The carrot and the thick.

tereas may.jpg

Maslow’s hammer – if you have a hammer, everything looks like a nail.

I don’t believe in a market for healthcare. I don’t believe in a market for schools. And I don’t believe in trickledown economics, the belief that giving money to the rich helps the poor.

When I see the innocence of children I can believe in God. As Dr Benjamin Spock wrote for post- Second World War baby-boomers: ‘Each child is retracing the whole history of mankind, physically and spiritually, step by step’.

‘We believe that the person with a stigma is not quite human’, Ervin Goffman.

We can build more schools or more prisons and follow the lines and lies of the American model as we’ve been doing. This isn’t Trump talk but propaganda and ideology in action.

I sometimes watch The Chase on ITV with Bradley Walsh. It’s a quiz programme, general-knowledge quiz on around dinner-time, or tea-time depending on what you call it and whether you are a bit of a nob. Contestants play against a quiz master, the Chaser, someone like Shaun Wallace who is a barrister and has won Mastermind. Amateur again professional is a mis-match, but in the final round there can be a maximum of four amateurs again one professional answering similar quiz questions. The Chaser attempts to knock contestants out in earlier rounds, which are easier multiple-choice questions than the cash-build up. All contestants start with a one point advantage. That means that if they get a question wrong and the Chaser gets it right, they don’t get caught right away. Contestants get a second chance. Most contestants win usually between three and six thousand pounds in an earlier question-and-answer format called the cash-build up. If they want to play against the Chaser for that amount they can get two questions wrong before they can be caught by the Chaser. The Chaser tries to entice the contestant to give up a potential life by offering vastly inflated sums greater than the money they have won. Usually this is a multiple and ranges from £20 000 to £60 000. The maximum number of lives a contestant can opt for is three. That gives them a three point and three question start on the Chaser. In effect they’d need to get three questions wrong out of seven before the Chaser could catch them. But here’s the rub, when a team is doing well, and has for example, £30 000 in the collective pot and two contestants have made it to the final Chase, the Chaser often offers a negative amount.  If the contestant has won, for example, £3000 in the cash-build up, in order to qualify for the three extra lives the Chaser will usually offer a negative amount of, for example, £5000.  If the contestant qualifies the team receives less money than they would where the contestant be put out by the Chaser (£30 000 – £5000 divided by 4 and not 3).

Let’s look at grammar schools. There are around 57 different types of state sponsored schools in England and Wales with shrinking budgets, growing teacher shortages and calls for an additional 750 000 pupil places projected for the next ten years. An increasing gap between expected funds and expected delivery.  Teresa May envisions spending around £50 million a year on grammar schools out of a total educational budget of £80 billion. The pitch is the same one made by the contestant taking money out of the pot, making is smaller (adding a negative amount) that by doing so they make the collective team, our countries, stronger and benefit everyone as we face further tests. Not funding grammar schools puts the nation at risk.

That’s true in the same way that the contestant going for the negative pot in The Chaser is true. It denies money in the public purse with cuts to services such as Sure Start that benefited the poor to help the rich and it denies the majority of children life chances. Sainted Margaret Thatcher as education secretary in the 1979 recognised this and shut more grammar schools than any other minister, Labour or Conservative. But she didn’t need to shut them, just no longer fund them with public money, taking money from the poor and giving it to the rich and out of 315, 139 public schools became comprehensives. Post war the gap between rich and poor had narrowed and not enough parents could afford to send their children to such schools. There is an interesting cameo of how the world was viewed in 1964 in a Granada series 7UP directed by Michael Apsted. The three upper class boys attended a preparatory school, then they said they’d attend Westminster Public School then they’d attend Oxford or Cambridge. The idea of attending any other university was snorted and laughed down (later one of them attended a northern University, but went on to work for the BBC, and was, of course, headhunted by Channel 4). Out of the mouths of babes was a keen understanding of how the world worked. The middle-class banner against comprehensive schools and the mingling of the the poor with the rich wasn’t because the latter were smelly and noisy as the Apsted’s Public school boys loudly intoned to the camera, but because, then as now, standards were seen to be slipping. Only the upper and middle-classes knew how to behave, speak properly and write properly, the first Black Paper was prophetical, ‘The Fight for Education’ in defiance of the Government’s White Paper announcing changes needed to modernise schools. This was a war that poor people and their children lost.

A 2009 OECD report showed that Britain routinely diverted the largest share of education spending, 23%, for any comparable modern nation from poor people to a small group, 7%, of privately educated children with rich parents.  Teresa May’s decision to continue with this trend is a reassurance to her Conservative backbenchers and Select- 22 Committee that nothing has changed. Britain is a good country to be rich.

Margaret Thatcher before donning the garb of Prime Minister and bastardising the words of St Francis of Assisi shared her thoughts with a rapt American audience. She utilised a poppy analogy, ‘we value all individuals…not because they’re all the same, but because they are all different…I say let our children grow tall and let some children grow taller than others if they have the ability in them to do so’.

