The US middle class is facing impoverishment and a furious debate has opened up about its future. Rising prices, loss of homes and low quality employment has brought the American Dream to an abrupt end. The mantra of the free market is being questioned by people who previously thanked it for everything they had.-link here-

In the UK, the governor of the Bank of England, Mervyn King, has warned the middle class population that their living standards will fall.
-link-
Rising food prices and energy prices along with the end of the illusion that owning a house brings wealth are rattling the English middleclasses.

In Ireland, the same global forces are at work, but none of our politicians have had the courage to speak out about the seriousness of the economic situation, and what best to do. The strategy in the past years has been Thatcherite - leaving a large minority in poverty, enriching a tiny upper caste and keeping the middle class happy with credit-propped "wealth".

Besides, after the Tribunals, who will want to listen to another "tighten your belts"?

The Irish poor are in deep trouble over food and fuel prices, but their voices have a way to go before they are listened to. How will the Irish political parties deal with an angry and vocal middle class ? Half are in the public sector, and the other half are gunning for its severe pruning.
The era when FF is seen as the 'safe bet' economically has surely ended and FG profess to saying nothing about the economy because it is bad news and largely beyond the influence of national government. Who will the Irish middle class vote for, and what are their chances of survival as a class?

Death of a Salesman all over again, maybe.

I'd also be concerned with the disillusionment that will undoubtedly be felt by those can't place themselves anymore. That has social ramifications that are very serious.

David Begg was the keynote speaker at today's Inclusion Ireland conference in Tullamore. He gave an excellent presentation, the gist of which was the fact that we can no longer continue to embed social justice on the economy but that the tenets of social justice must precede economics. I'm inclined to agree with him. He said we have a ten year window of opportunity to get it right.

That is a excellent post Cactus but the article linked is the greatest pile of manure that I only was able to stomach the start of it. When an article states that governments provide a stable corrency reading should stop immediately. There is no free market here. The country has been regulated andsocialised completely from what it was 100 years ago. The government helps the rich and the poor and the middle class pays for it. That is at an end. Having reread your post it is even better than the first time and if there is one critical question as you point out ,it is how are the angry payers and the government workers who are unaffordable end up and will a party address the grieveances of the angry taxpayers.

youngdan wrote:

That is a excellent post Cactus but the article linked is the greatest pile of manure that I only was able to stomach the start of it. When an article states that governments provide a stable corrency reading should stop immediately. There is no free market here. The country has been regulated andsocialised completely from what it was 100 years ago. The government helps the rich and the poor and the middle class pays for it. That is at an end. Having reread your post it is even better than the first time and if there is one critical question as you point out ,it is how are the angry payers and the government workers who are unaffordable end up and will a party address the grieveances of the angry taxpayers.

One of the things that interested me about the article youngdan was that it said that the middleclass was a creation of intervention in the free market. Interestingly there are plenty of studies that show how the middleclass benefit disproportionately from public services like health and education. A good example in Ireland would be the free fees to third level education that you posted so scorchingly on not long ago. The middleclass I suppose is a necessity in normal times for the upper class to have favourable majorities in elections and to form a relatively privileged educated caste to run government, education and so on. In times of trouble they can be let go hang themselves, it appears.

Their bedrock though was formed by small business people who are now being eaten alive. Half the small builders in Ireland, who have been developing and building at the same time, will be bankrupt in a year's time, will lose the house and the SUV and will have to try to find work on the sites. The low wage economy strategy in the US (wasn't that Clinton?) has not helped the shopkeepers who cant compete with Wallmart. How can someone benefit from the free market when they are homeless and bankrupt?

That is called Throwing Them a Bone. Somebody has to pay and it surely is not the poor or the rich. The middle class are told taxes pay for police etc. For what they are paying they could hire Chuck Norris instead. Getting back to the students. Correct me if I am wrong, a person gets a taxpayer to pay for his education to be a dentist for 6 years. Then he is a high earner and buys a bmw. If I were getting screwed like that I would at least expect a kiss. This is my solution, a student would be given a loan of whatever he needed to get his education and on completion he could drive a Vauxhall Viva until he had the loan repaid and then he could get the bmw.

youngdan wrote:

That is called Throwing Them a Bone. Somebody has to pay and it surely is not the poor or the rich. The middle class are told taxes pay for police etc. For what they are paying they could hire Chuck Norris instead. Getting back to the students. Correct me if I am wrong, a person gets a taxpayer to pay for his education to be a dentist for 6 years. Then he is a high earner and buys a bmw. If I were getting screwed like that I would at least expect a kiss. This is my solution, a student would be given a loan of whatever he needed to get his education and on completion he could drive a Vauxhall Viva until he had the loan repaid and then he could get the bmw.

