Broke: Who Killed the Middle Classes?

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But now the crisis of is behind us, he really should know better. He is so infuriatingly wrong about so many things, he makes me want to shout out loud. In summary, the author 1. Laments that increasing house prices have priced the middle class out of the homes they were brought up in.

Broke: Who Killed the Middle Classes? - Wikipedia

Laments that the building societies vanished and blames it on the Big Bang 3. Laments the corrosive explosion of finance. Laments the end of unaffordable pensions 5. Is downright scared about getting his kids in the right school The cornerstone of his lack in understanding is his attitude toward finance.

The United Kingdom is part of a bigger thing these days called the European Union, which in turn is a major power in the world economy. The European Union is a free-trade economic area that additionally allows million people, give or take, free movement of labor. It's even trying out its own currency these days, you know, though that's working out less well.

For better or for worse, and opinions between reasonable people can differ on this topic, various nations within the union have specialised in different areas. Spain and Greece are where people go on vacation.

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Central London and the French Riviera is where the world's super-rich live. Oxfordshire is where racing cars are made, not only for Europe, but for the whole planet. Oh, and London is the world's center for finance, ahead of New York.

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This means a bunch of things. In no particular order: Finance is not an elite. Finance is the business of the UK. All other business was crippled by the unions and finished off by Thatcher. If you are an accountant in the UK, chances are you work for the City. If you are a lawyer in the UK, you are a finance lawyer. Why do you think that is? Yes, the author descends from a family with a military background, but operation Sealion and the Battle of Britain, the last time the UK was engaged in a defensive war, was in Yes, the vicar in the church he describes had to double as the organist, the choir and the altar boy, but the role of the church has diminished, because i the state has stepped in to provide many of the support functions we once looked to the church to provide and ii there's now a bunch of faiths in the UK, again for better or for worse.

The author seems rather atheist to me, incidentally, so I think he's protesting for no reason. And the shopkeepers I know are not closing down their shops because of Tesco. My local liquor store sells Crystal to the super-rich at quid a bottle. But the shopkeeper's sons both have university degrees and, you guessed it, they'd rather work in IT or finance.

Can you blame them? There being a limited number of homes in London, these homes have gone to the people who have been doing the business of the UK. And the business of the UK is finance. So the guys who work in finance have pushed out of London the guys who work in advertising, publishing, entertainment, education and these days even medicine. I don't much like it, but it's what it is. Additionally, one of the many functions of finance in London over the past twenty years has been to provide a platform for local insiders from around continental and peripheral Europe chiefly politically-appointed managers of quasi-government businesses, pension plans or local government to raid anything in their home land that looks like a pool of money.

Greek pension funds, Italian and French municipalities, the German Mittelstand.

For the middle classes, things can only get worse

With the help of schemes hatched in London, sixty years of post-war savings have been pocketed across Europe by their custodians, with a healthy commission going to the finance industry in London. Entire graduating classes from Bocconi the Ecole Polytechnique etc. At Merrill Lynch, Dimitris. At JP Morgan, Antonio. Their partners come from across Europe, their kids are mostly English, and their families, very middle class families, mostly reside in SW3, SW5 and SW7, though they do move up to the NWs for school.

Some , professionals from across Europe have been practicing finance out of London.

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They need places to live. A middle class living. The author wonders how come Waitrose has a clientele for good cheese.

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Thanks to them, the natives are also now developing a taste for the stuff, and it turns out they rather like it. But here's the funny thing. Finance as we know it went bust in And please somebody tell David Boyle. In no particular order, this means that: Except for the amazingly exclusive addresses where the steel magnates, Formula 1 entrepreneurs, former soviet republic potentates, IKEA and Tetrapak moguls, North African former dictators and Saudi prices live, real estate prices cannot but come down. The children of the middle class will have absolutely no problem getting on the property ladder.

I would not waste one millisecond worrying about them. It's all coming to them.

The big banks will be broken up, and sooner rather than later. The process will start in the US. It will make no difference to local business, though.

My neighbour's kids will still want to do something more exciting than stand behind the counter and sell liquor and magazines. And returns to scale for business come from so many angles it's not even funny. Bigger companies will always be able to negotiate better IT contracts, better healthcare plans, better pension plans, better lending terms etc.

In rougher parts of the land they will be better equipped to fend off local bullies. They will be better able to accommodate issues like pregnancy leave or sabbaticals. And the aim of small business will always remain to become big business one day. It's the nature of the beast.

The "democratization" of finance is not what was to blame, funnily enough. The author ought to know, because he went through the Lloyds experience. The fees every layer paid in a Lloyd's syndicate killed the author. He was already dead before any natural disaster took place. Finance is not corrupt by construction either. It was the terms of the loans that killed the borrowers, not the loans themselves.

And look what's happening now. The government has set its base rate at 0. Disastrous for the lenders oh, are they evil but fantastic if you are sitting on the mortgage, paying a quarter of what you would normally be paying in rent. Pensions are unfortunately never going back to what they were, for the simple reason that they were predicated on two premises of which one was unjust the dependence on early leavers and one was doomed from the start demographics.

Broke: Who Killed the Middle Classes?

Nice one for those who got them. They got a great deal. Don't grudge them, but don't expect the same deal. If everybody does, it will be fine. Go ask what happened to Greek or Spanish or Portuguese pensions over the course of the past few years. All those school spots will become available again. Because , people who work in finance have already left the industry. It will be gradual, and the last thing they will cut is their children's education. Education was good to them, after all. It landed them the job at Goldman.

But in time the bottom half of the people engaged in finance will have to give it up and their London residence and school spots with it. And where does that leave us? In the long run, better balanced. Finance has existed for years, give or take. From Shakespeare to Bismarck to David Boyle how's that for anti-climax? So the middle classes of the UK will suffer for the next decade, because finance will. And when the business of finance has been fixed, the fortunes of the UK middle classes will also turn.

Finance will pay less than it did, because it will extract fewer rents.