Family and Faith

I married into Philippine culture in 2012. It has brought me many blessings and helped me to develop.

My own family is tiny and classically English. We rarely meet and are stiff with each other. We would help each other in need, but hardly go out of our way. Then I married into an Irish Catholic family, which was rather larger and closer. I learned about generosity and support, as well as some less pleasant aspects such as hierarchical expectations, undiscussable subjects and forever feuds.

This acted as a helpful primer for the Philippine experience. It has all the positive and some of the negative aspects of the more family-centred western traditions, but exaggerated and multiplied. On balance, I have come to find the culture and great blessing.

This past weekend, we paid one of our periodic visits to Toronto for a reunion centred around the daughter of my brother-in-law, who was turning eighteen. Tradition dictates a party rather like a debutante event. This already highlights three huge differences from how I was brought up. In England, such a party would never happen. Even if it did, nobody living a flight-ride away would dream of showing up. And even if they did, they would never share a house with eighteen others, augmented by visiting local cousins.

It is all very lovely. It is especially good to see how such traditions help families stay strong as generations pass. The elders are revered, the next lot host and try to set an example, the ones behind learn and gradually take over, and the young form lasting bonds.

But, me being me, I cannot just celebrate the positive aspects of this, I can’t resist becoming critical. Partly this is a reaction to being taken out of my routine, a sure sign that I am getting older. Sharing a house with nineteen certainly imposes plenty of distractions and temptations to judge people who aren’t exactly like me. So the longer I stay in Toronto, the more I find myself thinking thoughts that are judging and angry. I feel it happening and hate myself for it, and I try to stay outwardly cheerful – but usually fail.

Many things set this off. One is Toronto itself, or actually a sprawling suburb called Mississauga. It is flat and featureless, and I find we often drive for fifteen minutes past endless shopping malls. My brother-in-law already has a three car family, which goes against many of my principles, but it is hard to see how they can live there any other way – the winter is harsh, the distances long and the mass transit virtually non-existent. Toronto is cleaner than most US cities, the people somehow seem more civically minded, there is evidence that public amenities are well maintained, but still it copies the ugly, sprawling, car-centric model so common in the US.

So I am already angry, and then I observe this extended family and I start judging. Wow, those girls never shut up! Surely people aren’t going shopping yet again? Could we watch something other than a brainless animated movie? What, even more junk food? And don’t get onto politics! 

Luckily, a small miracle happened that helped me to check myself. Of the many lovely aspects of a Philippine family, perhaps the best of all is the ritual of going to church. All nineteen of us got ourselves up on Sunday morning to travel in four gas-guzzlers to a local church. The place is unremarkable, and one of many nearby churches, but there were nearly 2000 worshippers, an impressive testament to Canada’s immigration policy. At church, all the best aspects of an extended family come to the fore.

So I am already feeling more mellow and reflecting on my own behaviour, when I listen to the readings. All three were magnificent. In the first, we heard an old-testament teaching of love thy neighbour, focusing on holding family close and avoiding grudges. The second, from Saint Paul, advised us to always consider ourselves foolish, even to strive after foolishness, for those that think themselves wise are inevitably revealed as anything but and also fail to learn. The gospel argued against seeking revenge, with the famous lines about turning the other cheek. We must always seek to understand, forgive and heal. It ended with the tough message “be perfect”, which I take as a warning against complacency.

The three readings sum up why I find religion and church helpful to me, and why I think it can help many others too. I have no particular faith, if faith means believing in God and afterlives and last judgements and the like. I find much of the human practice of most churches to be hypocritical and unworthy. But many of the teachings are wonderful, and hearing them in a place of reflection with family offers a perfect setting and a fine opportunity.

So I was able to reflect on my own attitude to family, often reactive, reluctant and distant. I was able to reflect on my own pathetic intellectual snobbery judging the worthy tastes of others. And I could embrace, forgive and remember to be generous and supportive. My grumpiness in Toronto is the polar opposite of such behaviour. I could also remind myself what wonderful parents my in-laws are, and what fine young adults their children have become. I could even celebrate the value of family more widely, even praying for the absent family member who had expressed a horribly racist sentiment the last time I saw him but is now suffering through a tough cancer.

On returning to New York, yesterday I attended another mass, this time for Ash Wednesday, and listened to my favourite gospel of the whole year, the one that tells me to pray, fast and give alms but not to brag about it. At St. Thomas’s on Fifth Avenue, the dean gave a fine passionate and self-deprecating homily on the subject, which brought me as much joy as the beautiful music.

