A Bold Expression Of The Truth

In my blog post Capitalism And The Importance of Lying, I set out why it was that hiding the truth, from the majority of citizens, was a necessary part of the way Capitalism works. I'm grateful for the BBC News Channel for alerting me to a classic example of that. Every night they have a brief look at the next day's papers. Last night, the two newsreaders, on the change over, responded with a bit of a giggle to the headline in the Daily Express - then again who could take that rag seriously - proclaiming in large letters that house prices were about to surge. I was drawn to this because it is contrary to all my own analysis of the housing market, prices and the economy, and more importantly it is contrary to what every other survey has been saying, and what pretty much every economist thinks is likely to happen to house prices. At the later review, where a representative of the press goes through the papers, even more scorn was poured on the headline, and the following story, which talked about an expert saying that confidence was rising. As the reviewer from the Independent said, how this could be interpreted to justify the headline about a house price surge was not clear. So today, I had a look at the actual story in theDaily Express

It quotes a spokeperson from the Royal Institure of Chartered Surveyors, saying,

"Price falls have steadied and more homes coming up for sale will boost confidence, reports the Royal Institution of Chartered Surveyors.

Its latest housing study, a closely watched indicator of the market’s health, is upbeat about the direction sales are heading, with a growing number of experts forecasting them to rise over the next three months."

In fact, an increased Supply of houses is more likely to lead to further falls in prices not rises, and RICS argument as with others is that prices have stabilised in the last month due to a reduction in Supply. They continue,

"Just 39 per cent of surveyors reported values falling last month, down from the 44 per cent who did so in November."


But, this is either lazy journalism, a failure to understand basic statistical information or a misrepresentation.

RICS did not say that.

Here is what RICS actually said,

Pessimism still surrounds current house prices, with 39 per cent more surveyors reporting prices fell rather than rose in December, although this is an improvement from -44 per cent during the previous month. Expectations for house prices over the next three months saw 29 per cent more surveyors predicting prices would fall than rise (from -41 per cent more in November)”

On the Express's version of reality more suveyors reported house prices rising than falling - i.e. only 39%. But, in fact what the RICS statement says is that more surveyors reported house prices falling than rising i.e. 39% MORE. In other words, on the Express account you might understand that 39% reported falling house prices, whereas the remaining 61% would have recorded them rising. But, in fact, the RICS figures suggest something like 69% recorded falling prices, with just 30% recording a rise i.e. 39% MORE reporting a fall than a rise. The same is true of the other figure here. If, as RICS say, 29% MORE surveyors are predicting a fall than a rise, then contrary to the Express's interpretation of this meaning a surge in house prices, it means a majority of surveyors see a continuing FALL. It would mean something like 65% see prices falling with just 35% seeing them rising! Giving the difference of 29% more seeing a fall than a rise.

RICS continue.

“The level of completed house sales stabilised at the end of 2010, but the outlook for the property market remains mixed, says the latest RICS UK Housing Market survey.”

“New buyer enquiries, which signal demand for property, fell for the seventh consecutive month. Surveyors continue to report that lending constraints, particularly to first-time buyers, remains the biggest barrier to any strong improvement in the market.

“Although bad weather hit the housing market during December sales levels have remained stable. While lack of supply, and more importantly demand continues to impact heavily, surveyor sentiment does appear more positive for the coming months.

The key issue now is mortgage finance. However, with commentators suggesting lending constraints are unlikely to be eased, it is hard to envisage a meaningful increase in sales levels in the near term.”

RICS Press Release

The Express also quote from Rightmove to back up their headline. But here again is what Rightmove actually says,

“Miles Shipside, director of Rightmove, comments: “The opening skirmish in the 2011 price battle looks to be going marginally in favour of scarcer sellers, especially in locations preferred by tooled-up cash buyers or those packing a hefty deposit. With the number of new sellers at a two year record low, prices are being under-pinned by muted new supply just managing to fight off the downsides of lender reticence. However, in less popular locations, the smokescreen of New Year price optimism is temporarily masking the collateral damage that the new era of tighter credit will continue to inflict”.

