Birmingham & Detroitification

Extract from : http://www.custardfactory.co.uk/2008/10/29/bennie-grays-manifesto-to-avoid-detroitification-of-birmingham

“Bennie Gray, owner of the Custard Factory and Big Peg in the Jewellery Quarter, had his manifesto for saving Birmingham’s economy published in the Birmingham Post yesterday.

In exactly the same way that first-time buyers are the foundation of the housing market, start-up businesses are the foundation and – these days – the possible salvation of the economy.

Especially of Birmingham’s local economy.

It’s easy to forget that most great enterprises have been sparked by the vision and the energy of one person. But for Henry there would be no Ford. But for Larry there would be no Google. But for Bill there would be no Microsoft. But for Richard there would be no Virgin.

The list of entrepreneurs who have started a small business and proceeded to change the way we live is a long one.

So as we face the onslaught of the worst economic storm of modern times, the extraordinary and transformatory potential of the entrepreneur is something that we in Birmingham dare not ignore.

If we are to insure against the nightmare scenario of massive unemployment and – even worse – of “Detroitification” we must urgently unleash our most important and least recognised economic resource – the entrepreneurial energy and talent of our young people….”

The Meaning of Detroitification

From The Detroit News 09/25/08 by Daniel Howes

The Detroitification of America is under way.
No, I don’t mean the collapse of neighborhoods, the flight of resident taxpayers or a descent into rampant public corruption — the hallmarks, alas, of contemporary life in the Motor City. I mean the denial woven deeply into the fabric of a community, its culture and its major institutions, from local and state government to the automakers, their suppliers and myriad other businesses operating in the Michigan economy.

Only in a Detroitifying land do borrowers gorge themselves on cheap money, assume too much debt and buy property they can’t afford. Only in America do lenders write mortgages they can’t justify, package them into securities, sell them to investors, reap the fees and then assume, with everyone else, that prices will always go up. And when they don’t, blame someone else.

Take it from the Big Mitten, home to the nation’s sickest economy, America: Denying reality doesn’t work. It won’t ease the tightening credit crunch, boost investor confidence or keep Congress from heeding President Bush’s call Wednesday night for a $700 billion bank bailout.

But denial of the country’s financial peril would take the country a few steps closer to our preferred way of seeing the world. Add vilification of Wall Street, absolution for Main Street and abdication by the political class and you get Detroitification writ large…..”

Mother Earth Shakes Her Fleas

Yesterday, BBC Radio 4 reported some interviews with Native Americans, who prophesise that Mother Earth will shortly be shaking her fleas : ie we humans !

According to pa.press.net – 27.10.2008 07:08

‘Minor’ quake hits Midlands

A “minor” earth tremor has hit the UK, police said.

Police received reports of the tremor affecting the area between Malvern and Worcester.

A spokesman for West Mercia Police said: “It was a very minor tremor. We have had no reports of any damage whatsoever.

“We have had about 15 to 20 calls from members of the public at most.”

A spokesman for the British Geological Survey said: “We have had quite a few calls reporting an earthquake so it seems like it is something.

“The seismologists are looking in to it right now.”

A statement released by the BGS said the earthquake measured 3.6 on the Richter Scale. It said the earthquake’s “locality” was Bromyard in Herefordshire.

According to reports given by residents to the BGS, the earthquake felt like “a thump as if someone had jumped off the bed upstairs”.

Another report described it as a “loud boom noise, as though something extremely heavy had fallen on the wood floor above my head”.

The statement from the BGS added: “The strength of the shaking has been described as moderate, enough to make furniture shake and windows or crockery rattle. Some reports indicate that people were woken from sleep and a few were frightened.”

Co-incidentally, former Conservative Norman Tebbit has advised Shadow Chancellor George Osborne – in the context of the “Yachtgate” Affair – that if you sleep with dogs you should expect to catch fleas ! Mr Osborne has now apologised for his role “Yachtgate”.

Osborne apology over ‘yachtgate’

Methinks an apology to Mother Nature is long overdue !

Baron Mandelson of Foy and Hartlepool

Dressing down: the newly enobled Peter Mandelson in his work clothes (London Evening Standard)

Foy being in Herefordshire, the County has a new Lord.

