IT is early morning at possibly the finest observational post in the rich cultural savannah that is Dublin Airport. The perch here at Butlers Cafe is to the social observer what the “hide” is to a bird watcher.
We are at a crucial intersection. Straight ahead, the relative civility of area B, where some of the remaining Aer Lingus flights still take off and other reasonably humane carriers cluster. To the right, past the last-minute panickers looking for travel adaptors, is Ryanair country, the long winding road that leads to a grim but cheap, efficient — and, if you are organised, not too unbearable at the price — experience known as low-fare air travel.
Here at the intersection of areas B and C, far from the swank of Terminal 2, all classes of humanity are on show, parading up and down in various stages of irritation.
Airport irritation is a spectrum from the one-off traveller to the weekly flyer at home in the airport — the sort who has a routine and can’t hide his annoyance at knots of elderly Yanks who shuffle aimlessly, holding up the flow.
This place is home from home to two of the more familiar Irish beast: the mortgage navvy and the accidental millionaire.
The mortgage navvy is a refugee from the crash, living and working in London Monday to Friday to service huge Irish mortgages and a cost of living that, by European standards, is still prohibitive. The mortgage navvy can’t quite accept that middle age is fast approaching. He realises that he doesn’t have the energy to keep doing this indefinitely. But the mortgage is for 25 years, the children are settled in school and he is a slave to the decisions he took in the boom. Stoically, he keeps the show on the road and if that means a bedsit in Clapham for the foreseeable future, so be it.
My flight is full of these men. They are tired, it’s Monday and they know what they are facing into. They text their still sleeping kids to make sure they’ll get up for school and brush their teeth. They are getting old and they will get older quicker if they keep this up.
Across the cafe are the other airport regulars. They are grey, sprightly, and they are going on a short break. They are Ireland’s wealthy pensioners, the weekend break kings and queens, people with no mortgages and large pensions. They have savings, hugely positive equity and a lifestyle that would make the editors of ‘Conde Nast’ blush. They are rich and they are having fun.
In 2007, in ‘The Generation Game’, I foretold the coming great Irish property crash and sought to examine which generation would be affected most adversely by the resulting recession. The title alluded to the fact that the present and future wealth of the younger generation of first-time buyers and 30-something trader-uppers would be wiped out in the crash. They would be mired in negative equity, carrying huge debts, which would ultimately end up being defaulted on.
Their plight is in direct contrast to the people whose wealth was magically lifted up by the property bubble. Many of these lucky ones traded down in the boom and made a fortune; those who had bought their houses for a song in the 1980s, 1970s or 1960s are still in positive equity, the others are in debt.
As the price of houses raged rampantly upwards, the people who already owned their houses with small mortgages would become enormously wealthy. I called them in the book the accidental millionaires.
They got another gift when we joined the euro, as their savings in a weak currency were miraculously transformed into the euro, anchored by the solidity of the German mark. The purchasing power of their savings suddenly increased.
What’s more, their wages went up dramatically in the boom and then, when it came to retirement, their handshakes, linked to their last wage, were substantial. Many ended up debt free and, if they were public-sector workers, with decent pensions. Some retired in order to take their pensions but then came back to work as consultants, blocking the prospects of younger workers.
Contrast this with the position of the younger generation born from the late 1960s to the early 1980s. These people — hundreds of thousands — are now in huge negative equity, they have no savings, they are the debtors of Ireland, their wages are being cut and their taxes are increasing but yet as their income falls, their debts remain fixed and crippling.
They are caught in what the 1930s American economist Irving Fischer called debt deflation, where the value of their assets is falling and so too are their wages but their debts are fixed and, therefore, more difficult to pay.
There is a generational divide playing out in Ireland. Many of the older generations are rich and many of the younger ones are poor and getting poorer as the debts mount.
A recent survey by Standard Life bears this out. The over 60s were the most financially secure with 60pc saying they felt secure, as opposed to only 46pc of those aged between 35 and 44.
We can see this income disparity again in survey results on changed spending patterns since the recession began. In the last quarterly national household survey, only 50pc of those over 55 said they had cut back on clothing and footwear spending in the recession, compared with 75pc of those aged 54 and under.
