Tuesday, 8 May 2012

We need to turn the focus onto Housing.

I was at an event last week organised by the University of Ulster - it was a small conference on housing in Northern Ireland. I was there to do a very quick Q&A panel session but got there nice and early and managed to catch a presentation on the effects on housing the financial collapse has had. The chap presenting was Richard Ramsey, the Chief Economist for NI at Ulster Bank. It was, shall we say, alarming though not entirely surprising to find that in most of the slides of statistics Richard presented, NI was pretty much at the extreme end of every graph, table or line chart.

What was evidently clear from the presentation was that everyone over the age of 10 should have seen this collapse coming. There's no point going into the whole hindsight debate now, but what we should be doing - and it's my belief that we're not - is making sure we don't play the game the same way again.

For all the differences in political ideology, nearly all sides agree that underpinning (or rather central to) the whole collapse was housing. This wasn't caused by people taking out credit cards and buying too many luxuries, it wasn't caused by people buying cars that were too expensive for them, it was caused by people buying houses. Of course, there's nothing fundamentally wrong with buying a house but when an economy rests on house buying, then it is only house buying that can destroy it so totally.

So, when we look back at the crisis, we talk about tighter banking regulation, we ponder whether retail and investment banking should be separated, we talk about stricter lending criteria across the board and we (well, not me) bemoan public spending levels. But, have we changed our view on housing? No. Undoubtedly people are not trying to obtain high risk mortgages any more (not that banks are offering), and the numbers of what you could classify as normal applications for mortgages are down. But that's not a change in attitudes to housing, it's just a delay while people respond to the immediate financial constraints.

When the economy eventually recovers, there's no evidence to suggest we will do things any differently. People still want to buy a house (they just can't at the moment) and society is still reinforcing that this is the best form of securing your future. I don't have a problem with people having big houses that they have worked hard to afford. I have a problem with people who don't own a home being considered somewhat inferior to those who do.

Since Thatcher's grand sell off of public housing, there has been an almost accepted truth in this country that owning a house is the most important measure of worth in society. Our culture almost revolves around it. If we haven't done something to significantly change that culture then come the economic turnaround, that desire of ownership combined with a market that likes to respond to demand (whether rational or not) will set us straight back on the course to economic disaster again.

Human Rights issues discussed with Chinese official?

Before, during and after the recent visit to Northern Ireland by Madame Liu Yandong of the Communist Party of the China, many people and special interest groups raised the issue of China's terrible record of human rights abuses. In doing so, they were trying to get the First Minister and Deputy First Minister to raise the issue with Madame Liu Yandong directly. 

Most of these calls were dismissed with the excuse that Yandong was here to discuss matters of trade and commerce and strengthen links with the University of Ulster. The implication being that human rights weren't an appropriate subject of discussion when much more important issues had to be discussed first. In a reply to an assembly question from TUV leader, Jim Allister, OFMDFM stated that there had been private discussions with Yandong where human rights issues were discussed. 

What's interesting to note is the language that OFMDFM used in their reply to Mr Allister; the initial question specifically asked what discussions were had with Yandong on the subject of human rights abuses. The reply said private discussions included the subject of human rights issues. Ignore for a minute the fact that Mr Allister's question was insufficiently answered and what you realise is that OFMDFM could have discussed our own human rights issues without ever mentioning China's human rights abuses. 

Of course, this 'elephant in the room' approach to dealing with China is hardly unique to Northern Ireland and in fairness to our own political leaders, there's really no upside to annoying China other than a tiny fraction of moral capital. What is needed is for the US, Russia, Europe to get together and discuss China's human rights abuses. 

I'm not an idiot; I know the obstacles standing in the way for such an approach. I just think the logic behind current thinking is flawed. It's based on the idea that trade with China steadily helps to improve things like some kind of very slow, very ineffective conversion therapy. All it does really though is allow China to make the least amount of effective change for the maximum amount of reward.

I don't think there is an easy solution to the problem, but I think it's easier to fix if the terms are along the lines of 'if you play by these rules, you can come into the club' instead of allowing them into the club and then asking them ever so nicely to abide by the rules which didn't prevent us from letting them in the club in the first place.