Anyone else read...

[faraday]

this!

Quite interesting, really. It does show how everyone comes at a situation from a preordained point which then affects their perception of the situation.

Oh this article read like a self-indulgent whinge to me tbh.

It's true that losing your posh house and private school place is just as distressing as losing your tiny little two up two down and monthly Chinese takeaway; but the tone of the Telegraph article is indignation and sadness that rich people are now going through this. As Nightynight says, many people live in financial crisis all the time, but the Telegraph has precious little sympathy for them. The whole tone of the article is one of entitlement - how dare they do this to us? It's OK when they hit poor people like this, who talk with funny accents and have naff houses, but us?

And the bloody cheek of calling very rich people "the coping classes". FFS, it's a damn sight easier to cope with lots of money, than with a little. People who should be called the coping classes, are generally people the Telegraph is not remotely interested in. Which is why I think this article has raised eyebrows and hackles.

Actually, I must say, the over-riding 'feel' I got from the article was incensed indignation at the loss of 'god given' entitlement.

Actually I kinda 'admire' The Telegraph. They are SO sure of their demographic that they will print stuff like this that other broadsheets dare not! They seem to just KNOW they are preaching to the converted, like having a private conversation in an old-school-tie gentlemen's club!

The reality is, and I am going to get in trouble for this, people who have worked their butts off for most of their lives are the ones that are going to be most effectd by this depression recession.

A lot of those on benefits, getting their council houses paid for, will just keep on doing what they've been doing, and it won't effect them in the slightest.

So what if someone earning about the averge salary loses their job? It is still bad news for them.

£41K is far far far from "very rich".

I think it's a bit misleading to talk about "middle income" families as the ones with nannies and private schooling. On my planet that's "rich".

Still, meh...tis a shitty time, true.

Yes £41K is far from "very rich". It is however, much higher than the average. If you bear in mind that the average wage in London is something in the region of £30K, then that places £41K in context - it's a quarter more than the average.

But on the whole, that article wasn't talking about people on £41K. You don't get to send your kids to private school on £41K on the whole (although obv. there are always exceptions).

Yes and it's crap to pretend that people who can afford to pay a nanny out of their income, are middle income. They are not. They are high income - very high, compared to the average.

So the "very rich" can't move to a house (is that such a lofty ambition?), they can't have their two OS holidays a year, they are having to take their kids out of private school, cancel mobile phones, gym memberships, put off buying a new car, stop going out....

A lot of people, who "serve" (for a better word") the "very rich" will in turn be effected.

It's so not as simple as saying they should have put more aside, they're only giving "luxuries", etc etc etc. If we have any hope of coming out this we do need to spend, spend, spend, to save ALL the jobs, not just the "very well paid" of the middle classes so many of you on this thread are deriding.

I'm not deriding anyone.

I'm merely pointing out that this article has the tone of whingeing entitlement that the Telegraph condemns when it comes from a demographic that isn't generally its target readership.

I agree with you MM22BYS

Tis hard for everyone whatever economic class you started in.

We too have had our income slashed but I do have a cleaner to sack - only problem is I can't bring myself to do it as she is a single parent with 2 kids and really really needs the money - she would be devestated. So we will slog on for as long as we can, cutting back where we can and i will try and try to keep her in employment for as long as I can

I know some of the comments in the artical are a bit . But try to see the human side. Like they said, each statistic is a person, or a family. Every factory worker out of work is really struggling right now. But every professional out of work has could be really struggling too.

My DH is unemployed now. He used to have a professional job, he has 2 university degrees. Now he applies for jobs all day. He has never been rejected for a job before in his life, and now he has not had even an interview for 4 months. We have 3 DC. I am a SAHM. Our income has never been super high - certainly there was no cleaner to lay off, but now we are barely scraping by. DTs need new shoes and I don't know if we can really justify it FFS.

And its not just the money either, its a huge change in all our lives, I'm afraid DH is getting depression...and as for me.

I know some of you might feel pissed off that other 'professional' people have more money than you or whatever, but it is just grisly and sick to see people gloating over other's misfortune.

Sorry, where exactly is the gloating?

I missed it.

No, I don't see gloating here either, just some irritation that the place these wealthy folk are being 'reduced' TO is where the vast majority of us have been all along.

It has surprised me the extent to which so many of these well to do folks on incomes most of us can only DREAM of don't seem to have a brass razoo stashed away for such rainy days. They seem genuinely caught out by all this and perhaps, according to the tone of this article, quite offended that this recession is affecting THEM at all- isn't that for the Little People? Who come clean and dog walk for us?

