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01.04.08
For general use with acknowledgment to the
author only required if and where
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Brown's Claim of Unprecedented
Economic Prosperity and Stability for the
United Kingdom Since 1997

MORTGAGING THE FUTURE
Part 1.
1. In the political hedonism that besets a
large proportion of the United Kingdom’s
population at the moment the words of
President Clinton aptly summarizes the
voter’s preference, ‘It’s the economy stupid.’

2. Short term populism is always de rigueur
so despite grandstanding, as Brown is
presently doing, man (apropos
the voters) being predominantly motivated
by self-interest, will not support a party who
would propose policies that, although they
may be designed for the long term good of
the country, would be politically disastrous
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at the moment.

3. So what Brown is presently doing is
attempting to pre-empt what is most likely to
be an economic crisis in 2008 by adroitly
focusing blame on ‘world economic
influences’ and thus away from himself and
his government.

4. Simultaneously Brown has dismissed all
charges of incompetence or prevarication
against his administration and its handling
of the Northern Rock crisis, Labour party
donations, loss of 25 million child benefit
data, immigration fiascos, employment of
illegal aliens, et al…by claiming he is
concentrating on the future and ‘getting on
with governing.’

5. This is typical of Brown. He is claiming
credit for handling flooding, terrorism and
the foot and mouth & blue tongue outbreaks.
But what did he actually DO? In reality, he
did nothing other than make the correct
noises and PR visits. He is adept at
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manoeuvring blame and credit. For
example, credit for economic prosperity but
blameless for economic downturn.

6. When Brown became Chancellor of the
Exchequer he made the Bank of England
independent - a long overdue move (that
unfortunately dismissed by the Tories for
political reasons has not been extended to
other vital areas under government control)
and promised no changes would be made in
financial policy for two years. This was
probably accurate on the spending side but
was not kept to on the taxation level. For
example, he bought in the disastrous tax on
pension funds that has brought private
pensions to their knees.

7. Brown inherited an economy that was on
the upturn and thriving but knew that he
would have to do everything it took to dispel
the notion the Labour could not run the
country’s economy but was essentially a
‘tax and spend’ party.
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8. And this is where his amazing luck
combined with Labour’s spin machine kicks
in. It is difficult to see how Labour has got
away with so much lying and deceit over a
decade.

9. It is partly due to the superb
showmanship and ability of Blair, Brown’s
predecessor, to convince a gullible
population that the most nonsensical
proposals and unintended consequences
that they engender are both original and
necessary. Blair was aware that deception
must be based upon facts however small or
disconnected. Outright lies are much more
easily detected.

10. Most voters are unaware of the
numerous indirect (stealth) taxes introduced
since 1997. Or the amount of power the
unelected EU commissioners have over our
national affairs, and how much this is
costing the United Kingdom? Or of the
number of Immigrants and amnesties
granted to asylum seekers since 1997? Or
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the billions of pounds the hundreds of
quangos are costing the country? The list is
endless…

11. No, the underclass voters who dictate
the social mores of the country care little for
this as long as they hold an illusion of never
ending prosperity and non - judgmental
living. As pointed out in another paper the
underclass is neither an ethnic nor
financially based group. It is a mindset-a
mental attitude based amongst other things
upon vulgarity, self-indulgence and instant
gratification -living for the moment. A
member of the underclass can be
well-educated or illiterate, rich or poor… the
basic qualification is being a self-obsessed
slob.

12. Whether in the underclass category or
otherwise, it is true to say that a large
number of people have tolerated mistakes,
incompetence and deceit for whatever
reason, from this Labour government that
they have never, and would never, tolerate
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from any other political group. But why this
toleration?
Voters first look to their income and
spending powers. If these remain constant
or consistently increase, the government
can be tolerated. There is no need to
change it. It’s the economy stupid!

13. Theresa May, Portillo and other
apologists, got it wrong with their public mea
culpa about the ‘nasty’ Tory party. They
suggested that the Tories lost three general
elections by raising immigration, health,
education and crime, as key issues. But,
now since these factors are affecting our
quality and economic lives the voters are
waking up to the problem. ‘Nastiness’ has
never been the issue outside the limousine
liberal mindset. As stated, anything
affecting economic prosperity and the
accompanying economic feel good factor,
will arouse the voters who are remarkably
short-sighted on other matters. Rather like
the good citizens and leaders of Troy!
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14. Examining this ‘unprecedented
economic growth’ and its accompanying
prosperity, if the welfare of future
generations is borne in mind there is cause
for great alarm because it is based on an
erroneous interpretation of economic
circumstances supported by a decade of
easy, reckless credit and other calculated
but mistaken policies.

15. There have been three prongs to
Brown’s economic ‘miracle’ namely
IMMIGRATION, CHEAP CREDIT including
property mortgages, and CHEAP IMPORTS.
(Oil has been the exception of late but is a
clear indication of what can befall an
unbalanced economy that relies largely on
financial services rather than on a high
proportion of exports that consist of
fundamental wealth in the form of
agricultural and manufactured goods).

