End of the long party
Now that it’s the evening of New Year’s Day, and the holiday season will be over in a few hours (even if it’s still the school holidays and a few people will be taking tomorrow off work as well, perhaps to sleep off any remaining hangover), I thought I might post my New Year reflection post, particularly as it’s Islamic New Year as well as the new year in the West. The biggest story of 2008 without doubt was the so-called Credit Crunch, caused by various retail and merchant banks going bust, largely as a result of lending to too many people whom they really knew couldn’t possibly pay the debt back. The upshot was that the supply of money dried up, which led to most businesses, and therefore people, having much less money than they did this time last year. Still, one has to be conscious that not everybody got much of a share of the “long party” which has been in progress since the end of the recession of the early 1990s.
While Woolworths is not a direct casualty of the recession - it is a victim of its own managers’ decisions, which left it selling nothing most people wanted to buy - the circumstances surrounding it are an interesting lesson on the culture of the economic circumstances of the past era. Woolworths owned one of the country’s biggest entertainment distributors, Entertainment UK, which supplied Zavvi - formerly Virgin Megastores - along with Borders and practically every other seller of music and video except for HMV. EUK have gone under with Woolworths, resulting in Zavvi going into administration as well. Years ago, I recall someone arguing that to be a “fat cat” takes a certain talent which some people have and others envy; this was at a time when “fat cat” salaries and bonuses were under a lot of criticism (mostly in relation to executives at privatised utility companies). However, it takes a certain talent to become the biggest, or second biggest, distributor of something a lot of people buy, and still go bust, taking another - well-established - company down with you. Exactly how was that allowed to happen?
Much as the crash will cause a lot of hardship for people, including me as my supply of agency work dried up in October and, a few days last month aside, I’ve had nothing since, I cannot help but think that the end of the long party is a good thing. In London, especially, it brought an awful lot of money to chase a hardly larger supply of goods and, especially, housing. It’s saddled young people with housing debts several times their salary, sent rents through the roof and made it impossible to live in many parts of London on an average income, or to raise a family in London on one wage, unless it is a very high wage. It has made areas which were once trendy or occupied by the working class into preserves of the rich, and almost every town centre into collections of the same chain stores.
Francis Gilbert, a teacher, described the culture of the boom years in his book Yob Nation, which compared the behaviour of young people in schools and in the streets with the behaviour of rich young men in the trading rooms of London as they worked long hours and then spent the nights partying, taking absurd risks with other people’s money. Surely, one of the worst aspects of culture in recent years has been the rise of gangs and violent public behaviour in parts of our cities, to the extent that young men in some places cannot walk to the next neighbourhood for fear of being shot or stabbed. This has caused an awful lot of hand-wringing but its worst effects have remained confined to its communities of origin, something which might not keep up if economic conditions for everyone worsen. Dare we hope that something might be done about both the circumstances and the culture which breeds this violence?
Anyway, I am hoping that the end of the “long party” will bring a fairer society, in which there is room for people to make a living for themselves and live decently, without running up colossal debts, and without so much easy money for a few resulting in everyone else getting priced out of the market in their own neighbourhood, both in urban and rural areas. There are already signs that the market orthodoxy of the 1980s is being questioned, particularly the dogma that everything should be left to the market, now that it has been demonstrated that the market is dominated by the greedy, the incompetent and, in some cases, the corrupt (well, we actually knew it already, but their recklessness had not had its impact). Particularly in our cities, we need to have some serious debates if our existing urban problems are not to boil over if the economic problems make life difficult for most people.
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