The Way forward

It strikes me that the Credit Crunch is just one of many problems that our Global society needs to address.  We all have our own theories about the way forward which inevitably will be biased to minimise personal impact. 

The Credit Crunch appears to be have been caused by the Banks being willing to lend to people who could not afford to repay the loans.  What most of us cannot understand is why bankers in various parts of the world lent this money under these terms in the first place.  What happened to the principles of conservative banking?  It is not just the bankers who are to blame but also the borrowers some of whom must have known that they were borrowing over their limits.  The whole system then escalated when property prices rose forcing more cautious borrowers to take on bigger mortgages simply so they needed somewhere to live.  In hindsight they should not have borrowed so much but the banks should have said we won’t lend you more than 3 times your income like they did in the 60’s and 70’s.  The 90’s property debacle should have taught them that. 

However because some bank employees and loan brokers got hefty commissions from selling loans they sold as hard and high as they could with few scruples at all.  When some bankers realised what they had done they invented securitisation to off load their bad loans onto others offering “attractive” deals claiming that there was little risk.  This was how Iceland, hitherto a stable prudent sort of place came unstuck.  It does seem that the British banks which got burned so badly where those who were new to high finance, many of the former building societies and the Scottish banks.  They should have known better but they were essential cheated by some of the bigger players especially American Banks.  This does not means that they are not blameless because they too were pushing high mortgages, loans and credit cards like there was no tomorrow. 

Then came the crunch which we should have seen coming a lot sooner, some in the know probably did and set about off loading debts which they knew to be bad onto others.  Anyway it’s here and we have to deal with it nationally and as individuals.  As individuals we cut down our spending drastically to pay off debts and build up some reserves.  This fiscal prudence though may be too little too late especially if the bank is already foreclosing and you have lost your job.  By cutting our spending, for very understandable reasons, we are reducing demand for goods that are not strictly essential and adding to unemployment.  The banks now see everyone as a bad risk and so won’t lend at all.  This means that property is not selling at any price and companies cannot continue trading further adding to unemployment. 

Society has to question what benefits it gets from some classes of work and some people.  We do not need people who exploit others by taking financial advantage and giving little or nothing in return.  We do not need “celebrities” who are paid way in excess of what talents they may have.  The excesses of capitalism have simply gone too far in too many instances. 

Economists preach that economies need to constantly grow and that is true to a point but we need to recognise that economies cannot constantly expand when the planet is straining at the seams.  Some economies inevitably need to shrink and as a society we have to re-evaluate our priorities.  This is what we are going through now yet no world leader is prepared to say that saturation point has been reached and in some instances passed.  Our society only requires so much food, fuel and consumer goods. 

In many advanced countries we have more food that we need evidenced by the amount of waste and conspicuous over consumption.  Most Western countries could reduce food intake by between a third and half through eating just what we need and not throwing away good food.  This would leave more food for the poor and hungry, they have desperate need of it.  By reducing food miles a lot of fuel would also be saved reducing green house gases.  The same is essentially true of many consumer goods which we don’t really need.  Of course when we reduce our demands unemployment will rise because we have learnt to produce everything more efficiently. 

There is nothing wrong with efficiency, people should be as efficient as they possibly can because work for its own sake rather than for a purpose is just as bad consuming way over our needs.  Back in the 60’s when great strides were being made in efficiency we were told that the future would be good with more leisure time, more fulfilling lives with people working shorter hours.  To an extent that has happened, there is less work as we would expect but that work is being done by fewer people often working longer hours rather than by more people working shorter hours. 

Work has also been concentrated into larger units not always for good reasons.  Work places are often many miles from living places requiring lengthy commutes which benefit nobody taking up both fuel and time.  This has just happened yet we know it is cannot be right.    Transport of both workers and materials needs to be optimised to cut the waste of valuable resources and improve quality of life by giving us more leisure time.  We have the technology to do this already; to bring employment closer to the people rather than always expecting people to travel long expensive and time consuming journeys into cities. 

These problems need to be addressed but they must be addressed holistically with regard not only to short term profit but also to society’s needs and longer term sustainability. 

As a species we owe respect to our planet and to ourselves a better quality of life based on real needs as opposed to perceived ones; to live with fewer better quality items and less but healthier food.   