16. IMMIGRATION is the key and this
accounts for the ultimately deleterious
policy of mass immigration. Large numbers
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of immigrants such as the almost 1 million
Polish workers now in the UK, ensures that
the gross domestic product constantly
increases as more immigrants arrive but this
does not mean an increase in income per
head. This is an entirely different matter.
In fact quite the reverse happens because
wages will tend to fall and thus disposable
income will fall with them. And in this
‘prosperity’ equation no notice is taken of
the cost of huge numbers of immigrants on
public services and quality living space.

17. PROPERTY has increased in value as
immigration has increased demand against a
falling supply and this plus cheap mortgages
(now coming to an end) has caused property
prices to rocket. However if a general credit
shortage occurs then this yardstick of
wealth based upon property valuations will
disintegrate. Britain’s housing market is the
most over-stretched one, world-wide.

18. Apart from mortgages, cheap credit
supplied recklessly has resulted in a
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consumer debt mountain more burdensome
even than that of the USA.
Consumer debt in the UK now consumes
almost 6% of GDP.

19. Starting with Margaret Thatcher’s
‘monetarism’ and its concentration on paper
wealth, through to the benign neglect of the
Labour government, industry and its
exports, which were the backbone of this
country’s wealth, have declined at a rapid
pace to a disastrous level. Much of what
remains, which has not been transferred
lock, stock and barrel to China and India is in
foreign ownership. This includes many
strategic industries and public utilities.

20. Align this with the worst current account
in Western Europe, it can be seen that Britain
is dependent upon funds from foreign
debtors - funds that could cease very
quickly!

21. To close this gap, the value of the pound
will need to fall thus making everything
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‘foreign’ from holidays to Chinese
goods…much more expensive thus
increasing the cost of living and subsequent
inflation. This reduces the ability of
financial institutions such as the Bank of
England to take remedial action. A
deflationary situation could arise where the
cost of living and inflation rise
simultaneously .

22. For both financial and strategic reasons
the United Kingdom needs to rebalance its
economy away from debt-fuelled
consumerism and property speculation to
export- led growth.

23. This is a difficult course of action to take
because, as stated, manufacturing, as the
main impetus for real export earnings, has
been in dramatic decline and the country
instead relies heavily upon financial services
(paper transactions) to support growth.

24. Ironically despite Brown’s boast that the
‘boom and bust’ days are over, financial
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services are highly vulnerable to cycles.
When a credit crunch arrives these services
rapidly retrench.

25. Brown’s economic ‘miracle’ that has
produced tedious superlatives from certain
sections is based upon very weak
foundations, per se, and can well prove
economically and socially disastrous in the
years to come.

26. The outcome, then, is for much slower
growth with falling property values and a
slide in the value of the pound. This
experience may bring the country ‘down to
earth’ back to the days of balance of
payments based upon tangible economic
assets.

27. In addition there should be a deliberate
government policy to restore the
magnificence of industry based upon state
of the art technology not as some exercise in
nostalgia but as a vital policy to restore a
tangible, secure economic base. There
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should be regulatory restraints on those
companies and individuals who are solely
concerned with corporate and individual
greed and who have not the slightest
concern for the general well-being,
economic, security, and political stability of
the citizens of the United Kingdom

28. This national disservice is not practiced
by the rest of the world. Without exception,
including our ‘partners’ in the European
Union who, whatever they subscribe to in
theory, have a keen desire to support their
own country’s welfare within a global
situation.
29. This is TOTALLY UNLIKE main stream
politicians in Britain who appear almost
traitorous in their headlong rush to divest
their country of its industrial and economic
base (and therefore its national security) for
social engineering, international and
multi-cultural concepts closeted in
misplaced or outdated theories within
ill-conceived arrogance. There is, of
course, the age old shibboleth of personal
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greed.




Postscript
To put the question of unprecedented
economic growth into perspective and
obtain a reality check on the degree of
inflation an easy test would be to compare
what can be purchased for £1 today and
what such purchases would cost in 1997.
This should cover every item big or small,
taking individually not as a pot pourri of
‘consumer indexes’. A good start could be
made with house prices, fuel, food and
energy.




MORTGAGING THE FUTURE
Part 2.
1. In public the Labour Party still deceives
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the uninformed, uneducated and prejudiced
by sermonizing the goals of equal
opportunity, social mobility through social
engineering and a more equitable sharing of
the national wealth. Parallel with this is their
propaganda that the Conservatives are the
representatives of, and work for, the
privileged class. This meaningless rhetoric
goes down well with certain sections of the
population who see nothing strange about
this ‘sell’ as they trot down to the nearest
football stadium to see footballers, many of
whom now earn £50000 plus a WEEK,
kicking a leather ball around, however
skillfully.

2. Of course, this is normal since most of us
live around the cult of the celebrity.
Nothing is too extreme, ostentatious , banal
or uncouth that will not have its exponents
and followers. The cult of the celebrity is
with us and its concomitant obsession with
money is nowhere more pronounced than in
Government. Not only have they voted more
money in the form of salaries, allowances
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and pensions for the political class at
Westminster but they have a penchant for
mingling with the rich and powerful.

