So what have we learnt from the recession?

Graham_Devon

All I seem to be seeing is "recession over".

So let's say it is, this one at least.

What have we learnt?

Have we learnt that we were using the worlds resources up far too quickly, in an unneccesary way?

Have we learnt that debt cripples people?

Have we learnt that house prices are too expensive for absolutely any younger generation starting out with nothing, or even, many families working tirelessly?

Have we learnt that taking gambles and incentivising these gambles with bonuses is only asking for trouble?

Have we learnt that growth in prices too rapidly ultimately leads to hardship?

Why do I ask these questions? Well, because I don't think we have learnt anything at all. What we do seem to have learnt is that you could solve debt problems with debt and fairy money. I have learnt that figures are there to be manipulated, played with, aritifically changed to create sentiment.

I have also learnt that as a nation, we still have our heads buried deep within the sand. For hardly any of these recovery stories talk about how we have actually been able to recover. It's not on the back of the nations back pocket, or the nation actually being able to afford to buy new shiny things and new houses. It's on the back of fairy money and stimulus.

So have we learnt anything? Personally....no, I don't think we have. Personally I feel we are setting ourselves up for one massive great fall. Just where on earth is this money going to come from when tall the taps have been turned off?

Afriend_2

Graham_Devon wrote: »

All I seem to be seeing is "recession over".

So let's say it is, this one at least.

What have we learnt?

Have we learnt that we were using the worlds resources up far too quickly, in an unneccesary way?

Have we learnt that debt cripples people?

Have we learnt that house prices are too expensive for absolutely any younger generation starting out with nothing, or even, many families working tirelessly?

Have we learnt that taking gambles and incentivising these gambles with bonuses is only asking for trouble?

Have we learnt that growth in prices too rapidly ultimately leads to hardship?

Why do I ask these questions? Well, because I don't think we have learnt anything at all. What we do seem to have learnt is that you could solve debt problems with debt and fairy money. I have learnt that figures are there to be manipulated, played with, aritifically changed to create sentiment.

I have also learnt that as a nation, we still have our heads buried deep within the sand. For hardly any of these recovery stories talk about how we have actually been able to recover. It's not on the back of the nations back pocket, or the nation actually being able to afford to buy new shiny things and new houses. It's on the back of fairy money and stimulus.

So have we learnt anything? Personally....no, I don't think we have. Personally I feel we are setting ourselves up for one massive great fall. Just where on earth is this money going to come from when tall the taps have been turned off?

It's not money but resources you should be worried about Graham.
Money can be printed. Housing, fuel, food e.t.c. can't.

97trophy

Graham_Devon wrote: »

What have we learnt?

Left wing Govts always damage the UK economy.

Cleaver

I would argue that trying to flatten out growth and development to a straight line would be difficult, a bit pointless and actually counterproductive.

We'll always have bubbles, crashes, booms, busts. Always. Because a lot of that is human nature. Although I still don't think that that oft-posted graph is gospel, it has some really good points including the bit that demonstrates the psychology of herd movement towards the next big thing, whether that's property, stocks, gold etc. The smart money was there at the start, the mass money comes in to create the boom, the very smart money moves out just before the crash and the herd tumble with the crash. No one buys in for a while, then it all starts over.

There is therefore no point trying to teach people that "debt cripples people", "house prices are too expensive", "taking gambles and incentivising these gambles with bonuses is only asking for trouble" or that "growth in prices too rapidly ultimately leads to hardship". Everyone pretty much knows all of the above, but none of it will ever cease, in my opinion, because it's ingrained in human nature.

I do agree that something should be learned and that's better regulation around the edges of all of the above. To use an anology, driving is very dangerous and kills lots of people. But banning driving isn't really a solution and, when you weigh it all up, the convenience and necessity of driving outweighs the downside of people being killed and injured. So there are rules and regulations to ensure cars have seatbelts and airbags and that there are speed-limits. Somehow regulators should surely learn that boom, bust, bonuses, risk and debt are necessary for progress and growth, but need to be monitored and carefully assessed to ensure that the crashes aren't too severe and the booms aren't too, well, boomey.

On a personal and societal level, I think a number of people will change some of their thinking, which could be interpreted as learning something. For the likes people in their twenties like me, this is my first recession. But more than that, it's the first time we've seen any type of hardship and I think that will stay with people for a while. Maybe think a bit more carefully about the next big purcahse, take a bit more notice with their finances, think twice about upping ship and going travelling. I think it will effect our culture and society more than we think, but it's maybe too early to make any assessment at the moment.

This post was no where near as entertaining as that graph. Apologies.

thriftybabe

I believe too that we are going to take a great fall! On TV last night there was talk that if the increase 3p on income tax, up VAT to 20% and cut some of the nhs budgets etc we are still nowhere near the budget deficit. I wake up this morning and apparently everyone is seeing the end of the recession.

I for one cannot wait for it to be over as we have been hit particularly hard. On the other hand I do not want things to go back to where they were 2007. House prices cannot surely be substainable at the values back then.

One family I know are splitting up and neither of them can keep there house. Fifteen years ago they had a mortgage for £35k, now their mortgage is £117k! This is where it is all wrong. People trying to keep up with neighbours and think they are entitled to nice cars etc.

Personally we could have went a bit mad and bought flash cars etc but have not. We have saved for our rainy day (or year or two!) and I am so glad we have done this.

I think most people will just return to normal spending and nothing will be learned.

I have also learned in this recession that quality time is definitely key to a happier life. I am enjoying that I am able to spend more time with my kids and other half. Work may not be great but family life is fantastic at the moment!

