Now the Tories want to sell your tax details to private firms

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advertiser, agencies, agency, autumn statement, BBC, benefit, Big Brother Watch, budget, Coalition, companies, company, complaint fatigue, confidential, Conservative, contract, credit rating, Customs, data, David Gauke, disabled, discrimination, Dun & Bradstreet, Emma Carr, Equifax, Experian, firm, government, hm, hmrc, identification, identify, medical record, Mike Sivier, mikesivier, multinational, NHS, out, outcry, politics, price, privacy, private, private sector, pseudonymise, public, retailer, Revenue, risk, sweetheard deal, tax, The Guardian, Tories, Tory, Treasury, Vox Political, work

[Image: The Guardian.]

Not happy with its attempt to sell your health details to private companies, the moneygrubbing Conservative-led Coalition wants to sell off your personal tax data to companies, researchers and public bodies.

The government is considering how much to charge for the information, and claims that all data accessed by third parties will be “confidential”.

But the public has already been stung once by the Coalition’s incompetent attempts to go commercial. The proposed initiative to share NHS medical records with the private sector had to be suspended after a public outcry over “pseudonymised” data – a process by which medical records were said to be anonymous but it was in fact possible to trace exactly whose they were.

The plans for HM Revenue and Customs to share its data are, apparently, being overseen by Treasury minister David Gauke, whose relaxed attitude towards private firms led him to sign off on the infamous “sweetheart deals” that allowed multinational companies to keep billions of pounds of tax that they owed to the Treasury but didn’t want to pay.

Worse still, it turns out the government has already allowed private firms access to our data.

The government has strict rules about what can be released outside HMRC, with a near total ban on data sharing unless it is beneficial for the organisation’s internal work. But according to The Guardian, despite the restrictions, HMRC has quietly launched a pilot programme that has released data about VAT registration for research purposes to three private credit ratings agencies: Experian, Equifax and Dun & Bradstreet.

To comply with the law, the private ratings agencies, which determine credit scores for millions of people and businesses, have been contracted to act on behalf of HMRC and are “therefore treated as part of the department” – giving them access to tax data about businesses that would otherwise be confidential.

The government’s plans to change the law to allow the sale of anonymised individual tax data and release of the VAT register were buried in documents as part of the autumn statement and recent budget.

An HMRC spokesman told the BBC: “HMRC would only share data where this would generate clear public benefits, and where there are robust safeguards in place.

“Last year’s consultation made it very clear that there would be a rigorous accreditation process for anyone wanting access to the data and that any access would take place in a secure environment.

“Those accessing data would be subject to the same confidentiality provisions as HMRC staff, including a criminal sanction for unlawful disclosure of taxpayer information.”

So there. Do you feel better now?

Emma Carr, deputy director of civil rights campaign group, Big Brother Watch, doesn’t. She said: “The ongoing claims about anonymous data overlook the serious risks to privacy of individual level data being vulnerable to re-identification.

“Given the huge uproar about similar plans for medical records, you would have hoped HMRC would have learned that trying to sneak plans like this under the radar is not the way to build trust or develop good policy.”

Ross Anderson, a professor of security engineering at Cambridge University, told The Guardian the information could be highly useful to credit rating agencies, advertisers, and retailers wanting to practise price discrimination.

“This is going to be a big battleground,” he said. “If they were to make HMRC information more available, there’s an awful lot of people who would like to get their hands on it. Anonymisation is something about which they lied to us over medical data … If the same thing is about to be done by HMRC, there should be a much greater public debate about this.”

It seems the Conservatives in the Coalition are determined to sell information that doesn’t belong to them, and intend to grind us down with a relentless bombardment of initiatives and plans until they succeed.

They seem to by relying on the possibility that we will get ‘complaint fatigue’ and give up any protests. This is how they have beaten disabled people into submission to the draconian system for withdrawing state benefits from them; the system for appealing is drawn-out and convoluted, and many people with illnesses are too tired or weak to go through the process.

Also, this is another way of contracting-out government work to private firms, as evidenced by the VAT “research” that has been handed over to credit ratings agencies.

You can be sure of two things: Your data is not safe in their hands, and they won’t stop trying to sell it until they have been pushed out of government.

What are you going to do?

UPDATE: Campaigner Patrick Olszowski has responded to my challenge by launching a petition on the Change.org website. Please visit and sign!