The paragraph that stood out to me was:

"Just under a year ago, this newspaper highlighted how the middle-class, middle-income backbone of Britain was buckling beneath the burden of punitive taxation, high utility bills and council tax rises. With typical stoicism, professionals were quietly labouring away, paying the mortgage, putting teenagers through university and looking after elderly parents."....

perhaps on the assumption the rest of us good for nothing, dole bludging layabouts DON'T have these concerns!

Next we'll be hearing how their expensively educated DCs, by going into teaching and manufacturing instead of The City are all doing us a favour for which we must all be grateful!

To be honest, I think they type of person who WRITES this sort of this may really benefit form the attitude readjustment this recession might bring! After all, it was the entitlement culture of the bankers that kept on awarding them silly money as bonuses which got us into this mess!

Suffering can be relative or absolute. Theirs is relative. We are allowed to make value judgements thus are we allowed to see this as whingeing of the sort one wouldn't expect from the 'stiff upper lip' brigade.

Finally, wasn't it 'spend, spend, spend' that clocked up these vast debts that our grandchildren will be servicing?

I don't understand how they can be called "the backbone of Britain" either.

They are a very small minority.

Agree about the spend spend spend thing. Was going to reply earlier to that, about how living in debt has become the norm, whatever socio-economic group you're in. The availability of interest free or very cheap credit made it normal to be in permanent debt for a large number of people. Forty years ago the way we live ("a paycheck from poverty") would have been considered the height of irresponsibility, now it's just normal life. I think the existence of student loans has added to this attitude, young people I know who have debts of £25-£40K, simply see that as not real - it's just electronic figures to them. I have hesitantly tried to point out that it will become real when they want to buy their own homes as having a debt of £5K versus £40K might be the difference between buying this house or that one, living in this area or that one, but they just look at me oddly and I accept I'm an anachronism.

actually £41k is below average according to National Statistics data. Full-time workers in London earn an average of £46,000, compared to the UK average of £31,300.

i will never understand why people snipe about the middle classes, particularly when they are almost always themselves middle class or very near to.

and it is sheer ignorance to say that it was bankers' bonuses that got us into this mess. No, it was because interest rates were low the world over, money was cheap, and asset bubbles formed because investors had to put their money somewhere. Companies and people were doing so well, enjoying the benefits of low inflation from globalisation, etc., that they didn't consider how they would service their debt when interest rates rose again.

banks' risk taking culture is just one small piece of that puzzle.

It was bankers' bonus awards being linked to profit making thus profits were sought from huge risk.

That's where the idea of lending to folks who had no hope of repaying the debt came from. It was called 'Sub Prime'. The debts were all packaged up and sold to other banks which is where the UK banks came into it.

The bankers would not have taken such obscene risk if their pay wasn't going to be handsomely augmented by it. Risk without penalty.

Except we're ALL paying that price now.

It was bankers who made available such vast credit to high risk customers. No one forced anyone to take out such credit but trouble came when all this free money sloshing around the system caused prices to rise to meet the market(witness house prices).

Industries grew up or expanded to take a cut of all this apparent extra wealth, eg accountants, lawyers, airline pilots. It is THESE of whom this article writes.

I don't see where there were actual genuine 'asset bubbles'. There were certainly vast debt bubbles, but we always knew them to be just that.

Faraday - trust me, I can out-jargon you on this topic - it is my work and I have been on the front lines of the whole crisis. (note: I am not a banker.)

I do disagree with your assessment that bonuses were the main cause of the credit crisis and subsequent recession, but I apologise for saying what you wrote was ignorant. Simplistic would probably be a more accurate word. But that's a broader argument, and I would concede that your take on it isn't completely unreasonable.

re: asset bubbles. In case you really care, the largest one in the world is still inflating right now, in the US government bond market. Other recent asset bubbles that have deflated to one degree or another include oil, metals (except gold, which is inflating again), currencies, emerging markets, etc....

For years, pension funds, insurance companies, banks, building societies, corporate treasuries, and individual investors helped to inflate virtually every market in search of an investment yield. Money was cheap and returns could be made higher by borrowing more money against the investment (i.e., leverage) or investing in assets that had built-in leverage.

Nearly everyone benefitted until some of the assets turned out to be a lot dodgier than thought (such as debt backed by subprime mortgages), and the entire concept of risk was reevaluated.

anyway, the story purported to be about middle-income people. I don't see why they are the enemy. You mocked their "god given" right to entitlements. What about their years of hard work to get to where they are? Yes I absolutely agree that everyone should save for a rainy day but I don't see why we have to resent middle class lifestyles.

is it so wrong to aspire to take a couple of foreign holidays a year or have a cleaner come in every couple of weeks?