In Toronto, I did what I often do when seeking peace and went on a long walk. It was icy and cold but sunny and the path had plenty of beautiful nature. As well as reflecting on my own behaviour, I specifically recalled a walk that I had taken twenty one years ago, and I thought back to those times, good and bad, exciting and mundane, and took plenty of lessons and also much comfort. The church visits are more communal than such walks, and on walks we have to conjure up our own readings and homilies, but such peaceful moments are also blessings.

Far from being perfect, sometimes I feel that I never learning and am just destined to carry on making the same mistakes, perhaps even more so as I grow older and even less tolerant. But looking back on the walk also led me to believe that in some respects I have developed positively. For that I can thank two things more than any other. One is my personal faith, such as it is. And the other is the immersion in a positive family culture, one that emphasises humility, generosity and service. I heartily recommend both blessings.       

The Democratic Horserace

The primary system is rather strange to somebody from Europe. Its main feature is that it seems to go on forever. It starts to get interesting in the autumn of the year before a general election, and the winning candidate might not emerge until the following summer.

The Democratic campaign for this year’s election is the first one to have really caught my attention. Before, I have given the primaries a wide berth, either because the results seemed inevitable or because anything including Trump makes me sick in the stomach. But this time, the Democrats have put on a real show, with many viable candidates, lots of swings of fortune, and plenty of uncertainty as we go into peak season. As many as six candidates might still have a lane to win, each with their own constituencies, style and vulnerabilities.

In the autumn, there was a point when Elizabeth Warren seemed unstoppable. She is the intellectual powerhouse of the field, spouting thought-through detailed policies with great passion. She seemed poised to sweep through the middle, more electable than Sanders to her left and more professional then anybody on her right. Somehow, she lost traction. Pundits suggest that she has pivoted too much on health care, but I think there is more to it than that. She came in for plenty of ire from Trump, which suggested to me that he was scared of her. Anyway, she is fading, and her best chance now is to hang in there long enough (she has plenty of money) and to emerge as a last minute compromise between Sanders and a moderate.

Before Warren, the shoo-in seemed to be Joe Biden, and even now he leads national polls, bolstered by lots of support from the party machine, unions and African-American groups. But the gruelling campaign has showed him up as old, tired and out-gunned, and he is crumbling and broke. He might still win though if he dominates in South Carolina and his machine holds up to give him wins on Super Tuesday.

So the only one of the original big three still intact is Bernie Sanders, an impressive, consistent firebrand who is the only candidate to fire up the base, especially young voters. He has become the frontrunner, and may be unstoppable, especially if he handily wins California and other Super Tuesday states. His vulnerability is that the party machine will try to stop him once again, and the ceiling to his support might come to haunt him. His healthcare plan is bad for cosseted unionised groups with favourable insurance schemes, and those groups wield party power.

The other victor in the early states has been Pete Buttigieg, an inexperienced, openly gay candidate with authenticity, smarts and the benefits of youth and of relative poverty (all the others are multi-millionaires, and it shows). He has played a weak hand beautifully, and has a clear lane as a likely recipient of new support if Biden collapses completely. But he will surely be spread very thinly over the coming crucial month, and seems to have made little or no headway so far with non-whites.

Hanging in there is Amy Klobuchar, an attractive traditional candidate who has worked her way up as a competent legislator from Minnesota. She had been a bit lost in the fog of all the candidates, but strong debates and the schedule have given her something of a lane. She will probably be spread too thinly as well, and she starts from a lower base than Buttigieg.

Finally there is the wild card, Mike Bloomberg, the filthy rich former mayor of New York City, who has upturned traditional ideas by sitting out the early states. In normal times he would be barely credible as a Democrat, being rich, short, uncharismatic and even Jewish. But he bought the NYC mayoralty and then performed competently, at least as far as I can judge. He has recruited a strong campaign team and is money-bombing the airwaves. It is working, and now he has a clear lane, as potentially the last moderate standing against Sanders, at which point the party might hold its nose and rally around him.

Who will win? Like any great horserace, it is hard to say, and I am chastened by my early coronation of Warren. But at this point I fancy Bloomberg. Biden is collapsing fast, and neither Buttigieg nor Klobuchar have the deep resources to fully capitalise. Warren seems to have peaked. Sanders will get close, but I don’t think the bulk of the party is ready to let him win – as Hillary Clinton says, they all hate him.