Follow me on Twitter: @MidWalesMike

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‘Slimy’ minister talks up unfunded housing scheme while 50,000 face eviction

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AAA, alistair darling, bedroom tax, bubble, building, Channel 4, Coalition, Conservative, credit rating, crisis, David Cameron, debt, deficit, equity loan scheme, evict, George Osborne, government, help to buy, housing, interest rate, Johnny Void, Keighley, Kris Hopkins, Michael Meacher, Mike Sivier, mikesivier, mortgage guarantee, Nadine Dorries, nastiest, nasty, Northampton, people, Philip Davies, politics, price, slimiest, slimy, Tories, Tory, under occupation charge, unfunded, Vox Political

‘Slimy’ Tory mouthpiece? Kris Hopkins (left), the Coalition’s new housing minister, takes tea with David Cameron on a Northampton housing estate while talking a lot of nonsense about Help to Buy. [Picture: WPA Pool/Getty Images Europe]

One of Parliament’s “slimiest, nastiest MPs” has got stuck into his new job, putting out a press release on how the hideously ill-judged ‘Help to Buy’ housing scheme is “surging ahead”.

Kris Hopkins, the Conservative MP for Keighley whose only previous claims to fame were allegations that “gangs of Muslim men were going around raping white kids” (thanks to Johnny Void for that one) and a Twitter spat with the odious Philip Davies, said the equity loan scheme had driven up the rate of house building and captured the public imagination with more than 15,000 reservations for new-build homes in its first six months.

Reality check: House building is at its lowest level since the 1920s. In the 2012-13 financial year, only 135,117 new homes were completed – the lowest number on record.

Earlier this year, Hopkins called for Conservatives to unite behind David Cameron – to which Nadine Dorries responded, “pass the sick bag”. Yesterday, he at least was united behind Cameron – as they toured a Northampton housing development.

According to the press release, he said government action to restore confidence to the housing market was working, with over a third of a million new homes built over the last 3 years, including 150,000 affordable homes.

Reality check: That is a lower number than any period on record prior to the current Coalition government. It is not an achievement. It is a disaster.

Under the equity loan scheme, buyers can get mortgages on new build homes with a five per cent deposit, with the rest provided by an equity loan from the government of up to 20 per cent on properties with a value of £600,000 or less.

Yesterday (October 8), Cameron and his Chancellor, George Osborne, launched the second part of Help to Buy – the mortgage guarantee – which will also be available on existing properties worth £600,000 or less. Lenders will be able to offer a 95 per cent loan-to-value mortgage, made possible by a government guarantee to the lender of up to 15 per cent of the value of the property.

Reality check: In English, this means the taxpayer is underwriting people’s mortgages. Osborne reckons he has put aside £12 billion for this part of the scheme but – as former Chancellor Alistair Darling recently noted  – the source is unidentified. “Strange that when Labour makes promises, the Tories claim it will mean more borrowing, yet it’s fine for them to make unfunded promises,” Mr Darling wrote.

Back to the press release: “Housebuilding is growing at its fastest rate for 10 years,” it says.

Reality check: The Channel 4 article, quoted above, warns us to “take the proclamations we are getting from the government about high rates of growth in housebuilding with a hefty pinch of salt. Housebuilding completions are starting from modern record lows; the rates of growth are bound to be high.”

What does Kris Hopkins have to say about this? Not a lot, in fact. He blathers that the equity loan has “captured the imagination of the public and is boosting the supply of new homes across the country”.

Reality check: Back to Channel 4 – “The levels… show that something went wrong in 12/13. Turning the corner means going from abysmal to terrible.”

“Our policies on housing are working,” said Hopkins in the press release. “Housebuilding is growing at its fastest rate for 10 years, and the tough decisions we’ve taken to tackle the deficit have kept interest rates low and are now delivering real help to hardworking people.”

Reality check: We’ve already covered the speed at which house building is growing; he should not be pretending this is a huge success when the number of new houses being built has fallen to a record low. As for the policy on the deficit keeping interest rates low – Vox Political blew that out of the water months ago. For clarity: A government can always service its debt, if that debt is in its own currency. Our debt is in UK pounds and we can always service it. Our creditors know that, so they remain happy to continue financing it. Otherwise, with Osborne borrowing 75 per cent more than he said he would in 2010, and with the UK’s ‘AAA’ credit rating gone in a puff of agency doubt earlier this year, Osborne would have been up a certain creek without an economic lever (to mix a metaphor or two).

“I’m delighted we’ve launched the second part of Help to Buy, the mortgage guarantee, which will strengthen the package of measures that have already done so much to restore confidence in the housing market,” Hopkins concluded.

