Thoughts on Deano

In recent months, a little corner of UK politics/economics Twitter has become somewhat obsessed with an excellent series of articles by In The Sight of the Unwise and its main protagonist – Deano.

For those of you not acquainted with Deano, he is essentially the new key marginal voter in UK politics. In essence, a 21st century version of the Essex or Mondeo man so heralded for delivering electoral victories to Thatcher and Blair respectively. Deano is a man in his late 20s or 30s, is married (or is at least in a long-term relationship), works in real estate or some similar service profession, is comfortable but not rich, is too busy enjoying the finer things in life to be engaged in politics and crucially – is a homeowner.

This last fact is crucial in that it means that as long as interest rates remain low and mortgage payments stay affordable, Deano feels like he is on the up and as long as that is the case, he will continue to vote for Boris Johnson and the Conservatives. This makes Deano a crucial voter demographic for the party in terms of expanding support beyond their current pensioner base.

This blog will offer some disparate thoughts on Deano – his financial position, his beloved Miss Fiat 500, and those Deanos beyond England.

The Lost Deanos

Deano may or may not have went to university – but doing so dramatically reduces the chances that an individual will eventually become a Deano. Imagine for a second Deano’s school/Sixth Form. Almost all of the boys there will have been potential or proto-Deanos. They live in a town where house prices remain affordable, have decent job prospects and bear all the cultural hallmarks of a future Deano.

However, little do they know it, but these proto-Deanos are all about to take the decision that will largely determine whether or not they ultimately become fully fledged Deanos. For at the end of the year, these proto-Deanos will either stay in their home town or leave for the bright lights of university.

For those proto-Deanos that do head off to uni, their initial few months there is an extremely disorientating experience. It is here that they encounter the “anti-Deano” for the first time: the trendy, middle class, metropolitan student. All of a sudden, what made proto-Deano popular in school no longer makes them so at university. The left-wing hegemony on campus means that the non-politically correct banter that used to go down so well in the Sixth Form Centre is a non-starter, particularly if he is trying to impress girls.

(Above: Some Deanos (right) and anti-Deanos (left))

In order to survive, proto-Deano must adapt to his new environment – and adapt quickly. Out goes the River Island jacket and in comes the edgy retro Adidas Jumper. No longer does he care much about whether Fury would beat Joshua. Any attempt to successfully woo the Corbynista girls on campus means signing up to woke politics as a minimum. Slowly but surely, this proto-Deano’s path diverges from those he left behind. Never is this divergence more apparent than whenever he returns to visit his hometown. His friends are all getting on in life: stable jobs, nice cars, about to put a deposit down for a new build house on the edge of town. Meanwhile, our Lost Deano has moved to London after graduating, is living in a 5-bed house share in Stratford with no living room while working an entry level job in PR. Voting Tory couldn’t be further from his mind.

Miss Vauxhall Astra

A relatively minor point, but in naming Deano’s significant other “Miss Fiat 500” – I fear she may end up getting confused with the popular phenomenon of “Fiat 500 Twitter”. Deano’s wife and your average Fiat 500 Twitter girl will both watch Love Island, enjoy nights out with the ‘gals’ and holidays in Spain, but they are fundamentally distinct demographics. Whereas Deano’s wife is aged 26-36, has a proper job and may even be a mother, the Fiat 500 demographic tends to be populated with 16-24 year old, middle class girls who got bought a Fiat 500 by their parents for their 17th birthday. In this sense, “Miss Vauxhall Astra” may be a better term to describe Deano’s wife.

Is Deano Liquidity Constrained?

There has been much discussion in macroeconomics in recent years about liquidity constrained, “wealthy hand to mouth individuals” (e.g. see here and here). These are individuals and households who are in one sense wealthy in that they have relatively high illiquid wealth (i.e. housing) but on the other hand hold little to no liquid assets (savings, cash etc.). Therefore, although these people will often have medium incomes, their lack of liquid assets means they are liquidity constrained – meaning they are unable to borrow and save to reach their ideal consumption level in each period. As a result, these individuals end up behaving much more like poor people than other wealthy people, living “hand to mouth” and spending close to their entire income each month, with very little saved. These individuals would like to increase their consumption, and have the total wealth and assets to be able to, however the fact that this wealth is tied up in illiquid housing means they are unable to do so.

One of the defining features of Deano is that he is a homeowner, a characteristic that is increasingly uncommon for his generation. However, another key characteristic is that he is not super wealthy – with an income somewhere around the average. The only reason Deano is able to afford a home is because a) he lives in a more affordable part of the country and b) his mortgage payments for the past decade have been kept low by interest rates on the floor.

