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Is economic uncertainty and personal insecurity the long term norm?


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Bit depressing, at least on the face of it, but possibly worth debating.

One of the accepted wisdoms on here is that house prices and incomes are bound to incomes so will return to the long term ratio.  In the same vein, is it possible that the brief period in the UK during 2nd half of the 20th century where house prices made sense, apart from some short booms, there was social mobility, and there was no imminent health emergency, was an aberration.

Is it possible that human life is inherently a struggle with crises operating as a sort of malign, endless relay race? That it doesn't 'make sense'.

Its sad, but history suggests that even if house prices correct, wealth redistributes across the generations and the pandemic is resolved, a new set of financial and well being problems will arise to replace them.

Perhaps thinking differently and replacing the current epidemic of entitlement, and belief that things will somehow get better, with the  expectation that we will continually have, and collectively overcome, major difficulties, will make for a happier society..?

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Its an interesting point, I think there were a cocktail of factors that enabled the post ww2 generation to succeed so much. 

I also think funnily enough communism played a part as the Capitalist countries couldn't afford not to have the majority of the population on board with their way of thinking. Since the collapse of the soviet Union their has been no other challenger system that can claim to be better than capitalism. 

In regards to your title, I think economic uncertainty and personal insecurity have been prevalent since 2008, the jobs recovery that cam after this crisis were low paid and precarious and mostly in the gig economy.

I am hopeful though theat the next decade will be different as we are now getting in a position where the level of wealth inequality is just too much and already an inhibitor of economic growth. The politics also play a part, I've said this here before but I believe Corbyn had a serious chance of winning an election if it weren't for BREXIT, don't be surprised if the politics start to move left wards in the coming years especially from Tories. 

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I think there will always be struggle but also that in the last 25 years there has been a very different type of struggle.  I believe it started in the 1980 when the Fed first injected money into Wall Street to prevent total collapse.  What I have experienced is that even being in the top 1% of earners is not enough to be anything like rich in this country.  The reason being that asset prices, tax and living expenses continue to rise out of reach.  250k in the bank in 1995 was a serious bit of money and even in 2000 it would have bought something special.  My point is that the average person have zero chance of anything but a lifetime of paying most of their money into a mortgage.  This is a drag on everything apart from the BTL crowd.  What I hear from young people is they are hoping bitcoin will make them rich (homeownership) and its a sad kind of desperation.  Honestly, I’d collapse house prices and then take action to keep them low given the problems caused by debt in the last 12 years.  

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Is it possible that human life is inherently a struggle with crises operating as a sort of malign, endless relay race? That it doesn't 'make sense'.

It always has been always will be. Life and existing is fiercely competitive.  It was ever thus since the days of prehistoric man.   

 

Perhaps thinking differently and replacing the current epidemic of entitlement, and belief that things will somehow get better, with the  expectation that we will continually have, and collectively overcome, major difficulties, will make for a happier society..?

I think you are right about the huge sense of entitlement so many people have.  Agree also that the way to gain peace and sanity is to deal with a problem when we have them rather than think we are more unlucky that most of the world and wallow on misery. 

I have always found that when you start dealing with a problem you immediately feel much better about the world and yourself and your ability to deal with it. 

How many people think how lucky they are compared to the vast majority of people in Africa and Asia and the Middle East? So many people do not realise how lucky they are.  

I think that the most important things is that the people you love and care for are well.  

 

In regards to your title, I think economic uncertainty and personal insecurity have been prevalent since 2008,

Since the dawn of time.  Recessions have always been a feature of the world - the 1st one was in the 1,400 s. 

We have not had to deal with anything like the great depression or 2 world wars.  What we face is nothing we are very lucky.   

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In regards to your title, I think economic uncertainty and personal insecurity have been prevalent since 2008, the jobs recovery that cam after this crisis were low paid and precarious and mostly in the gig economy.

 

The period after WW2 was a golden era when you hear first hand accounts. 

There was a shortage of labour so everyone got paid well - hard working piece work factory workers could earn the same as a headmaster this encouraged social mobility this continued right into the 70's

Crime was very  low - I think people just sick of bloodshed. Go back further to the twenties or the original Edwardian Teddy boy era - violent street crime was much higher

The advent of factories in the 20's with Taylorism created millions of middle management jobs which looked professional in security but AI and automation is stripping that back now

In fact job insecurity is broadly the norm its not new - in fact I saw an article in the late 90's saying we will go back to a Victorian model you will either own the business (or be senior)or  be a useful artisan or professional and thus command good money (top country house cooks could earn £70k+ in todays money) everyone else including middle management will be subject to the uncertainty you talk about 

I remember my Dad earning a few pounds putting up a circus marquee in the 70's because his factory was on strike there was no realistic safety net

The difference was and is why this site exists is house prices relative to wages we are going into an era with that feel but with stupid high house prices

 

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I had to laugh though I have met Roger Bootle  a few times - he was the economic advisor of choice of an insurance company client of mine - was rubbish at forecasting anything they booted him ! I think his company was Capital Economics

That's an interesting anecdote.

