To think it's depressing that everyone seems to think after this recession we should just return to exactly how things were?

[kake]

Does anyone else get this sense? What I mean is that everybody is lamenting this recession, quite rightly as it's awful, and I feel for everyone who has lost their job or is struggling.

But on the other hand there doesn't seem to be an acceptance that in some ways this has been at least a little bit caused by complete over-consumption in the good times and that we need to change our ways a little bit. Or a lot. When people talk about house prices especially, the consensus always seems to be that if there's any talk about a recovery that must be a positive thing, with the implication that we should be getting back to stupidly inflated house prices as soon as possible.

I find it depressing, as someone who didn't buy partly because we couldn't really afford it but also because we were really cautious and didn't want to overstretch ourselves. But now we're seeing a lot of friends who did somehow being rewarded as their mortgages have been slashed.

I'm also someone who wishes that taxes had been much higher for what I consider to be well paid people (and that would include my DH!) during the boom, so that there hadn't been such a disparity in income in this country then. It's a shame that higher tax levels in future will have to pay off debt not contribute to the national benefit! If I mention this to (well paid) friends they look at me as if I'm mad, although they are people who in principle I think sort of do believe in equality, just not if it affects their/our pockets. My view is that as satisfaction with income is largely relative (ie it matters more to people apparently that they get paid more than their neighbour than their absolute wealth), then if everybody is taxed more at higher income levels, then we'd all be in the same boat and it wouldn't make much difference.

But I feel like I'm STILL swimming against the tide, just when I would have thought more people would begin to feel like this. We have lots of friends who work in the banking sector for example who've been through a bit of a rocky time but now seem to be out the other side and better off than ever and sort of with no lessons learned!

It just seems ... so wrong! Or maybe I just got out of bed on the wrong side. And this post isn't as articulate as I would have hoped!

[Meglet]

Yanbu. Things have got to change. I swear we'll all end up like our grandparents, hiding money under the mattress, living frugally and darning socks.

[junkcollector]

YANBU AT ALL. Agree completely. Let's start a revolution!!

[junkcollector]

...a velvet one...I'm a bit squeamish

[WynkenBlynkenandNod]

YANBU. I was at a friend's house the other day who started renovating her house 18 months ago and was told by the estate agent that her house would still now be worth what she was hoping it would be before the recession ie. 500k. Personally I think he told her what she wanted to hear. But now she has been told her "equity is intact" she is thinking about buying a motor home (she has a very large mortgage).

Not bad value for 30k if you think about it she said, couldn't really manage to find the words to comment at that point. She sounded most surprised when I said we were trying to pay as much off the mortgage as we could as if she couldn't really see why we would want to. I gave up and felt utterly depressed about how nothing had changed. I'm in on the revolution !

[TrillianAstra]

One of my friends was ranting a bit about this the other day, he ended up talking bollocks but one point he did manage to make is that if the banks are only lending 3x salary for motgages then eventually (after all the rich parents have helped out their little darlings by stumping up cash and keeping prices aritficially high) prices for 'first-time' houses are going ot have to drop to 3x average joint salary + 10 or 20% for deposit. That's a lot lower than they are now.

[fuzzylittlesheep]

Kake - YANBU, but house prices need to recover otherwise many perfectly average families will be left in negative equity, leaving them unable to sell and move. This is a serious problem for some people. Though I agree that once they recover hopefully they won't keep shooting up at the rate that they did before.
The best lesson learnt would be that we can't all keep taking credit. A few credit cards, a few store cards, a car on finance, DFS sofas on buy now pay in three million years etc... that really lands you in trouble once things go bad but it was so readily on offer that you can't really blame people.

[kake]

Oh thank goodness, some fellow revolutionaries! This is one of the only subjects me and my DH argue about and it's really hard to talk about in RL for some reason.

We were at some friends the other day, where the DH earned previously A LOT of money and will do again I think. Anyway, they have a big mortgage and recently it was looking touch and go although they seem to be through the worst and I am genuinely relieved for them. BUT, I couldn't help getting annoyed when they kept asking why we are not buying now etc etc. I was saying we're not absolutely confident about DH having a job in a few months time best to wait, and their response was Oh, just get redundancy cover etc etc. I thought that one of the few benefits of this recession was that people might become a little less ... greedy? And hypocritical too. The DW of this DH is quite big on social justice and equality etc but is still really happy to sit back whilst her husband gets paid his very large salary (in the good times) as part of the VERY sector that caused this whole thing in the first place.

Oh God, I sound like a right old grumpy cow. I am NOT saying that I am perfect by the way! I'm really hypocritical too.

[kake]

Agree with that fuzzy and really genuinely feel bad for people in negative equity. But just don't really feel comfortable with the government pumping money back in in a way that seems to suggest they want to see a return to the really bad old days (or good, depending on your perspective) of massive price inflation. I am not sure what kind of recovery we need - prices need to be affordable, don't they, as Trillian says and people who are now in negative equity were really unfortunate to buy at a time when prices were least affordable.

