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Labour’s Universal Basic Income is nothing but a temporary bridge across a black hole of a problem that none of the Parties understand or are prepared to deal with

November 10, 2019 Leave a comment

89447a1c-d5a9-4158-b167-d12c506c5774The headlines this morning make painful reading to anyone who can see the real costs of The Labour Party’s plans and what they will involve.

Actually, it’s not the suggested figure of £1.2 Trillion over five years spent on public services that the real problem.

It’s the reality that this child-in-a-sweet-shop-with-birthday-money approach to fixing public services involves nothing more original than throwing money at the problems with no investment for the future or genuine long-term returns involved.

All well and good you might say if your only priority is to get a government elected and indefinitely keep that power.

But for the millions of British People who are experiencing the arse end of all that’s wrong in this Country each and every day, any positive impact from Labour’s great giveaway will be short lived once the default causes of all these societal ills have quickly bubbled back up to the surface again through the pile of vaporising money that these cynical left-wing politicians tell us they have in store.

The hollow promise that comes with a Universal Basic Income is the suggestion that poverty can be addressed as simply as giving everyone the same amount of money each month before spending on everything that life demands of us begins.

It’s a nice idea. And for people caught in a poverty trap with little or nothing, the promise of a lump of no-strings-attached cash each month is an electoral vote winner that is likely to go far.

If only life were really that simple.

The biggest problem that people on or below the poverty line in this Country face is not what income they have. It’s keeping control of the cost of everything that is essential to live, get by and to enjoy a basic or acceptable standard of living or quality of life.

Identifying the amount of money, or the combination of a Universal Basic Income payment plus any benefits that might be payable that are involved right now, today, doesn’t address the issue of what they will cost thereafter. Nor does it address the issue of how the real cost of living got to where it is today.

The reason for this is one of the greatest cultural ills of business today.

It is the exploitation of every opportunity to make profit wherever and whenever possible. Not because that’s what makes businesses work and function. But simply becuase the circumstances exist where they choose to because they legally can.

Too many profit hungry business owners, managers, shareholders, agents, financiers and speculators are taking too much money out of a system where there would otherwise be plenty that was affordable for all. They interrupt and place themselves within supply chains, production chains and service chains without adding any value to the process themselves – and this process often happens more than once.

Gandhi once said that ‘Earth provides enough to satisfy every mans need, but not every mans greed’. Our politicians clearly don’t read and if they did, they certainly don’t listen.

Whilst an argument can be made that Labours Election Manifesto includes a plan to re-nationalise essential public industries such as power, water and rail, the reality that they have no plans to address the institutional problems that exist within the Public Sector mean that the profits currently being sucked out of these industries by private shareholders will simply be redistributed to other destinations of a self-serving kind, whilst the service itself and cost to users will progressively get even worse whilst costing us all even more.

Addressing the cost and regulating the freedom of the private interests that you can never realistically remove from all manufacturing and production, services and supply, to charge whatever they want for goods and services that are essential to providing a basic quality of life for us all, should therefore be the primary aim of any political party that really wants to improve life.

It should be a simple task for politicians who genuinely care and intend to lift the poorest in society out of the circumstances that are a vicious circle that condemn them to want, debt and an experience of life that nobody in the 21st Century UK should ever have.

Labour, the Liberal Democrats, the Conservatives – in fact none of the Political Parties we have on offer to us as Voters today, really have any idea nor understanding of how the monetary system works. Yet they are obsessed with monetary theory.

They don’t know how business operates. But they believe themselves qualified to regulate or deregulate at will.

They certainly have no appreciation of how technology is not only destroying and dehumanising relationships. But is also making the ability of the unscrupulous to exploit others and the vulnerable easier than it ever has been before.

The people or so-called politicians that we already have and that we are about to elect again in December are not fit to rule over us. They have no idea of what the problems facing this country really are and how they affect people of all demographics and backgrounds. They have no vision of how those problems can be addressed. And they certainly have no idea of what they really need to do to begin solving any of them.