Bootle did get the death of inflation right whilst failing to extrapolate that to rising house prices. He also called Brexit right.

Interestingly, Martin Wolfe isn't too far off the inflation opinion, but does show a counter argument:

https://www.ft.com/content/dea66630-d054-401a-ad1c-65ebd0d10b38

 

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The period after WW2 was a golden era when you hear first hand accounts. 

There was a shortage of labour so everyone got paid well - hard working piece work factory workers could earn the same as a headmaster this encouraged social mobility this continued right into the 70's

Crime was very  low - I think people just sick of bloodshed. Go back further to the twenties or the original Edwardian Teddy boy era - violent street crime was much higher

The advent of factories in the 20's with Taylorism created millions of middle management jobs which looked professional in security but AI and automation is stripping that back now

In fact job insecurity is broadly the norm its not new - in fact I saw an article in the late 90's saying we will go back to a Victorian model you will either own the business (or be senior)or  be a useful artisan or professional and thus command good money (top country house cooks could earn £70k+ in todays money) everyone else including middle management will be subject to the uncertainty you talk about 

I remember my Dad earning a few pounds putting up a circus marquee in the 70's because his factory was on strike there was no realistic safety net

The difference was and is why this site exists is house prices relative to wages we are going into an era with that feel but with stupid high house prices

 

It was Thatcher who devastated UK manufacturing, squandered the vast benison of North Sea oil and gas, and set in train the financialisation of the economy via the housing market (essentially, a vehicle for middle income Britons to maintain  their living standards against the blows and sleights of globalisation).

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It was Thatcher who devastated UK manufacturing, squandered the vast benison of North Sea oil and gas, and set in train the financialisation of the economy via the housing market (essentially, a vehicle for middle income Britons to maintain  their living standards against the blows and sleights of globalisation).

A quiz...which PM said this:

"Britain faces its most dangerous crisis since the war … The cosy world we were told would go on for ever, where full employment would be guaran­teed by a stroke of the Chancellor’s pen, cutting taxes, deficit spending, that cosy world is gone …

When we reject unemployment as an economic instrument – as we do – and when we reject also superficial remedies, as socialists must, then we must ask ourselves unflinchingly what is the cause of high unemployment. Quite simply and unequivocally, it is caused by paying ourselves more than the value of what we produce …

We used to think that you could spend your way out of a recession, and increase employ­ment by cutting taxes and boosting Government spending. I tell you in all candour that that option no longer exists, and that in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of infla­tion into the economy, followed by a higher level of unemployment as the next step. Higher inflation followed by higher unemployment."

Plus a Brucie Bonus point if you can guess the year....

Edited by nightowl
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That's an interesting anecdote.

Bootle did get the death of inflation right whilst failing to extrapolate that to rising house prices. He also called Brexit right.

Interestingly, Martin Wolfe isn't too far off the inflation opinion, but does show a counter argument:

https://www.ft.com/content/dea66630-d054-401a-ad1c-65ebd0d10b38

 

To be fair I suspect he was no worse or better than any of them - very nice guy as I remember 

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Peak Growth.

Most people do not work full time, not enough work for everyone unless keep breaking windows to mend them.

Too much focus on materialistic satisfaction, not enough on spiritual, nature, arts music etc....stuff that is greater than stuff.

Less greed, power and ego.....instant hits, instant highs, instant gratification......nobody cares who you are or who you think you are.;)

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It was Thatcher who devastated UK manufacturing, squandered the vast benison of North Sea oil and gas, and set in train the financialisation of the economy via the housing market (essentially, a vehicle for middle income Britons to maintain  their living standards against the blows and sleights of globalisation).

We were going down hill way before that I started my apprenticeship in Lucas industries in 1978 some machines were from the thirties - were you working in industry then ?

The British Motorcycle industry went finally pop in 1983 having done nothing to counter the technical elegance of the Japanese machines from the 60's

It was transition of empire thinking not Mrs Thathcher in the main 

Its convenient to blame Mrs Thatcher - perhaps her policies didn't help  - The housing market thing came to a shuddering halt in 1988 and it was the Tories who removed MIRAS

The obscene boom was created under Labour 1997 -2010

 

 

 

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It always has been always will be. Life and existing is fiercely competitive.  It was ever thus since the days of prehistoric man.  