This is how they do it in the UK. However some of them still have debts of 20,000 € years after they have finished. Some do a runner to NZ or the US. Even worse, a much higher proportion now go to university because it without a degree you are nowhere and the government says the economy needs more graduates - When they graduate it takes up to a year to get a "graduate" job and about a quarter never get a "graduate" job as there aren't enough to go around. They are working in a shop, with a degree in media studies, and a debt of €20,000 they can't afford to pay around their neck.

This is called Playing Devil's Advocate

If it's the Middle Classes who are paying the taxes and the Middle Classes who are availing of third level education, then surely you could argue that it's a nice little loop that serves itself and nobody gets hurt when Johnny spends six years studying to be a dentist and keeps the BMWs among the middle classes.

Alternatively it could be argued, if one was playing devil's advocate, that the everyone in the country has far greater access to third level because there are no fees - another obstacle has been removed. I know people who managed to get to college by holding down three jobs and commuting 150 miles a day on a bus for the privilege - and could do it because there were no fees and there was a grant available. So it's there for those who want it - to the extent that there are more places available in Irish colleges than there are students to take them up.

The devil's advocate could also argue that in the Irish situation, free education (insofar as it's free) has been a lynchpin in the economy because I remember the lecture my mother gave in the 80s that people with MAs couldn't get jobs on the cashdesk in Dunnes Stores. Free education ultimately brings in more money to the economy than it costs the state because of the quality of jobs in R&D etc that the educated workforce facilitates.

Countries like Germany operate a BaFog (I think I have that right) where students can borrow money for their education. The problem with that, is that it gets in the way of a cohort who simply cannot think that far ahead - but would take advantage year to year of going to college.

By the way, my understanding was that in Europe at least middle classes emerged out of the collapse of the aristocratic classes combined with the opportunities created by the industrial revolution - perhaps not in this jusrisdiction but certainly in others.Some might say that we didn't have a middle class here until relatively recently. The professional class that predated it was very, very narrow. And that it was and has always been in this country, education that facilitates upward mobility.

Has it less to do with markets than with a meritocratic system that at one point at least, rewarded hard work - even if it was on the shoulders (as it was during the industrial revolution) of the poor that the middle classes now have the responsibility of supporting.

It's just a thought...

If a degree does not get you a job then it is not a good idea spending 4 years trying to get it. Middle classes expanded greatly but now globalism dictates that it's days are numbered. Living standards will standardise throughout the EU and it seems that the thinking is that the poor states will rise to Ireland's level. That is a far fetched dream indeed. I was struck by a headline saying that house starts were down 70%. It is possible that a month will soon come where there is zero house starts in Ireland

I now see that the indo on Sunday has an artcle saying that in 3 counties there were less than 10 houses started so far this year. Perhaps I was too optimistic. Lets see how Mr Cowen will deliver his welfare state when he is short 20 billion Euros. This is awfull altogether. 60 days before the plebs are supposed to vote for Europe. How are we going to fool them now. I know, Don't let the Party down, wan more time. Brian and Enda and whoever the Labour, Green and PD non-entities are will take care of ye. To think that 96% voted for these parasites is enough to make me realise that things can only improve

youngdan wrote:

I now see that the indo on Sunday has an artcle saying that in 3 counties there were less than 10 houses started so far this year. Perhaps I was too optimistic. Lets see how Mr Cowen will deliver his welfare state when he is short 20 billion Euros. This is awfull altogether. 60 days before the plebs are supposed to vote for Europe. How are we going to fool them now. I know, Don't let the Party down, wan more time. Brian and Enda and whoever the Labour, Green and PD non-entities are will take care of ye. To think that 96% voted for these parasites is enough to make me realise that things can only improve

Some counties haven't had a single planning application for housing (apart from one-off's) in the last 9 months (Yet we have Alonso on P.ie saying we need to employ more planners). Whether or not more houses are built in the next few years will depend on employment/migration more than any other factor.

