Tackling irresponsible lending and borrowing

A major cause of the financial crisis is often attributed to subprime lending. Banks irresponsibly gave money to those who could not pay back and consumers irresponsibly borrowed money that they could not realisitically pay back. Then, the banks realised (!) - and had to write off all that money. Confidence plummeted and loans dried up.

The lenders were trying to give these high risk categories with poor credit ratings access to the credit market. But now look at the mess we are in.

To combat this problem, the FSA have announced a string of new proposals to ensure that mortgages are only given to those who can afford to pay it back. Self-certified mortgages will be banned - customers will have to prove their income before taking out a loan. This new rule will be vital in the next boom to save ourselves from getting into another crisis like this.

From an economic recession to a political recession.

Yes, our debt levels are unsustainable - but that does not warrant curbing the quality of our democracy. A myriad of new proposals from the Justice Ministry including reducing polling stations and voting hours will have substantial adverse effects, which is unjustified just to save "a few peanuts," as described by the Electoral Reform Society.

General and local election turnouts have been falling steadily since the end of the war, with only 61% of the electorate voting in 2005. Many more have become apathetic towards the political process since the expenses scandal. In this context, the government still has the audacity to say that it is willing to, in effect, compromise democracy in an effort to save some money.

By closing many polling stations will mean voters, including the elderly and disabled, will have to travel further to access their nearest polling station. Further, closing polling stations earlier will mean that some workers will not get back home in time to register their vote. This is not the democracy I know. Ultimately, less people will be able to vote.

This is, to say the least, a bit ironic. For years, the government has been trying to engage people and encourage them to vote, but now they are doing the opposite.

I understand our debt is very high and we need to make savings. If we can reduce how much we spend on the elections, without compromising voter turnout, I am all for it. Unfortunately, these proposals will affect the quality of our democracy.

We are in an economic recession; let us not make it a political one as well.

Too big to fail?

Hank Paulson has revealed that Alistair Darling effectively vetoed the acquisition of Lehman Brothers by Barclays Bank last year because he did not want to "import America's cancer." If this revelation is true, it was certainly an audacious move by the Chancellor.

Although Britain is America's closest ally, British interests must remain at the heart of our decision. Thus, it was right that the Chancellor wanted to stop Lehman's toxic assets infiltrating into the British markets. Especially when details about the deal were very vague in terms of taxpayer support, it was wholly understandable why the British government were reluctant.

They must have assessed the situation, and concluded that the world could cope with the the collapse of Lehman Brothers. But then, why did they rescue other banks later on, but not Lehman?

At this point, we must note that Lehman was an investment bank. However, the banks the government bailed out also had a retail sector. This is the crucial difference. The government had a solemn duty to protect retail banks because their collapse would be truly catastrophic to the public. People had vast amounts of savings in Northern Rock and RBS - this is why they could just not collapse. Although, Lehman Brothers sinking would affect the world market with confidence and lending, other retail banks would have a direct effect on British consumers.

The Kelly Review proposals - not in our interests.

Gordon Brown anticipated the MPs expenses scandal and decided to set up the Kelly Review to investigate and reform the sytem. Now, his findings are published. MPs will be banned from claiming on mortgage interests and claiming for a second home if their constituency is within 60 minutes of Westminister. Most inconveniently, they will not be allowed to employ their family members. This last proposal is irrational.

Being a MP is not a regular job. It requires irregular hours and sometimes working on weekends. A job of this nature requires a secretary that is flexible and almost always available - who better than a family member? Currently, over a 100 MPs employ their spouse or children to work for them. This makes sense because MPs are in a better position to fulfil their role efficiently because they will have a fully functioning team catered to their needs.

So not only is it a matter of convenience for MPs, but also a matter of necessity for the public. If this enables MPs to be more productive, then we are the ones who benefit. Problem?

The rebirth of true economics.

If the recession is remembered for anything but misery, it will be remembered for reinventing the nature of economics. It was announced on Tuesday that George Soros will start the Institute for New Economic Thought (INET).

The financial crisis exposed the failings of modern economics bogged down so much by mathematical models that it could no longer take account of reality. When policymakers and politicians looked to economists last year for advice, it proved futile. Economists could only conclude that our crisis was impossible because their theories say that the situation could not exist. The economists who believe in the vigorous use of orthodox mathematical models are from the 1980s. Their theories are in line with the Thatcher-Reagan ideals.

