Welcome to subprime Britain. How scared should you be?

Alex Webb

Interesting asd probably true, as far as the electoral maths goes. But which party intends to bring an end to our love affair with home ownership? None as far as I can see. Which party is proposing tighter credit? None. Which party is proposing to move us towards a producing and saving society, instead of a this consumerist orgy? None. Which party has seriously proposed there's more to life than greed and material wealth? None that I've heard of. So don't expect anything to change, whoever's in power ...

Ian Sargent

The clear implication is that 'Dave' would surf into office on a wave of discontent, not be propelled there by a surge of belief in Conservative policies. There's still a big problem with Tory credibility out here in the real world, and Luton Lady is unlikely to feel empathy with any of the Bullingdon Buffoons currently striving for high office.

David Short

All the Government has to do is to reform our Dickensian laws as they relate to debt, bankruptcy, liquidators and bailiff.

And not before time.

Water

Alex Webb, nice one.

Water

I often find myself wondering "Does Gordon Brown care about this country and it's people?"

Remote terminal

Water.
No he doesn't.

john problem

What is really curious is how we, the voters, have managed to put in power such a continuing succession of disastrous governments. Are we thick?

David Kay

Labour voters won't change - too thick. Or in a Graudian reader sense too thick to use their intelligence because " Margaret Thatcher was so awful, darling and the current lot are still the grasping boss class"
No danger for Gordon.

Jennie

David Short, I agree. For example, the government could pass legislation to force companies that pushed credit recklessly at people during the bubble era to write off, without strings, substantial amounts of the money owed by their debtors. The bulk of these debts is cumulative interest at greedy rates anyway.

praxis22

The politics of financial pain are those of right wing populism and always have been. So the Tories will be preaching orthodox financial piety & probity once again, and do the usual bait and switch, much the same as Mr Brown preaching prudence, while proceeding to let banks behave and lend irresponsibly. "everyone wants to go to heaven, nobody wants to die"

As for being a 'burdened optimist' I presume that's code for 'financially illiterate' or 'daydream believer' or simply 'out of her depth' I think the real story here is that people are being preyed on by those who have a vested interest in not telling the whole truth. First by those who stood to earn a handsome profit from "equity release" schemes, as well as those with something to sell. Did anyone sees the loan ad that was banned by the ASA? It targetted young women, bright clourful cartoons that basically said, it's OK, to chalk up debt on plastic to impress the boy with the nice eyes, go ahead, why wait, you deserve it.

Of course once it goes bad we have politicians of one stripe or another looking to make political hey, by telling the poor abused wretches that "we understand you, you're safe with us" while actively preying on thier fears for the sake of gaining or maintaining power.

If economics teaches us anything it's that we should always look at the incentives in any given proposition, somebody is always profiting, often at our expense.

Of interest in this, is this article, (American) "Why people believe weird things about money"
http://www.latimes.com/news/opinion/la-op-schermer13jan13,0,1195880.story?coll=la-opinion-rightrail

Water

Praxis22 you stated "think the real story here is that people are being preyed on by those who have a vested interest in not telling the whole truth" seems about right. I've worked as a bailiff and for a credit card debt recovery company and the only truth anyone is concerned with is how to get as much money as possible whilst doubly entrenching the customer.

It’s interesting even to look at the manner in which the word debt has evolved with regards to etymology and moral psychology as Nietzsche stated “‘Schuld’ (‘guilt’) descends from the very material concept of ‘Schulden’ (‘debts’)” and people feel guilty (or inadequate at the very least) about not adhering to social norms and plastic dreams which are very much out of their financial depth.

Water

praxis22 you stated "So the Tories will be preaching orthodox financial piety & probity once again, and do the usual bait and switch" hence Alex Webb summed it up in saying “So don't expect anything to change, whoever's in power” as Rousseau would have it “man was born free, and he is everywhere in chains” very much so, financial fetters. As long as the superficial reign official nothing will change.