"anyway, the story purported to be about middle-income people"

Yes it purported to be. But middle income people on the whole, can't afford nannies and private schools. So it wasn't really about middle income people, it was about a combination of some middle income people and a tiny minority of extremely high income people. The middle income people were thrown in to muddy the waters and make us all feel a bit more sympathetic.

I don't think people are mocking their "god-given entitlement" attitudes, so much as mocking the Telegraph's insufferable attitude that their (desired) demographic is having it so much harder than everyone else because it's not supposed to happen to them.

It's not that I'm unsympathetic to the idea that rich people being fucked financially is awful for them; I'm unsympathetic ot the idea that it's worse for them than for everyone else, which I think is the main thrust of the Telegraph article and the thing I find mildly irritating about it.

goodnight: Are these all examples of asset 'bubbles'? I had always thought the term 'bubble' rose up out of the original 'bubble', that of The South Sea, implying something that had outgrown its original 'value base' and had proceeded to expand unchecked by solid foundation or common sense. I'm not sure one can project that terminology on every 'fashionable' asset item, be it metals or gold. By and large, bubbles burst whereas the markets you've used have 'deflated' once they had BEGUN to overheat, which is surely the nature of capitalism.

It's when the actual basis of growth isn't real ie the Sub Prime (and really, I'm not attempting to 'out jargon' you. Every reader of our simplest red top could quote THAT at you!) where there WAS no substantial employment happening to support those debts. THAT was a bubble!

There is no 'enemy' in this- even most of the bankers, really, given that no one in any position to rein them in chose to do so. There are only victims and some of them are perhaps more deserving of our sympathy than others.

HBLB, yes, the story was sloppy and went off piste on what it claimed was its focus.

i haven't crunched any numbers myself and really don't know, but i think their main premise is meant to be that true middle income families are paying relatively more tax than poorer or richer income bands, and not getting any credits against higher utility bills, childcare, etc.

but agreeing that the story and the newspaper are crap, i am really just here to grind my axe about class envy/resentment.

i don't think there's any shame in aspiring to be middle class - and that is what most working people the world over aspire to be.

however, in Britain, the so-called working class (much of which is actually "middle income") is glorified and people are made to feel bad about wanting a cleaner or a nice holiday.

Without being too technical about this, asset bubbles occur all the time across various markets, be it mortages, government bonds or commodities. The reason that they are not (or haven't been) recognised as such is that for the last 20-30 years everyone has believed in the efficient market hypothethis, i.e. that market values reflect asset values and that therefore assets can never be over-valued since they reflect what the current market price is. How can you have asset bubbles if you believe in this? Historically, it's only when something happens which makes the gap between market value and 'underlying' value evident that people call it a 'bubble', be it tulips or sub-prime mortgages. Unfortunately, the sub-prime crisis has highlighted that the efficient market hypothesis is, sadly, bollocks. Even proponents like Greenspan have admitted as much. Asset and capital prices simply do not move in the same way that goods and services prices move such that self-reinforcing spirals upwards and downwards occur regularly in these markets. The reality is that globally, plenty of markets are arguably mis-priced (either under or over) but have not had causal events to make this evident.

I don't think we're being snide: I for one pointed out that even if dh and I do become unemployed we, having had reasonably well paid jobs (though nowhere near 41k, even between the two of us) will still be in a much better position that a cleaner who loses her job, because we have those benefits of mortgage insurance and a little bit of money in the bank. We won't be put on the street next month for failure to pay the rent. And if we do have to sell the house, that will give us money for the deposit on a flat. We're much better off; it's ridiculous to pretend anything else.

As for saying 'oh it won't matter for someone on benefits they can still stay on benefits'- well, so can dh and I go on benefits. What's so rarefied and wonderful about us that it would be a tragedy if we went on benefits, but not if someone from the lower classes did. Or is there something that says people from the lower classes are not prone classes are less prone to depression? I don't think so. If dh would get depressed from living on benefits (as he probably would), then I think it likely that a fair few of the people who are already living on benefits are already depressed.

The only difference is, it will a lot longer before we are destitute. That's the great advantage of being middle class.

i think the idea of that point is that someone living on benefits, not working or working very little, can expect their situation to stay pretty much the same during a downturn, while someone with a full-time job and owning a home could lose both quite easily and their situation would change dramatically.

plus, the middle class are likely to be penalised further with expected tax rises that are unlikely to affect those lower down the income spectrum.

"someone living on benefits, not working or working very little, can expect their situation to stay pretty much the same during a downturn"

But most people aren't living on benefits or working very little. Most people who are going to be hit hard by this recession, are
working hard - as hard as those in that article, just on a fraction of the wage. And their situation is going to change dramatically, but they don't have anything like quite such a big cushion as the ones in the article.