The Middle Class Will Die Within 30 Years Leaving "A Wealthy Elite & Sprawling Proletariat"

Tyler Durden's picture

If we continue down this path of ignorance, we will be left with a "tiny elite and a huge sprawling proletariat" who have no chance of "clawing their way out of a hand-to-mouth existence," is the loud and clear message from UK government advisor David Boyle. As The Telegraph reports, Boyle cautions, "we won't own our own homes, we won't be able to afford it," adding that "we cheerled the rise of property prices not realising that it would destroy, if not our own lives, but the lives of our children." His conclusion, "the middle classes have to wake up to prevent it happening and to create a political movement that will do it."

 

Authored by Sarah Knapton via The Telegraph,

The middle classes will die out within 30 years because of rising property prices, which will rob today's children of their dreams, an economist has warned.

David Boyle, a government advisor and fellow of the New Economics Foundation think-tank, said that youngsters can no longer expect the same level of affluence as their parents.

Speaking at the Hay Festival he warned that Britain will be left with a ‘tiny elite and a huge sprawling proletariat’ who have no chance of ‘clawing their way out of a hand-to-mouth existence.’

He predicted that the average house price will reach £1.2 million by 2045, putting a home beyond the range of most people as wages fail to keep up with huge increases.

Boyle said that the traditional middle classes will need three or four jobs just to be able to pay soaring rents. People will no longer have the space or time to pursue cultural interested.

And he blamed bankers bonuses for artificially inflating the property market.

“The really scary thing is if in the next 30 years house prices rise as much as they have done in the last 30 years then the average house in Britain will cost £1.2 million,” he said.

 

We cheerled the rise of property prices not realising that it would destroy, if not our own lives, but the lives of our children.

 

“The place where this is heading is a strange society with a tiny elite and a long struggling, straggling line which is the rest of us, a new proletariat, who will be in hock to Landlord PLC.

 

"We won’t own our own homes, we won’t be able to afford it.

 

“It will constrain our dreams and constrain the dreams of our children. It’s a new kind of economy where there are no middle classes at all.

 

“Nobody in society will have the kind of space in their lives, space in their homes, space in their careers for any kind of culture at all, because we will be having three or four jobs to make ends meet

 

“I think will impoverish society make it more intolerant and make it more difficult to live.”

Boyle claimed that one of the major problems was Margaret Thatcher abandoning The Supplementary Special Deposit Scheme, known as the ‘corset’ which limited how much banks could lend for mortgages.

Although the scheme kept house prices low in the 1970s, Boyle said it was unlikely that today’s buyers would accept having to wait for months for a mortgage.

Instead, he suggests a ‘parallel’ housing market were new homes were sold at the initial price for 100 years.

He predicted that without such a radical solution, mortgages will be inherited and only be paid off by the grandchildren of the original buyer.

“We were rationing mortgages in the 1970s, that’s what kept prices low and I don’t know if we will accept a time again when you have to wait,” he said.

 

Boyle said the rise in Ukip was fuelled by disaffection of the middle classes.

 

“You saw this huge revolt. I think what happens when you suppress the dreams of the middle classes is you get rather peculiar and very dangerous political movements beginning to emerge,” he argued.

 

“That doesn’t forgive people voting in the neo-facists but it does somehow explain it.

 

Very unequal societies are very inflationary societies and in the end it drives out those other degrees in society until it becomes very flat and very desperate.

 

The middle classes have to wake up to prevent it happening and to create a political movement that will do it. I don’t think Ukip is it.

 

“You could say that it doesn’t matter and that a more classless society would be a good thing.

 

“I think if there is no place in the middle that anywhere can go to claw their way out of desperate hand to mouth existence, and the precariat, then that condemns us all to a precarious existence because there is no ladder.”

Boyle sits on the Liberal Democrat’s federal policy committee and was commissioned to write a report into access to public services by the government, which was published last year.

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hankwil74's picture

Rising housing prices are great for homeowners, but for everybody else they're awful. How is a 28 year old married couple with 44k in debt supposed to afford a 640k house?

jbvtme's picture

30 years?  i'm figuring by the end of the summer...

Lionhearted's picture

America is voting for it. The voted for the snake oil sales for two TERMS. Till that changes nothing will change.

Ahmeexnal's picture

it's not a new kind of economy...its quite old....it's called socialism....

 

F*CK KOLLEKTIVISM

NoDebt's picture

Like I've been saying since I first came to ZH:  Small number of rich, large number of poor, just enough middle class to service the rich.  Same as it's been in most societies throughout most of human history.  Giant reversion to the mean for the US.

Could it be stopped?  Yes.  Will it?  No.  