More than six out of 10 of those aged under 35 had cut back on grocery spending, compared with only four out of 10 for those over 55.
Changing attitudes of Ireland’s accidental millionaires are captured in an interesting study carried out two years ago by silvercircle.ie — a company that offers lifestyle tips and discounts for the over 55s.
Some 81pc of people between 55 and 64 believe that old age begins at 80 and eight out of 10 believe that retirement is “time for an adventurous new life, rather than for relaxing and resting”.
While young Irish couples are mired in debt and have seen their houses become destroyers, not repositories, of wealth, research compiled by The Business of Ageing Partnership reveals those aged over 65 in Ireland have a declared income of €6.6bn. Most of them have paid off their mortgage, with research showing that 63pc of 55 to 70-year-olds are in owner-occupied homes without a mortgage.
Is it any wonder, therefore, that many of us roll our eyes when we hear of the travails of some of those older than us? Don’t get me wrong, I am aware that there are many thousands of old people on the breadline, who need and deserve every bit of help we can give them, but there isn’t a coherent block called “the elderly” or “the retired”. Like any society, there are huge differences within the age groups, but in Ireland too much debt to put a roof over young families has led to a massive generational divide.
To rebalance this, future benefits to the accidental millionaires should be means tested. This is the only fair way to disentangle need from entitlement.
It’s not just millionaires that should have their benefits slashed it’s the public sector workers with their perks too. More power to the ‘rich’ elderly who CHOSE to stay in Ireland and work hard, they deserve to enjoy retirement. David, what exactly do you mean by ‘future benefits’ to the rich elderly? Bus passes and telephone allowances? Stopping these benefits will only save peanuts. Let’s instead look at those that never worked including the immigrants that came here with the sole intention of claiming benefits.
Means tested is the only way. In my area I see plenty of older/retired people rather strangely driving brand new cars (would have thought the money could have been better spent), flashing the cash. The young v the elderly is a perfect example of the inequities and madness of the capitalist system, a lot of the elderly have the money but don’t have the health or time, while the young are either broke/unemployed or indebted/employed along with the usual exceptions and caveats. And people say this bat crazy $hit is the only way. You’ve got to be kidding. This is… Read more »
Raises the economic question of why don’t the Mortgage navvies move officially to UK, declare bankruptcy a la ex-Ministers and be shot of the very thing holding them back?
18 months later houses will still be cheaper…..
I appreciate there are family considerations, but still.
Not many folks over the age of 70 who are having an amazing active lifestyle. When your 55, you have about 15 years of good health and then splat…you’ll hang on for another 5-15 years as a semi invalid and gah gah. These elderly were through the crap of the 50s and 60s and 70s in Ireland as well. It was far from what it is like today. At least now it is trivial to phone home/ skype etc. It is actually a soft life we lead. Lay off the elderly. They are not the problem and they deserve their… Read more »
I’m glad to see a reference to Irving Fisher in this piece. Not only did he describe debt deflation very well, he literally wrote the book on how to fix the problem through full reserve banking.
‘100% Money’ is reviewed quite well by the UK organisation, The Cobden Centre, at the following link:
http://www.cobdencentre.org/2010/01/100-money-irving-fisher/#
To be honest chasing pensioners for money might result in minor gains, but the D2 complex love nothing more than a complex set of regulations to implement on the populace, and money to be extracted. Of far more intelligence would be if the government decided to stop paying the bank bondholders money. However, in this stange valley of the clueless type existence, the Irish media does not even admit the existence of the bankbholders. There is a strange form of self-censorship in the Irish media, with respect to the Anglo Bondholders. I don’t know. But it is very, very strange.… Read more »
The approach of this country’s establishment towards fixing the borrowing problem indicates that they know nothing about mathematics, finance or economics. If we start getting to the point where we start attacking old people, then we are facing in entirely the wrong direction. How about the young pups who are still on the payroll in Anglo, and the other banks who never took a paycut, and who were high on cocaine when they made deals with the speculator set in the Irish establishment. How come they have not yet been sacked ? What about the idiots who hired them because… Read more »
Tarzan Land
I am surprised that no TV documentary has been done on the early Irish male retirees in their fifties most from the Dept of Justice Prison Officers Sect who have settled in places like Thailand in small colonies and some who have absconded from their families at home and who have a coterie of lovely local ladies for comfort.It makes Gypsy Weddings look pale in comparison.