While in any primary the candidates have to fight each other, they all know that the most important thing is to beat Trump, and, incredibly to most non-Americans, that will be a tall order. There are two ways to beat Trump. One is to encourage all the low-turnout sectors to be enthused enough to show up and vote. The other is to peel off the least fanatical Trump supporters. In both cases, this is only really relevant in the ten or so states that decide elections.

Another way to look at electability against Trump is to highlight four specific constituencies, again specifically in the marginal states. One is the young, a second are racial minorities, the third are unionised blue-collar workers, and the fourth are other marginal Trumpers (“I don’t like him, but the economy is doing well and I fear socialism”).

Sanders can bring out the young, but not the other groups, and indeed repels the third and fourth groups. Buttigieg is great for groups three and four and his mid-west background helps, but seems weaker with minorities.

What about Bloomberg? Well, sad to say, money really talks. Trump will use incumbency to influence the campaign, probably spurning debates altogether and trying to build beyond is base by spending big (and smart on social media) with negative messages. This tactic can drown all the democrats, except for Bloomberg, who can spend just as heavily and smartly, and actually matches Trump well on most of his brand messages. Furthermore, only Bloomberg can chuck money to support key senate races.

I am enjoying these primaries, but the electability questions really shows up their flaws. I also love cricket test matches, and watch baseball and NFL games end to end for the sport and not the highlight reels and personality shows. But this places me in a small minority nowadays, and most of that minority is far from any of the four key constituencies. Who watches long debates nowadays, especially a long series of them over months and months? The primaries are a beautiful process, but one that is irrelevant or even harmful to electability.

In the end, the primaries are another symptom of a fragile democracy. Even the debates are seriously flawed, in that they focus on topics where congress, not the president, has much of the power. The primaries use a method that few have the stomach or passion for and are off-putting for most. They cost a fortune, hamper law making, and are only really available to super-rich candidates, and ones that deliver sound bites rather than policy.

We can also observe that such an out-dated system can only persist within a two-party duopoly. With more credible parties, not even the cable networks would carry all those debates, and even fewer would tune in if they did. The campaigns would become shorter, sharper, less expensive, and reliant on policy manifestos. Lee Drutman’s recent book, Breaking the Two-Party Doom Loop, posits that it is the duopoly that is the true root cause of political dysfunction. Much though I am loving them, the primaries are just one more example of how Drutman may be on to something.

Housing Policy

My mum never hesitated from offering financial advice. She lived through rationing and had a background in small business retail, and this context made her famously frugal. Look after the pennies and the pounds will look after themselves, she would utter frequently. Never a borrower or a lender be was another favourite. Most of all, she loved the idea of owning property, epitomized by the phrase safe as houses.

A lot of our values come from our parents, sometimes consciously and sometimes unconsciously, and this homespun wisdom has surely influenced me. The idea of unmanageable debt fills me with fear; I notice a physical reaction whenever I go near a casino. And, sure enough, I bought a house at twenty-two, with a deposit from mum and a loan from some building society. She hated mortgages but accepted that for a London flat an exception had to be made.

Recently my daughter and her husband asked me for general investment advice, and I found myself sounding like my mum, an unpleasant realisation that comes to most of us eventually. They should surely invest in a house, said I, but then my curious brain kicked in and I challenged my own instinct. A couple of weeks later The Economist included one of its excellent special reports, about housing. True to form, it was ready to challenge conventional wisdom. It did not argue that my daughter should avoid property, but it did argue that governments had made a mistake since 1945 in encouraging home ownership as a goal.

I just looked up what flats in that first block have recently been selling for – the internet is a wonderful thing! My 28,000 pounds would now be about 400,000. After inflation, that is price growth of 3.6% per annum, while investing in the UK stock market for the same period would have given a real annual return of 2.4%.

Of course, it is not so simple. There is tax to consider, and moving costs, mortgage fees and interest, and the cost of maintaining the flat, all compared with rental equivalents. Over thirty-eight years, my housing needs have evolved as well, not least because I have only lived in London for ten of them. But I am sure I am not alone in wondering why I didn’t just hold on to the London flat and rent it out – until I remind myself that cash and credit limitations at the time made that quite impossible.

