People believing things which just aren’t true

Capitalism in Britain is broken and needs urgent reform because it is leaving young people worse off than their parents, the Archbishop of Canterbury has said.

But then a belief in consubstantiation is a requirement for that particular job, isn’t it?

The belief that the young are worse off than their parents is equally untrue. It’s bollocks quite frankly. A result of gussied up statistics and a refusal to look at consumption, the only economic outcome that actually matters.

Just one teenie example. Someone in their 20s today, their parents would have been born in the 60s. We have the concept today of fuel poverty, can you heat the whole house to a certain temperature on less than 10% of income? If not, you’re in fuel poverty. In the 1960s, being unable to heat a house in that manner was called “normal.”

And then there’s the manner in which CPI overstates inflation – makes a hell of a difference some 1% a year over 40 years.

32 thoughts on “People believing things which just aren’t true”

  1. Fantasist believes in fantasies. News at 11.

    See also the Pope.

    Fortunately, at least in the UK, fewer and fewer people are taking any notice of these idiots.

  2. What about housing? A young person would need to earn 2.5 times what I did in 2001 to buy the same flat. Compared to 97 4.5 times more.

  3. The Archbishop is talking bilge. The C of E, however, doesn’t hold to the Lutheran doctrine of consubstantiation.

  4. The Lauighing Cavalier

    The real rise in the cost of living is seriously understated by the CPI on account of politicians fiddling the figures. As ever, Brown was the most egregious of these. Excluding the cost of housing from the CPI makes it meaningless.

  5. A stat I read a while back was that someone on benefits today has more disposable income than someone on average earnings in the 70’s.

    So this “kids are poorer than their parents were” is utter bullshit.

  6. As someone in their 20s I grew up hearing stories of an orange or a calculator being an exciting present for Christmas for my parents. This is alien to my own generation. The ONLY aspect that has worsened is house prices versus incomes. And that’s thanks to our lovely government restricting supply and pumping demand (I. E. A socialist, not a capitalist issue)

  7. @Mal Reynolds
    I agree 100% with you, saying that house prices is quite a big part of life. (Football tickets have also risen but are not so important)
    I once calculated how much a mortgage for my house would be now if prices had risen since 97 with inflation, interest rates had stayed the same etc and compared it to the actual cost for a FTB today. The results were £850 pcm and £1850pcm – thanks Blair, Brown Cameron.

  8. As a percentage of income low interest rates mean that mortgages cost pretty much what they always did. Deposits are bigger but monthly payments are about what they always have been.

  9. Mal,

    At 41 I’m old enough to remember calculators being nifty things, and yes, Christmas presents they often were. Home stereos were also items that were bought by everyone, and renting your telly was a necessity, even for affluent homes- we had a Ferguson 17″ TV on plan from Radio rentals for about 5 years- total cost of which must have easily outstripped it’s purchase price (if Ferguson even made TV’s for purchase at that point).

    On house prices, everyone knows my idea for sorting that, so I’ll not rehash it again, lest people start to think I’m like DBC Reed, but there’s a bit of this discussio0n reminds me of Tim’s note on GDP being used as a basis for comparison between generations. Isn’t there a wealth of things now that add value to us that simply don’t figure in most of the standard metrics? Whatsapp being outside of GDP is the one that comes to mind, but I’m sure there are others.

  10. Their parents were also brighter in that most didn’t get themselves £50k in debt just to get a Grievance Studies degree.

  11. John Square,

    Housing is a useful metric precisely because it’s fairly constant: 1,000sqft twenty-five years ago is the same as 1,000sqft today, even if your pocket calculator has morphed into an all-singing all-dancing smartphone.

    Timmy,

    Your comparison with the 1960s is too far back. Today’s 25 year old’s parents were 25 in 1992.

  12. @Ljar
    “As a percentage of income low interest rates mean that mortgages cost pretty much what they always did. Deposits are bigger but monthly payments are about what they always have been.”
    My calculations show that they are not. (Compared to 1997) for South London.
    If you wish to check them the price in 1997 was £65k now £110k with inflation rises, about £400k interest rates in 1997 about 7% now, 1.14% from money saving expert.
    The price you would have to pay is £1,384 pcm at todays interest rates
    At £110k with 7% interest £713 pcm.