Water

Parxis the link to Shermers article was great "loss aversion appears to be a trait we've inherited genetically because it is found in other primates" but it’s how this trait has been played with to alter peoples group dynamics and how this reciprocally effects spending probabilities that is most interesting. The human psyche has received a whole onslaught of financial iatrogenic cuts as Huxley would have it “external constraints have been replaced with internal compulsion”.

Water

The rest as well please

Water

Thank you

john L

yet another article about the coming housing bust. Of course city centre new build apartments were overpriced (who wants to live in them) and some areas are vulnerable, but people still have to live somewhere and people want to own their own house. Taking a survey of credit card debt or judgements as a basis for the broader housing market is a bit of a nonsense as the two are only tangentially related. The problem with 1992 was (i) people lost their jobs (ii) interest rates were very high. Neither situation holds at the moment.

The tone of this article and the comments is, to paraprase: people are too irresponsible to aspire to own their own home, too stupid to understand what they can safely spend. Well it is all a bit snobbish in my view - I am of course an educated person quite capable of making good financial decisions, but the great unwashed cannot. People should free themselves from financial chains, well apart from me as I like living in a nice house.

Water

John L you stated "Taking a survey of credit card debt or judgements as a basis for the broader housing market is a bit of a nonsense as the two are only tangentially related" I respect your point of view but strongly disagree and think you may have missed the point if you are indeed alluding to me (since you have mentioned credit cards I will run with this thought). Any claims as to relation are based with reference to consumerist aspirations [and the cognitive quagmires to which they are trapped] which directly not ‘tangentially’ aids cyclical debt… thus it is by no means nonsensical. Also if you live in a 'nice house' whether you are free ultimately boils down to your existential disposition. Though, unless you own the house you won't have a 'free hold' which would infer it's not truly and freely in you possession.

Dennis

The problem isn't sub-prime.
Never before have so many governments printed so much money.
When this comes home to roost, sub prime and 1927 will look like Sunday School picnics.
If you have cash, take refuge in property and movable assets.

lee Hegarty

The issue of the UK economy is undoubtedly looming large on the political landscape BUT to say it "back at the heart of politics" is wrong. Likewise "the next election will be won by the party that is most trusted to provide it" is also in, my opinion, totally wrong and the reason why the Conservative party has been expelled to the political wilderness.
Unfortunately in this pop idol x factor big brother public relation dominated society it is about engaging and relating with the voting public.
John Major's strong economy was no use against the 'people friendly' Tony Blair. Removing a late 30's (ish) bald flat toned orator William Hague and replacing him with a late 30's (ish) bald flat toned orator Ian Duncan Smith proved this concept was not grasped, as does the connotations of this article.

Karl Dunkerley

As someone who actually lives in Brightside - the primest of the sub-prime areas - I am at a loss to explain this finding.

Okay, so this is not some paradise but nor does it show any obvious signs of being a creidtor's hell. There are a lot of poor people. There are streets with low occupancy but there is no mass despondency. This is no ghetto of despair.

I've travelled large parts of this country including the worst parts of Manchester, Liverpool and even Glasgow and London and Brightside is far removed from these sloughs of decay.

Many parts are much better than they were 10 and 15 years ago.

So how come this area is classed as so sub-prime?

Maybe you should investigate how the statisticians have determined this. Especially as this article has been misquoted in the Daily Mail as being a negative equity hotspot. Check the Land Registry - prices are still rising greatly and occupancy is rising as conditions improve.

Karl Dunkerley aka Mystified of Brightside.

jon livesey

There is one unusual aspect to this article, which is that its suggestions are susceptible to test. Come the next election, we will indeed be able to see what happens in Labour's marginals.

The fact that comments so far seem totally to have missed this in favour of some pretty daft woolgathering makes me wonder if the UK has yet come to terms with the gathering economic storm, or if the voters still think of politics in terms of what colour of tie politicians wear.

David Short

None of this makes sense.