Baron Mandelson enjoys courting favour amongst the wealthy, and put this talent to good use when he secured a handsome loan – to buy a London flat – from ministerial colleague Geoffrey Robinson in the golden days of New Labour. However, this wasn’t regarded as entirely de rigeur and led to Mandelson’s enforced resignation. After his return to Government, further favours and resignation followed. However, his role as European Trade Commissioner, from which he returns to the Lords, seemed to have favoured him better, and he has now been elevated to UK Secretary of State for Business.

The “Foy Connection” Explained

” In the late 1970s and eighties, Lord Mandelson owned a small, semi-detached cottage in a hamlet in the Welsh borders near Ross-on Wye, Herefordshire. According to a Daily Mirror tearjerker – by one Alastair Campbell in 1989 – it was a humble house with no carpets (‘just a collection of various rugs’), a ‘minuscule hall’ and three bedrooms, two of which were ‘very small singles.’ Even the three-piece suite was second-hand, and that the Vermeer prints on the walls had been ‘ripped from an art book.’  The choice of Foy is no coincidence

The Mandelson makeover continues.”

Posted by Sam Coates, Chief Political Correspondent, for The Times on October 13, 2008

Birmigham’s Housing Developments Hit Worst By Recession

Of all the UK cities who have embarked upon large-scale central area housing (ie apartment block) development, Birmingham has been worse hit. So what we don’t want is a lot more housing development in places like Worcester which will undermine the regeneration of the West Midlands conurbation even further. Politicians and planners take note, and let’s start developing real strategies to deal with the recession.

On the Parallel Universe inhabited by West Midlands Planners

Mr Anthony Johnson has just drawn my attention to his blog @ http://selfbuild.wordpress.com in response to my post of 24 April 2008 which deals with a (welcome !) market-led housebuilding moratorium and looks forward to better regulation : this includes planning !

2 major planning consultations are currently underway in Worcestershire, with reference to the South Worcestershire Joint Core Strategy and further proposed Revisions to the West Midlands Spatial Strategy. In fact, neither of these exercises is appropriate in the present economic context. However, West Midlands planners appear to inhabit a parallel universe, along with key members of the present Government, and the likes of the National Planning & Housing Advisory Unit.

However, it is interesting – syncronistic even – that Mr Johnson has also drawn my attention to another website : www.solvingstonehenge.co.uk. I would, in turn,  direct readers to the parallel universes of my E-Pantomime “Carry on Communities” @ (http://janetmackinnon.blogspot.com) and of my (much darker !) satyre “The Court of the Red Tar” @ http://janetrocco.blogspot.com whose action moves towards its climax with events at Stonehenge.

Returning to the real world, might I suggest that all parallel universe dwellers (particularly planners !) read the Financial Times “Property – Special Report” of 6.10.2008, and note just how fast the times are a-changing ! On page 7, Claer Barrett writes that “German banks are amongst the only institutions in Europe willing to finance real estate deals”….and one of these is Hypo Real ! So Get Real Folks  !

Feline Station Masters needed for Worcester’s Railways ?

Could feline station masters hold the keys to the regeneration of Worcester’s two railway stations and provide a much needed boost to the city’s visitor economy ?

Please see http://janetrocco.wordpress.com

A COMMON SENSE VIEW OF THE GLOBAL FINANCIAL CRISIS

Although I try to confine myself to local and regional matters in this blog, given the impact of the global financial crisis just now and the role of the United States in this, I thought this very good article from MSN News today was worth reproducing : “Are we really heading for another Great Depression?

MSN UK homepage editor Ian Jones wonders if some of the apocalyptic language being applied to the present turbulence on the world’s stock markets is a little out of place.

The dramatic economic events of the last few weeks have prompted a number of newspaper columnists to alight upon one particular historical motif.

‘We are now unquestionably in the worst financial crisis since the Great Depression,’ wrote Anatole Kaletsky in The Times. Jeremy Warner of the Independent dubbed it ‘unambiguously the worst financial crisis since the Great Depression.’ Peter Koenig of the Telegraph preferred simply ‘the worst financial panic since the Great Depression’.

But were they reaching for their history books, or rather just a lazy cliché? Larry Elliott of the Guardian noted that ‘culturally, America is fixated by the Great Depression. When it appeared Goldman Sachs could itself fall victim, the US Treasury saw lurid images of dole queues and soup kitchens.’ Might the British media also be fixated by the same thing? Is the Great Depression, which began in 1929, a useful comparison to drop into coverage of the current financial crisis?

‘They hollered and screamed’

Drawing parallels with the past in order to better understand the present is part of a historian’s trade. Those parallels need to be rooted in fact, however, or else the resulting conclusions may do more harm than good.