Hi Bonbon,
What brought America back was world war 2. If you don’t believe me search the internet for the charts which show a huge rise in GDP in the US at that time!
Michael.
Hi David, “While young Irish couples are mired in debt and have seen their houses become destroyers, not repositories, of wealth” From now on I am going to refer to you as a housing Nazi. A house is an inanimate object. It can neither create nor destroy wealth. The wealth is being destroyed by the scum of the earth in charge of the banks. Let me point out to you how fucking angry I become when I read suggestions about means testing Oap’s manny of whom lived through Develara’s watered down pol pot aim of making everyone live off the… Read more »
The mortgage navvy is living proof of what this country has become, a disgrace to its citizens . Work is work but this is no way to live your life, so we have the dole or , pack up family and leave , or the navvy . This reminds me of the film the deer hunter remember the one bullet in the gun. Enda is definitely a one trick pony who’s all out of tricks, I say if you had enda in a corner he would not be able to think for him self. Where are the real jobs to… Read more »
The biggest crimes the old generation committed were ignorance and their abject failure to educate themselves and their children on finance, the threats of communism, socialism, the EU and the globalists who are trying to enslave everyone.
They are also guilty of letting fluoride to be put in the water, blindly been fooled by propaganda, using pesticide, insecticide, not questioning vaccines and allowing the country descend so low as to allow abortions here there and everywhere. The old generation have a lot to answer for.
As an unemployed Construction Operative myself, have briefly entertained the idea of doing likewise, but don’t see the benefit over and above €188pw….which means after digs, food, etc. and a likely income of about €550pw net., even slumming it, probably take back €300! I’m not going to sacrifice my family’s notion of normality for €112pw. However, this is where the Government could step in and “sponsor” me if you like, by letting me retain a benefit of sorts, that would encourage me to go and bring ‘foreign capital’ back to our country. Of the 1000 perks allotted to the public… Read more »
Hi David, Remember the Fucking Cunt Corzine who fucked mf global? It seems he is starting a new hedge fund? That’s no shit either. http://www.forbes.com/sites/halahtouryalai/2012/08/16/jon-corzine-yes-that-jon-corzine-may-start-a-hedge-fund/ I knew the pay off would come further down the line. Any chance the money will come from the people who benefited from Corzine buying their worthless shit securities knowing that MF Global would fail with the tacit nod and wink that down the road he would be looked after by let’s say the same people giving him a pile of moola to set up a hedge fund? And all knowledgeable commentators like you are… Read more »
What exactly is the problem about there being winners and losers? What we are really seeing here is that Ireland and in particular Dublin is becoming a satellite city. Manchester and Birmingham are the same and “mortgage navvy” is no different from his opposite numbers all over Europe commuting in and out of cities they cannot afford to live in. This has nothing to do with old v.young in Ireland but rather the spread between manufacturing going to the East and Value Added services staying with the elites in the West.In our case in London. So the Mortgage Navvy is… Read more »
subscribe.
“…but there isn’t a coherent block called “the elderly” or “the retired”. Like any society, there are huge differences within the age groups..”
Excellent article and I fully agree.
