Tom Brown: After a 20-year party it's time to wake up and feel the hangover
EVERYONE remembers Gordon Gekko's rant in the film Wall Street: "Greed – for lack of a better word – is good…" But most forget how it goes on as a perverse paean of praise for selfishness and avarice: "Greed is right. Greed works. Greed, in all of its forms – greed for life, for money, for love, knowledge – has marked the upward surge of mankind."
That was 1987, when those who could afford and many who couldn't bought into the Gekko (and Thatcherite) philosophy of materialism, acquiring possessions, property, cars and the fancy goods and fripperies of 'the good life'. In 2008, we are all paying the price – and griping and girning about it.
We are now experiencing the inevitable financial headache that follows a reckless 20-year party and, as with all hangovers, we only have ourselves to blame. I have heard complaints from people who live in over-priced houses with hefty re-mortgages, who run two cars, who holiday abroad twice or more times a year, and who crash the credit cards every weekend on things they want but don't need. One in his thirties said to me ruefully the other day: "My trouble is I'm one of Maggie's children. We had to get on the property ladder, we had to be upwardly mobile – but most of it is on credit."
The total personal debt in the UK is a mind-boggling 1.5 trillion. Every British adult owes an average 29,926; for households, it is almost 60,000 including mortgages; the number of mortgage-holders with secured debts of over 90,000 has doubled in the last two years.
These figures would horrify past generations who lived by the Polonian principle "neither a borrower nor a lender be" and for whom debt equalled disgrace. Our grandparents saved up-front in clubs and provident societies before they bought and the advent of hire-purchase was greeted with suspicion. No more.
Irresponsible banks have thrown money at us for decades and now that the crunch has arrived, they are queuing up in Downing Street for the Government to throw more billions at them to bail them out. We've all had the unsolicited offers of lavish credit on as many cards as our wallet can hold; on my plastic, I can spend 25,000 with no questions asked – and the fact that I pay every month to avoid interest makes them very unhappy.
Millions of others pay the monthly minimum, making the debt millstone around their necks ever heavier. Result: around 300 people are declared bankrupt or insolvent every day and 60,000 homes in the UK are at high risk of repossession.
Who says a fall in property prices is a bad thing? Only those who expected to make massive profits on houses that had become grotesquely over-valued. The International Monetary Fund figures Britain's house prices are still a third higher than can be explained by fundamental factors because credit has been artificially cheap. People are finding out the true value of their houses in the real world and not the phoney universe where prices increased by an unreal 215% between 1997 and 2007. While that may be tough on those who regard their houses as investments and not homes, or sons and daughters waiting for parents to pop off and leave them a six-figure windfall, it is actually a return to common-sense values.
Crisis? What crisis? Six out of 10 adults still eat out at restaurants or go to pubs and clubs, and we are spending a disproportionate amount on goods we dump within a year. How many homes have, not one or two, but four or five TV sets? Kids pester parents for the latest model of mobile phone or iPod; if they ask for a Wii or a new football top it's theirs.
Steadily rising prices will force us to adopt a more rational approach.
The average British shopping basket costs 11% per cent more than a year ago. In belt-tightening Britain, we could return to the days of "waste not, want not", choosing cheaper cuts of meat at the supermarket and relearning the art of making meals from left-overs – bring back shepherd's pie, hash and stovies!
Thrift may mean making the car run for another 10,000 miles and driving past the new models on the forecourt; holidays abroad postponed as one in five say they'll be looking for cheaper alternatives and shorter breaks which must be good news for our own tourist industry; and a long, hard look at whether we really need new clothes or furniture. Already, the retail trade says sales have declined as consumers make "serious economies" – expect a desperate advertising blitz to tempt us back on a shopping spree.
Of course, help must be given to those whose need is real and urgent but for the rest who are living comfortably and complain about losing a few luxuries, a bit of self-help and self-discipline is called for. Frank Buchman, the founder of the Moral Rearmament movement, was a controversial figure but he was right when he said: "There is enough in the world for everyone's need but not for everyone's greed."
It is easy to complain and, although it is a global problem, say the buck stops with Gordon Brown. But the uncomfortable truth is we all have a bit of Gordon Gekko in us.
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