Until we have politicians and leaders in this country who do see, understand and are prepared to do whatever it is that is necessary to deal with the issues that this Country faces, the fuckwits that we have in power will play around only with what they perceive to be the problems that others outside the Westminster bubble face, whilst what amounts to their tinkering makes everything everyone else is experiencing a whole lot worse.

 

New houses never lower prices within their local ‘market’ and the Persimmon CEO’s £110 Million Bonus gives our ‘housing crisis’ the lie

January 9, 2018 Leave a comment

Money HousesHousing has become one of the hot political issues of our time. To read and hear about it in the media, it has become easy to conclude that the Government, our Councils, Housing Associations and Builders alike all share the view that we are in a housing crisis. The picture they paint suggests that they are all doing everything that they possibly can. But should we all really believe?

Laid bare, the lack of housing really does look nothing like the story we are being presented. Immigration inflating real need exponentially has become as much an unspoken truth across the whole country, as it has that 2nd homeowners are leaving seaside and rural property empty for much of the year, whilst they add nothing financially to the communities in which they don’t have time to genuinely reside.

“We need to build more homes” has become the mantra of the many. Yet the real beneficiaries of this process will not be the people who will end up living in many of them. Nor will it be the Government which is operating on the premise that money is the only way to solve any problem, no matter what it might be.

The real beneficiaries of the push to create housing will be the builders and the bankers who finance them, whose real take from all the public money which is being fire-hosed at them is only too well illustrated by the bonus payment being made to the CEO of Persimmon Homes.

Under the auspices of self-serving government at all levels and the ineptitude of policy making and long term strategy which has been rolled out in real time within current planning policy, Builders and Developers of all kinds have found themselves within what can only be described as a smorgasbord of discount and profit and the epitome of the one-sided win-win.

Deals are and have been done, not on the basis of what is best for us all. For if that were the true intention, there would be little need for deals of this kind.

Deals are being done, because the focus of this housing crisis is little more than money and profit itself.

People young and old are being out priced in all parts of the housing market, not because prices reflect the true value of houses and the market, but because the system and government policy is facilitating house builders, mortgage lenders and private landlords to take us all on one massive, great big bubble-building ride.

The evidence is not difficult to find. Wherever we may live, new housing developments are never far away. Yet when homes are released, we never see prices being lowered nearby.

Lower house prices within the communities in which these additional homes are built would be the logical outcome within any localised market which was genuinely left to itself to determine and decide.

Instead this so-called ‘crisis’ continually goes on unsolved, whilst we are being sleepwalked into a national travesty in the shape of an unsustainable housing price bubble which is guaranteed to explode.

When it does, those profiteering and responsible now will be the first to run and hide.

image thanks to unknown

The ‘rent’ economy is enslaving us all, creating money for nothing for the ‘asset rich’ and progressively extending poverty to all the ‘paying poor’

December 28, 2017 Leave a comment

download (10)Every day we are hearing and reading stories about wage stagnation, price escalation, homelessness of the kind where young people can’t afford their own place, spiralling personal debt and a whole range of stories which relate to the cost of living. Stories that are repeatedly telling us that maintaining a basic life in the UK is very quickly becoming a luxury that many of us simply cannot or will not be able to afford.

Alone, each tale told can and often is attributed to a range of causes which are nonetheless real, but also overlook a common theme throughout all of these issues. The commonality between them all is the economic concept of ‘rent’. The impact of third parties taking ownership of all or part of a product, the delivery of a service, or some other form of purchase at some point in the process from where it originated to where we use or in consume it in some way.

Rent is of course a term we use in daily life to describe paying to use something which belongs to someone else. The most common usage is that of renting of a house, where instead of there being a simple relationship between an owner occupier and their house or property, the occupant rents the property from the owner, essentially increasing a basic two part relationship into three.

In just this example alone, we can take it one stage further and add a bank or mortgage owner of a buy-to-let property (1) which is rented by the occupant (2) from the owner (3) who borrows the money and pays interest to the bank (4), which may itself have borrowed that money from another bank (5).