Hi David, Thank you for your response. I am much calmer this morning. I have taken your advice and re read the article especially the last paragraph. It is a very important point you make no question. The trouble is that if you tax pensioners who can afford to pay the money it wIll not be used to help other pensioners in trouble. It is going to go to central funds to be squandered on trying to make up for the mistakes of the banks. Some really wealthy pensioners like Michael Smurfit etc don’t even live heer anyway. If you… Read more »
Economist Discusses How Germany Can Avoid Inflation in Returning to the D-Mark Sept. 20, 2012 (EIRNS)–Belgian economist Paul de Grauwe discusses how Germany could avoid rewarding “hot money” and thus avoid inflation in a return to the deutschmark. Since there is no longer a gold standard, the Bundesbank should be concerned that a change-over involves no more money than the amount of goods in circulation. A nightmare for the Bundesbank is represented as “Target2” liabilities, i.e., recent hot money inflows from the Eurozone’s periphery countries, from investors who think their money would lose no value if it stays in Germany… Read more »
N.Y. Banker: Glass-Steagall Must Be Congressional Priority #1 After Elections Sept. 19, 2012 (LPAC)–“Once the election is decided and Congress gets back to work, fixing the banking system and reinstating Glass- Steagall should be the highest priority.” That’s the final punchline of the latest salvo in {American Banker}’s ongoing debate on the restoration of Glass-Steagall protections for the American people. Its author is the founder and CEO of New York City metropolitan area’s Signature Bank, Scott Shay, who comes out swinging full-square behind Glass Steagall, nicely capturing “The Absurdity of Too Big to Fail Banking.” Shay takes apart the three… Read more »
German Social Democrats Want To Carve Up Deutsche Bank
Sept. 20, 2012 (EIRNS)–That Deutsche Bank, Germany’s largest, is too big to be bailed out by taxpayers, is dawning also in the minds of the German Social Democrats now. Peer Steinbrueck, one of the SPD’s contenders for Chancellor candidate against incumbent Chancellor Angela Merkel, is quoted by the weekly {Die Zeit} with a call for separating the bank’s investment and commercial branches. Steinbrueck will present a first position paper to the SPD Bundestag group on Sept. 25.
Morning Every week the Government attacks some section of society for more money across Europe yet this does nothing to solve the problem only proves time and time again how unqualified elected or unelected politicians are at running Government,its departments or quangos. I guarantee if any one of us gave Enda a chq for 100Billion euro they would be back in debt in 3 years time. This financial crisis has highlighted the management/fiscal crisis in our Country and across Europe Why solve a debt problem when their is so much cheap debt flowing for Countries and their failed Banks..? In… Read more »
How come there were two articles today?
Hi Bonbon, The german economist recommending partial conversion of deposits is very insightful. The way around that problem is to buy property in Germany. Germany gas a double problem in that regard. Inflation in property prices due to an increasingly worthless euro and price rises in property due to people getting rid of their euros in the perifery by buying property in Germany. If they go down the route of the pulling out of the euro they will have to close the border until the metaphorical dust settles unlike the fallout dust in the middle east if the US Neo… Read more »
Hi David, The reason you are so shocked regarding Corzine is proof positive you were born with a conscience. I bet that the money for the new hedgefund comes from suds friends in gsucks. The photographs of Corzine show an affable smiling individual which reminds me of the lyrics from John Lennon’s superlative working-class hero; ‘There’s room at the top they are telling us still, but to get there you must learn To smile while you kill’ Do you know who else smiles serenly when doing billions of dollars of damage? The pilot of a hijacked fully fueled airliner piloting… Read more »
How can one pay no taxes? How can one fight for proper representation? This all sounds very familiar. You know, if this were just an Irish problem, we’d just fix it by emigrating, or taxing or whatever. The export economy would pull us up and it would be sorted – and funnily enough I would be 100% for this article and taxing accidental millionaires etc because it is OUR problem. Croke park is not a benefits retention scam. In the current situation is a damage limitation scam to ensure the rest of us comply. Remember that. This is all about… Read more »
What about farmers in all this – many of which held property pre Celtic Tiger, were able to sell sites, re-zoned land etc at hugely inflated prices. In many cases they still qualify for student grants etc as well as the obvious subsidies.
