Monday, 14 July 2014


The Guardian Newspaper - 14 July 2014 - Letters
In response to interest rates remaining unchanged at 0.5% for a 65th consecutive month (Report, 10 July), we strongly advocate a 0.25% rate rise in August, working towards Bank of England governor Mark Carney's "new norm" of 2.5%. The below-target consumer price inflation, 1.5% in May, gives the Bank the necessary leeway to act now. We advocate this approach as the sustained low interest rate is encouraging households and businesses to borrow to excess.
Britain's household borrowing is at a record high of £1.44tn, equivalent to an average household debt of £54,629, on a background of a 2.2% fall in real wages a year. While we applaud the financial policy committee's decision to limit the proportion of high loan-to-income mortgages and related affordability checks, we question whether this is enough to cool the market. Carney himself warned in April that the economy faced renewed dangers from excessive borrowing as encouraged by low interest rates.
We have been told that any future interest rate rises will be data-driven. A marked relapse in manufacturing output in May, when it fell 1.3% month on month, highlights that ongoing strong growth cannot be taken for granted and we recommend a rate increase at the next possible opportunity. The CEO of Lloyds Bank, António Horta-Osório, said at a recent event at Judge Business School that banks had a duty to give back to society. We would encourage the monetary policy committee to announce this rise on 7 August, helping to embrace Carney's vision of banks contributing to the good of the people.

Dr Rav Seeruthun 
Dr Ian Colwill

NB - If these dreaming Cambridge economists had all their wishes come true, and interest rates paid by borrowers returned to what these economists used to know as "normal levels" of say 7.5% on mortgages; at the cited UK household borrowings of £1.4 trillion, the Haves would be paid by the Have-Nots £180 billion a year - unearned income, for doing nothing, risk free. This amount would keep 6 million people in good jobs with "earned income". But hey, We are all in this together - capitalists are suffering too - SUPPORT YOUR LOCAL LOAN SHARK!
My Reply Letter to the Guardian - 14 July 2014
Contrary to Dr Rav Seerthun's and Dr Ian Colwill's plea to help The City cash-flows with higher interest rates (Banks should lift interest rate next month - Letters - Guardian 14 July 2014), the price of money on all borrowings - from home mortgages to business loans to credit cards to loan sharking should be capped at 5% APR. Five percent is ten times the base-rate. A 5% cap will reduce most retail prices, including housebuilding, by 25%, through reducing unearned-income inflation (interest) at every stage (about ten stages) in all supply chains. The world is awash with $32 trillion of criminal tax-evasion-capital-flight, desperately seeking investments in safe-havens in stable OECD countries.The money-economy (bookkeeping) is massively, ridiculously overmanned, overpriced and is increasingly offshore. It siphons after-tax wages from the underpaid poor to the over indulged rich. In the UK every 0.25% increase gouges £3.1billion per annum from the Have-Nots to the Haves; which is great obscene greed capitalism but dangerously foolish social economics.                 

(Mr) Noel Hodson

16 Brookside, OXFORD,
NB - Borrowing by the undeserving poor has increased to enable real transactions in the real-economy. e.g. My first house cost £16,000 in 1972, on a 120% mortgage costing 12.5% APR - My demonstrable income that year was £5 (five pounds) as I was starting a new business. The generic 12.5% interest rate drove unearned-income fuelled inflation - that forced up house prices and all prices. The obscenely greedy rich blamed the unwashed undeserving poor's wage increases. But, as ever, the inflation was in fact unearned-income driven.  Inflation always slavishly follows the Base Rate (unearned income); as it does today. That same house is now £500,000. Borrowing was and is dictated by necessity and by determination to earn the ability to repay - regardless of the Base Rate. Some sociopathic economists would deny all lower paid workers the right to rent or buy a decent home - instead of building more homes and increasing mortgage supply to meet the real demand.  If they are not by nature cruel slave owners, they live in a  time-warp fairy-land where factory floor workers buy a house for £250,000 on a mortgage that is only 3 times their £83,333 annual wages - just like Cambridge Dons do.  It is time to reform the global money-economy and reduce its parasitical, immensely high cost. A 5% per annum interest cap on all loans would be a good start.



    Monday, 27 April 2015


    UK Inflation mirrors the Bank Rate.
    Unearned income, not wage-rises, drives inflation.
    Dear Carol,


    Thanks for your FT inspired article which stimulates me to respond fully.

    I agree with your economic analysis.  Productivity is the neglected driver to make the UK wealthier. The allegedly “good news” on GDP, jobs etc consists mostly of more Brits serving other Brits with ever more fattening coffee and cakes – on minimum wages on zero hours contracts. A recipe for rapid decline and congestive heart failure. But aimless service-industry self-pampering consumerism does at least slightly stir the sluggish blood flow of money through the flaccid UK arteries, in the short term. Banking, usury and old professions will be fully computerised (think of agricultural workers replaced by combined harvesters) – they are dead-ends – the City will not save us - move on.

    VISION - We need boosts to exportable commerce and industry. We have three high-tech high-earning world leading major export activities to enlarge – Education – Health – News & Entertainment. Our old heavy industries cannot compete with Chinese wages – but we do/could win with hi-tech (more education) – Electronics – Air & Space – Transport – and Marine Engineering (we are a bold sea-faring nation – and sea level is rising).