“It is not unusual for traditionally optimistic. January sellers to ask more for their property, though 2008 and 2009, post the Northern Rock and Lehman Brothers collapses, did record falls of 0.8% and 1.9% respectively. Sufficient confidence had returned by January 2010 for new sellers to increase their prices by 0.4%.”

But in the October HPI, Rightmove also commented about higher asking prices.

“Why would new sellers test the market at asking prices 3.1% higher than a month ago?...

* Bullish pricing is a normal characteristic of the autumn selling season with average asking prices increasing in every October for the past decade

* Vendors struggle to react to the increasing stock as most are unwilling or unable to adjust to new market conditions

* Post-HIP speculative sellers can now test the market at minimal cost
Disappointment is the likely outcome for many sellers as evidence shows high launch price damages chances of securing a later sale”


In fact, a friend of mine I saw the other day told me that the terraced houses near him are now selling for around £40,000, a price he can never remember seeing in many years. More ecently, he says, they had been selling for around £70-80,000, something again backed up by the Rightmove recent HPI.

The Express talk about rising consumer confidence, but pretty much every available survey shows the opposite, as the Bloomberg analysis, based on Nationwide's survey, I provided previously demonstrated.

Besides the fact that I wouldn't even trust the Daily Express to provide me with reliable information about what was on the TV, let alone on anything more important, why would they come out with this rubbish?

The Daily Express is a died in the wool, Tory rag. Its target audience are the over 60, working-class Tories who think they are middle class, because they were lucky enough to have been born at a time when they were able to buy a house very cheap, back in the 1960's and which is now anything up to 60-70 times the price they paid for it. They don't want to disillusion their readers with the thought that the policies being pursued by the Tories, which are once again leading to economic decline, large increases in unemployment, and inflation once again on the rise as today's huge rise in CPI from 3.4 to 3.7% (a 10% rise in one month) signals, and is likely to once again result in higher interest rates, mortgage rates and a crash in house prices, just as happened in 1990, under the last Tory Government.

Then the Tories economic mismanagement led to inflation in the first years of the Thatcher Government of nearly 27%, mass unemployment of around 5 million, and economic and social collapse. Having deregulated the Banks, Thatcher's Government then opened the monetary spigots and let loose a torrent of cheap money on to the economy sending house prices soaring. Then with millions having turned themselves into debt slaves – many in order to buy their Council Houses on cheap mortgages – the Tories were forced to increase interest rates to 15%. Even when that came down, mortgage rates stayed at around 15% for several years. The consequence was a 40% fall in house prices in 1990, which was not recovered even in nominal terms until 1996.

Today, after a further two decades of the monetary spigot being opened full bore to keep the Capitalist economy afloat, house prices have climbed into the stratosphere, way above the bubble levels of 1990 – in fact, today around 5 times even their bubble level of that time. Its no wonder the Express doesn't want to scare the pants off its Tory readers, and is trying to do its bit to keep the bubble going with a version of reality that would give the Ministry of Truth a good run for its money.

The Insanity of Capitalism

That rabid, rascally, racist rag the Daily Express has on its front page yet another story attacking people on Benefits. Better still for it, the person cocnerned is originally from Nigeria, though has lived in Britain for ten years. Better still for it she is a single mother with five kids. No doubt it is the kind of story to get the kind of rabid, rascally, racist readers of the rag riled into a rage.

See: Racist Rag

The poor woman concerned lost her previous accommodation after a conflict with the Landlord. Now to add to her problems she has to face all of the hassle whipped up against her for no fault of her own. Having lost her previous accommodation her local Council could provide her with no adequate Counci Housing. So she found a house to rent, and corectly claimed her Housing Benefit. The Express is in a righteous rage over the fact that the house concerned is a £1 million - looks overpriced to me from the picture - house in a leafy suburb. What really is the gripe here?

This poor woman's problem really comes down to the fact that there are insufficient Council houses. But hang on, the main reason for that is that egged on by papers like the Express, Maggie Thatcher, in the 1980s forced Council's to sell their Council houses at give away prices!!! Now having helped cause the problem, the Express wants to whip up a moral panic against the very people who are the victims of the situation Thatcher and the Express created!!!!