But I agree with youndan that the existence of a privileged middle class is under heavy pressure that is going to become much heavier. The last period saw the enrichment of a super-caste of billionaires and increasing economic division between rich and poor. That was masked by the silly money of the credit boom, which made the middle class feel rich. The credit crunch is beginning to wipe that out. From what Mervyn says, the middle classes are being told that fuel and food is all they are going to be able to afford. If the current system and its current drivers continue the way they are going, everyone will be paying for this except the very rich.

Cactus I think we can forget about house building for at least 10 years. The price of houses will drop way below what it would cost to build them. There are many reasons for this. Also the number of people coming in to Ireland will drop. Cowen should have come out with an emergency budget in February as I predicted last year but now they will try to play for time. You are going to see anger like you never saw before. Cowen has zero ability to do anything because the dimwits gave the control of monetary policy and interest rates to Dusseldorf. I would suggest that they be brought to trial but they have an excellent defense of insanity. The icing on the cake now would be a billion Euro fine for too much carbon dioxide. The country has been taken on a ride that would make the designers of Disneyland green with envy. I have got to find a video of Enda Kenny urging people to vote for Europe for comedic relief otherwise I am going to pray to that Indian goddess that our latest convert is on about

youngdan wrote:

Cactus I think we can forget about house building for at least 10 years. The price of houses will drop way below what it would cost to build them. There are many reasons for this. Also the number of people coming in to Ireland will drop. Cowen should have come out with an emergency budget in February as I predicted last year but now they will try to play for time. You are going to see anger like you never saw before. Cowen has zero ability to do anything because the dimwits gave the control of monetary policy and interest rates to Dusseldorf. I would suggest that they be brought to trial but they have an excellent defense of insanity. The icing on the cake now would be a billion Euro fine for too much carbon dioxide. The country has been taken on a ride that would make the designers of Disneyland green with envy. I have got to find a video of Enda Kenny urging people to vote for Europe for comedic relief otherwise I am going to pray to that Indian goddess that our latest convert is on about

I think pusillanimous is the word I would use equally on Kenny and Cowen, neither of whom has said a serious word about the economy in the last 6 months whilst the ISEQ has turned to ashes and employment has shot up. At least Bertie had the nerve to say something: "The Banks Are Safe". Not a word about what we can, and can't do. They are afraid to say "we can't do anything" before the Referendum. The plan is to stay stum until then, and then after the YES vote, tell us "its not our fault its the EU". In the meantime there is not even an attempt at seeing what we can do.

Not so sure there ia a 'large minority' in this Country who are poor.

From what I can see most people are doing all right - so long as they have a job and can get credit on that basis.

It will all start to turn sticky when the lay offs begin....

OK that's already happening but it will probably not start to hit home until later in the year.

The middle classes will certainly feel the pinch - in particular those who are self employed and have taken out big borrowings.

The Civil Service will as always survive though Cowen IIRC has bumped up their numbers in recent years thus adding to the public burden. He will rue the day he sanctioned that as these chickens come home to roost.


IMO we might be on the cusp of one of those periodic 'Crises of Capitalism' that recur every 25/30 years or so.

Economic turbulenence of some duration is the most probable outcome of the global metamorphisis that we are just begining to experience.

There will be winners and losers here but those States best able to conduct their own affairs without hinder have the best chance of adjusting rapidly and playing their cards to their own advantage.



So fasten your seat belts and get out the paper bag...

BTW here is an interesting Link to a guy I learnt about in Maynooth:

Nikolai Dmyitriyevich Kondratieff (1892 - 1938)

http://www.kwaves.com/kond_overview.htm

Brandubh wrote:

Not so sure there ia a 'large minority' in this Country who are poor.

From what I can see most people are doing all right - so long as they have a job and can get credit on that basis.

It will all start to turn sticky when the lay offs begin....

OK that's already happening but it will probably not start to hit home until later in the year.

The middle classes will certainly feel the pinch - in particular those who are self employed and have taken out big borrowings.

The Civil Service will as always survive though Cowen IIRC has bumped up their numbers in recent years thus adding to the public burden. He will rue the day he sanctioned that as these chickens come home to roost.