Graham_Devon

Cleaver wrote: »

I do agree that something should be learned and that's better regulation around the edges of all of the above. To use an anology, driving is very dangerous and kills lots of people. But banning driving isn't really a solution and, when you weigh it all up, the convenience and necessity of driving outweighs the downside of people being killed and injured. So there are rules and regulations to ensure cars have seatbelts and airbags and that there are speed-limits. Somehow regulators should surely learn that boom, bust, bonuses, risk and debt are necessary for progress and growth, but need to be monitored and carefully assessed to ensure that the crashes aren't too severe and the booms aren't too, well, boomey.

Good post, thought provoking.

The only bit I wanted to pick up on is the encouragement bit, and hence I have highlighted the above paragraph. Yes, driving kills people. However, my point was more a learning point.

Have we learnt that driving kills people? Yes. Have we done something about this? Certainly.

My point was, to use your anology, that we are now encouraging bad driving, which will have the knock on effect of killing more people.

So although I see where you are coming from, with that analogy, we have learnt a great deal and are always striving to go a step further to make it even safer.

Whereas my points were more we are now encouraging everything, it seems, that led us to the problems we had.

Cleaver

Graham_Devon wrote: »

My point was, to use your anology, that we are now encouraging bad driving, which will have the knock on effect of killing more people.

What aspect of current government action do you feel is encouraging bad practice? Their actions seem to be having 'positive' effects. Of course, we could say that government action at present isn't sustainable and is delaying the problem, but I guess this remains to be seen.

Afriend_2

Cleaver wrote: »

What aspect of current government action do you feel is encouraging bad practice? Their actions seem to be having 'positive' effects.

Encouraging spending through lower VAT, or giving taxpayers money to people to buy brand new cars.
What is really needed is to make the most of the resources we have. Only then can we be wealthy.

ess0two

Graham_Devon wrote: »

All I seem to be seeing is "recession over".

So let's say it is, this one at least.

What have we learnt?

Have we learnt that we were using the worlds resources up far too quickly, in an unneccesary way?

Have we learnt that debt cripples people?

Have we learnt that house prices are too expensive for absolutely any younger generation starting out with nothing, or even, many families working tirelessly?

Have we learnt that taking gambles and incentivising these gambles with bonuses is only asking for trouble?

Have we learnt that growth in prices too rapidly ultimately leads to hardship?

Why do I ask these questions? Well, because I don't think we have learnt anything at all. What we do seem to have learnt is that you could solve debt problems with debt and fairy money. I have learnt that figures are there to be manipulated, played with, aritifically changed to create sentiment.

I have also learnt that as a nation, we still have our heads buried deep within the sand. For hardly any of these recovery stories talk about how we have actually been able to recover. It's not on the back of the nations back pocket, or the nation actually being able to afford to buy new shiny things and new houses. It's on the back of fairy money and stimulus.

So have we learnt anything? Personally....no, I don't think we have. Personally I feel we are setting ourselves up for one massive great fall. Just where on earth is this money going to come from when tall the taps have been turned off?

After reading that the ability to knot a noose and use when required.Get out dev spend some cash and enjoy yerself.

purch

So what have we learnt from the recession?

That most people don't have the foggiest clue whats happening, and why......and in most cases if it's not directly affecting them, they don't care either !!!!!

Graham_Devon

Cleaver wrote: »

What aspect of current government action do you feel is encouraging bad practice? Their actions seem to be having 'positive' effects. Of course, we could say that government action at present isn't sustainable and is delaying the problem, but I guess this remains to be seen.

It's not so much bad practice. But an example I am annoyed at is that the government promised us all this reform on the back of bailing out banks, yet nothing has happened.

We have a government telling, and now possibly looking at creating negative interest rates to force lending.

But this isn't so much what I was getting at. My point was, we seem to be as a nation, cheering on this recovery, however, the stimulus, i.e. scrappage scheme, BOE rates, QE, has had possibly the biggest part in this recovery. It's not in the slightest bit natural.

Which is why I asked, where is the money going to come from when the taps are turned off?

A really quick example here, as I believe families are going to pay the price here....

2 parents, 2 kids. 1 parent out at work, the other looks after a 12 month old and a 4 year old. Other parent brings in 32k net a year.

(These are really rough examples of figures!!)

So, 24k gross a year, plus 10quid a week tax credits = £24,500

I'm going to go with rent simply because the variables of a mortgage are too large...

Rent - £600 per month for a 3 bed home, £7200 a year.
Council Tax - £1200 a year
Gas / Electric - £1000 a year
Phone, TV, 1 mobile - £500 a year

We have £14,600 left.

Going to use a Vauxhall Zafira 06 plate as an example as it's just something I heard advertised, and is a family type car. So 1 car, at £131 a month = £1572
Insurance - £350
Fuel (at £50 a month) - £500
Servicing, tax, MOT etc etc, approx - £400

£11788 left.

Food / cleaning etc etc, supermarket shop, £200 a month, £2400 a year

£9388 left

I'm going to stop here, as this list could go on and on, and I don't think I need to go too into depth for the point to become clear.

So, lets say thats your average family, pretty decent wage, pretty low costs. How much are they going to have left over at the end of the year?

Is this money they have left going to support the economy as we see the pace of recovery now? Are they going to be able to save deposits of 20% for a home of their own? How long will it take them?

Theres 30 million families in the UK, half the population, all at different stages, I realise some will both be working, etc, but for all those who have both working, you halso have those where both can't work, so I just gone in the middle really.

Sorry for the long post, hope I got whats going on in my mind across. If anyone actually read all that blurb, congrats!