[TrillianAstra]

I'm not even talking about what should be, or what must be, or how it would be best for everyone for it to be.

Logically if people can't get mortgages for more than 'X' amount then anyone trying to sell their house will find it impossible to sell for more than 'X + deposit', so unless there is some kind of serious intervention house prices will come down.

[ABetaDad]

kake - I totally agree with you. We have rented houses for 25 years and did not participate in the house price boom. House prices still have to fall 20% to bring them back in line with the long run relationship with wages.

I buy and sell shares, bonds and commodities for a living. We are still miles away from getting out of this mess. The banks are really bust but no one dare admit it and from politicins downward they are still tryng to talk thngs up. It will not work. My FIL is in the car trade and works for one of the largest UK car dealerships. He says the April sales are even worse than predicted by senior managers.

One thing I do know is that we cannot just 'borrow' our way out of this recession. Things are getting much worse every day. For example, last Friday one of the big credit rating agencies downgraded the debt of all the UK buiding societies because they fear a 40% drop in house prices. These building societies will find it very hard to raise money in the capital markets to lend out to new mortgege borrowers so even less mortgages will now be on offer and they may have to be rescued or taken over by other banks - but which banks are solvent enough?

fuzzylittlesheep - I had friends who bought flats in 1989 before the housing crash in the early 1990s. They stayed in negative equity for 8 - 10 years. They could not move. I fear the same will happen again.

[kake]

That's all interesting.

I find it terrifying how the government seems to want to prop up the housing market artificially though. It seems to me that however painful, they have to be allowed to find their natural level again.

Before all this happened I was thinking that the solution to the green/environmental thing would be forced upon us, by something catastrophic forcing us to spend and consume less. Now something approaching that has happened everyone seems to be doing their best to ignore it.

As a general point, one of the other most depressing things about this situation is that I am a lifelong Labour voter. I even hung on through the Blair years though I hated what he did in Iraq. Now though there is no way that I can vote Labour. It pains me to say it but there is no way that I can vote for Gordon Brown, how could he have said all that 'no more boom and bust' twaddle in the middle of what was obviously a major and unchecked boom!

[BigBellasBeerBelly]

YANBU at all! I feel exactly the same!

Our planet cannot support this "growth at all costs" economic model that we have. It just can't work. We have to buy more and more and waste more and more and spend more and more just to keep standing still it seems.

I vote for:

Green electricity everywhere!
Get rid of all the cars and have little electric ones you order up or monorails or something all whizzing around, not polluting at the point of use (and not much at all if the leccy is green) and no-one getting run over!
Start building products which are designed to last more than 5 mins!
Bring back repairs!
Stop being so horrible and selfish and everyone live a happy happy community life full of sunshine!!!

[kake]

I definitely get your drift. I've been reading quite a lot of stuff about happiness and equality etc etc lately (anyone read The Spirit Level?) and it just seems that we could kill so many stones if we stopped consuming so much. People seem to think that less income means less happiness, but in fact the opposite could be true if it was true across the board! Why does no-one seem to get that? I blame Thatcher. Largely because I blame her for most things although not my inability to stop mumsnetting and get some blimmin' work done as that might be a step too far even for me. I really need to get some work done ....

[powpow]

YANBU!

[JHKE]

I agree with most of what you are saying but not the higher tax on salary. Why should someone who has more responsibility in their job be earning the same as someone below them because they are taxed more? My dh is in the higher tax bracket but if a higher percentage was taken then

[JHKE]

oops meant to delete last bit of sentence..

[policywonk]

Agree with Bella - low carbon recovery is what's needed. Will be interesting to see what's announced in Wednesday's budget.

kake - I really want to read the Spirit Level. You don't fancy posting a 12-page summary do you? (I've already read the Guardian article so don't try to palm me off with that.)

[TrillianAstra]

JHKE that's not how tax works, you know.

You can never be earning less than or the same as someone on a lower salary, because the higher tax rate only applies to wages over the cutoff point. So if you earn £1000 over the cutoff you don't get taxed 40% on everything you earn, you just get taxed 40% on that £1000, so you get to take home whatever you did before plus £600, which IMHO is still very much worth having.

[oneplusone]

YANBU. I totally agree with your sentiments. For a long time now I have really only bought what I and my family needed and very little else. I think we have been brainwashed by the media to think that material possessions will bring us happiness and that a bigger house/car etc means we are better than other people. People's fears and insecurities are exploited so we keep on spending which means the people at the top keep getting richer.

I was also hoping that the current problems might make people re-think their values and ideals and lifestyle, but like you said, it is depressingly obvious that the government in particular simply want us to return to the old model. They seem unable to see that the old model is unsustainable, that it has come to it's natural conclusion and we need to adopt a different mindset and lifestyle and economic model to carry us through the next 50 years.