The first ideal is known as "rational expectations". This means that capitalist economies with competitive labour markets do not need to be interfered with by the government.

The second ideal is the notion of "efficient markets" which assumes that resources will always be allocated efficiently when the market is competitive.

Lastly, there was the belief that economics was no longer a descriptive study of human behaviour, but had to be expressed using algebraic formulae. If not, it was irrelevant.

These ideas could cover up income inequalities and huge bonuses in the city as vast impersonal scientific forces rather than being a political issue. This way of thinking prevents economists from accepting that the markets and the world are by its very nature, unpredictable and not consistent.

But now, with INET, there is an opportunity to revert back to original thinking that explains reality to offer solutions. INET is not shackled to the confines of mathematical models. The great economists of the 20th century, Keynes and Adam Smith did not speak only through complicated maths, but were still able to uncover some of the greatest theories. INET will bring back this thinking.

(Précis from The Times, Wed 28th Oct 09)

New jobs - a breath of fresh air.

The social costs of the recession are biting hard as unemployment levels worsen. Since the fall of Lehman, we've been suffocated with depressing headlines about the downturn and its dire consequences; but now, things are changing ...hopefully!

News today that Tesco's banking sector will recruit 1,000 people for its new customer service centre in Newcastle comes as a breath of fresh air. Lord Mandelson, the Business Secretary welcomed the news as invaluable for the North East of England.

The announcement from Tesco Bank, comes as the EU today approved of government plans to divest itself of the nationalised Northern Rock's lending assets. With the top 5 retail banks forbidden to purchase these assets, there is rife speculation that Tesco will be the buyer. The government has specifically said that it wants a new entrant to the financial services market to buy these assets as a means of increasing competition.

The problem with universal health care.

There has been a large furore over Obama's health care reform. So, what are the merits of a privatised health care system?

Privatisation, contrary to popular belief, can be seen as a fairer system. Those who live illicit lifestyles, eat unhealthily and don't exercise are more likely to fall sick. Thus, it is right that they pay a higher premium than those who live healthy lifestyles. With universal health care, the healthy, safe people are effectively subsidising the dangerous who use hospitals much more. The healthy are paying for those with bad habits like smoking through taxes. A health care system needs a sense of responsibility - you pay for what you need, not for what others need.

A health care system where you get the treatment you need without paying for it creates a moral hazard. If those who choose to live dangerously are always assured of getting the care when they need it, they are more likely to be careless. However, if they know they have to pay for their own action, we are encouraging sensible behaviour.

Tony Blair: A global statesman

The zenith of Tony Blair's political career was at a time when I was too young to understand the world of politics. However, I have taken a particular likening to him over the years since. His charisma and standing in the world makes him the perfect global statesman to lead the EU.

If the role of the President is more than chairing meetings, then Tony Blair should be the one to do so. As Miliband says, he is the only man with the clout to stop the traffic in Washington and Beijing. He will have easy access to the leaders of the world.

Years ago, when he was our Prime Minister, he paid a visit to my tennis club (and played with my racquet!) After that, I decided to find out more about him; his record was just amazing. After his landslide victory in 1997, he introduced the minimum wage, established Scottish Parliament, Welsh and Northern Ireland Assembly and signed the Good Friday Agreement.

After his premiership, he remained in the front line, becoming an official envoy of the Middle East. How can such a diplomat with these credentials be denied any role?

Youth democracy at its best! A year as Deputy Young Mayor

Amidst a cacophony of screaming and shouting, the Returning Officer declared the newly elected Young Mayor and Deputy Young Mayor of Newham 2009/10. Handing over the baton on stage was a very poignant moment because after a year of hard work, we were no longer the directly elected representatives of young people in Newham.

Taking up a public role has given me a refreshing experience of local government and democracy. We were able to work closely with elected politicians and control our ₤25,000 budget.

We have interacted with the community at local events, identified crime hotspots and immensely raised the profile of youth democracy. After live appearances on BBC News 24 and on radio programmes, I think it is fair to say we have shown that young people are not apathetic about politics. The fact that there was a 43% election turnout attests that young people are enthused by the political process.

I am confident that the new Young Mayor, Deputy and Youth Council will do an equally good job to strengthen the voice of young people.

The individual vs society - a History Masterclass

Who has been more important in shaping the world - great leaders or society? Can we draw scientific laws to predict the future? Does history repeat itself? After reading E.H. Carr's What is History?, I thought it was appropriate for me to attend Debate Chamber's History Masterclass in London to probe these questions further.