Can’t see FG willing to take them on though
Today’s retirees are the generation that produced the oversized families that flooded onto the job and housing markets over the past 25 yrs. The predictaable result has been a surge in housing costs and numbers out of work and emigrating.I know a civil servant who retired 6 months ago and bought a heavy duty new Beemer. Cost €40k. It doesn’t leave the garage. He has a bus pass! When are bank staff taking a pay cut ? They get paid for doing zilch.
gizzy says: September 21, 2012 at 12:37 pm The country needs a new political party. it needs all of us to join and be active. We cannot just continue to give out about the current incumbents they have no desire, intention or skill set to change anything. they are spoofers and chancers. Enda Kenny as a leader of a country come on, an old grumpy man as minister of finance, Howlin couldn’t change a tyre, Gilmore makes Kenny look plausible by comparison. It won’t change with them in charge. Set up a new party I will join, I will run… Read more »
The politics of envy and greed are just the ticket, David. Devide the population against itself and the elites laugh all the way to their corrupt banks. I am one of those pensioners you talk about. I emmigrated with a debt to my local bank, L50 in my wallet and a ticket to a new land. I worked any job available. I have been on jobs of 70 hours aweek in -50 deg F and others where it was +90 degs F. I have spent 30-50 days living in cheap digs trying to get hired. I have lived in a… Read more »
From Jim Sinclair http://www.jsmineset.com My Dear Extended Family, Everyone has an opinion of QE3. Almost all are wrong. What has taken place here in its size, and in an almost simultaneous international unified approach has no precedent in economic history. QE1 and QE2 were not failures. Do you have any idea what the world would have looked like if every major bank in the Western financial world broke? It is easy to be a naysayer and say let the banks go broke, but you have no idea how hard it would have hit you and yours and maybe gold and… Read more »
Could you please explain the meaning of negative equity? I bought a house in 2002 and worked 15 hour days to pay down the mortgage, driving a 10 year old Fiesta during the boom. The remaining debt is now less than the current market value. Am I in negative equity?
If I had boought a nice new car, worked less hours, taken foreign holidays and stuck to the mortgage repayments, the remaining debt would now be more than the current market value. Would that be negative equity?
Was I a fool to live frugally until my debts became manageable?
Hi Geriatric, Your house is not in negative equity because your loan is less than the Market value of the house. You were not a fool I’n my view. Sniggering asholes in financial institutions will probably view you as an idiot and certainly a Mark for them to ensnare in their ponzi financing so tell them to fuck off when they come knocking. It is very important that you take steps to protect your savings from the coming crash because the euro and new Irish punt if it returns will be substantially less valuable than now so you need to… Read more »
Hi Tony Brogan,
You are welcome to stay one night in my house and enjoy hospitality at my expense on your travels to defray your costs. I’d love to chew the fat on the gold views you hold. I got into gold 3 weeks ago at 1690 and it’s now 1765 but dropping as I think profit taking is going on. I am expecting a correction down to 1550 but share your view fir the medium term outlook. Post your email if you like.
Michael.
Incompetence and corruption have destroyed any hope. The following article is enough to want me want to hold a gun to these bastards who run our country. It is a tale of corruption and wilful deception made to look like incompetence. Read it and scream
Irish Democracy – A Little More Secrecy
http://bocktherobber.com/2012/09/irish-democracy-a-little-bit-more-secrecy/
David It’s a reasonable article and you make reasonable points. But aren’t the accidental millionaires your Jagger generation? Don’t they (as the name implies) subscribe to enlightened philosphies of caring and sharing, as well as self-indulgence and hedonism? So what does this tell us? Also, while it is a generational thing I suspect that holders of real wealth help out their children. Are there tax loops and accounting tricks to facilitate this and other forms of tax evasion? I should retire in a little over 10 years but I don’t expect any big pension. I’m ‘buyin back years’ to qualify… Read more »
Hi padser,
Because cash depreciates in value with inflation. What they should do is buy units in a eurostoxx 50 ETF and tell the pension managers to fuck off!
Michael.
Head Draghi
Am I correct in saying that one of Davids articles was omitted on line ? I am refering to the one about Draghi – dont remember the full caption .I think it was on the 9th Sept .Please confirm.
Hi padser,
Just make sure the units are held in a crest account and not a nominee account. If held in a nominee account and the bank fails you will have to get in line with all the other creditors whereas the crest account is at arms length from them.
Michael.
Hi Tony,
Top quality land is making from 7.5k to 10k per acre without entitlements.
