US/UK responses to the credit crunch

This year I have read many times commentators and market experts tell me the USA is “already in recession”. They should take a look at the first quarter figures, which shows the US economy still grew at 0.6%, thanks to improvement in exports following the devaluation of the dollar, some increase in government spending and stockbuilding. So far it’s on course for the sharp slowdown without two negative quarters. The Fed once again confirmed its determination to prevent a recession by cutting interest rates to just 2%. This quarter should see some modest stimulus from the tax cuts, whilst the second half of the year will see more impact from the shift to cheap credit. At some point even the very distressed housing sector will stop falling, as it has crashed so far.

Meanwhile on this side of the Atlantic we get a pep talk from the Bank of England, telling the banks they should lend more! Is this the same Bank of England that was telling bankers last autumn they were lending too much to the wrong people? Do they still belong to the tripartite regulatory system, which is telling banks they need to have more capital and more cash just to sustain the business they have already written, let alone to offer any more loans? Does the right hand know what the left hand is doing in this three way split of a regulator?

No-one pretends it is easy to move from credit being too readily available to a situation where levels of credit are appropriate. It is wrong to claim it is all the banks fault – it was the authorities who encouraged the excess lending by setting low interest rates and drawing up regulatory rules which encouraged off balance sheet wizardry. The UK has decided to go for boom and bust banking, lurching from too much credit to the absurd spectacle of a government owned mortgage bank halving its very extensive mortgage book over a three year period, whilst the government and its agencies urges the banking sector to lend more! It will take time for the effects of the wind down of Northern Rock to work through the system, thanks to bad decision to nationalise it. We will pay a price for the authorities not making the £50 billion of swaps available last August to prevent the run on the Rock, and pay a further price for now owning a business which they want to halve in size, with all the lost jobs and downward pressure on the housing market that entails.

The US is handling this credit crunch better than the UK. The UK authorities should study the US response more, and should stop making the problem worse through regulatory confusion and inconsistency. The government should reinstate the Bank of England as principal banking regulator, going back to the pre 1997 system. That worked better during periods of error and crisis.

Guilty motorists or oppressive rules?

Today we can elect new Councillors in many parts of the country. I do hope all the oppressed motorists of the UK will take this opportunity to tell their would be Councillors we are fed up with the way we are treated by petty officialdom at the local level, as well as by our rapacious government who see the motorist as one of the prime sources of extra revenue.

The national press this morning highlights just how many motorists now end up paying speeding fines and parking fines. Some of them deserve them, for parking in places which block the traffic or hinder others, and for driving too fast in difficult conditions. Others are caught out by bizarre changes of speed limit on good roads, by confusion over what the parking rules are on any given piece of kerb, and by the officious efficiency of the public sector when it comes to taking money off us. If only they were equally efficient and determined to provide good service in all the other departments.

In recent conversations I have been told of the kind of intolerance shown by some parking officials to usually law abiding people. One person came out of his house to take his car away from an overnight space at 8.32 in the morning. A ticket was placed on his vehicle because he was meant to have moved it at 8.30. Another found a ticket on his car because the boot protruded beyond the line marking the end of the parking bay, even though the vehicle position was not blocking anyone’s entrance or impeding traffic flow. A taxi driver explained why he could not drop someone off in a location where he was not blocking the traffic, because taxi drivers are under the steely eye of the surveillance cameras in London all the time they are at work and they would be fined.

Whilst the press is right to highlight the financial impact of this surrogate for taxation, the steady stream of fines, there is another feature which should worry us. One third of motorists apparently have fallen foul of the rules and had to pay up. The two thirds of us who escaped fines have still had to run the gauntlet of the sometimes unreasonable and perverse rules. We have had to change our driving style to accommodate endless scanning of the horizon for all the signs and instructions which now dictate how we drive. Instead of spending the maximum time on surveying the road ahead for hazards and adjusting direction and speed to the conditions, motorists now spend much of their time seeking out the frequent changes of rule and watching their speedometers to try to keep within them. It makes people worse drivers. The whole process puts people on edge too often and for too long.

The same happens to us when we have finally parked the car at the journey’s end Have you felt that nagging fear that you will overstay your time in the local car park because it takes longer to buy something in the shops than you thought? Have you ever had to abandon your purchase because of the queue for the till and dash for the car to avoid the car park vigilante getting you for a few minutes over your time? Have you ever stood in the rain by the car puzzling over whether you can or cannot park in a given spot because the rules and signs are unclear? Have you ever been done because you misread the signs? Why can’t you top up the fee you paid on entry in the car parks where you have to pay in advance, if you need to? If limiting the time of your stay is so important to the Council, there could be an allowance of extra time you could pay for before the penalty kicks in.

There is a parking area in Wokingham where a municipal car park shares a common entrance with a private car park. People often get caught out, parking in the wrong part. They have to pay a penalty, even though they have paid and put a sticker in the windscreen, because they have parked in the wrong space. I recently wanted to park in a central London side street. The residents’ parking places were clearly banned to me. Next to one of them was a single yellow line, creating a space for a single car in the line of parked vehicles, well away from the turning. There was no sign up to tell me when the single yellow line applied. Just round the corner on the main road there was a red line for an urban clearway, and a sign telling me that could be used for parking at the time of my arrival. I eventually found a space some way away on the main road, where the parking impeded traffic flows more than would have been the case in the side road. I could not afford to take the risk on the yellow line. Sometimes there can be as many as three different regimes for the timing of parking on the same stretch of road. You need to walk up and down checking for all the signs to make sure you have understood. Many of the places fail to tell you on the signs whether a bank holiday counts as a Sunday or not.

The truth is that parking controls and charges have become too complicated. Of course we need rules to prevent people blocking side roads to traffic, and to stop them restricting the width of the carriageways of main roads when they are busy. Of course it makes sense for a Council which has had to buy a piece of land and needs to spend money on maintaining the car park to charge the users for their use rather than putting the whole thing onto the Council Tax. This system has now been turned into a money spinner, seeking to make Council profit out of their near monopoly provision of public parking. It has also been over complicated by too many officials endlessly varying the rules of the parking schemes and spending our money on reconfiguring the street, the pavement, and the parking spaces.

So as you go to vote today, try to have a word with those who would represent us. Tell them it’s taking the pleasure out of shopping and increasing the pressure on going to work or visiting friends. We are under the cosh of the surveillance society. We have to dance to the tune of petty officialdom. They seem to forget that parking is a service to make our lives easier, not another way to terrorise us and make us nervous about what we are doing. Surely our Councillors could unite to get some commonsense back into the system? If they did we would need fewer officials, so we could be charged less for the whole process.