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The housing crisis and the credit crunch
It’s clear the world is facing a very serious problem arising out of the credit crunch in the United States. Years of debt-financed growth, a sort of private sector keynesian binge, are now unwinding, sending the US economy into recession and lowering growth world-wide.

At the same time, basic commodity prices are rising including crucially oil, after a long period of relative stability where inflation was displaced into property.

The combination of lower growth and even recession combined with rising inflation makes monetary policy particularly difficult to manage. The UK economy could also be particularly vulnerable to a downturn in the financial sector as this is the sector which has led economic growth in the UK over the past several years.

Alongside private sector housing starts slumping and the construction industry heading for a severe downturn, we have an accumulated problem of huge numbers on council waiting lists and a severe problem of overcrowding in inner cities which has not been and cannot be alleviated by private sector solutions.

For example, here in Tower Hamlets the council waiting list has 20,000 plus families on it. Shelter estimates some 12,000 families are living in overcrowded conditions. Coming into George Galloway’s surgery every week are families who have been on the waiting list for up to fifteen years living in intolerable Victorian conditions and with little prospect of any short-term solution other than getting on the proverbial bike and moving to Hartlepool.

The housing crisis is a direct result of successive government policies - above all the right to buy combined with failure to invest to replace the council housing that has gone into private hands.

The government’s current plans to see Housing Associations lead on investment in “social” and “affordable” housing is not working or likely to work and with a mayor determined to abolish any targets for social and affordable housing, the situation is going to get worse.

In the context of an economy facing at the very least a growth recession, monetary policy stalled, a construction industry facing downturn and a massive housing crisis, state-inspired pump-priming via a crash council housing programme is a policy whose time has come, even if the neo-liberal dinosaurs can’t see it.

For those who ask where will the money come from with the government already in debt and about to pay out £2.7 billion over the 10p tax debacle, the answer is from two sources.

Firstly, the better off can clearly bear a significant tax increase which should be clearly tied to a programme of public service works with housing a central component.

Secondly, the government can borrow more. The banks have become reluctant to lend because of the sub-prime crash. But the state is the most secure borrower and can borrow at lower rates than the private sector because of it.
 

News and articles of interest

Here are some articles and news reports we think are worth looking at

From Triumph to Torture by John Pilger
Two weeks ago, I presented a young Palestinian, Mohammed Omer, with the 2008 Martha Gellhorn Prize for Journalism. Awarded in memory of the great US war correspondent, the prize goes to journalists who expose establishment propaganda, or "official drivel", as Gellhorn called it.

SATs school tests criticised by official report by Harvey Thompson and Linda Slattery
In May, millions of school children throughout England undertook their Standard Assessment Tasks (SATs) in English, mathematics and science. The statutory tests are widely considered to be flawed and almost universally reviled by teachers and children alike.

Health: Who asked for choice? - Morning Star
IF Health Minister Ben Bradshaw believes that there is political capital to be made by taking on our NHS doctors, he will quickly come unstuck.

Afghanistan troop deaths outnumber those in Iraq by Angela Balakrishnan and agencies
Militants in Afghanistan killed more US and Nato troops than those in Iraq in June after a fresh spate of rebel attacks that highlighted the growing strength of the Taliban.

Iran legally entitled to develop nuclear energy, says UK MP
Iran is legally entitled to develop nuclear energy under the Non-Proliferation Treaty, according to a British MP visiting Tehran for the first time. George Galloway, who was expelled from Britain's ruling Labor Party for his outspoken opposition to the Iraq war, also criticized the hypocrisy of Israel's belligerence towards Iran, which has its own illegal stockpile of nuclear weapons.

In the Cause of Fear and Ignorance by John Pilger
Muslims are alone as they watch the British state, with its "obstinate incomprehension" of their faith, do to them as it would never do to those of other faiths. Imagine Jews treated this way. You cannot imagine it; the profanity is too great. The silence of British Jews, who have the history, is also great.

Migrant Myths by Adam Ford
As part of her degree course, Kurdish migrant Filiz Celik researched the conditions that workers from overseas face in the United Kingdom. The full text of her study can be read here, but this summary by Adam Ford gives some idea of the reality behind the media-generated myths.

Tesco shareholders reject TV chef's chicken welfare call
Tesco shareholders today voted against a resolution from TV cook Hugh Fearnley-Whittingstall which called for the retail giant to improve its chicken-rearing standards.

Academies expelled 10,000 pupils
Academies have been accused of excluding disproportionately high numbers of students after it emerged that they excluded nearly 10,000 pupils for poor behaviour last year.

Let companies run state schools for profit, says Sir Simon Milton
Private companies should be allowed to run state schools at a profit and be free to dismiss teachers who are not up to the job, the head of the Local Government Association (LGA) said yesterday.

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