Its amazing that the Express can feel that it can continue to appeal to its small-minded readers with such stories about trivial matters like this affecting disadvantaged people given the fact that over the last few weeks the capitalist State in Britain along with Capitalist States hroughout the world have paid out hundreds of billions of pounds in benefits to the rich bankers and their shareholders. They quote someone from the taxpayers Alliance saying that Housing Benefit should be only a stop-gap while people get back on their feet not a lifelong commitment. If it were possible for everyone to get a decent paid job in such a short period of time that might be fair enough, but, of course the reality is different. Especially if you face the likely probles of this poor woman of having to deal with a society in which racial discrimination in employment is rampant, and especially given the problem of trying to cover the cost of childcare. Moreover, they might want to consider that the chances of employment have just got a whole lot worse, and not for any mistakes made by those on benefits or other workers. No, it is the greed of Capitalism that led to the reckless decisions of Bankers and Capitalist States that led to the Credit Crunch and its effects on the real economy.

The answer to the Express's righteous indignation is simple. If they object to the cost of the rent for houses like the one in question then the State should simply take them over as it has done with the Banks. The Express doesn't complain about the Housing Benefit paid to the Queen to enable her to stay in the rented accommodation at Buckingham Palace - whose value I'm sure is much more than a million, and hte annual rent would be a lot more than £25,000. What about taking that over for more efficient use along with all the other udner-occupied palaces and large houses, and converting them to flats for the homeless to make up for all those Council houses Thatcher forced Councils to sell.

Of course, the Capitalist State won't do that, and its pointless socialists demanding that it did, or misleading workers into the belief that it might. The job of marxists is to provide workers with real solutions to their problems, solutions they can bring about thesmelves here and now through their own activity not playing games in trying to make the State and its agents look bad - no effort is required for that it does it itself. The answer comes both from Marx and Engels and from the experience of workers own activity in the past. Marx and Engels argued that workers should not look to the bosses or their State to provide them with solutions. Instead they had to rely now and in the future on their own self-activity, in their own collective and co-operative efforts. That was true wheter it was in defending their wages and conditions through their Trade Unions, in building their own economic and social position through the creation of Co-operatives, or fighting the attempts of the bosses to frustrate them politically, by building their own political party. Workers and small farmers in the US did that. They had a thing called "Barn Raising". When a new small farm started up, all the neighbours would club together and build the barn and other buildings. Through, their collective, co-operative effort not only could they build a barn quickly, and efficiently - often within a day - but they could do it cheaply.

Today, tat perhaps, is not a possibility in the literal sense - although there are examples of peple working co-operatively udner the guidance of skilled craftsmen tobuild their own houses - but we do have the possibility of creating Co-operative construction companies, we do have Co-operative and Mutual Banks and fianncial institutions such as the Co-op and Unity Trust Banks, and e do have the experience of building Tenants and residents Association to bring about some measure of co-operative control over local estates. If instead of wasting its time in futile battles with the Capitaist State sapping its energy and strength the Labour Movement set itself the task of developing such solutions, of bringing the Co-op Bank etc. properly under workers control ensuring that funds were dircted accordingly and so on workers could begin to build worker owned an controlled estates throughout the country desigtnd to meet the needs of the people living there, not the whims of some bureaucrat sitting in a planning office at the local Council or in Whitehall. Not only could the cost of such communities be reduced, for those living there considerably, but they would be under their direct control with no fear that at some point the Council will icnrease rents, introduce some new edict, try to sell off the houses to some private company or fail to maintain them for years on end. In place of the huge sums that go just to cover the bloated expenses of State Capitalist bureaucrats that run Housing departments in local Councils or in the Housing Associations, the administration cost would be slashed with the consequent benefit for tenants.

In so doing and bringing back a large amount of property int the ownership and control of workers a start would be being amde in constructing a different type of society. A society workers could begin to understand and believe in in place of the anrarchy and madnesss of Capitalism, a society where the great inequalities in wealth and income create the lunacy of a surfeit of million pound homes amidst a shortage of decent homes for the vast majority.