    Of course the bigger deposit £40k today and £10k under the hypothetical 1997 + inflation prices is a big difference and I have ignored stamp duty. The two would need several years of saving.

    I hope this makes sense. Sadly some prices have had even bigger rises.

  13. Can I point out that the reason why my figures differ is because the interest rates have changed since I last did the calculation.

    Another way of course to do this, is if people remember their first mortage payment put it in the bank of England inflation calculator and see what they can get today.

  14. @John Square
    “On house prices, everyone knows my idea for sorting that, so I’ll not rehash it again,”
    What is it?
    “Isn’t there a wealth of things now that add value to us that simply don’t figure in most of the standard metrics? Whatsapp being outside of GDP is the one that comes to mind”
    Some people would say whatsapp, which makes it difficult to hold conversations would people in the same house and is replacing email – a far superior tool is a curse not a benefit but I digress.

  15. The Purge also needs to extend to all left supporting elements of the C of E.

    And MI6 arranging an accident for Pope Lenin would be a good idea as well.

  16. Funny how (at least nominal) Christian leaders cease to become the target of the Two Minutes Hate in the Guardian at times like these? It’s almost as if they were being useful idiots or something…

  17. Anyway, doesn’t the Church make its income from investments in the Evil Capitalist Stock Exchange? Seems a bit rum to me.

  18. @AndrewM

    I agree, but I think housing is the outlier- everything else has gotten cheaper.

    @Anon
    My thoughts on housing are to take the 25% of all housing stock owned and managed by the state (and it’s agents) and give it to the current tenants.

    We are apparently c 400-700k homes short in this country (depending on the definition of homelessness used), which is roughly the equivalent of 5 years worth of housebuilding.
    The larger part of the housing ‘crisis’ is an allocations issue- and we have a really good tool for resolving the allocations problem- the market.

    Why not let that do it’s thing, and ditch government involvement in housing entirely? As a by product, it’d be the single largest transfer of wealth from the state to the people ever, which would probably be a good thing in and of itself.

  19. @John Square
    “My thoughts on housing are to take the 25% of all housing stock owned and managed by the state (and it’s agents) and give it to the current tenants.”
    I am not sure on a segment of society which compared to those who rent privately or have bought in the last few years are relatively lucky getting even more money.
    I would just stop giving housing benefit to people in London that would make rents and prices drop there and the ripple effect would effect the rest of the country.

  20. Tim Newman,

    “To be fair, he worked for a large French oil company. Little wonder he’s confused about how money is made.”

    Further than that, the corporate world of the 80s and 90s in the UK was far less of a meritocracy than it is today. Middle management was over-rewarded compared to specialists (who were often in short supply) or senior management (who make or break companies). I worked for so many arseholes back then who had no idea about the stuff they were managing, who covered their arse by being overpaid bureaucrats doing performance reviews, collecting timesheets and hosting meetings. Many managers stayed in jobs because in reality, they happened to inherit a team with an excellent senior person who actually ran the team. They were far more political, far more about old boy networks.

    Also, why do people assume the 20* multiplier was right but the 150* multiplier is wrong? Maybe we undervalued senior management back then? Look at companies like Apple and WH Smith? Who turned around Apple? Tim Cook? Jony Ive? No, they were both there before the turn around. Both making sure that lots of overpriced, unwanted OS9 machines were made. What’s the multipier effect to shareholders of Jobs coming back to Apple? Without him, how much smaller would Apple be?

    I’m not saying all CEOs are that good, but that can be the stakes. WH Smith went from loss-making to profit-making with a new CEO. She got around 10% of the profits because of her deal. But you’re a shareholder. Someone offers you 90% of something, or 99% of nothing. Which option do you prefer?