Final reality check: Michael Meacher is one of many who believe that ‘Help to Buy’ will do nothing more than create another housing price ‘bubble’, most likely leading to another debt crisis. “Even [George Osborne’s] Tory supporters believe [this] will throw oil on the fire of the already overheated surge in house prices,” he wrote.

Meanwhile, at the other end of Britain’s housing market, 50,000 people are facing eviction because of the Bedroom Tax.

The Magical Land of Os(borne) – fantasy economics

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'Starve the Beast', AAA, austerity, Bank of England, borrow, budget, Coalition, Conservative, credit rating, David Cameron, debt, deficit, economic, economy, Eurozone, Financial Times, fuel duty freeze, G7, GDP, George Osborne, George W Bush, government, Gross Domestic Product, have-yachts, help to buy, inflation, Interest, James Talbot, job, Labour, Labour Party, Malcolm Sawyer, married couples allowance, Martin Wolf, Mike Sivier, mikesivier, OBR, office, part-time, people, politics, private, productivity, public service, rate, recovery, responsibility, sector, Spencer Dale, surplus, Tories, Tory, unfunded, Vox Political, wage, work, zero hours

George Osborne’s claim that his nonsense policies have magically turned the economy around, coupled with his equally-preposterous claim that the UK needs another seven years of austerity before he can balance the books – provides a fine example of the duality at the heart of Conservative economic policy.

He needs to convince you that his choices have made a difference and the nation’s fortunes are changing, but he also need to convince you that we’re in a terrible mess – or he won’t have an excuse to continue cutting more public services and selling them into the private sector so his rich friends can use them to fleece you.

The two claims are not only contradictory of each other – they are self-contradictory. The evidence shows that Osborne’s policies delayed the recovery, rather than encouraging it, and the ‘Starve The Beast’ plan he cribbed from George W Bush has long been recognised as harmful to any country’s economic health; by cutting services he is starving the economy of the liquidity that is its lifeblood.

(This is a point worth remembering: Whenever a TV news reporter says Osborne or the government want to make cuts in order to “save” money, they mean the government will be “taking money out of the economy” – which will consequently be worth less. As a result, some people will have to become poorer. Can you guess who?)

Before we congratulate Osborne in ways that are anything like as effusive as David Cameron’s endorsement earlier this week, let’s look at the facts: According to Martin Wolf in the Financial Times, in three and a half years, the UK’s economic performance has improved by just 2.2 per cent – against a prediction of 8.2 per cent by his pet Office of Budget (Ir)Responsibility. In the second quarter of 2013, Gross Domestic Product was 3.3 per cent below its pre-crisis peak and 18 per cent below its 1980-2007 trend, making this the slowest British recovery on record.

Osborne and the Conservatives point proudly to the strong increase in private-sector jobs but, as Mr Wolf states, “this is hardly something to boast about”. While employment – on paper – is at an all-time high, productivity has fallen back to the level it reached in 2005. What does this say about the quality of the jobs that are being filled? Are they high-quality, long-term, well-paid careers, or are they part-time, zero-hours, throwaway fillers? We all know the answer to that. Average wages have been cut by nine per cent, in real terms, since 2010 – and they are still falling.

Even by the standards of other crisis-hit, high-income economies, the UK’s performance has been dismal, says Mr Wolf, pointing to work by Spencer Dale and James Talbot of the Bank of England. This indicates that the Eurozone has performed just as badly – but the difference is that the Eurozone countries do not have control of every economic lever that is available to them; Britain does.

Osborne claims that high global inflation and the performance of the Eurozone have impacted on the UK; Mr Wolf’s assertion is that austerity is the reason for this disappointment – and Osborne was just as much a cheerleader for austerity in Europe as he has been for it in the UK. Furthermore, as the Labour Party pointed out in its report, “David Cameron’s out of touch, you’re out of pocket” (2013), inflation in other G7 countries has been lower than in the UK, indicating that high global prices have little to do with the problem.

“Yes, but,” says Osborne, “austerity has kept interest rates down.” Did it? Did it really? In that case, interest rates would have been kept low because of the promise (in 2010) that borrowing would be brought down by 2015. When the Coalition came to power, Osborne said he expected to borrow a total of £322 billion by 2015. In March this year, that figure had risen to £564 billion – an increase of 75 per cent! Meanwhile the deadline for the national debt to start falling has slipped from 2014-15 back to 2017-18 and the level at which the debt was expected to hit its peak has jumped from 70.3 per cent of GDP to 85.6 per cent. The deficit has been stuck at £120 billion a year for the last two financial years, despite the repeated claims that it has been cut by one-third. None of this has affected long-term interest rates and neither did the loss of the UK’s AAA credit rating in February this year.