Greenskeeper_Carl's picture

I don't buy that this article is realistic. We are heading in that direction as a society, yes, but that stuff with the houses is kinda far fetched. Its just a bubble, which will pop. When the serfs can't afford the houses because they are too expensive, the prices will come down to a lower level. Take the US for example. The fed can't suppress interest rates below what the market would dictate forever( although lately it has seemed that way), and when they inevitably go up, prices for homes will fall again. People that are buying 300k homes on a 30 year at sub 4 % aren't going to be able to buy a 300k house at 6.5-7%, even though that used to be pretty normal. Therefore, home prices must drop again. This is what happens when central planning blows an asset bubble to in realistically high prices. Assuming home prices will keep shooting up indefinitely makes no more sense than assuming the S&P is going to keep going up 30% a year.

CIABS's picture

"America is voting for it. The[y] voted for the snake oil sales for two TERMS. Till that changes nothing will change."

- Lionhearted

Actually, they voted for it six times in a row, but the two middle ones were stolen by the other party.

Rubbish's picture

Property taxes don't increase beyond normal inflation in rural America. Jobs might not be plentiful but they never were.

 

A scant piece of land is still very affordable and hasn't increased much at all. Mobile home over the last 15 years. Cheapy entry level 2000 = $20k  Today on sale $23k

 

So drive a beater car for 6 years instead of $600 a month payment, bingo homeowner almost paid for.

duo's picture

My property taxes just went up $1500/year because some "investor" way overpaid for the abandoned house next door to mine (and it was in bad shape).  I wonder what I won't buy with that money.

Vampyroteuthis infernalis's picture

The fate of many homeowners in the US. Your property taxes are not only going to go up, but WAY UP!

clooney_art's picture

30 years ?? this can only mean that the sheep will remain sedated for 30 more years.

mrpxsytin's picture

As the IRS officer assigned to your case I am very interested to know how you plan to pay the increase in property taxes, considering that you have filed zero taxable income for the last 5 years. 

Jumbotron's picture

"My property taxes just went up $1500/year because some "investor" way overpaid for the abandoned house next door to mine (and it was in bad shape).  I wonder what I won't buy with that money."

 

Next time....make it so that the authorities wonder why the place burned down and what all these wild pigs are doing munching on the grass.  Takes care of your carpetbagger investor.

IdiocracyIsAlreadyHere's picture

Actually the other party is the same party.  It matters not who technically "won" those elections the transfer of wealth upward would have continued just the same.  The Uhmerican public gets a "choice" of voting for the same shit no matter what color costume it wears.

de3de8's picture

That timeline seems optimistic

Againstthelie's picture

Sept. 27th - Oct. 1st 1995 San Francisco: exclusive meeting of the globalist "elite". Only three journalists were allowed. Among them Hans-Peter Martin, at that time working for German Spiegel and Die Zeit.

 

Martin reported what was discussed and envisioned there.

In his best selling book "Die Globalisierungsfalle" (trap of globalism) 1996 he reported about the targeted shape of society: "rich countries, without middle class - and nobody disagrees."

19 years have passed since this conference. An article in Spiegel Online about Portugal's current situation:

Portugal leaves the Euro rescue shield, but the people are paying a high price for it. Severe austerity measures have destroyed the middle class, social security nets have been destroyed, 2.5 million people are living close to poverty.

http://www.heise.de/tp/artikel/41/41841/1.html

 

Gary Allen's book "The Insiders" was already written in the 1970s. In this book, written at a time while the sheeple were still distracted with the East-West-conflict (the red globalists in Moscow and the orange globalists in New York both share the same goal), Allen explained the aim of the globalists to the US audience: destruction of the middle class.

Fifty years ago Adolf Hitler had declared war on this plan and prophesied this outcome. When he took power in Germany, the German farmer class was close to extinction because of overindebtedness, while the banks and speculators had grabbed everything since 1918.

Hitler removed the speculators' grip on the economy, threw them out of Germany (which allegedly was very evil), destroyed the influence of the banking cabal on politics, turned things from the head on the feet, by making the currency serve the economy and the economy serve the people and not upside down, the people serving the economy and the economy serving the money. He was successful in removing the farmers' debt and the foreclosures of their farms, rebuilt a strong German middle class, where one salary could easily feed a family, jobs were secure and almost for a lifetime, children were extremely well educated, learned self discipline, valuing traditional values, the mass learned to care about the nation and it's future generations, educated them about the lie of "free media" and to never become debt slaves again, but if someone wants to buy something, he has to work hard and save for it.

Therefore the red and orange globalists fear Hitler (and similar movements all over the world) like the devil fears sacred water.

Pee Wee's picture

Get real, fraud-fiat is syndicated power.  The entire world economy is synthetic bullshit from top to bottom.

Don't be the fool that thinks that "homeland security" will protect the rich.

The rich are lunch - those "without" simply aren't hungry.

robertsgt40's picture

Yup.  Nowhere near 30yrs before the SHTF. Mr Boyle fails to note, this is all by design.

thamnosma's picture

Taking out a 300 year loan.  I believe it approached that at the height of the Japanese housing bubble.  Basically, indenturing your offspring and theirs.

Pee Wee's picture

Indenturing isn't the word, but slavery is.