So, must I admit that mum was right, once again? Well, in my narrow case, yes, but for a particular reason. Shell moved me around the UK in my early career years, and had a scheme whereby they compensated for that inconvenience by paying large chunks of mortgage interest, which enabled me to climb the property ladder quickly, as long as I had been on the rungs of that ladder before all the moves started. I was, so I did, and I benefitted. 

There are other such special reasons why becoming a homeowner (well, in practice, owner of a small part of a home) as early as possible can be a good strategy. Many are linked to government policy. School quality follows the money, and money is often in districts with barely any rental market. Many countries, including the US, still subsidise mortgage interest. Zoning laws can protect areas with high owner-occupancy, thereby creating scarcity and nudging up prices. There are big tax advantages to having wealth tied up in property, notably estate tax exemptions.

But if we start from economic fundamentals, home ownership is a pretty reckless strategy. Who would want such a large share of an economic portfolio – all the wealth and significant debt - tied up in a single asset within a single class, one where liquidity is low and where values are volatile? It is like taking out a large loan and investing all of it, plus all your other cash, into one stock, one that is hard to trade. Good luck with that one. You might have chosen Apple. But then again you might have chosen GM, or Enron.

Apart from all the special reasons noted above, there are other emotional reasons to buy. The real estate and finance industries peddle nonsense about how homeowners are happier and somehow classier people, and there is something comforting about owning somewhere. There is also one good practical reason – you are hedging your largest long-term liability: if you know at thirty that you will want to live in a part of outer London as a pensioner, you can buy there and avoid the risk of being priced out in your dotage. But nowadays, who wants to tie down their future so specifically?

In the same way that home ownership is rather reckless for an individual, encouraging mass home ownership is reckless for a government. This was a strong argument made in The Economist. You create a massive voting bloc whose prime economic driver is house prices. No wonder all those subsidies emerge and are hard to remove! Zoning becomes a political hot potato, as the NIMBY class grows larger and more vocal. Then there are those who become excluded. I don’t think my mum would have been able to help me climb onto that first rung if the price had been 400,000 pounds. Even more dangerous becomes the asset class that is mortgages, then subprime mortgages and derivatives of subprime mortgages. When that (inevitably) collapses, it affects not just greedy bankers but ill-advised first time buyers as well; families become trapped and blighted.

Mass home ownership is also a constraint to economic and social mobility, because it is expensive to move, and maybe impossible in times of negative equity. The rooted become more rooted, and not for good reasons. Selling off the council estates was Margaret Thatcher’s most brilliant political move, but the long-term consequence is that families have become stuck and indebted: after all those estates were not generally in areas with desirable schools or growth industries or housing supply constraints, so prices have not leapt up like they have in Clapham South.

Because of our international moves, I have lived in rented accommodation for twenty-five years, and I’ve come to prefer it for its mobility and simplicity. It is important to have a large enough rental market in the area; New York’s is a dream, with lots of transparency and churn, and the city council are taking steps to reduce the power of parasitic middlemen even further.

According to The Economist, there is evidence that states that have maintained a lower share of home ownership have benefitted over the long term, for example Singapore over Hong Kong or Germany over France. It makes sense, because reducing friction in a major asset class must help mobility and make economic policy less of a hostage to a large voting bloc and to missteps.

One other interesting discussion in the Economist was over long-term trends. The modern trend towards agility and holding fewer assets and possessions indicates more renting, and even communal renting (sharing spaces like kitchens with neighbours). Mass car ownership led people to spacious suburbs where home ownership became the norm, but that trend is reversing, and autonomous vehicles may accelerate that further.

So there is a growing consensus around a set of policies that would reverse the drive towards greater home ownership, and those same policies would make home ownership a less good bet except in areas of long-term demand growth and supply constraint, such as Manhattan. It makes sense to remove subsidies, to invest to ensure quality schools, mass transit and community facilities everywhere, and to facilitate supply of new homes, including affordable ones, without creating new distortions like rent controls. Taxing property is more equitable than many other targets, while large landlords, developers and realtors need to be regulated carefully. Gently managing the supply side also applies on the way down, so for example the policy of reducing the footprint of Detroit is imaginative and smart.

The first flat in Clapham South worked well for me, so I admit it, Mum was right as usual. But advising my own offspring now indicates a different priority. Buying a house can be smart in an area of constrained supply, especially one where they can see themselves living far into the future. But there is also a strong case for renting and putting any spare cash into other assets, perhaps including a fund that tracks city property prices.