It is heartening to know that there are like minded people out there, like you said it is difficult to talk about this in RL for some reason as I personally don't really know anybody else who thinks this way.

And financially DH and I will lose out if house prices fall drastically, but it doesn't bother me, there is more at stake here than monetary wealth.

[FluffyBunnyGoneBad]

I agree with you. We have a society which is controled by spending and money. It's greedy and materialistic. It's not just the Jones's people are trying to keep up with, it's the whole country, the govenment encourage this behaviour though to keep the economy moving. They don't appear to give a hoot where the money's coming from. When we are all spending, it looks like the country's doing well right? Lots of jobs, building trade improves as more people want houses, price increases as people get more and more gready, it had to go pop sooner or later. It has never been sustainable. I'd like to see the government encouraging people to save, not spend. I'd like them to say " hey, don't get a second job to earn lots of money, spend some time with your children and forget about another car or a fitted kitchen. You don't need that".

[MrsFlittersnoop]

Kake, YANBU.

I've been really hoping we will see major a cultural shift in our screwed up thinking about property, credit and "lifestyle".

DH and I are in our mid/late 40s and live in a modest rented 3-bed semi. It was valued at 500k 2 years ago. We have no loans or debts whatsoever and a healthy savings account and could afford to pay a lot more rent than we do. But we have bugger-all chance of owning our own home because prices are still grossly inflated and no-one wants to give mortgages to self-employed people during a recession.

There is a considerable social stigma attached to renting in this country. It's much harder to get credit for a start, (not that we want to) and insurance premiums are higher. DH's family regard him as a poor relation and flatly REFUSE to believe how much he earns, because property ownership is the only indicator of status they understand.

I find it very ironic that our car-free eBaying cook-from-scratch lifestyle, which for years has been viewed as loser/hippyish/penny-pinching/charmingly retro/wilfully puritanical by friends and family has become the stuff of endless "Polly Filler" type articles in the press. "Survive the Credit Crunch! Give up your gym membership and walk the kids to school! You'll save money and get fit for free!" My arse!

I'm entirely with you on the not voting for Labour front. I'd really hoped we'd seen the back of the 1980s/90s "greed is good" mentality, but Labour have actively engineered a materialistic debt-fuelled society.

[kake]

I'm SO glad to hear from other people who feel the same way. But what to do? I go on about the tax thing but don't give away more of my income when I should do because that would make me proportionately so much worse off!

Another book I read a while ago told the story of Easter Island where they kept on chopping trees down even though they knew they were going to run out and have nothing left to make their boats in. It was meant as a warning that even where societies can see what they are doing they don't stop (as opposed to the view that civilizations in the past have collapsed because people didn't understand the effects of their collective actions).

I'm feeling depressed about this and now I've probably ruined your Monday morning too! Sorry! It just seems as though we're on this unstoppable juggernaut and the government refuses to turn it around because they obviously hope to gain in the short-term in electoral terms.

Is it time for a dictatorship where Kake takes the helm I wonder? Just a thought ....

(Policywonk: The Spirit Level: Lots and lots of graphs showing in lots and lots of ways that more equal societies are better in lots and lots of ways for lots and lots of people. Does that help? I don't have a Phd for nothing)!

[oneplusone]

I agree with the not voting for Labour....but then who do I vote for? I don't want to not vote and I don't want to waste my vote by voting for a minority party who have no chance of gaining power. It's a sad and sorry situation that our country is in, and there is absolutely no sign of a visionary leader who is not afraid to make drastic changes in the way our country is run.

[FluffyBunnyGoneBad]

If there's enough people who think like this then it's a start. Isn't this how the communit movement started? I know what you mean with the trees on Easter Island, Brazil do the same thing. It's shocking, there needs to be someone who say's "no". Society is a lemming, following what other people are doing. I'd love to live in a self sufficient town, everyone helps out like a skills trade. A dentist looks at your teeth for a loaf of bread, that type of thing. It's more of a helpful community then one that worships money. I'm not surprised all our children are miserable and the communities have broken down. Money's the root of all evil.

[becstarlitsea]

Really agree with your points kake. We also didn't get onto the 'housing ladder' (silly, misleading expression!) because we couldn't afford to and would have to borrow more than was sensible. We paid off all unsecured debt including student debts and credit cards. We set aside money for a rainy day, even though that meant hardship in the short term.

Now our rainy day money is earning no interest and is actually depreciating because of price inflation. Our rent is still huge while others have got less monthly outgoings because they have a (far too big for their income) mortgage. And I guess it's partly envy and bitterness, but it's also a longing for values and common sense to come back to this country. We as a nation have burned through so much money in the past ten years, and yet during this time huge numbers of children have been brought up in poverty. We have borrowed far too much and yet we're told that the solution is to borrow more and overconsume more. It's not right.