Regards,
Michael.
Hi padser, Endowment policy’s are life insurance policy’s which pay out aump sum on maturity or death. I’m not a financial adviser but I wouldn’t touch a pension unless it’s self administered which means you control where the money is invested ie shares indexes derivatives property etc. The two nooks I refer to are the coffee house investor and the mootly fool investment book which gives a very good pairing strategy for investing half your money in an ETF bond and half in an ETF equities fund like euro stocxx 50 etc. When one goes up the other invariably goes… Read more »
Theodorakis Calls for Liberation Struggle To Free the Nations of Europe Sept. 21, 2012 (EIRNS)–On September 10, Greek freedom fighter, patriot, and artist, Mikis Theodorakis, issued a statement calling for the launching of a liberation struggle to free the nations of Europe from the new bankers’ totalitarianism. In his preamble he calls “For a Europe of Nations-Peoples and of States, a Europe of science, art and culture, a Europe of economic, industrial and social development, a Europe of peace and solidarity between peoples.” The 84 year-old statesman-artist writes, “Today the main contrast is between all the peoples of Europe and… Read more »
Theodorakis has exactly got it : “After all, the attack, with money as weapon, is much more severe and more efficient than any form of police or military force. Because it is an attack on the citizens as a whole. Not only on the integrity of his body but also of his mind and soul. ….. Money with the shock of unemployment, misery and fear dissolves the individuality of the citizen personality and destroys [the] social tissue which establishes the form and content of the People-Nation State”. ——— This is what Blair’s post-nation-state, post Westphalia, “governance” means. An attack on… Read more »
Thank you binbon for the post Outlining the Theodorakis speech. All 6’5′ and 20 stone of me is moved to tears. I just listened to a clip from the Jim Sheridan film the field where bull McCabe (Richard ‘dickie’ Harris) speaks the immortal words ‘how can I face my father and mother in heaven or hell if I let go of my field’. And the citizenry of this great republic established in arms in the face of the world handing the keys to the scum of the earth in the troika! I suppose the are too busy watching the late… Read more »
Calls in U.K. for Jailing Banksters September 22 (EIRNS)–Ian Fraser, a frequent advisor to BBC documentaries on the financial crisis, and Rowan Bosworth-Davies, the former lead investigator to the British FIMBRA regulatory agency (folded into the FSA, Financial Services Authority) have both come for strong prosecutorial action against the criminal bank practices that led to the 2008 crisis. Fraser has published on his website (www.ianfraser.org) his written submission to the Parliamentary Commission on Banking Standards after the commission put on the Parliament website other submissions but not his. We can see why some Dons of the City might object, as… Read more »
5th WORLD CONGRESS OF AGRONOMISTS AND AGROLOGISTS, in Quebec City, Sept. 17-21, brought 800 people from 25 countries, to discuss how to urgently increase world food production. A team from the Committee for the Republic of Canada attended, stressing the point: You can’t feed the world without changing the system. They met many people, and circulated material on Glass-Steagall, the NAWAPA XXI Resolution for Canada, and more. Scientists from the Mediterranean to the Americas were engaged.
David,
Slammmmmmmmmm Dunk !!!!!!!!!!!!!!!!!!!!!!!!!!!!!
This babyboomer generation going about their existence dropping matches and torching the past, present and future.
Reminds me of the movie the Wicker Man.
Anyone outside of the generation of babyboomers are trapped in their cult of destruction and sacrifice to the altar of their materialistic insanity.
test
Michael Coughlan,
Isn’t D’s article all about Corzine and his gangster buddies.
Thats the point of the article.
They all belong to a specific generation looting the system with no moral compass and no limit to the destruction unleashed.
Hi willis,
Thanks for your response. I don’t think there was any point at all to David’s article in the way you see it. David contrasted Oap’s in Ireland with middle aged Ireland. Much of the older group he suggests became accidental millionaires because of circumstance.
There is no connection whatsoever between most of the retired generation in Ireland some of whom happen to be well of and the way in which mr Corzine acquires his money. In fact the difference couldn’t be more striking.
Michael.