The message is clear, some children (the 93% majority of poor children) are holding back other children (7% rich children). Coal miners were an industry-sized example of greedy workers that were holding the country back. They were ‘holding the county to ransom’ and getting paid as much as twice as much as the average worker. There’s a moral in that story of what happened to them. Thomas Piketty, Capital, and more recently The London School of Economics’ paper, have shown how money is moved from the poor to the rich. Mark Townsend quotes from a TUC report that shows that the average remuneration of a FTSE 100 boss in Britain is 123 times that of a full time worker. An example of this is advertising executive of WPP, Sir Marin Sorrell whose annual package is worth £70 million. He has grown into a very tall poppy indeed and earns in 45 minutes of his precious time the annual salary of a non-unionised full-time worker that has the same rights as a plastic spoon.

But the story is an old one of Gothic horror and the fear of contagion and contamination with the rich being a different breed of human, with children in particular needing to be kept apart, for their own good. Think tank, Policy Exchange, the Notting Hill sect, prior to Cameron’s election, suggested that city’s outside the rich South were beyond revival, full of Lamarckian chavs, feral and promiscuous youths, bent on destruction and unwilling to work. Stereotypes that proved hugely popular as had the fear of the Irish in Scotland, and the fear of the Jews in London’s East End in the late nineteenth century. Both were seen as threat to our nation’s stock.

The issue was one of control, not education. Theresa May is playing to a gallery, and singing from an old hymn sheet, build more prisons and less local authority schools, less public anything. Talk about weaning ourselves away from the nanny state while filling her friends’ pockets with loot from the nanny state. It’s a great trick when they pull it off.  Poor people deserve what they get, because they are different. Their children are different. They are Goffman’s ‘other’.


Not the housing problem again.

homer wisdom.jpg

I’m going to start boasting now. So if you’re the type that turns off the computer when someone posts a Facebook picture of their dinner or their cat or both – look away now. I got an O’Grade in something when I was younger. Yeh, hard to believe, but it was in economics. I found it quite simple. If something wasn’t a problem of supply then it was a problem of demand. Multiple choice A or B. Fifty-fifty chance of being one or the other. I might have been thick but I wasn’t daft.

Take the plunging oil price. A problem of oversupply. Saudi Arabia, Russia and the US, the big three are swilling in the stuff, and the latter has frackers ready to scale up production when the global price of energy increases. Iran is scaling up oil production. The UK with less than one percent of oil production isn’t a global player, but for Scotland mooted tax revenues would provide around ten to fifteen percent of total revenues it hurts, but let’s be crude, Saudia Arabia without oil is a worthless piece of sand. Demand for oil has dropped, mainly because China has cut back on its frenetic building programmes. Oil traders and investors talk about a pain threshold –which will force the price up.

Forcing the price up is seen as a good thing for countries like Saudi Arabia, but I want to look at something closer to home. Housing.

Housing is a barometer of the British economy. Since the great British giveaway of council housing in the nineteen eighties property prices have just kept going up and up and up. That’s seen as a good thing. Our wealth increasing in windfall profits.  Investors, such as the Russians and Chinese know a sure thing when they see it. And the property market has boomed. Even the 2008 crash hardly made a dent on property prices, particular in the capital, London. Win-win. Britain is a good place to live, if you’re rich. And you don’t even have to live here, you can still make money.

Demand for housing has been increasing. An estimated 200 000 houses need to be built every year just to stand still. This pushes prices up even higher. And the market rate for housing drags up the price the council householders have to pay. The recent furore of ‘rich’ council house tenants having to move out to make room for the poor is a good example of supply not meeting demand. But let’s look at it another way –as an opportunity.

The Organisation for Economic Co-operation and Development (OECD) issued a statement saying something quite radical last week (well radical for them) it advised its members, 34 wealth countries, to ease spending cuts and spend more on infrastructure. I’ll interpret this for you. Interest rates hovering above or below zero (negative interest rates in Japan) and quantitative easing both of which directly and indirectly give money to the rich by propping up stock markets and lifting housing prices out of the reach of the poor is not working (wealthiest 10% raised their financial stake in the UK economy from 56% in 2008 to 65% in 2014). The OECD advised member states to turn off the taps of quantitative easing and invest in tangible assets. Some would call this socialism. It’s certainly Keynesian. And a return to common sense.  It exposes the big lie that austerity works.

I look forward to the day when I read that due to overcapacity house prices plunge. Traders are selling because no one is buying. The link between rising house prices and windfall profits is cut and the supply of housing meets the demands for homes and not as a tool for parking wealth and watching it grow. I look forward to the day when poor people can afford to live in London. I look forward to the time when the Scottish government, borrows money at zero interest starts training youngster in the skills needed to construct housing and builds houses for the future. I don’t think that it’s too much to ask to stop giving money to the rich and build housing for the poor. Invest in the green sector and invest in housing and a better future. Then again I wasn’t that good at economics. There seems to be an oversupply of rich people wanting something for nothing and getting it. Britain is a good place to live if you’re rich. Let’s make it a good place to live if you’re poor. Build homes for the future, but build them now.