Whilst we would normally think of just the transaction between the occupier and the property owner as being ‘rent’, in economic terms, any additional party taking something from an overall transaction or supply chain between its origin and use who isn’t essential to the core process is receiving rent of some kind. They in turn may split their role between themselves and others, each adding their own profit as they do every time it happens. Ultimately each additional participant in the chain raises the price of whatever we as users or consumers will be expected to pay.

Sometimes, a number of stages appear necessary. For instance the food we eat might have to be grown by a farmer (1), which is bought by a manufacturer (2) who pays a haulier (3) to transport it to where they will process it. The manufacturer then sells the prepared food to a wholesaler(4) and pays another haulier (5) to deliver it to their warehouse. The wholesaler then sells it to a supermarket (6) and pays another haulier (7) to take it to their distribution centre. The supermarket then pays another haulier (8) to deliver the product to its store, where it sells the finished product to us (9). Do believe me when I say that the chains are usually much more convoluted than that!

Of course, we are all guilty of falling into the trap of forgetting how complex the process is which brings us our food and most of the items that we consume or the services we buy, because for us the process seems to be so very easy. But look closer and we will soon see that even a supply chain of this size may involve unnecessary parts and people taking ‘rent’.

So what does this all this talk of rent really have to do with the cost of living?

The real problem with the provision of goods and services is that the UK operates within what is called a ‘free market’ environment, which it has been since at least the time of the Thatcher Government (1979-90). Within this free market, reduced levels of regulation and influence from the government – who we expect to guard and protect our best interests – provides the opportunity for additional 3rd parties and in fact many more of them to involve or add themselves to the chain of many of our daily transactions. By doing so, they can make significant profits from what in some cases will be as simple for them as a click to buy and another to sell.

Whether it is food, clothing, fuel and oil, transport, communications, borrowing money, or just about anything we can imagine that we can buy, there are now speculators buying and selling products and services, sub contracting responsibilities to others, all of them taking additional profit by taking ‘rent’ which there is no practical reason for anyone needing to pay. They indirectly inflate the prices we pay for the end product, increasingly making those things which should really be quite affordable, simply too expensive for us to buy.

These speculators do this because they can. There are no real rules to stop them, and they are making as much money as they can without any consideration for the impact of their actions on the end users – that’s us. And they have little concern that they will have to stop doing so, because the banks simply continue to lend money to the people who have been forced by this process to borrow – if indeed possible – in order to survive.

Think about what really caused the 2007-08 Financial Crisis, which was the sale, resale and resale again of financial products or debts which became so complex, even the financiers themselves didn’t really know what they were buying and selling on.

Bankers were making massive amounts of money – all because nobody was monitoring exactly what they were doing, whilst their own ‘success’ blinded them to how value was being created by lending to people at one end of this elaborate chain who simply didn’t have the ability to pay back what they had been lent.

The Bankers didn’t care before it happened and they don’t care now. They are still not regulated in the way that they should be, and were actually saved from going under in 2008 by the Labour Government at the time by giving them Billions of Pounds of money in bailouts and rescue funds that the Government itself borrowed, and which we are still paying for through the accumulation of public debt.

These are people, banks and companies who are quite literally making money for nothing, and its all at our expense.

The ‘rent’ economy has been evolving as the reality in which we live for many years now. But it is only as more and more products and services have come under the control of those with the money and unrestricted influence to speculate, whether it has been through privatisation, the development of near monopolies or money simply being placed within unscrupulous hands, that the real impact of ‘farming everything for profit’ has began to become fully clear.

 

 

 

Tax avoidance, foreign companies and the real influence of Utility providers on our cost of living

Utility companies are in the news again and this time for exploiting the foreign ownership loopholes that are allowing an increasing number of monopolistic companies to avoid paying sizeable sums in tax.