Many advances have been made in medical science and many more will be made to allow us to live better and longer lives.  Advances in medicine are good for society providing we adapt to them by effectively controlling our population and not overriding natural laws with impunity.  World population has already passed its critical point without us accepting the fact and doing something about it.  The planet cannot support so many of us yet world leaders are reluctant to say fewer children.  Better a smaller population of fulfilled happy people than masses of stressed unfulfilled miserable ones.  It will take several generations to reduce the population yet respect human dignity; some religious beliefs will need to be reconciled with this.  If we don’t address this issue it will be addressed for us by nature imposing its own limits through starvation and disease.  Mankind will quite likely aggravate the issue through conflict.  Better a managed humane program of population control than war and pestilence.  

The problem and the solutions are thankfully beginning to dawn on us.  Clinicians are more reluctant treat those who are obese or smoke heavily.  Some think that this approach is inhumane but we can all see the logic behind it and we must take responsibility for our own health by trying to live a healthy lifestyle.  Most parents feel that two children is plenty with many stopping at one child and an increasing number of people deciding they do not need to have children at all.  However many influential people still believe that there should be no limits to the size of their families and expect the rest of us simply to accept that they have rights with no responsibility.  Ultimately we have the right to impose responsibility on those who do not choose it for themselves. This may go against some faith beliefs but which is more important the future of a faith or that of humanity itself.

You may not agree with me or regard me as heretic but can you come up with a better analysis.  Just for the record I am nominally a Christian with strong humanist tendencies.  I believe that a compassionate god would put the fate of mankind and all life above that of the few who claim to follow him.

Gordon, I think lots of people would agree with what you have to say here but it's virtually impossible to bring together isn't it? If only because of their (our) greed. I will read through it again later and if I can find sufficient time will try to address some of the 'grey areas' perhaps (or at least comment further) about some of the points where I may not agree entirely.

It's a great post that's for sure, and one that I hope will stir the minds of the members such that they feel able to respond, regardless of whether they agree or not. That's what the forum is for and I thank you for putting it together. I look forward to a few replies in due course with great interest.

Thank you Gordon for your thoughts, it made me sit up and put pen to paper... 

As you refer to the Global credit crisis, I assume your observations are global too. With this in mind, I would like to add: 

 I do not see the connection between the food consumed by western nations and the starving of the world. Most nations affected by food shortages are either engulfed in internal conflict (Ethiopia, Somalia) or governed by those who have a vested interest in keeping thier population hungry (Burma, North Korea, The good old soviet block) or have rejected western advances as insult to thier faith. I would agree that nobody in a western nation should go hungry.

I also agree that a time has come for individuals to take responsibilty for decisions to smoke. It still amazes me that so many young girls in the UK take up smoking (albeit as some misguided attempt to control weight).

As far as diet is concerned, I do not see the youngsters out in the countryside as I did in my youth. This is partly due to the lack of recreation areas, partly to do with the appeal of computors and related games, and partly to do with the standard of parenting. Although thier are many good parents so many are committed to both Father and Mother working to pay for the mortgage, thats it is of little surprise that if the TV or the Grand parents can do the babysitting so be it. This then impacts on the relationship between the children and parents. I was raised with the utmost respect for my parents, but I'm concerned that respect for others is dissapearing from English culture.

As for house prices, I blame the home ownership culture within the UK. Who wants to take out a 25 year mortgage and see the price stagnate against the level of interest which has to be paid. We all want to judge house ownership as an investment. Because we live this life I think the only way to amend it is the crisis we find ourselves in, and unfortunately many people will suffer financially (I was recently informed my house was worth 45,000 GBP less than the mortgage) but hopefully the upturn will see some stability and hope for younger generations, but I can foresee the same series of events happening again in the future.

Children are the true wealth of a nation, and a reduction in the percentage of children can only be judged as a negative (nobody should want an aging population) Ultimately the decision is becoming more based on finances, that the simple desire to raise a family. Obvioulsy in developing nations where children are seen as a safeguard for the future welfare of the parents, the situation is reversed, as it componds the circle of poverty the children are born into. Even in here in Thailand there's a desire for parents to keep going at it (sorry) untill they have a son.

