Women end up shrinking their city and curtailing their activities in order to feel safe. Photo: Gonzalo Arroyo/Getty
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Are all-women taxi apps the answer to creepy unlicensed cabs?

New affordable taxi app She Rides, which has only women drivers and passengers, might mean we can ride again in safety.

Most days, I love taxis as much as I love my Mum. If there’s one luxury that should be democratised, it’s the cab. Whether you’re world weary, knackered, drunk, or having to deal with a sudden emergency, there is nothing more civilised than pulling a heavy passenger door towards you and knowing that, for an established sum of money, someone else has to deal with you and your destination for the next few minutes. Cabs are romantic. If you’re a literary heroine running from peril, or a soap heroine running from Albert Square, taxis are around to get you there safely. But in real life, taxis have turned on us. Black cabs are less of an affordable luxury and more of a joint Christmas and birthday present. So when Uber, the affordable app-based taxi service, rolled up in London, it was as if all those Christmasses had come at once. If I wanted to get home safely, I just had to forgo a final round of drinks, and not say goodbye to paying rent that month.

I live in London, where I struggle to remember that the public transport is comparatively speaking, wonderful. But it’s not perfect, and when I can help it, I prefer not to use it after 10pm. It gets hot and loud and frightening. There are too many people putting their hand up your skirt or vomiting on your shoes. I’m privileged, in that I’m not forced to spend time in many places where I feel marginalised, vulnerable and scared. But I’ve been in enough situations on the tube and nightbuses which have made me think that I’d rather not go out at all.

Like many women I know, I shrinked my London to fit me better, gave myself a curfew and hurried home by nightfall because I might not be able to afford to get home safely if I got stuck. Black cabs are for emergencies. Sometimes you get lucky and meet a driver who looks you up and down and tells you “I have a daughter your age”, and you know that he will do his best to protect you from rapists and muggers as you jump out and get his cash from a dubious looking ATM. But more often than not, the driver doesn’t want to go south of the river, or whichever distant, barely urban zone you can only just afford to live in. If they do, it’s going to cost the better part of a day’s wages to get there.

Once you’re in, and the doors are shut, no one but you and the driver knows where you are, and only the driver really knows where you’re going. The spectre of John Worboys looms large. Last Christmas a friend jumped into a black cab, only to jump out again as soon as she leaned forward to tell the driver he wasn’t going in the right direction, and realised all the ads were out of date. It’s very easy to buy a decommissioned black cab and drive it around the city.

I’m infuriated by Transport for London’s ads warning against unregulated mini cabs, the ones that scream at you to get in a Hackney carriage. Unless they staple a bunch of pink notes to the bottom of the posters, they may as well instruct us to roll home on Fabergé eggs that have been strapped to our heels and elbows. In France last month, a student was attacked by cab drivers after trying to get into a rival Uber car, and she explained that as a student, she couldn’t afford to use the services of her attackers.

But it looks like my era of Uber is over. The company stand accused of a litany of less-than-honourable practices, such as planning to smear journalist Sarah Lacy, (who had been critical of the company), neglecting passenger safety, running a sexist campaign in France pairing passengers with “hot chick” drivers, and failing to thoroughly vet the people who work for the company.

It’s an indefensible list. It makes me feel sick with guilt about giving the company my money within the last 12 hours. As a feminist and supporter of women, I cannot, in all consciousness continue to use an organisation which treats women so appallingly. And I’m heartbroken, because I really, really, REALLY love Uber. But I have high hopes for the all women passenger and driver service She Rides, which just launched in New York.

Founder Stella Mateo created the company, transporting only women and employing only female drivers, when she found that in New York, over 60 per cent of passengers are female but 99 per cent of drivers are men. Mateo told CBS News: “I wanted to create a service that would empower women financially, and personally”. Earlier this month passenger Scott McLaughlin was convicted of kidnapping and sexual assault after he held a female cab driver captive for over four hours. It makes sense that an all-woman cab service will make female drivers and passengers feel safer.

Predictably, some people are very upset about the exclusive nature of She Rides. Employment discrimination specialist Sam Estreicher of NYU commented: “In general, the rule of law is that just because customers want someone of a certain race or sex or national origin, you cannot exceed to those wishes, you are engaging in discrimination when you do that.” Three men in the Bronx are currently under investigation for the murder of two male livery drivers. Irrespective of gender, driving is a dangerous occupation. And traditionally, men are at greater risk of dying from work-related fatalities. All drivers and passengers deserve to be safe, regardless of gender. But other taxi apps need to demonstrate the same commitment to safety and quality as She Rides before we can talk about closing it down on a legal technicality. At least, someone needs to investigate the massive gender disparity among traditional taxi drivers first.

Uber and She Rides are not the only players in the marketplace. In the US, Lyft, Curb, Hailo and more are challenging the traditional taxi monopoly. So if we don’t feel safe and valued as customers and passengers by one company, we can move our money to an organisation where we do. If every woman I know stopped using Uber it might not end their presence in the greater London area, but they’d definitely feel the pinch. She Rides can make a killing if and when it arrives.

Ultimately, if all car services made greater efforts to regulate employees and clients, the need for a service like She Rides wouldn’t arise. But for the sake of woman everywhere, I can’t support Uber any more, now I know the way it treats its female customers. And for personal and entirely selfish reasons, I’d rather get taken home by a woman every time.

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We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?