Sting in the Tail: The bubble bursts (1995)

The Sting in the Tail column from the July 1995 issue of the Socialist Standard

The bubble bursts

Bradley Stoke, near Bristol, is Europe’s largest private housing development where in 1988 people queued overnight to buy houses before they were even built.

After all, house prices were rocketing and this, along with mortgage tax relief, made buying a house seem like a sound investment, so buyers took out mortgages in the belief that they could always sell at a profit.

Then came the recession. People lost their jobs and tax relief was cut. Many homes were re-possessed and house prices tumbled. Bradley Stoke became the negative equity capital of Britain and residents renamed it “Sadly Broke”. On top of this, professor Doug Woods of the Manchester Business School predicts that house prices will stay depressed for another 20 years!

Of course, no one can be certain what any market will be like one year from now let alone 20, but what does look certain is that the agony will continue for many workers who, like those in Bradley Stoke, fell for the guff about "a property-owning democracy”.

Panel in a muddle

Remember the panel of “seven wise men” appointed by the Government in 1993 to advise it on the economy? And remember how one of them announced after their very first meeting that the other six hadn’t a clue about how the economy worked?

At their latest meeting the panel, now only six, deliberated over what the government should do about interest rates:

“Three of the Chancellor's six independent advisers believe he made a 'tactical error' in not raising rates this month. The three ‘wise men’ say the current 6.75 percent will have to rise. . . but two others oppose further rises and the sixth expect the cost of borrowing to fall. ” (Ceefax 23 May.)

Setting-up the panel was just a political stunt to reassure the public following the ERM debacle of 1993, so the government never had the slightest intention of paying any heed to what the panel would say, and it isn’t hard to see why.

Unhappy minority

A Mr Allen Hancock in the USA has been publishing a quarterly More Than Money since 1993. He is a compassionate man who produces this publication to comfort a forgotten minority of US society—the filthy rich.

Inheriting $500,000 in 1988 from his oil-rich grandfather, Mr Hancock found himself "feeling isolated, embarrassed and encumbered”. According to a recent Cornell University study, over the next 20 years $4,800 billion will be inherited in the USA and Mr Hancock is worried about the recipients.

“One third of that wealth will go to just one percent of the population, amongst whom the average will be some $1.6 million. That is going to create a lot of stress and even unhappiness, Mr Hancock argues. " (Times, 12 April.)

As the unhappy inheritors don’t seem liable to give away this money burden, don't you think a compassionate working class should abolish the stuff for them?

Elementary, My Dear Whitehouse

We are all familiar with the deductive methods of the fictitious Sherlock Holmes. Unfortunately modern detectives are not quite so logical.

In the Observer (21 May) there appeared a report of the career of a real live detective Paul Whitehouse, Chief Constable of Sussex. Mr Whitehouse is an unusual policeman. He and a contemporary were the first Cambridge graduates to enter the police for 20 years. He is also unusual in that he can make deductions based on facts, even if these are rather obvious to socialists without the benefits of a Cambridge education:

“I started in Hartlepool. I couldn't help but notice that crimes were mostly being committed by the poorer people, who lived in the poorest areas. That is an interesting starling point. "

His deductive powers are somewhat less than Holmesian though, for he obviously understands less about policing in capitalism than Alan Clark:

“Alan Clark (the former Defence Minister) would say that we are here as servants of the ruling class. I would say we are here as servants of the people. ”

A look in the future

Those wearing red rosettes were happily chanting “easy, easy” while those with the blue rosettes looked on in dismay. Rival fans at a football match? No, only Labour and Tory activists on TV after the recent local elections.

“A great night for Labour” chorused the pundits, but party leader Tony Blair warned his followers that the night could well be Labour's high point. It probably was. If Labour wins the next (general) election and takes on the task of administering British capitalism then what can we expect to see?

First, the initial euphoria will evaporate as the new government struggles in vain to provide the jobs, security, improved social services, benefits, etc. which the voters were led to expect.

Next, public anger and media hostility, now aimed at the Tories, will be turned on Labour. Its popularity will slump in the opinion polls, seats will be lost at by-elections, Labour councillors will be ousted in droves from town halls, and finally there will be exultant Tories and dismayed Labourites on TV after a future election.