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The Middle Class Will Die Within 30 Years Leaving "A Wealthy Elite & Sprawling Proletariat"
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.
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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OK, so look at the core of what makes things expensive.
1. The parasitic drain of banking on the world. The banks collectively take a percentage of all money they have put into the world, every year.
2. Parasitic government regulation. Government regulation and the support systems required to maintain the regulation make it almost impossible for those without power to have an independent business, where a permit, license and paid-for inspections are required for EVERYTHING. Why is it not possible for a kid to legally have a lemonade stand? Out-of-control government.
3. Misallocation of resources. Those in power allocate money to themselves for their personal benefit and for the benefit of their cronies and not for the benefit of the population in general. While I abhor communism as a fraud because modern-day communism is a lie designed to get the powerless to sacrifice for the benefit of the powerful, an allocation of resources toward those things that ensures the survival of the population is sane, while anything else is insane and sociopathic. Why allocate money to wars? So that those in power can benefit at the expense of those not in power .. and for no other reason.
The situation will not improve until humans mature a bit more. Thee solution does not come from conflict, but from intelligence and compassion.
Slaughtering those responsible for #1-3 would be fun though?!
Sustainability means planning our future in a way that we do not set ourselves up to crash and burn at some future date. Long-term planning has not been something politicians excel at or are even good at. Our system is geared at getting politicians reelected and fulfilling the most pressing needs of today.
Things like profit, greed, and quenching our unrelinquishing desire for growth are placed in front of longer term issues and needs. Mapping out a logical and sustainable long-term plan requires delving into some rather hefty philosophical questions like what brings real happiness. More on this important topic in the article below.
http://brucewilds.blogspot.com/2014/04/planning-sustainable-future-for-m...
It is said that the only way to "control" a society is through "hope" or "fear".
The ultimate society does not need to be controlled. When we get to that point in our evolution we will have defeated the dialectic, rather than defeated those who seek to control us through fear.
... and while my emotions say that the world could use a little more hope to keep things in balance, I also realize that hope is a control mechanism as well.
Today a big topic is the huge growth in inequality. Those who look closely understand that it is not the 1% at the top stealing the icing off the cake, but the much smaller .1% or .01% that are skewing the numbers and overreaching.
I contend this goes hand in hand with the massive growth in crony capitalism and corruption. Much of this can be attributed to the ability of those in control "changing the rules" and positioning themselves to benefit at every corner. In our busy and complex world we have found it impossible to watch all the moving parts. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/05/how-empires-collapse.html
I have no problem with funneling fiat through the system and collecting it at various points, be they banks, corporations, countries or individuals. In a fiat system where all money comes from debt, it really does not matter who or where those points of collection and reinvestment are as long the money is wisely reinvested into value adding activities.
Unfortunately those at the collection points seemingly do not see their purpose as value adding and instead have become parasitic and destructive to the whole. They have even branded themselves as "elite" AS IF being designated a collection and reinvestment point for fiat makes one better than anyone else. The purpose of the branding is clearly designed to create animosity between those who are collection points for fiat and those who need fiat as a trade medium.
The clearest indicator to me that the self-branded "elite" are slacking in their responsibility is that the velocity of money has slowed to a crawl. They may claim that there is a lack of worthwhile investment opportunities ... and so they make things more expensive by simply bidding up old and historically valuable assets ... but this is nothing more than a testament to their lack of "elite-ness" ... they do not have the intelligence, creativity or motivation to execute their responsibility and use the fiat well. Maybe they should turn over their responsibility to someone better suited for the job. (IMO, the middle class did it very well for many years ... until the self-branded "elite" decided to ruin it).
100 years? What are you going to do for homeowners to balance their risk? They had to pay interest on the mortgage which is mitigated by rising prices. If I have to sell my house for what I paid (with borrowed money), all that is down the tubes for me. It's not a nest egg, I'm just paying rent to a banker instead of a landlord. Rent control for bought houses is going to work about as well as rent control for apartments.
Many believe that the greed of the wealthy are to blame for the decline of the middle class and the system as a whole. In fact it is the fault of the ever expanding government like the 1958 movie 'The Blob', it keeps consuming, growing larger and never shrinks. no thought for the future only the here and now - consume and F' everything.
If you want to point a finger, try the government sector unions and career politicians.
I agree 100%.
Career politicians have become the elite class, along with the billionaires. Together, they conspire to fleece the proletariat.
“The middle classes have to wake up to prevent it from happening and to create a political movement that will do it."
I agree: don't complain about something without thinking of a solution. We need to think of the best way to change the political system to break this iron grip that the elites have on the voting class.
Yup, and as gubbermint grows, so does the croniness as fewer and fewer, larger and larger companies, and richer and richer and ever more powerful elites suck off the monetary outflows of said mints to the point where there is no free capitalistic system anymore. System dynamics are a bitch, as step by step the inherent instabilities in the system have more and more unintended (or are they intended???)consequences, until the final crash, the coup de grace, marks the end, or rather the start of a new cycle.
Turned basic shelter for the masses into a racket. Sad indeed.
ditto USSA
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered..." - Thomas Jefferson
Take heed, England, as we must also.
Pathetic analysis truly reflective of the dishonest liberal mindset. Extrapolate history, create a crisis and move in with new big government solutions: unintended consequences be damned. The future whined about here can never happen, where do all the jobs come from so everyone can work 3 or 4. Stop the interest rate rigging and artificial home ownership interventions by government and the rampant distortions and speculation will abate. Then capitalized rental flows will govern home prices and affordability. Government always intervenes in the market to address some bogeyman then complains the market doesn't work. STFU, get out of the way and go to mass at the altar of Piketty.
Yawn....
Rural renaissance.
When the clever folks with blue collar skills, or the motivated to learn, find that small town America can run a town with first class services at annual property taxes of less than an average monthly car payment, they will come.
Former farmland or undeveloped acreage can still be had (for larger parcels) for under $2000 /acre and older fixer-upper homes under $100K.
The catch is that a person would need a productive skill to start a business that doesn't rely on high volume and be willing to live a low overhead lifestyle.
Our small town will soon be a host to a small coffeeshop/ bakery that a prodigal daughter will open who returned to care for her elderly folks. Her skill as a professional baker for a time will fill a niche that the existing mediocre donut shop doesn't cover. She won't get rich and startup businesses have a high failure rate but I think she'll do just fine because everyone has the time and money for coffee and a home-made muffin and, once inside, will want to leave with fresh baked bread or a pie.
Mad Max may come to the cities with a disruption of supply chains but around here it will give local beef and produce growers opportunities to expand sales. Barter is an accepted form of trade round these parts and always has been.
Mad Max will never come by here because there isn't a gun-free zone. We even have a Granny who is a minor celebrity because she shot an intruder who came off the freeway looking for some easy pickings that kicked in her back door.
"He's damn lucky I didn't have my glasses on or he'd be pushing up daisies now."
I think she secretly likes it when I call her Ma Barker.
30yrs??? Me thinks 30 months is closer to the mark.
There will always be a middle class...just under a different definition than todays. the new middle class will be the upper middle/lower upper class that exists today, and their sole purpose will be to serve the upper class. The lower class is everything below the 80th percentile. 80-99th percentile is the middle class. top 1% is the new upper class. This will lead to rioting, civil unrest, separatist, areas looking to secede, and ultimately war. And it will not take 30 years.
Your future will look like "In Time" but without a visible clock. You'll be enslaved, starved, hard-working & die early but you'll get a small bonus short-term for every new child you have, accounted against your life-debt, to ensure a large supply of slaves.