The masterclass was primarily attended by those applying for History at Oxbridge next year; so to be in the company of these able, older students was challenging. I had the opportunity to contribute to discussions on a wide range of questions.

I was particularly interested by the notion that the historian is a product of his own era. Therefore, his facts and interpretation of them, are in fact, a reflection of society's views. This is aptly illustrated by the great German historian, Meinecke, who's views change as Germany went through a period of rapid change from the Bismarck to the Weimar Republic to Third Reich.

The day was thought-provoking, and a valuable opportunity to widen my horizon. Perhaps some topics for the "i-history Society" at school...

Immigration is not that bad.

Spongers, criminals, terrorists - these are the headlines of tabloid newspapers. This insidious, narrow-minded view has infiltrated into many people's heads. According to them, immigration can only have negative, undesired effects. There always seems to be the assumption that immigration is a bad thing.

The notion that immigrants "steal" our jobs could not be more wrong. When Poles started to come to Britain in 2003, there were over 700,000 unfilled vacancies in Britain. Further, foreigners stimulate the economy. The money they earn is spent purchasing goods and services in the UK. Thus, they increase domestic demand - and with that, create more jobs for everyone!

The BNP are attracting many supporters by creating a false fear that the country is heading for disaster. Yes, immigration needs to be capped, but that does not mean there needs to be some sort of national panic.

Is it really a criminal justice system?

Today I read a shocking article in The Times about our prison service. Sure, I knew our prisons were fiercely overcrowded but not to the extent that convicted criminals were immediately freed to ease crowding. No wonder there is very little faith in the justice system.

It is a shambles that the jail sentences of those who terrorise our streets are determined by the population of our prisons - it should be the other way round.

This news will further undermine public confidence in the justice system. More needs to be done so that people see justice to be done. As the Deputy Young Mayor of Newham, this notion was the main focus of Newham Youth Council's response to a recent green paper on engaging communities, that we sent to Jack Straw. We highlighted the fact that many people do not report crime because they feel nothing will be done about it. This perception needs to be changed if we are to tackle crime and the fear of crime effectively.

We have already started that process. Since September 2008, lawbreakers doing community payback have worn fluorescent orange jackets to increase their visibility to the public. Perhaps we could take this one step further and publish recent convictions and sentences for crimes in local leaflets and magazines.

Justice needs to be done, and seen to be done.

Bring on Nick Griffin

Nick Griffin may be a distasteful figure, to say the least, but it is the right decision to host the BNP leader on Question Time next week.

We can no longer ignore the party, who brags a seat on the European Parliament. Instead, we must stand up and challenge his views. His supporters need to be shown how wrong they are. But, the only way is to bring the BNP into the public arena, and land the blowing punch there.

By blockading his route to the BBC Television Centre, as planned by some, is the wrong strategy to adopt. His greatest asset is to make the BNP seem as if they are being oppressed and swept under the carpet because we cannot challenge them. Really? We will see next week!

Fight against the Taleban - together

Pakistani security forces have mounted a fierce battle against the Taleban, in their stronghold of Waziristan. This fight affects us all. If we can keep the Taleban under control, we will be in a safer world - in the USA, Pakistan, India and of course here in Britain.

Therefore, we must help Pakistan's military action. The least we can do, from the Western world, is to offer humanitarian aid. Civilians are being caught in the cross-fire, as they try to flee the troubled region - and their medical centres lack basic resources.

From sweet to sour

Recently I went to Thorpe Park, and went on the rollercoasters - this has pretty much been the story for the Olympic games this week - a rollercoaster ride going from high to low in a second. They reached the summit when the 2016 games were awarded to Rio de Janeiro, the city of passion, but plummeted straight down when golf was accepted as part of the Olympics from 2016 onwards.

The Olympics symbolizes the pinnacle of a sportsmen's career - what they dreamt about since the age of 7. This is is not the case with golf. The four majors will be far more important to the golfers, which has a string of golden history. The Olympic games will just be a little extra. It will not be the competition of all competitions for them, which renders everything every other tournament insignificant. This defeats the spirit of the Olympic games - the Greatest Show on Earth!

Last week, the taste in my mouth was invigorated with the carnival from Rio, but became sour with the IOC's decision to include golf in the Olympic games.