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The middle class forsook classic middle-class values (free time, time with family, a small home in the 'burbs, seeing raising kids as something worth your time,

The middle class forsook classic middle-class values (free time, time with family, a small home in the 'burbs, seeing raising kids as something worth your time, etc) to play the money game with the rich folk, and surprise surprise, they're getting outplayed. The only winning move is not to play.

intended 13y ago
Thats very revisionist. Lets take an average middle class person pre boom: You are urged to take out a mortgage against your property because "House prices have only gone up!". Your banks are giving you great rates, "you'd be an idiot to not take them. We're giving it out to people with No Income, No Job or Assets! We made the cover of Time with the way prices are going up!" Everything is rosy, and you would be remiss and getting behind if you didn't take care of your future. This is what people faced. Do note - the Middle class isn't the one responsible for manipulating the banking system or creating exotics to over leverage a housing bubble. Nor are they the ones who are meant to be the educated sophisticated investors. Further the root of the issue, the housing bubble, required banks to actively sell their products, all the while telling average people that its all turning out great! In essence: the Banks were derelict in their duty to be wary of leverage, and abused the information asymmetry they enjoyed to convince customers to "Just get a mortgage! You can get that new kitchen you always wanted". I'd say the middle class got played.
- Domenic_S 13y ago
  Obviously they did, that was my point. The middle class was (and continues to be) manipulated. Instead of one-income households being typical, two-income households are typical, and guess what happened to housing prices as that started to happen?
jgh 13y ago
Wages have stagnated for 40 years and everything else is getting more expensive, what are people supposed to do? If wages had have continued growing with productivity as they should have, would we have had the middle class looking for fast cash in the stock market in the 90s? Or in the housing market of the 2000s?
- beat 13y ago
  To be fair, most of the middle class didn't enter the bubble housing market looking for "fast cash". They were looking for a place to live. Being middle class generally means only owning one house.

intended 13y ago

Thats very revisionist. Lets take an average middle class person pre boom: You are urged to take out a mortgage against your property because "House prices have only gone up!". Your banks are giving you great rates, "you'd be an idiot to not take them. We're giving it out to people with No Income, No Job or Assets! We made the cover of Time with the way prices are going up!" Everything is rosy, and you would be remiss and getting behind if you didn't take care of your future. This is what people faced. Do note - the Middle class isn't the one responsible for manipulating the banking system or creating exotics to over leverage a housing bubble. Nor are they the ones who are meant to be the educated sophisticated investors. Further the root of the issue, the housing bubble, required banks to actively sell their products, all the while telling average people that its all turning out great! In essence: the Banks were derelict in their duty to be wary of leverage, and abused the information asymmetry they enjoyed to convince customers to "Just get a mortgage! You can get that new kitchen you always wanted". I'd say the middle class got played.

Domenic_S 13y ago
Obviously they did, that was my point. The middle class was (and continues to be) manipulated. Instead of one-income households being typical, two-income households are typical, and guess what happened to housing prices as that started to happen?

jgh 13y ago

Wages have stagnated for 40 years and everything else is getting more expensive, what are people supposed to do? If wages had have continued growing with productivity as they should have, would we have had the middle class looking for fast cash in the stock market in the 90s? Or in the housing market of the 2000s?

beat 13y ago
To be fair, most of the middle class didn't enter the bubble housing market looking for "fast cash". They were looking for a place to live. Being middle class generally means only owning one house.