    LAND & HOUSING – SURPLUS POPULATION  A trip last week to Cornwall confirmed that the UK is heavily overcrowded, stressing all utilities and infrastructure. Just as it is OK for Jews, Catholics, Tories & Muslims to make risqué jokes about their own groups; at 72, into my last decade, I’m permitted to recommend get-rich-kwik businesses aimed at the elderly “Coffins to Die For” and replacing Starbucks with corner-shop franchises “Friendly-Fifty-Quid-Euthanasia-Clinics”; reducing overcrowding and releasing land & homes. Seriously – I have an inventor client who designs emergency flat-pack housing from recycled plastics – costing £200 per room which last 30+ years. Many post-war prefabs (pre-fabricated-homes), designed to last 10-20 years are, 70 years on, still much loved homes. It only needs political will and vision to provide enough affordable homes on underutilised land. LVT - Do it today!

    WHERE’S THE MONEY ?  THE EMBARRASSING FACT ALL POLITICIANS STRIVE TO AVOID - Money is simply government permission to act (think of building pyramids). The UK has billions of well-fed, aimless, underutilised, skilled person-hours (e.g. 35 hours a week watching TV or meandering mindlessly round golf courses etc). IF cramped purblind economists insist that we apply only “existing” capital – money-surpluses already accumulated – then there is £2 to £3 trillion (8 million jobs) of UK tax-evasion-capital-flight frozen in dozens of banks in 70 tax-havens (read the HSBC Swiss & BVI figures and do the maths – or ask the OECD). The “owners” clearly don’t need it, it is redundant – and it is illicit tax-unpaid UK assets, gouged from our High Streets, which HMRC have existing powers to immediately claw-back via back-tax cases. Get it back to HM Treasury, end the UK’s premature retirement culture, and build houses and expand our world class commerce and hi-tech inventions.

    Vote for intelligent co-operation, vibrant leadership and informed-referendum-politics.


    (Mr) Noel Hodson
    16 Brookside, OXFORD, OX3 7PJ, UK 

    From: [mailto:labour-land-campaign-supporters@googlegroups.comOn Behalf Of Carol Wilcox
    Sent: 22 April 2015 18:01
    To: John Lipetz
    Cc: Richard Hithersay; henry law; David Triggs; tommas graves; peter bowman; John Howell; Paul Nicolson; Mark Wadsworth; Janos Abel; Ed Randall; peter challen; Dave Wetzel; Neale Upstone; Rob Blakemore; William Davidson; Louanne Tranchell; David Hirst; Ole Lefmann; Michael Learoyd; heather wetzel; Tony Vickers; LLC Members Group; LLC Supporters Group
    Subject: Re: FT leader today

    UK’s weak productivity invites a bolder response
    Capital and labour are already deregulated, now is the time for land
       Raise the subject of productivity in any gathering of UK economists and the mood will surely darken. Insofar as opinions differ, the room will split between the extreme pessimists on one side and the merely gloomy on the other. None would dispute the dire recent performance, nor the waste wreaked as a result. Had Britain kept to its pre-crisis trend, output per worker would be 15 per cent higher than it is.    Productivity matters more for the country’s fiscal health than any of the parties’ flimsy electoral vows. If it picks up again, the end of fiscal consolidation would be in sight. Should it sputter along as it has, the outlook is grimmer. Recent figures tilt towards the latter. Growth in “total factor productivity” — the residual once the effect of increased labour and capital is stripped out — is negligible. This is not the performance of a country set to win any global races.    Caution should be mixed in with the gloom. Like the Higgs boson, the economy’s productive potential has great import without ever being directly observed. How much it has fallen and or could rebound is a matter of conjecture. The output possible when resources are fully employed can be known with certainty only when the UK is again firing on all cylinders.    It cannot be a coincidence that productive potential fell just as the economy suffered a shock to demand. This allows room for the possibility that a cyclical rebound would restore this potential. For example, Britain’s hitherto thriving professional services sector lost revenues when the economy receded, and could recoup them without needing an expensive hiring spree.    Given how entrenched the recovery is, it would be unwise to bank on this. Other causes of the productivity shortfall are less likely to reverse. Unless the rocks beneath Gatwick really are awash with crude oil, UK production of hydrocarbons is in secular decline. Another key productivity driver, manufacturing, has shrunk too far to carry the rest of the economy on its own.    Per capita hourly output is not prominent in any electoral literature, but Britain’s deficit and cost of living problems will overshadow politics as long as productivity remains weak. The election campaign is yet to elicit a convincing response from the parties. They have coalesced around the usual measures: boosting apprenticeship numbers, promising more credit for business and more funds for infrastructure. This undifferentiated mishmash could have emerged at any time under Gordon Brown’s chancellorship, when growth policy was based on the “five drivers” of competition, enterprise, investment, innovation and skills.    Such agreement is not bad in itself — sharp changes in economic philosophy seldom help a country grow. But more is needed. What holds this worthy consensus together is its timidity: no one objects to better infrastructure and skills. The last great step-change in UK productivity followed the radical deregulations of the 1980s, and took far more courage. Now that capital and labour are deregulated to a sensible degree, the challenge that remains is the dysfunctional market for land. Here, artificial scarcity acts as a tax on all enterprise, and drives up the price of a home (which indirectly raises wages). It also slows down the delivery of better infrastructure.    To address this, measures would be needed: land value taxation, the greenbelt policy revisited, even more compulsory purchase of land. Delivering these would prove just as fraught as when David Lloyd George and Winston Churchill tried to take on landed interests a century ago.    But decades of stagnant growth are a much worse prospect. On 2015-04-22 10:17, John Lipetz wrote:
    Dear All,
    Just to advise that the FT leading article points LVT as the key measure to deal with the current economic situation.

    Carol Wilcox
    Labour Land Campaign
    480 Lymington Road
    BH23 5HG
    01425 279307
    07912 038811
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