Here’s why – as explained in an article on this site in June:

As Professor Malcolm Sawyer notes in Fiscal Austerity: The ‘cure’ which makes the patient worse (Centre for Labour and Social Studies, May 2012), “It is well-known that a government can always service debt provided that it is denominated in its own currency. At the limit the UK government can ‘print the money’ in order to service the debt: this would not take form of literally ‘printing money’ but rather the Central Bank being a willing purchaser of government debt in exchange for money.” This is what is happening at the moment. Our debt is in UK pounds, and we can always service it. Our creditors know that, so they remain happy to continue financing it.

“With interest rates at the zero bound, austerity weakened the economy relative to what might otherwise have happened,” wrote Mr Wolf.

“Nobody thought recovery would never happen under austerity, merely that it would be damagingly delayed… This has been an unnecessarily protracted slump. It is good that recovery is here, though it is far too soon to tell its quality and durability. But this does not justify what remains a large unforced error.”

Looking to the future, Osborne has reacted to the new barrage of Labour policies, all of which have been carefully costed against savings in current budget areas, with a series of rushed measures that are entirely unfunded. Remember that, next time a Conservative accuses Labour of borrowing and spending!

The married couples’ allowance, worth less than £4 per week (and less than £2 if you’re on a low income) is unfunded. The promised fuel duty freeze is unfunded. These will cost more than £2 billion and no source has been identified.

And what about the £12 billion stage two of the housing ‘Help to Buy’ scheme, that Osborne rushed forward to this month?

He has pulled £14 billion out of nowhere, but still expects us to believe he will resume his stalled deficit cuts by £35 billion by 2015, £42 billion by 2017-18 and £43 billion by 2020, in order to create a budget surplus.

All the while, he is promising “improved living standards for this generation and the next”. For whom? These cuts must come from somewhere, and they mean removing a cumulative total of £120 billion from the economy each year by 2020. That has to come from somewhere.

Look at the amount by which bosses’ pay in FTSE100 companies has increased in the last three years – 32 per cent, while average worker pay has dropped by nine per cent.

Do you really think the “Have-yachts” will be paying for these cuts?

Further reading: George Osborne’s credibility gap (Alistair Darling, Guardian)

Have the Tories taken leave of their senses? (Michael Meacher, blog article)

From the DWP to the economy – the Coalition’s growing credibility chasm (Vox Political, June 2, 2013)

Treasury responds to Vox’s austerity challenge (Vox Political, May 13, 2013)

From the DWP to the economy – the Coalition’s growing credibility chasm

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All the wrong choices for all the wrong reasons: The evidence fails to support George Osborne’s economic austerity policies – the only likely explanation seems to be an intention to rob this nation of everything possible before 2015.

The more we learn of the Tory-led Coalition’s policies, the wider the gap grows between what it is doing and what it should be doing.

Look at the sham psychometric tests, exposed by fellow blogger Steve Walker in a series of articles on his Skwawkbox site. It is now firmly established that the DWP – aided by the Cabinet office ‘nudge unit’ – set out to pressgang put-upon benefit claimants into taking part in a crude piece of neuro-linguistic programming – no matter what answers you provided, the test always pushed out a ridiculously upbeat appraisal of your character and then tried to get you to act according to this verdict in your jobsearching activities. The theory is that this will make a jobseeker more confident and finding a job easier. The problem is that it’s quite utterly ludicrous.

If you haven’t already, you can read the Skwawkbox exposure of this particular caper on that site – there are plenty of links to it from this one. The reason it is mentioned here is that it provides a useful set of questions with which to analyse any government activity: First, is the theory behind this activity sound? Second, if that theory is being used to support a particular course of action, is that action justifiable?

So let’s turn once again to George Osborne’s reasons for pursuing economic austerity, as described in the letter Vox Political received from the UK Treasury last month.

Firstly, the letter warns against the perils of losing market confidence. By this, we can see that it means we should fear any downward revision of our credit rating by the credit agencies, as “a one percentage point increase in government bond yields would add around £8.1 billion to annual debt interest payments by 2017-18”.

What’s being said is that a drop in our credit rating would mean the people and organisations that have invested in UK government debt (by buying our bonds) might move their funds to others, meaning the government could be faced with an interest rate rise, leading to increased difficulty in borrowing.

But we know that this isn’t true. The UK’s credit rating was downgraded only a few months ago. Did interest rates rise? Was our ability to borrow hindered at all? No. There’s a reason for that.