Robert D.Putnam (2015) Our Kids The American Dream in Crisis

our kids

It takes a certain sort of courage to say that you are wrong. Robert D Putnam thought all the hoo-ha of kids not being able to grow up and get on – the essence of the American dream, work hard, play hard and you’ll get your just rewards – was belly aching from those that had failed to thrive. In any society there are winners and losers. He was a winner. He didn’t come from a rich family, and through hard work became Malkin Professor of Public Policy, at one of the grand old dames of American education, Harvard University. The same University attended by the current United States President and his wife. Winners and losers. The hard working commoner can make it to the top of the political tree. All he or she needed was true grit.

Putnam looks backwards to the 1950s, his generation and his town Ohio, which was a bellwether of the United States. He extrapolated the narrative of winners and losers and looked at the data and he found a scissor like movement between rich and poor, not only in wealth, but in education, social and economic opportunity. A gap that did not exist in the cohort that he belonged to, a gap that he did not believe existed. The American Dream he found to be a nightmare for the majority of Americans.

Putnam tells the reader ‘class differences were not absent in Port Clinton in the 1950s’. But kids from the different social backgrounds attended the same school. Frank’s parents, for example, owned much of Port Clinton, but he went to the same school as the farmer and fishermen sons and daughters. He charts the success of the two black students, Jesse and Cheryl, who gained doctorate degrees at a time when the colour bar was at its highest. Frank was smart enough to play down the social and economic difference between him and his classmates. Indeed his father warned him when he went to a café he was to order only what his classmates ordered and could afford. The rules were different outside Ohio.

The rules are different but the pattern is the same for modern (or postmodern) industrial nations. Thomas Piketty in his book Capital in the Twenty-First Century charts how as economic growth slows money flows at an increasing rate from the poor to the rich. In Britain, for example, the top 20% own an estimated 100 times more than the other 80%, even before the planned £12 billion of austerity cuts scythes its way through the economic system, increasing the gap even further. Data released a few weeks ago by OECD shows inequality in the UK growing even faster and further. But there is also a gap opening between the top 1% and those other 19% which is also increasing. The tail doesn’t wag the social and economic dog, the tip of the tail does.

Putnam’s graduation class of 1959 did well for themselves.

Humble class origins did not prevent them from using their talents and work ethic to achieve greater upward mobility.

Half of his class went off to college. Race was an issue, but in a climate of greater job instability and declining relative earnings that have fallen in real terms since the 1970s for those outside the top tier, being rich or poor is all about class. A class, an untermensch, in which divorce rates have steadily increased, non-marital births have increased and the number of ‘fragile families’ with absent fathers in prison have grown, as have the number living in child poverty, increasing from just under 10%  of American children in 1999 to 40% in 2013. The mark of a ‘fragile family’ is the rigid boundary of the neighbourhood where they live and where they are educated. The mixing of different social classes that Putnam fondly remembers from the 1950s is, like the Waltons, and John Boy, from a different black-and-white era in which having the right colour of skin was a passport to more.

In a more-it-ocracy those that have the best homes, the best education, the best health prospect and the most political power, demand increasingly more. And they get it. One mother for example demanded her daughter get a school prize, misguidedly awarded by teachers to another pupil, or she’d go to her friends the school governors. Her daughter deserved it. She got it.  The scissor gap between those in the high-income bracket gaining a college degree cuts the tie between rich and poor in terms of opportunity and social mobility and shows a steady upward progression from under 40% in 1970 to 80% in 2011. Those in the low-income bracket also shows a progression for those in the third-quartile (poorish) income group from just under 15% to 23%. For those in the bottom quartile its stasis. 10% to 12 or 13%. Putnam defines education as social and economic success. Those with a college education are more likely to have better jobs, better housing and be more likely to be in a stable marriage. It’s a two-income virtuous circle in which their children reap the benefits of prosperity.

Poverty is marked in other ways. Verbal interactions for example. Children of professionals with an upper-class dual income are richer in verbal encouragements and the words they are exposed to 166 000 by the time they start school, in comparison  – I’ll beat the hell out of you if you don’t stop that now – non-professional children’s exposure to 26 000 words. The patterning and division of class begins before children begin kindergarten. Children are marked out to fail even before they begin school. But those that are poor and show a greater aptitude in tests to succeed than their rich counterparts are far less likely to go onto to get a college degree. Wealth is a physical marker and guarantor of social and economic success.

Richer kids are less likely to drink or take drugs. Less likely to have been in a serious fight. Less likely to have had premarital sex (I guess that goes down as a negative, but not at my school). Less likely to be suspended from school. Stop the world. Poor kids need to get off. In a decade of zero growth and declining wages poor kids are screwed in every way.

Putnam suggests,

If it takes a village to raise a child, the prognosis for American children is not good.

The prognosis for British children follows the American pattern. Those with the least social and economic capital do the least well. The only growth is in unequal opportunity.   Nobel Laureate economist James Hackman estimates that the opportunity cost of writing off our youth costs the economy around 6% to 10% GDP. Nobel economist Joe Stiglitz calls The Great Divide ‘immoral’ and counterproductive. But investment is a dirty word. More and greater austerity is called for in a failed economic experiment. Class disparities accumulate. In a tick-box society the answer is quite simple. Don’t have children unless your income is at least three times the median income. Both in absolute and in relative terms – we’re fucked.