IMO we might be on the cusp of one of those periodic 'Crises of Capitalism' that recur every 25/30 years or so.

Economic turbulenence of some duration is the most probable outcome of the global metamorphisis that we are just begining to experience.

There will be winners and losers here but those States best able to conduct their own affairs without hinder have the best chance of adjusting rapidly and playing their cards to their own advantage.

So fasten your seat belts and get out the paper bag...

BTW here is an interesting Link to a guy I learnt about in Maynooth:

Nikolai Dmyitriyevich Kondratieff (1892 - 1938)

http://www.kwaves.com/kond_overview.htm

Thanks for that Brandubh: I has a memory of the waves too. To me, when some of the waves didnt rise until shifted by a World War, I don't think that they are acceptable by product of the system and we should try to manage things better.

On poverty in Ireland, this is the best link I could find. .Cori Poverty Briefing 2007
The "poverty agencies" sites are impenetrable as they have a vested interest in proving that we are all poor.

How many are below the poverty line?
The most up-to-date data available on poverty in Ireland comes from the 2005 EU-SILC survey, conducted by the CSO. Table 2 presents their key findings showing poverty levels among the Irish population.

Table 2: The numbers of people in poverty in Ireland, 1994-2005

% of persons in poverty
Population of Ireland
Numbers living in poverty

1994
15.6
3,585,900
559,400

1998
19.8
3,703,000
733,194

2001
21.9
3,847,200
842,537

2003
19.7
3,978,900
783,843

2004
19.4
4,043,800
784,497

2005
18.5
4,130,700
764,179

Using the EU poverty line set at 60 per cent of median income, the findings reveal that in 2005 just under one in every five (18.5%) of those living in Ireland were living in poverty.

That table can been seen properly here [url=url=http://www.cori.ie/Justice/Publications/51-BriefingDocuments/64-Policy_Briefing_Poverty_2007]Cori Poverty Briefing 2007[/url]]

The report says that Irish people experience one of the highest risks of poverty when compared to all the other EU member states.

Comparable poverty figures produced by Eurostat show that the risk of poverty which Irish people face is 2 per cent higher than that in the UK, 4 per cent higher than Germany, and 9 per cent higher than in Luxembourg, Denmark, Finland and Sweden.

The only countries recording poverty levels higher than Ireland were Slovakia and Portugal. The lowest poverty risk levels are in the Czech Republic (8 per cent). The only countries recording poverty levels higher than Ireland were Slovakia and Portugal.

Quote :

The average risk of poverty in the EU-25 for 2004 was 16 per cent. The Eurostat findings reflect the fact that Ireland’s poverty problem is large and exceptional by European standards. It also underscores the need for Ireland to address this issue with greater vigour

.

The report says that in 2005 there were approximately 913,000 children aged between 0 and 15 years living in Ireland. Of these the CSO found that 22.0 per cent were at risk of poverty. This amounts to 200,860 children.

While the figures probably improved from 2005 -2008, they are likely to get worse this year unless we decide to shift our resources to preventing poverty in the way they do in most other EU states.

These figures are a lot to do with how angry the whole Bertie carry on made me feel, as there was a deliberate choice under his watch in favour of regressive taxation to create and benefit a "golden circle" and he couldn't even be satisfied with what he got out of that

Good discussion here. Machine Nation getting going while the nation goes down the tubes?

CORI says that "720,000 still have incomes below the poverty line." See here. That's about one in five.

Fine Gael at least is beginning to say something about these issues. Though perhaps they're afraid to shout loudly because of the Lisbon Treaty referendum. They're looking critically at the HSE and at quango proliferation.

On the latter point, I started a thread on P.ie about the dental quangos in particular: here. Things are bad in general, but I can't think of any more egregious example of waste and wickedness than the fluoridation business.

youngdan wrote:

... This is my solution, a student would be given a loan of whatever he needed to get his education and on completion he could drive a Vauxhall Viva until he had the loan repaid and then he could get the bmw.

Hey Dan, you're not really young, are you? (Who remembers Vauxhall Vivas? )

The CORI figures are rubbish quite frankly. But I would expect that.

IMO about 10% of the population at most would today live in'poverty' and probably half that is due to personal failings or illness.