  21. “I think housing is the outlier- everything else has gotten cheaper”

    Could there not be a link – at least part of the reason housing has gotten more expensive is that everything else has gotten cheaper? If the cost of a holiday abroad, a big TV, a new car, eating out etc etc have all fallen, that leaves a huge extra amount of spare income to spend on what sort of accommodation one want to live in.

    Put it this way – if someone lived at the same level of creature comforts that people did in 1965, then they’d probably have enough income spare to buy that bigger house that everyone keeps thinking they should be able to afford like their parents did.

  22. “Could there not be a link – at least part of the reason housing has gotten more expensive is that everything else has gotten cheaper? If the cost of a holiday abroad, a big TV, a new car, eating out etc etc have all fallen, that leaves a huge extra amount of spare income to spend on what sort of accommodation one want to live in.”

    Rent is charged at the maximum of what 2 people/couples/families will pay for a location, so yes. Less money on the food bill means that people can stretch a little more on the mortgage.

    And add into your numbers that lots of women are now working and at least before kids, earning good money.

    The real trick is remote working. Find somewhere no bugger wants to live in and do programming/book writing/whatever.

  23. Remote working, Tim waves *Hello!*

    Rural Portugal, Bohemia, getting paid US and UK wages to live in cheap places.

  24. Bloke in North Dorset

    Mal,

    “As someone in their 20s I grew up hearing stories of an orange or a calculator being an exciting present for Christmas for my parents. This is alien to my own generation. The ONLY aspect that has worsened is house prices versus incomes. And that’s thanks to our lovely government restricting supply and pumping demand (I. E. A socialist, not a capitalist issue)”

    When I bought my first house in ’77 I’d had to save the equivalent of the mortgage in the building society for 6 months before they even considrered me for a mortgage. I could then borrow a maximum of 2.5x salary and had I been married they wouldn’t have taken my wife’s salary in to account. That was normal. As the manager said, they expected people to have a life.

    When I next purchased a house in ’88 I was offered 4x salary, but, to my wife’s chagrin I refused borrow more than 2.5x. By the time I moved in ’92 I was offered 4.5x my salary + 1.5x my wife’s potential earning as a teacher, even though we had said she wasn’t going to work until our son was older.

    I believe that by 2007 they were offering outrageous mortgages of 5x or greater plus multiples of a wife’s salary.

    I agree that the supply of land is a problem but suggest that the supply of credit may also have been in no small part a contributing factor.

  25. @BiND

    I had a similar experience in the 1980s. I went to my bank manager and asked if they would give me a mortgage.

    ‘Certainly’ he said. ‘How much do you want’.

    I said I thought they multiplied my salary by a fixed amount and offered me that.

    ‘OK’ he said ‘we can do that. You’re in IT sales on salary + commission. We know what you made last year, how much are you going to make this year?’

    ‘I have no idea’ I replied.

    ‘Exactly’ he said ‘so how much do you want to borrow?’

  26. “I agree that the supply of land is a problem but suggest that the supply of credit may also have been in no small part a contributing factor.”

    Its no coincidence that the first UK house price boom took place soon after the US closed the gold window and the global monetary system became 100% fiat for the first time. Suddenly there was nothing holding banks back from lending more money…..

  27. In the 1960s most houses did not have central heating. I didn’t live anywhere with central heating until I was 29. As a small child I used to get dressed in bed in the winter. It wasn’t a question of money – the gas fire wasn’t big enough to heat the room to a decent temperature unless someone switched it on an hour or more before I needed to get up. I completely fail to understand why people moan about “fuel poverty”.

  28. also perhaps interesting to consider what sort of work a youngster today might do compared with 40 years ago, generally work is less arduous and hours shorter, there are exceptions.

    i’d say that economic rents (price of buying something limited by supply eg: football ticket, house) have gone up for youngsters, but factor costs (price of things unlimited by supply eg: bread, a tv) have gone down for all.

  29. @Bloke on M4
    “Rent is charged at the maximum of what 2 people/couples/families will pay for a location, so yes. Less money on the food bill means that people can stretch a little more on the mortgage.”
    In Spain prices have fallen more than wages – of course there is no Spanish term for NIMBY.

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