Monday, December 29, 2008

Credit Crunch: Hype? Apocalypse? Opportunity?

Confused ramblings on a year ending in recession.

The media constantly tell us about the credit crunch and it's effects. But when I stop and think about it how has it effected my family this year? The big one is house prices - though there is some evidence that ours may have retained its price. Either way, we're not planning on moving house for several years. Demand for housing remains in a nation that continues to grow and where families continue to break down. The "need" has not gone away and so there's every reason to think prices will rise again. For now, confidence is lacking.

Our mortgage is on a fixed rate which means we've not benefitted from the change in interest rates - but many people will have. Food is cheaper than it was six months ago, as is petrol. VAT is also a bit lower though 2.5% is only worth a few pence here and there. In addition to which suddenly we're all thinking more carefully about our spending, and so probably spending less - which is bad for the economy but good for your bank account. We have more money but less confidence.

Clearly some people have lost their jobs but businesses do fail and the fall of Woolworths and Zavvi is hardly a shock to the system. Sentimental as the testimonies about Woolworths were on the BBC last month we all stopped shopping there a long time ago and started buying from the ever-widening range at the Supermarket, and the CD/DVD Shop model looks deeply outdated in the age of Amazon and downloads. I don't want to trivialise that and unemployment is devastating whatever the cause. If we needed to sell our house tomorrow we'd have a problem but most people probably weren't planning to do that anyway - and if we did sell for less we'd also buy for less. For the sensible with some savings there hasn't been a better time to be a first-time buyer in a while... yet who has the confidence to do it?

I'm thankful for the biblical and common sense approaches to money I was raised with, though I make no claims to have always lived prudently. I'm thankful for the two years of earning nothing post-Uni and seeing God's provision which remind me that my salary comes the same way. I'm thankful for having only taken a fraction of the mortgage we were offered 18 months ago. I worked in a high street bank a while back, an industry that has breathed on the basis of crazy credit and is now suffocating. God could take my current job away - either by Christians stopping being generous or just because he has the right to decide! You'd expect that my wife's job as a teacher is fairly secure but no grounds for complacency.

Something has gone badly wrong as we've turned to worship money, the bottom has fallen out of that market - but the problem of enslavement to idols is that when one fails we merely generate another... exposure of folly, failure of what we once thought was unstoppable is rarely enough to prompt a change of heart. Short-lived doubtless, for investments go up as well as down...

In the mean time I hope the last six months is a reminder to me that what we have comes from God and is not to be presumed upon nor handled recklessly... Bishops can cry: “It is unfair and irresponsible of the Government to put pressure on the public to spend in order to revive the economy" but where was that prophetic voice ten years ago? Where was The Money Course? Could it be that we rode the wave too and silently enjoyed the prosperity... Hopefully, better late than never, the church can be a prophetic voice to welcome and help the financially afflicted. If the church will not be a community where people sacrificially meet one anothers needs then the world is truly without hope.

Looking into 2009, the single biggest factor for our household is the impending arrival of maternity pay and the extra mouth (and associated costs) of a baby - but the credit crunch didn't really play any part in that change in circumstances. If I'd not read a paper, news website or watched 24 rolling news in the last six months I'm not sure I'd either think we were in recession or that it's that great a disaster. Maybe the thing that's actually happened is a slight shake in our confidence in self and money. Could the Credit Crunch amount to an exposure of human idolatry, that needs to now be met with a flood of grace.