Tuesday, November 12, 2013

Recession clouds lifting?

The news seems to be positive.  The recession is lifting according to press.  The benefits of this are hard to see on the ground.  In the last recession I was lucky enough to be isolated from the effects.  Not so this time with the government cuts directly impacting my revenue and business growth potential.  That is not a complaint, just a reality.  Cuts happen.

It did encourage me to diversify and start up in the private sector and that has got me through to some extent albeit things are tight.  Outside of business the costs of living keep rising.  In order to maintain the business I have had to cut back in the business and that means minimising personal pay for everyone including and starting with myself.

It has enabled me to see the real costs of things and also see what it must be like for those who may not have the opportunity to grow back their business or get a job when things start to improve.  The cost of rents is still growing and even those who say people should move out of expensive rents need to remember that deposits are needed to move.  You do not get back your deposit before you have to pay a new one for a new property.  In essence, it is very easy to get locked into a rent position and have to accept increased rents each year to the tune of minimum 5%.  With energy prices going up at double inflation and the trains likewise I see no let up for those at the poorer end of society.

Work is no longer a route out of poverty is probably one of the scariest statements I have heard in my life.  Take away this incentive, the opportunity and the ability to improve one's life and what is the bottom end of society left with.  Hope is all many people have in difficult times.  Banks ae still not lending, house prices are rising and demand still outstrips supply.

Energy companies are moaning and investors are being heard to say that the energy companies should be left alone for the market to sort itself out.  Really?  The market has not done a good job so far.  Energy supply is simply not keeping up with demand.  So costs rise.  Simples.  The market is operating in that respect but there is a different angle.  A correctly operating market is a financial thing and not a social thing.  It is a point I have made on a number of occasions.  Not everything can and should be boiled down to money.

If markets are taken to the extreme then it will be fine for some people to not be able to afford energy.  Or water?  Or food?  If the supply of a commodity is limited then the price will go up.  If the prices go up enough then it will become a luxury and some people will not have any.  Market operating fine.  Really?

So the question is not whether the market is operating correctly it surely should be whether a critical commodity like water, food or energy should be subject to market conditions.  It can only lead to subsidies.  People at the bottom end of society with no heating in winter due to affordability issues will have to be subsidised which of course means subsidising the energy companies.  At this point the market has failed society.

How far does it have to go before this is dealt with?  How many old people or poor people have to have 1 heater in 1 room before the multi millionaires running the cabinet do something.


Post a Comment

Subscribe to Post Comments [Atom]

<< Home