As Professor Malcolm Sawyer notes in Fiscal Austerity: The ‘cure’ which makes the patient worse (Centre for Labour and Social Studies, May 2012), “It is well-known that a government can always service debt provided that it is denominated in its own currency. At the limit the UK government can ‘print the money’ in order to service the debt: this would not take form of literally ‘printing money’ but rather the Central Bank being a willing purchaser of government debt in exchange for money.” This is what is happening at the moment. Our debt is in UK pounds, and we can always service it. Our creditors know that, so they remain happy to continue financing it.

This means that the Treasury’s next point, that “any loss of investor confidence in the UK’s fiscal position would not only affect the UK, but also the global economy” is also meaningless. There won’t be a loss of investor confidence, so there won’t be an effect on the global economy.

We move on – to the Chancellor’s claim that fiscal austerity is required to prevent the slowing of economic growth that happens when the national debt hits 90 per cent of gross domestic product (or thereabouts).

You’ll recall that my letter to the Chancellor was prompted by the revelation that the academic paper on which he relied most often, by Reinhart and Rogoff, had been proved to be mistaken. The Treasury’s response pulled out a series of references to other academic works suggesting a fiscal cliff similar to the Reinhart-Rogoff model, off which we would drop if the national debt passed an arbitrary level around 85-90 per cent of GDP. These were published by the International Monetary Fund, which we know isn’t quite as keen on austerity as it used to be; the Organisation for Economic Co-operation and Development, which this blog marked out as “schizoid” only a few days ago; and others.

Obviously I haven’t had time to look up eight academic works to support any opposing theory I may wish to create – and I think I would be foolish to try. I don’t have any grounding in economics beyond what I’ve been able to pick up by following the national and international debates.

But, then, according to Dean Baker of the Center (yes, it’s American) for Economic and Policy Research: “As a general rule economists are not very good at economics.”

He writes: “Most economists are unable to conceptualize anything that someone with more standing in the profession did not already write about. This is the only reason that the Reinhart-Rogoff 90 per cent debt-to-GDP threshold was ever taken seriously to begin with.”

That prodded my curiosity to check some of the papers listed by the Treasury in support of its stance, and the three that I checked (The Real Effects of Debt, Public Debt and Growth, and How Costly Are Debt Crises?) all listed the Reinhart-Rogoff paper in their supporting references. So Mr Baker is right.

“Debt is an arbitrary number,” he continues. “The value of long-term debt fluctuates with the interest rate… The value of our debt will plummet if interest rates rise… This means that we could buy back long-term debt issued today at interest rates of less than 2.0 percent for discounts of 30-40 percent. This would sharply reduce our debt-to-GDP ratio at zero cost.

“Bonds carry a face value, meaning the amount that will be paid off when they reach maturity. This is what gets entered in our debt figure. However bonds also carry a market price, which fluctuates inversely with interest rates. The longer the term of the bond, the more its price will vary with interest rates.

“If interest rates rise, as just about everyone expects over the next three-to-five years, then the market price of the bonds we have issued in the current low interest rate environment will fall sharply. Since we count our debt at the face value of the bonds, not their market price, we could take advantage of the drop in bond prices to buy up… bonds at sharp discounts to their face value.

“The question is why would we do this, we would still pay the same interest? The answer is that the policy would make no sense for exactly this reason.

“However, if we accept the Reinhart-Rogoff 90 per cent curse, then reducing our debt in this way could make a great deal of sense. Suppose we can buy back debt with a face value of 60 per cent of GDP at two-thirds its face value, or 40 per cent of GDP. In our debt accounting we would have reduced our debt-to-GDP ratio by 20 percentage points. If this gets us below the 90 per cent threshold then suddenly we can have normal growth again.

“Yes, this is really stupid, but if you believed the Reinhart-Rogoff 90 per cent debt cliff, then you believe that we can sharply raise growth rates by buying back long-term bonds at a discount. It’s logic folks, it’s not a debatable point — think it through until you understand it.”

I found Mr Baker’s piece after asking Jonathan Portes of the National Institute for Economic and Social Research (NIESR) for his opinion on the Treasury letter. He described it as “Predictable and largely irrelevant”.

So despite my lack of economic education, we have a working theory that suggests the Treasury has built its economic castle on the sand; that its justification for austerity is unsound. What about the austerity measures themselves? Are they justifiable on any level at all?

Evidence suggests not.