My thought on religion is that its a means of bringing like minded individuals together, to form a community which gives hope and faith to its followers, in many cases this is a positive to society. There is however extremist who taint a religion and bring about conflict, but it should be remembered there also non-religious extremist who bring about the same ends.

As a nation England has always exerted influence on the globe. Now in 21st Century, we recognise some of our failures and are proud of our finest hour. I think maybe we continue to meddle military when I'd prefer to see more dialogue, and I also think theres areas within the world we should get more involved. However as someone once said 'We're only human'.

Regards to all, Ian

Ian

I accept your comment about world food supplies.  Though over consumption by richer countries can push prices up so poorer countries can't afford it or sell some their food which they really need for themselves.  Your point about war and its effects on food is well made.

I don't see my you shouldn't take on a mortgage at a fair price and rate as an alternative to renting.  Even if the value of your house remains static or even falls slightly it is yours after 25 years where as rent is dead money.  The one advantage to renting is mobility but ownership gives you security in the longterm.  House price escalation above inflation is wrong not ownership.

I happen to think that population control is probably inevitable in this world and is already practised in some parts.  I believe that we probably have too many people already and that the only way to reduce population is my birth control until we reached sustainable numbers.  Yes there will be an imbalance of ages for 50 to 100 years but a time will come when an average of 2 children will be OK again.  I know that compulsory birth control is abhorrent to some but it may be necessary especially when oil runs out or global warming really takes effect.  Besides we are overdue a super volcano (Yellowstone) eruption and that will probably do it for us quicker than we would like.  That will make the credit crunch and other man made events seem like a minor scratch; it will happen though perhaps not for 1000's of years as will an asteriod strike or another ice age.  Unlike the Dinosaurs mankind has a good chance of coming through it though in greatly reduced numbers.

Ian and Gordon, a great thought provoking thread with posts that carry sensible argument on both sides. The problem is of course as usual, nothing will happen to right our considered wrongs, and then  one day we find ourselves up against it again. Perhaps the 'super volcano' that Gordon mentions will happen, or similar, and then finally we resolve it by pulling together.

As for whether or not it's good or bad to own/rent, well my thoughts on that are simply that the mortgage taken out by 'A' should be automatically passed onto 'B' in the family as I believe they do in France. Renting a property over a lifetime should also carry benefits rather than the tenant lose the money invested in what is essentially his palace! For example, the landlord who owns the property should perhaps be allowed to make an acceptable profit on his investment, a sum fixed by law, whilst in the knowledge that eventually he will have to give way to the tenant who at some stage becomes the owner.

I  need to get on with other things right now, so please excuse the rather short response in comparison but will continue to watch with great interest.

 >>>P.S Ron, If all responses are so involved maybe you should put a book of memoirs together

Nice idea Ian, but I have already got my hands full writing my second book titled 'Confounding C S Lewis'. Just don't get time to work on it!

Anyway, as I mentioned earlier.....great thread, great responses and thank you!

 Gordon,

 For most of Englands history the land has been owned, and as such the only options have been to rent or buy. I believe it is this fundamental principle which means that property and land will always be expensve, and scarcity will make it even more expensive. England is quite a compact country compared with our European neighbours, we simply don't have large tracks of cheap land to allow villages to expand. All land sold is on premise of its intended use, hence the huge difference between agricultural land and building land. Its like everybody wants a piece if the pie.

 A young man and women want to build a home to start a family, but the land owner sees the potential profit of such a development and prices the land accordingly. The banks see the potential and set interest rates and request guarentees accordingly. What started as the sum cost of land and build materials, escalates into the prices we see today.

 I know people have pursued economical build solutions but if we can't get the price of land down, and the fairness you suggested into the system, I can't see anything changing within England.

So with no change foreseeable, it would be nice to think that at least you would get value for money, but it seems even this is not achievable as the goverment allows building regulations to be significantly inferior to European or Scotish equivalents, and builders look at ways to engineer cost out of the project. (my house was built in the 1930's and all the interior walls are brick, where as my colleagues house was built in 1994 and the interior walls are paper mache, alright I exaggerate).

For myself I'd quite happily return to UK and live in a caravan in the Yorkshire dales. (Paying my way, ming you, not a b....y new age traveller!)

Regards to all.  Ian