3. Thus hypocrisy covers with rhetoric the
desire for riches and fame for which the
governing class yearns. Nowhere is this
more exemplified by ex-premier Blair’s
cheapskate tactics of holiday homes and his
wife’s ability to obtain free samples of goods
when on tour with him. And in a larger
dimension his strategy in preparing for the
future with well paid speaking engagements
and no doubt, eventually, directorships.

4. In the country at large the gap between
rich and poor has never been greater.
Whilst in the financial arena billions of
pounds have been distributed to a relative
few in bonuses, amongst the many, the
spectre of house repossession, interest
payments on various types of loans and a
higher cost of living in general is an
imminent
threat.
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5. Morgan Stanley bankers can distribute 5
billion dollars in bonuses despite its first
loss in history because of having virtually
written off a 4.7billion dollars portfolio of
badly sold sub-prime mortgages.

6. The crisis in credit is due solely to the
greed and incompetence of the financial
community who experiencing a seemingly
neverending financial bonanza became
overwhelmed with reckless optimism.

7. However the financial community has
placed the future of this country in jeopardy.
In doing so, as has been mentioned in Part 1
of this essay, it has had the full cooperation
of the representatives of the working class
government (sic). Not that the Tories with
their deafening silence would have done any
better! But Labour is in power with its
election manifesto based upon envy and
equality so must take the responsibility and
face the ultimate disgrace that should live to
haunt them and eventually cause their
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obliteration. Because in their desire to
obtain and then retain power they will stop at
nothing and with a host of parliamentary
mediocrities supporting them, discern
nothing!

8. It is the financial world that initiated the
destruction of our industrial, manufacturing
and research heritage
upon which the prosperity of the United
Kingdom was built. When companies
merge, are acquired or taken over, the
banks, amongst other professionals, obtain
huge fees. This means in some cases the
physical movement of plants to be
re-erected in China, India…lost for
ever or put into direct competition with our
Nation.

9. In late December 2007 ICI was taken over
by its Dutch rival Akzo Nobel. ICI was an
industrial powerhouse of this Nation. It
invented Perspex, and in the 50’s rayon,
nylon and polyester synthetic fibres. It was
the leader in pesticides and discovered the
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anti-malarial drug Paludrine and the Nobel
prize winning beta blocker drugs that have
saved countless heart disease patients. To
keep such a giant in indigenous hands
would be a matter of national pride for most
countries but not for British politicians.
Where was the cry from the Conservative or
Liberal benches?

10. The fact is that the investment bankers,
speculative hedge funds and mysterious
private equity firms involved in such matters
have no interest in British companies, per
se, or in this country’s well-being but only in
how much money can be squeezed out of
such transactions.

11. This country has been run by a serious
of defeatist politicians, long before Labour
governed, who through cowardice,
incoherency and lack of historical
perspective have willing participated in the
destruction or disastrous decline of our
world beating ship building, mass produced
cars, textiles and machine tools, mining and
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mining equipment and steel manufacturing
and fabricating industries. And this is not
the total list! They have had no stomach to
fight for what could be our very existence in
the economic challenges of the coming
decades - the need to compete in the global
markets but not just with pieces of paper.

12. We still have a few ‘world beaters’
remaining such as Rolls Royce and BAE
Systems, the pharmaceutical firms
Glaxo-Smith Kline and Astra Zeneca, with
some others but so few in comparison with
the past.

13. A decision was made to concentrate on
finance and allow industry to fall by the
wayside and no politician had the wit or
perspicacity to see the hidden dangers in
this. Banking and insurance now accounts
for 11% of our total national output. This is
most certainly an under- estimate. With the
ancillary services that support the financial
sector – lawyers, accountants, consultants,
IT experts, PR experts and many others, it is
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calculated that about one third of our
national wealth is dependent upon the world
of money. This makes our economic
position extremely vulnerable to external
forces.

14. The need to attract money and its
attendant services to the United Kingdom,
which really means to London, meant giving
incentives to financial entrepreneurs such as
‘non-domicile’ status that reduces taxation
almost to zero and slashing the tax on
private equity companies to 10%. And this
worked! London has become the financial
capital of the world.

15. All this has distorted British society.
There is a huge gap between the few super
rich of the City, with their £5000 a bottle
wines, and the bulk of the population. In
some areas of London and the South East
property is unbelievably expensive and this
wealth has distorted the market to such an
extent that many buyers have been forced
out of it or are compelled to live a long way
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from their workplaces.

16. The greatest folly which should be
repeated ad infinitum is that these people,
very largely our fellow countrymen, have
been permitted to enrich themselves
primarily by selling British firms down the
river thus putting this country into grave
danger.

17. And since our Prime Minister,
ex-Chancellor, Brown is immersed in his
own hubris praising our unprecedented
growth over a decade, one could ask:
MR.BROWN, WHERE WERE YOU DURING
THE LAST 10.5 YEARS WHILST UK
INDUSTRY WAS DECIMATED. WHO WILL
ULTIMATELY TAKE THE BLAME WHEN THE
CRUNCH COMES?

A.W.Hodges 20.02.2008

N.B. Written before the implementation of
the decision to abolish the 10% tax
threshold.
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