Let’s go back to our other friend in this matter, Prof Malcolm Sawyer. “Fiscal austerity and cuts in public expenditure do not work – there is a limited, if any, effect on reducing the budget deficit, and any return to prosperity is severely undermined.” We can see that this is true, using the government’s own figures. It managed to cut the deficit from £150 billion to £120 billion in 2011-12, mostly by axing large projects that invested in the UK economy. How much did it cut from the deficit in 2012-13? Less than £1 billion. The benefit cuts that created much of the fuel for this blog have not helped to cut the deficit at all.

“The reduction of the budget deficit can only come from a revival of private demand which is harmed by an austerity programme,” Prof Sawyer continues. Again, we can see that this is true. Austerity measures such as benefit cuts and the axing of infrastructure investment projects means there is less money available to the people who are most likely to spend it – the working- and middle-classes, and those who are unemployed. People with less money have to spend just about everything they receive in order to cover their costs. That money passes into circulation and the economy grows, through the fiscal multiplier effect. An attempt to explain this effect appeared on this blog within the last few days. The point is that demand increases when the people who earn the least have more to spend.

Therefore we see that Prof Sawyer’s next statement, “Deficit reduction requires investment programmes and reduction of inequality to stimulate demand”, is already proved.

So the answer is to reduce the unemployment rate by creating more jobs and closing the jobs deficit, as highlighted in this blog only a few days ago; to raise incomes by significantly increasing the minimum wage and adopting the proposed ‘living wage’, as promoted in this blog frequently; and investment in infrastructure projects.

What has Osborne done, along with his economically-illiterate chums?

He has created high unemployment.

He has depressed wages.

He has cut infrastructure projects.

He has, therefore, sucked all the demand out of the economy. What effect has this had?

Economic growth has, in the single word of Shadow Chancellor Ed Balls, “flatlined”, borrowing has remained high and the national debt is continuing to rise.

In other words, this part-time Chancellor’s strategy – a plan on which we have all been asked to judge the entire Coalition government, let’s not forget – has failed. Hopelessly.

I return you to Prof Sawyer, one last time [bolding mine]: “The austerity programme is economically irrational, socially irresponsible, and lacks credibility that it can reduce the budget deficit and secure any return to prosperity. The time has come to rebuild through investment and through a major assault on inequality.”

Guest blog: So, You’d Like a Job, Then? (Final part)

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benefit, benefits, car loans, credit rating, David Dennis, debt, Disregarded: The True Story of the Failure of the UK’s Work Programme, mike mauss, mortgage, people, savings, school, The Unemployed Guy’s Guide to Unemployment, unemployment, Vox Political, welfare

David Dennis interviews American Mike Mauss on How to Survive Unemployment

Q) I take it Michael Moore’s portrayal of families being thrown out onto the streets, evicted, families destroyed is, in all reality, the truth?

A) Michael Moore is a lying bastard who uses TV techniques to twist the truth. It’s bad, but there aren’t families on the streets. Everyone works out something– kids move in with their parents, people take in boarders, whatever. There’s always that opportunity to move to somewhere cheaper. My favorite solution, however, is something called “getting a job” and that is why I wrote The Unemployed Guy’s Guide to Unemployment.

Q) That’s the primary focus of your book– getting back into employment. Correct?

A) I break the book down into three parts. Dealing with the shock of being fired; looking for work; and getting by without enough money. Most people look for work in the wrong way. They answer job ads and talk to HR people and fiddle with their resumes. I have been at the receiving end of those CV/ resume emails and I can tell you that all of that is completely useless. The only way to get a decent job is to network with everyone you’ve ever met. Someone, somewhere will see how your skills fit their needs. It’s unreal over here. I’ve seen Harvard grad students applying for internships. This is how bad it is in the States– Al Jazeera just released a list of vacancies and they had 8000 applications in the first three days.

Q)  I was told this by an acquaintance of mine– he networks heavily to get business. Is that the kind of thing you would suggest?

A) Networking is everything!  People have an idea that the world has changed, that it’s all depersonalized. It’s not. It’s all about who you know, who you’ve helped in the past and who knows you do good work. It’s funny because the only type of people who have absolutely no problem with networking are … rich people. They will use Daddy’s friends to get a job in a split second.

Q) Many people just haven’t got the networking skills to do that, Mike. How can people network if they have no idea how to network?

A) How do you know you can’t? I doubt you’ve really tried. Have you contacted the people you went to school with? How about co-workers from previous jobs? Neighbors? People at your church? Have you asked people for lists of others to contact?

Q) Some people swear by cold emailing. Does that work?

