Hedge Britannia is partly about the way that hedges represent the division of property, land and wealth in society.
Like most people I’m disgusted by the rioting and firstly want the police, parents and politicians to get a grip on the situation. But when the time comes to reflect on the root causes, it’s worth thinking about the role house prices have played in our current economic mess.
Banks lending excessively against property drove a huge boom in house prices and rent. At the same time, the government bill for benefits rocketed. But the largest part of the increase was in the housing benefit bill.
This means that the real beneficiaries of the increase in benefits payments weren’t the claimants themselves, but the banks (via interest) and the landlords (who got their mortgages paid). It also increased the severity of the poverty gap – rents in London and many other cities have reached ludicrous levels, largely because of the bubble, and it is now harder than ever for someone on housing benefit to find a job which will pay those rents.
So the housing bubble represented a wealth transfer from the many to the few. But now it has imploded, this process has been cemented because, rather than let house prices collapse (which would bankrupt the banks and hurt property owners), the government and Bank of England are trying to inflate the debt away via near-zero rates. It is the stated policy of the BOE to allow inflation to continue at high levels so long as real wage levels don’t rise. In other words, our currency is being debased, and we are all being impoverished to bail out the bankers and those who borrowed heavily against property.
At the same time, the idea has taken hold that the national debt should be blamed on benefits claimants rather than the bankers. Many of the poorest kids have already lost EMA, which gave them £35 a week or so spending money. Their families are being targeted by housing benefit caps (while the landlords are not threatened with rent controls, which would be a far more direct way to limit the flow of money from taxpayers to banks and landlords via housing benefit). And in addition, real wage levels are falling as prices increase faster than wages or benefits, so everyone is worse off, whether on the dole, minimum wage or whatever.
In a dimwitted, criminalised way, going out robbing and rioting is partly a response to these pressures and the perception that the system is rigged against the poorest.
So maybe we should spare a thought for those kids from poor areas who aren’t rioting. They are the ones who are being made ever poorer to save the wealthiest in society. They are also the ones who tend to be the victims of knife crime and gang culture, and who get bullied by the criminal minority on a daily basis. And now their communities are being worst hit by the looting and arson.
The fact that the criminal minority have been behaving like complete morons shouldn’t allow us to forget that there are others out there who have a genuine right to be angry. And those in the media, political class and elsewhere who believed HOUSE PRICES UP and BANK LENDING RISES are always good news stories should remember that their cheerleading for the bankers’ debt bubble helped create this situation.