But the big question here is who will people fare when the job market contracts and the layoffs begin.

Trouble is people are not intrinsically 'rich' either - they have surface wealth through property ownership and very easy credit terms to finance their lifestyles on so-so wages...

We did not create real wealth here over the last 15 years or so - certainly not since circa 2001.

1994-2001 - the Boom

2001-2008 - the Bubble

2008... the Burst?

There would be a few posters less here if it were not for viva's, anglia's minor's and the rich man's son in the cortina mark 2.

Brandubh wrote:

The CORI figures are rubbish quite frankly. But I would expect that.

IMO about 10% of the population at most would today live in'poverty' and probably half that is due to personal failings or illness.

But the big question here is who will people fare when the job market contracts and the layoffs begin.

Trouble is people are not intrinsically 'rich' either - they have surface wealth through property ownership and very easy credit terms to finance their lifestyles on so-so wages...

We did not create real wealth here over the last 15 years or so - certainly not since circa 2001.

1994-2001 - the Boom

2001-2008 - the Bubble

2008... the Burst?

I agree with the second part of your post, but if you disagree with the Cori figures, based on CSO and Eurostat statistics, it would be helpful if you would give us your reasoning. I would be amongst the first to join you in dismantling phony figures or misleading interpretation of stats. I suspect a detailed exercise would produce a few wrong assumptions and fallacious conclusions, but I don't think that exercise would improve Ireland's relative position in the EU, even allowing for different levels of economic development. I have seen too much poverty at first hand to think that any amount of criticism of Cori's analysis would make poverty in Ireland disappear.

I wonder too how much attention you paid to the stats, as you really aren't saying anything very different to Cori - illness and disability is much higher in poor households - it is a chicken and an egg thing.

Soubresouts. Are you a supporter of Enda. Is it not the height of deceit to refrain from discussing the economy for fear people might reconsider the wisdom of giving up economic sovereignty. It does not surprise me that they care not one whit about those they should represent. Is this Peter Sutherland any relation to the lad that was attorney general and all of a sudden was worth over a billion dollars. It is amazing how these lads get on the board of Goldman Sacks and are issued stock. Blair is on a million a year with Morgan and a million a year at a London firm. Bertis kid gets a million for her first book. No surprise because it would be stretching credibility a bit too far to pretend he was a stock picking whiz.

youngdan wrote:

Soubresouts. Are you a supporter of Enda.

No. Why?

soubresauts wrote:

youngdan wrote:

Soubresouts. Are you a supporter of Enda.

No. Why?

I wondered too. Perhaps because you mentioned that FG was having a shot at reform in your last post. I think it was a genuine enquiry.

My family would have been FG but I am particularly dissappointed with them and therefore think little of them. In what way are they different to FF. They could start by demanding the Cowen should introduce an emergency budget. He won't do this till he has to. FG should have seen this coming because there were plenty of amatuers on P.ie shouting gloom 9 months ago and when we could see it anyone could.

Susan Faludi's "Stiffed" does a great examination of how the post-war promise in the US turned sour as people were hit with declining real incomes and job-losses. It gives a great insight into the betrayal of the middle classes and particularly the males.

I think J Stiglitz hits on the issue of the decline in the real incomes of american families on Globalisation and its Discontents though I may be confusing this with Bowling Alone as it is a long time since I read those books. As I recall there was a figure of a 30% decline in real incomes over the past 40 years or so.

As I am not an economist, I find it hard to fully understand all the root causes of this. Any help is appreciated.

youngdan wrote:

My family would have been FG but I am particularly dissappointed with them and therefore think little of them. In what way are they different to FF...

I think a lot of people would be thinking along those lines.

What's needed is a FF-FG coalition. We need to bang their heads together. They wouldn't clash much on policy, so why should petty rivalries and the remains of civil war hatred keep them apart?

Why is FG the only party not willing to talk about forming coalition with FF?

Such a grand coalition would be a stable government and the smaller parties could carry on constructive opposition, to the benefit of all.

BTW, FF seem to have no policies at all. Look at their website. It doesn't even offer you the Programme for Government.

They are both happy because they win about 150 seats and they both being the same. If they joined almost half them would have to get a real job. What they really fear is both of them being ran out of town so they have to keep the scam going. FF good FG bad, FG bad FF good. They are identical