Were it not for the near exponential rises that we seem to experience from energy and water companies alike on regular basis, you might be forgiven for having a little sympathy with a company which is struggling to make money.

But these are companies which are not only achieving great success in securing stratospheric profit margins from the services they provide using what appears to be increasing levels of media-friendly scaremongering; they are arguably doing so without making any real contribution to the wider society that pays them whilst customers also seem to pay for all their upgrade work as well.

This situation has of course been in the making for a considerable time and whilst it would serve the political interests of some groups to blame the problem on the process of privatisation in its basic sense, it is pretty certain that the sale of shares to everyday taxpayers was never intended as a direction of travel which would result in foreign ownership, or to the cartel like behaviour which has contributed to the creation of rip-off Britain.

Coalition Government or hung Parliaments don’t lend themselves well to dealing with issues of any real importance when they are in power as we all continue to witness each and every day. But that of course is when they face issues that we as a public are openly aware of because Politicians have chosen to acknowledge them for whatever politically expedient purpose that it might serve.

The real travesty with the issues regarding utility companies and the influence that they are having on the true cost of inflation to us all – which has this week been suggested to be as high as 25% – is that there is not even the will to talk about the true impact of their actions upon us all in Westminster.

With the economic fall-out of credit-card government and the continuation of spending with money that the UK simply doesn’t have, reality suggests that negligible or zero percent rises in wages for the workforces operating within the commercial and public sectors alike are here to stay. That benefit and service cuts will remain the uninventive and ill-considered weapon of choice used by a political elite which seems bereft of any consideration for the mechanics of life outside their own societal bubble.

However, there are choices for our leaders and within the constraints of Coalition Government or not, Politicians taking their responsibility to the Electorate seriously would and should all be using them.

Before anything else, acknowledgement that companies providing what are in fact essential services are profiteering and are misusing the opportunities that they have would be a significant step in itself. People would at least begin to feel that leaders are identifying with what real life is really like.

This would by its very nature have to been done with clarity and purpose and with much more than a mere suggestion of what action lies ahead. Another mealy-mouthed effort like that on the part of Politicians when it has come to addressing the previous actions and future behaviour of bankers simply will not do.

It has become clear that self-regulation in such key industries isn’t working for anybody but the companies themselves, and this is where those with Government responsibility should really be taking a lead.

The next step would be to regulate pricing to allow the true cost of service provision to be reflected in the prices that we pay and dictate the formula under which such Companies can raise funds for new and improved infrastructure which in most other industries would rightly come from the bottom line.

Because the services that these Companies provide are essential to everyone, profit should be capped and systems put in place through vigorous auditing processes  to ensure that clever accounting methods cannot provide a conduit through which different cost centres or budgetary areas can be manipulated to provide an enhanced dividend.

Company owners wouldn’t like this approach, but the fact remains that with services that customers have no alternative to use, profiteering before doing what is right has created a cash-cow for the few, whilst inflicting financial misery on the many in circumstances where people cannot even earn more just to compensate. That’s why foreign owners have been so happy to throw cash in the direction of companies in the UK that governments most other Countries would at least keep very close to State control and why our Politicians must now recognise the power and influence that these industries actually have in our everyday lives.

Finally, the time has long since passed when simplification of the Tax system was required on a comprehensive basis to stem the flow of revenue from leaving the Country that we desperately need and to which we are entitled.

Tax should be applied at the point of sale; not at the location where the account managers and owners  are based. This one simple and realistic change could find tax raised from the tills where coffees are physically bought; from the sale on the actual computer and screen where products are purchased; and from the meters where our power, gas and water are measured and supplied inside the houses in which we live.

Scary as the prospect of taking on the industrial and financial monoliths might seem, it is for reasons just like these that Politicians are Elected and why Governments are given power. It might not be easy, but if those who seek our votes at Elections take the trust we have given them seriously, it necessarily follows that they will use it for our benefit too.

Isn’t it time that they started living the mantra ‘action speaks louder than words’, rather than simply just paying lip service to it?

image thanks to source unknown

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