Fear of what might come is very different from fear of what is going on before your eyes. The panic of city bankers watching vast sums of money evaporating on their computer screens is genuine. The panic that is implied in talk of another Great Depression is not.

‘They roared like a lot of lions and tigers. They hollered and screamed, they clawed at one another’s collars.’ Those are the words of an eyewitness at one of the trading floors of Wall Street on ‘Black Tuesday’, 29 October 1929.

His description of the primal panic that had infested America’s stock market has no parallel today. And so far as it is known, none of today’s traders have yet tried to commit suicide, there and then, on any dealing room floor, or ‘stayed in the office a week without going home’, or rushed out into the street yelling: ‘I’m sold out! Sold out! Out!’

‘The business of America is business’ 

What became known as the Great Depression began that day and by 1931 had encircled the globe. It took root in every country in three sequential stages. First came a stock market collapse. Second, unemployment. And third, widespread (and often total) bank failure.

America set the pattern. An unregulated boom had raged for much of the 1920s. ‘The business of America is business’ declared President Calvin Coolidge. Speculation on the stock market became fashionable among both the well-off and the middle class, and soon vast notional sums were being exchanged. Investment was also encouraged, especially abroad. Wall Street indulged in some spectacular acts of folly, a typical example being when it agreed to assist a Bavarian village which needed $125,000 to build a swimming pool, and ended up spending three million.

When, one day, the buying turned – almost on a whim – to selling, the bubble burst. Black Tuesday was the culmination of almost a week of mania. 16,383,700 shares were sold in one day, at a loss of $10,000,000,000: twice the amount of currency in circulation in the entire country at the time. In the words of historian Hugh Brogan, ‘it was as if the whole fabric of modern, business, industrial America was unravelling’.

How enlightened Bush sounds

Nobody stepped in to help out, least of all the government. They didn’t know how. And they didn’t think they should. The prevailing doctrine of the day was: hands off. The market is no place for intervention. How enlightened George Bush’s words sound in this context (‘government intervention is not only warranted, it is essential’) especially considering what happened next.

Credit dried up (and here there some valid parallels with today). A scramble for currency – real money – took hold, and the cutbacks and lay-offs began. Unemployment in the US went up from 1.5m in 1929 to 5m by the end of 1930, and 13m by the end of 1932. The climax was a plague of bank closures, resulting in the introduction of the ‘bank holiday’: periods where nobody was allowed to withdraw money out of any bank anywhere.

By this point, in 1933, such were America’s trading links with the rest of the world that the entire planet was suffering. In the UK unemployment had doubled in 12 months and two million were out of work. Five million were unemployed in Germany. But still nobody did anything. And here is where the historian’s default reaction, to sound notes of caution, kicks in.

The most potent damage wrought by the Great Depression was in those three years following the Wall Street Crash. The consequences of the stock market slump were more toxic than the slump itself. And it was the inability of people in positions of power to arrest those consequences that led to mass poverty, starvation and homelessness and, in places like Japan, Germany and Italy, political extremism of the most appalling far-right kind.

History is not repeating itself

Today, here and now, people have acted. Lessons learned in the aftermath of 1929 are still being heeded almost 100 years later. Politicians from across the ideological canvas are stepping up. Unemployment on a similar scale to the early 1930s and total bank failure will not be permitted. We should be heartened, not hidebound.

The debate over the cause of the Great Depression, like the debate over the cause of the current events, will persist as long as human beings have the capacity to hold different points of view. But history is not repeating itself. And we certainly don’t know if this is the worst crisis since the Great Depression. We won’t know for many years.

What we do know is that other crises have exacted similarly profound consequences as that of 1929, and stand claim to be just as significant turning points in history: the post-war slump that almost bankrupted western Europe, for instance, or the oil shortages of the 1970s that generated soaring inflation around the world, or the recession of the early 1980s that sent unemployment in the UK over 3m.

We also know that it took a new President of the United States to save his country and by extension the rest of the planet from economic breakdown. ‘The only thing we have to fear is fear itself,’ declared Frankin D Roosevelt on the occasion of his inauguration in 1933, ‘nameless, unreasoning, unjustified terror which paralyses needed efforts to convert retreat into advance.’

There can’t be many who wouldn’t welcome a man of similar vision and courage into the White House this winter.”

…..And let’s hope the respite provided by the Jewish New Year has helped clarify the scope of immediate US Government intervention in their economy.