderland? Is there any society in history which has made it the moral responsibility of its citizens to spend money? There is such a desparation to re-clothe the naked Emperor which is our consumer debt society, and quickly, that surely we should be a tad suspicious. Where are the people asking fundamental questions about the system itself?
- after the short-term pain, a fall in house prices will once again enable a family to own a property without both parents having to work full time and shove their kids into (government sponsored) childcare to make it possible. At least, it will until you get clobbered with university fees. Families are suffering now because owning a home puts you at the limit of your financial resources, so if anything gives then there is no slack. But we have waited for the bubble to burst messily, rather than questioning how big it was allowed to grow in the first place.
- Where too are the voices which, when total consumer debt overtook annual GDP, reminded us that debt is money that doesn't really exist, that isn't really yours, and that one day you have to pay it back?
A story is told of a Himalayan mountaineering expedition, where the Western climbers wanted to make quick progress. For three days they walked quickly, though the sherpas seemed reluctant. On day 4 the sherpas sat down and couldn't be moved. One climber asked the sherpa translator what was happening, and he replied: "after walking so fast for 3 days, they are now waiting for their souls to catch up with their bodies."
Maybe this recession, painful though it is for impatient Westerners, is the same thing happening on a national level. We have been rushing ahead of capacity - of our personal capacity, and that of the economy and the planet. It's time to stop and let everything catch up. Maybe as we stop we'll get the time to think, reflect, and adjust.
The danger of the pre-Budget report, the interest rate cut, and the Christmas sales, is that they perpetuate the headlong rush for debt-and-spend that is the UK consumer lifestyle. We rush past the shivering, naked Emperor, and are too busy shopping to wonder why we ache, and feel distant from ourselves.
Spend or Save?
Meanwhile we plaster a terrorist attack on a rich hotel in India across our front pages, but when twice the number fall in Nigeria, nobody hears, whilst 5,000 infants a day die from preventable water-borne diseases. One estimate puts the cost per head of clean water & sanitation at £15. That's under $40billion for all 2,500,000,000 people in the world who lack either clean water or proper sanitation, which is the same as the rise in government borrowing from 2008-9. At what point did this kind of maths start adding up?
In blog threads about faith, it's not long before people like me are taunted for believing in sky fairies and the like. But which Christmas makes more sense, the one where we spend, or the one where we, and others, are saved?
this is a cross post from Touching Base, a column hosted by the Wardman Wire.