Debt in the Wider Economy

This group of posters links debt to wider issues in the U.K. economy, demonstrating the complex economic, legislative and socio-cultural dynamics of debt.

Poster 1: Know Your Enemy

This poster represents the multi-pronged approach of trying to reform high cost credit lenders or legal loan sharks (Payday lending, doorstep catalouge lenders etc,). It outlines some of the arguments made by payday lenders for their existence including: we are better than kneecappers, we are a technology company, we mainly lend to the “middle” classes, we fill a gap, overdrafts are more expensive and we are faster. It also outlines the following points:

Payday loan crisis as symptom of democracy crisis
But these arugments are often the same for the whole credit industry

Poster 2: Inequality of Wealth

This poster links rising debt as integral to the widening gap of wealth inequality. It states that the widening gap of wealth since the 1970’s has fragilised the economy making triggers to economic crisis inevitable. It goes on to state that the main mechanisms of this wealth transfer is debt. It also argues that rising national debt is due to tax strikes/go slows by the rich which is enabled by tax evasion/avoidance/regulatory capture/regulatory arbitrage. It also notes the following points

Asset based welfare (wrongly) assumes average household can accumulate wealth
Income inequality vs. wealth inequality
City of london explicit object is to PPP/PFI’s aroudn the world and admits it can’t see the general economy growing faster tha the financial debt one
Income/wages and benefits/services more important than wealth

Poster 3: Financial (re)Education

This poster challenges the idea that problem debt levels can be remedied by better financial education. It states that this is the political elite’s vision of financial education. It refers to the morality of debt borrowers vs. lenders and Austerity doublethink which states that 1) the problem is personal debt; 2) so lets blame public debt; 3) transfer blame and increase private debt. The poster asks: why are bankers not part of financial literacy campaign (post GFC), why do banks and other lenders give financial literacy classes and why are business schools penalised for offering economic education?

Poster 4: High Mortgates and Rents Crucial For Financial Sector

This poster explores the link between finance led growth, the profitabiliy of the banking sector and the distorted property market in the UK. It states that volatility/churning crucial to finance (debt) sector’s profit. It also explains that the UK is one of the highest % of tracker mortgages. The poster explains that high cost private housing and cuts to public/social housing have led to increases in homelessness and the criminilization of poverty, including the criminilization of squatting and a punitive bedroom tax. Finally it states that UK retail banks have greater than 80% of assets in property and in some instance we can’t tell if banks are solvent (Haldane). The conclusion is that finance led growth is not working and we are in a perpetual crisis.

First published May 2014