Good thing the cuffs are fake, just like the economy.

astroloungers's picture

proles and animals are free.....

falconflight's picture

Two legs baaadddd, four legs goooood.  Baaaaaaaaa

mrpxsytin's picture

Orwell did say that the only hope left was with the proles. 

Kirk2NCC1701's picture

If you leave your selfish interests and emotions out of it, and also think about the next generation (your kids, etc), rising home prices are just another part of the Fiat+FRB Ponzi.

Why should an aging (and depreciating) assets be worth MORE over time?  No good reason.  It's the FIRE (Finance, Insurance and RE) industries that keep ratcheting up the prices for their benefit.  If we're honest about it, and cut the bullshit.

Serenity Now's picture

+1.  A house is a depreciating asset, like a car, boat, capital equipment, shoes, or a gallon of milk.  It does not produce income or value, and it will crumble to the ground eventually.  It was painful to watch people buy into the housing bubble nonsense that a house was an investment that would ONLY go up.  

I tried to tell people that the only reason a house should ever double in "value" is if you walk into the kitchen, turn on the faucet, and crude oil drips out.  But nobody ever got my meaning.  Granite countertops trump common sense.

duo's picture

you forgot running a sweatshop in your basement.  That's a productive use for a house.  Other than that it's just a sink for electricity, nat gas, water, capital (taxes), etc.

Oh, and some of the earlier granite countertops are radioactive.

 

beaglebog's picture

Is it possible to have an interest which isn't "selfish"?

 

Just wondering.

sessinpo's picture

   They aren't. They are taking on more debt then they can service. Try a less expensive home and then upgrade later on.

what's that smell's picture

the fiat / speculative bubble economy leads to bubbles and price dislocations?

what? that's crazy talk.

MasterOfTheMultiverse's picture

Problem in the UK/City is that housing prices are rising because Russian and Middle Eastern oligarchs are buying properties for the purpose of money laundering, not to actually live in them.

StateofFraud's picture

Boyle calls UKIP fascist? LOL.

25or6to4's picture

Anybody who believes in not letting in every Tom, Dick and Harry into their country is labeled a fascist in Europe. Oh wait a minute, that applies here in the US also....

Chief Wonder Bread's picture

He recommends putting a 100 yr cap on the price of a house? This guy is clueless.

ZDRuX's picture

A government leech is telling us that government will destroy what we know of the middle-class... and his solution probably involves government.

 

You can't make this shit up.

Marco's picture

Government will provide a solution ... we will just keeping voting more fascists in until we get one on top who's crazy enough to not get bought and smart enough to not get killed and that's when we get a reset.

IridiumRebel's picture

Sure, now if you'll excuse me, but I must find my unicorn skittle shitting at the end of a rainbow.

Marco's picture

For all the screaming about gold's traditions people here seem awfully quick to discount history repeating in other ways.

Chief Wonder Bread's picture

+1 You're correct Marco. But it will most likely be a diversion.

Seahorse's picture

You can't, Boyle's party are Keynsian idiots. Round and round we go. 

Caviar Emptor's picture

Solution? Become a butler, valet, lackey or handmaiden. At least you'll be the first on the receiving line for food leftovers and hand me down clothes. You'll live on the inside where the private armies protect you, not on the outside where rogues rule the night. You'll also speak perfect English and you might be allowed to marry and procreate after a while in service.

Reference Variable's picture

Hmmm.. Lackey sounds alright. Is that like a yes man? I can do that.

falconflight's picture

Well doesn't Marxist/Leninist theory demand the destruction of the middle class in order to free the proletariat?

thamnosma's picture

We seem to going into a blend of Marxism/Leninism and Crony Capitalism.  I suppose it defines the New World Order.  

falconflight's picture

oh I think we are there...I just don't know how far the pendulum (ax) will swing.

TheReplacement's picture

See it two ways.

First there is a struggle between huge business and government (not necessarily the marxists as the marxists want to overthrow the government and replace it with their own creation).  Each has elements that want total control but they can't be outright hostile because, in reality, they need each other at this point in time as if the economy were to totally collapse then neither would survive.

Secondly, the marxists very well might be using crony capitalism as a means to their end.  They need to concentrate wealth and power in order to be able to seize it with their relatively small numbers.  Suppose the big banks collapse again and take the whole economy with.  What is a marxist to do?  Why not nationalize the banks and take control of the money supply (and your own destiny).  In that light it is in the marxists' best interest to encourage overlevering and all sorts of bad behavior. 

I think the banks are being given the ropes with which they will hang themselves, quite literally.  A novell could be written about all of the possibilities, especially if you throw in the MIC and the intel "folks".

Anasteus's picture

A wealthy elite & sprawling proletariat is the fastest guaranteed way how to overthrow the elite; kind of elite suicide. Any blend of Marxism/Leninism would sooner or later ignite uncontrollable anger because of apparent poverty, restrictions and inequality. A personal experience.