A) No. That’s just annoying generally. But if you get an email that says, “Joe X suggested I contact you about possibilities” no one responds badly to that. Usually, they try to think of a job or give some more suggestions of people to contact. Somewhere along the line, someone says, “Hey, that kid would be perfect for this.” There you go — you have found your “in”.

Q) This is a question that might make you cringe. You have been in some high level jobs. How many people have you hired through cold emails?

A) Well, including interns that only worked for me for a week or less, about ten. Sadly, I’m not usually in a hiring position. However, I’ve found jobs or contacts for others which developed into jobs for probably hundreds. I have done my fair share for the unemployed of the USA. It’s about time others did more to ease the problem.

Q) Mike, you’ve read my book Disregarded. What did you think about the situation in the UK?

A) It seemed a bit dismal and almost Dickensian. My advice for young people who can’t find a real job is to LEAVE. If you don’t have any debts, you don’t have kids, you don’t have a house, I would say travel the world, intern everywhere, sleep at friends’ houses and have some fun. You don’t need the grief, so why take it? If you can’t find something you love to do, then do the other things that you’ll never get a chance to do – like leave home and be on your own.

I described in UGGU walking into Las Vegas with $1.50 in my pocket and getting a job, a place to crash and a meal—all in thirty minutes. Then I decided not to go to New Orleans because there would always be another chance….

When the economy is working against you, it’s like a wave in the ocean. If you stand against it, you’ll just get rolled.

Q) Where is your book on sale, Mike?

A) Almost anywhere electronic – Amazon US, Amazon UK, Smashwords, iTunes. Also, if you are unemployed or think you’re about to get fired and feel you really can’t afford it (honor system) write me at maussmike@gmail.com and I’ll send you a coupon for a free copy.

Q) Thanks for your time, Mike. I hope the book is a success for you!

A) Thank you, David! I’m so glad to see the success your book has garnered!

Guest blog: So, You’d Like a Job, Then? (Part Two)

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benefit, benefits, car loans, credit rating, David Dennis, debt, Disregarded: The True Story of the Failure of the UK’s Work Programme, mike mauss, mortgage, people, savings, school, The Unemployed Guy’s Guide to Unemployment, unemployment, Vox Political, welfare

David Dennis interviews American Mike Mauss on How to Survive Unemployment

Q) Do you feel the “middle class” is neglected, abused? Unable to sustain themselves from welfare and unable to continue their lives until they get back into unemployment? Almost in a “void”?

A) Very well put, David. It used to be that the middle class had jobs that lasted for life. They had houses at the shore and they took vacations every year. Now, they are paying insurance costs for their kids’ college, getting hammered by the collapse of the housing market and spending more and more on simply getting by. That’s all fine if you’re working at the sort of job you’ve been educated and trained for — a white collar job. However, knock a leg out from under that structure and it can all go to pieces.

Even the lower class (and no one in America will ever admit that they are in the lower class) can’t get by on welfare. Bill Clinton eliminated that back in the ‘90s. It was probably a good thing, as it was insanely destructive to the families caught in it. People took all their time to fulfil the bureaucratic demands of welfare, leaving them no time to get off welfare. It was very similar to the situation in Britain– attend work sessions and classes all the time and have no real time to find the all-important job you need in order to escape.

Q) Welfare was destructive? I would have thought the destruction of industry was more apt to the description of “destructive”.

A)  Nope. People are pretty good at finding new jobs–the industrial sector has basically either moved up to the lower-white collar jobs or into service jobs. People who need to make $30 an hour to get by can’t compete in a global economy by making shoes. If you go to the places in the Rust Belt where the big factories closed, you’ll find new businesses, mostly in information technology and services, have popped up.

The industries that are left are producing things that simply cannot be produced in a low-tech society. Things like specialty steel, the first set of computer chips, etc. No, the real squeeze on the middle class has been the insane lowering of taxes on the very rich. That, David, is where the real problems lie.

Q) Let us say, for example, the middle class guy gets fired– he needs a job– he’s offered a job making computer chips– does he take it? Or does he turn it down? He has 4 kids, a mortgage, not a quid to his name– credit cards maxed out– what does he do?

A) Well, he is going to take a big step back, that’s almost certain. The most important thing he must know is that he can’t take a job that won’t cover the ‘nut’. You have to keep looking until you find something that will pay enough to get you by. People say to me, “We can’t do that! How do we survive?” and I always say the same thing in reply. I had two kids, two mortgages, credit cards maxed out and I survived for years. You just have to hustle. The trick is to do it without becoming depressed or breaking up the family. I put two kids through good universities, have a 730 Credit Score and a house with a mortgage– I survived and so can you!