That's because for the vast majority of history just getting enough to be able to scrape by has been a massive struggle. This isn't the case any more but we've still got the same instincts we evolved with and were necessary for surviving millennia ago (the same way you end up with so many obese people when food becomes easily available).

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We were going down hill way before that I started my apprenticeship in Lucas industries in 1978 some machines were from the thirties - were you working in industry then ?

If you were working over that time, then congratulations you are part of the the problem.

 

 

It was transition of empire thinking not Mrs Thathcher in the main 

Its convenient to blame Mrs Thatcher - perhaps her policies didn't help

Thatcher was obsessed with 'deregulation' and 'letting the market decide' - all that happened was we were sold off cheap and asset stripped into tax havens.  Whether Thatcher directly intended this outcome is debatable, but it was on her watch and she did nothing to curb the excesses.

 

Its convenient to blame Mrs Thatcher - perhaps her policies didn't help  - The housing market thing came to a shuddering halt in 1988 and it was the Tories who removed MIRAS

Knee jerk reaction. By that time, Lawson had already f***ed up fulfiling Thatchers dream.  I put him more responsible for the mess than Thatcher.

 

 

The obscene boom was created under Labour 1997 -2010

The joy of NuLabor inheriting the Thatcherite mantel.  Remember to get 'credibility' they took on Tory spending plans?  The boom was to reward their backers and show them they could enrich the spivs as much as the Tories. 

 

I'll give Thatcher's early intentions were honourable and she needed to be hard nosed against the Unions. What galls me is how she folded against her own wets and backers.

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Yes. Those in developing world countries have hope of better living standards, those in developed countries will plateau and drop. Pyramids schemes always fail.

Time for degrowth. 

Developing countries still seem to expect them though. I think there's an element of my previous post involved there too, a problem with "nothing's ever good enough" when it comes to material gains - why would an end to that drive have evolved when for all but a tiny fraction of human existence getting sufficient to be really comfortable was rare enough to be statistically meaningless? The difference between developing and developed countries there is that hope, and for the developing countries it really does provide real gains, whereas once developed people end up trapped in looking up for the next big thing that's really going to improve things, only to quickly feel it's tired, useless old hat and start looking to the one after that once they've got it.

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That's because for the vast majority of history just getting enough to be able to scrape by has been a massive struggle. This isn't the case any more but we've still got the same instincts we evolved with and were necessary for surviving millennia ago (the same way you end up with so many obese people when food becomes easily available).

What is there left to sell us........ads full of food, eat this, you want this or that food, not, enjoy yourselves by keep getting fatter, then pay to work it off.....or this will make you happy car, phone, perfume, drink....or bet on this and win that.....or you must sterilise and clean this and that, floor, surface, carpet, clothes, hands, face....germs are bad will be the death of you........wastage huge, excess huge.......your money can buy you happiness.....when it can't.;)

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I think there will always be struggle but also that in the last 25 years there has been a very different type of struggle.  I believe it started in the 1980 when the Fed first injected money into Wall Street to prevent total collapse.  What I have experienced is that even being in the top 1% of earners is not enough to be anything like rich in this country.  

 

I'd agree on the time frame you suggest. I'm not really old enough to remember employment conditions in the 1980s, but a lot of TV programmes from the era do reference the challenges. 

Personally I think a lot is to do with the rise of China, though declining interest rates longer term have not helped. 

I think the issue is that this has allowed asset prices, including housing, to rise faster than salaries. 

I am certainly top 1%, but as that is PAYE, I'm probably carrying 4 benefits households with my tax. 

I still get good money, but certainly my pension fund (stocks) rose by more this year than my take home pay. I've had similar situations in other years with housing values..... but does that make me richer??? 

Well perhaps versus someone with no assets. 

 

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There's a new landlord class. Life is very secure for them. They hoover up all the peasants' spare income through higher rents till they have zero. That's why life is precarious for the poor.  

But their lives will be entrenched like this for generations. It's the new normal. 

The peasants must all learn to doff their caps again. It'll scarcely be noticeable at first, small steps at a time. Only cumulatively it will be obvious.

Make no mistake,the perpetual oligarchy is back in business. 

1918-2018 was a hiatus. 1660-1914 is the norm. 

The only fly in their ointment is democracy. 

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There's a new landlord class. Life is very secure for them. They hoover up all the peasants' spare income through higher rents till they have zero. That's why life is precarious for the poor.  

But their lives will be entrenched like this for generations. It's the new normal. 

The peasants must all learn to doff their caps again. It'll scarcely be noticeable at first, small steps at a time. Only cumulatively it will be obvious.

Make no mistake,the perpetual oligarchy is back in business. 

1918-2018 was a hiatus. 1660-1914 is the norm. 

The only fly in their ointment is democracy. 

1918? Things were a pretty shitty tough depression between the wars.

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