Q) Would you say the family unit becomes more important when you are unemployed?

A) Of course. It’s important because it’s important. That’s where real life is– not at work–  and because you’ll get by a lot easier with someone helping you than on your own. I’m not saying don’t go to work at crappy jobs. You get whatever you can when you can, but your primary focus has to be on getting a real job with benefits (medical costs are the real killer here).

Q) Medical costs? Of course, those aren’t taken care of under the US system of unemployment, correct?

A) No. The main causes of bankruptcy in the US are medical bills and the mortgage. I thought it was wonderful that the Mortgage Bankers Association walked away from its mortgage on a building in Washington, DC; but they tell all the rest of us how paying our mortgage is a “moral duty”. It’s getting a bit better now, but as a responsible family member, you have to seriously consider whether paying a medical bill is worth destroying your life.

Guest Blog: So, You’d Like a Job, Then? (Part One)

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benefit, benefits, car loans, credit rating, David Dennis, debt, Disregarded: The True Story of the Failure of the UK’s Work Programme, mike mauss, mortgage, people, savings, school, The Unemployed Guy’s Guide to Unemployment, unemployment, Vox Political, welfare

David Dennis interviews American Mike Mauss on How to Survive Unemployment

Mike Mauss was once a successful American. Through fate, recession and bad breaks, he became unemployed. He managed to survive unemployment, however, and kept putting one foot in front of the other as he put his kids through college, paid his mortgage and continued to live his own life to the max. He wrote a great book, filled with practical advice, called The Unemployed Guy’s Guide to Unemployment. In it, he explains where and how to look for work in this dismal economy; what works and what doesn’t; and very practical advice about how to manage with less while you strive for more. I am the author of Disregarded: The True Story of the Failure of the UK’s Work Programme about the unemployment situation in Britain. I wanted to interview Mike about his American-centric book and see if he had any tips that would help the British unemployed.

Q) Hi, Mike. I wanted to meet you to talk about your new book: The Unemployed Guy’s Guide to Unemployment. Can you tell me why you wrote this book?

A) That’s easy. I became unemployed. For the fifth time in my career, I ended up out of work. I was hoping that a book like this would help others deal with the shock of getting fired, the stress of living without money, and the difficulty of finding a new job. That, and I thought I could make a bit of change with the book, too.

A new study just came out from Pew that said that one out of four people in the US has been out of work at some point in the past four years and over half know of a family member or close friend who’s been unemployed. There are too many people out there who need solid advice and need it now.

Q) In England, we currently have an epidemic of unemployment. I, myself, wrote the inside story of unemployment centres here in the UK. The training system is based around the concept of free labour. Would you have taken part in “shelf stocking” schemes for your benefits?

A) Probably not. I wrote in the book that working at minimum wage is wonderful from an “I will dig ditches to support my family” point of view, but it doesn’t really work. A middle class family cannot survive on minimum wage in the US – hell, a poor family can’t survive on the minimum wage these days. So every day spent working for less than your “Nut” – the basic amount you need to make to keep your family going – is a day wasted. You don’t have time to look for work that actually pays the mortgage and you’re just falling behind a bit less quickly.

Q) The problem with that method is pretty clear. So, how do you support your family whilst you search for work?

A) Well, I didn’t direct my book at the real poor. That’s a very different life and a very different set of realities. I was looking at the middle-class family where you have a mortgage, school, car loans, credit rating, maybe private schools, etc. Unemployment Insurance is pretty irrelevant in this case – it would take five weeks of UI to pay four weeks of mortgage ALONE. And that’s without the government taking taxes out, which they do. I basically assume that a middle-class family can get by on savings, credit cards, home equity loans and freelance work.

Q) I would say that, in fact, your book is a guide for those who don’t “really” need a job. It’s for those who have independent means and just want to bleat about their unemployment?

A) No. David, no one in the US middle class can survive without a job and most families have less than four or five months’ worth of savings. But they still become unemployed so the question is, what do you do when that happens? These people aren’t independently wealthy. They have been squeezed for decades by the very rich – the One Per Cent. If they get fired, it’s a race between getting a new job that pays enough to keep going and the day that all their money runs out. I just give people the tricks to keep going.

I don’t pretend to understand the problems of those under the poverty line. It would be a bit presumptuous to lecture them. I’ve been freelancing or basically without a “real job” for nine of the past twenty years. I don’t know about poverty – but I do know about the very real problems of being middle class and without work.

To be continued…