This high illiquid-wealth, average income scenario means that Deano fits nicely into the “wealthy hand to mouth” category. This has two major implications:

i) As a result of having so much wealth tied up in housing relative to his income, Deano will be very sensitive to any tightening of monetary policy via interest rate hikes. Higher interest rates would not only increase his mortgage payments, but also lower the value of his house, meaning he would be less able to borrow against its value/extract equity from it. Given Deano’s political importance to the current government, this could make for some interesting dynamics between the Treasury and the bank of England in the months/years ahead.

ii) The second implication of Deano being liquidity constrained is that he will have a high marginal propensity to consume. Liquidity constrained individuals are unable to reach their desired level of consumption via borrowing, therefore any extra income they do receive will go almost entirely towards consumption as opposed to saving. Hence, as the country exits the pandemic, if the government wished to boost consumption via fiscal stimulus, targeting any such stimulus on Deano might be a good start.

Devolved Deanos

There has already been discussion of whether Deano is just a white and/or northern English phenomenon. However, I want to now consider whether or not the Deano archetype can be applied as easily outside of England.

I think generally many of the cultural and lifestyle characteristics of Deano do translate quite well into the other nations of the UK – even if their political behaviour may differ somewhat (for instance, Scottish Deano definitely does not vote Tory). I’m not going to go into too much detail on Welsh or Scottish Deanos, since that is not my area of expertise. Once area where I do think the Deano does apply quite well is in Northern Ireland, particularly within the unionist community.

Low house prices mean that despite incomes well below the UK average, home ownership is able to stretch much further down the income distribution in Northern Ireland than in other regions of the UK and being able to put down a deposit by the time you reach your mid 20s is not uncommon. This, combined with an abundance of cheap farmland and a much weaker culture of NIMBYism than in England means that new Barratt-like developments have sprung up on the edges of most Northern Irish towns (see these examples in Portadown and Antrim). These heavily car-dependent neighbourhoods are where we find Ulster Deano.

In many ways, Ulster Deano is similar to the English variety – he will usually be found working in the service industry, owns an Audi A3 and enjoys a week in Mallorca each summer. However, one significant area where Ulster Deano differs from his English counterpart is in their level of political interest and awareness. Whereas a defining feature of English Deano is that he pays little attention to politics, Ulster Deano is much more politically aware. I should note that Ulster Deano’s political awareness is mostly on a cultural level rather than a party political level. Although he often votes for the DUP, Ulster Deano has little time for the party, particularly their social conservatism and although he dislikes the NI Protocol, its technocratic nature means it is an issue that struggles to really interest him.

(Above: a real life Ulster Deano, standing in a new housing development, gives his opinions on the Northern Ireland Centenary to Al Jazeera)

On cultural issues however, Deano is a true son of Ulster. Whereas English Deano only occasionally dips in and out of the culture war, Ulster Deanos are often the foot soldiers of Orangeism. If he isn’t currently in a loyalist blood and thunder band, he definitely was at one point until his wife made him leave to spend more time with her at the weekends. Nowadays, Deano’s Saturday nights are spent at home now binging series on Netflix with his significant other, his band uniform gathering dust in the back of the wardrobe. However, deep down he still longs for those warm summer evenings with the “fellas”, the distant bang of the drums, the smell of saturated fat drifting across the Ulster countryside from the burger van and the taste of an ice-cold bottle of lilt raised to his lips.

Big Lessons on Deano

So what are the main takeaways political actors should have from Deano studies?

The first is that many ‘swing’ voters in elections often vote based on how well off they feel at the time and a large determinant of that is their housing situation. This serves as a potent warning to the current government. In the short term, it should at least be aware that any rise in interest rates will likely have a disproportionate impact on this demographic. In the longer term, it provides yet another reason for the Tories to legislate genuine planning reform to fix the housing crisis. It is no coincidence that areas where housing remains affordable, such as the “Red Wall” have moved towards the Tories in recent years, whereas unaffordable housing in London has turned that city into a left-wing redoubt. If the Tories were to resolve the housing crisis, then they could create many more Deanos in new Barratt developments around London and other major cities, but if they don’t grasp that nettle then they risk seeing the political dynamics that have played out in London over the past decade be replicated across the country.

The second major takeaway, as has already been noted is that governments of all colours should be taking family policy much more seriously. This is an area of public policy that has largely been neglected over the past decade – with there being a quiet acceptance in Whitehall that there is nothing government can do to prevent falling birth rates and the aging population that causes. The case of Deano is a reminder that although the nuclear family as an institution has taken a bit of a beating over the past half a century, settling down and having kids is still a key aspiration for large swathes of society. Given its importance to so many, policies to help people achieve a family could be a significant vote winner, while also tackling the secular stagnation faced by the country as a whole.

Many thanks to @F_McCullough for his contributing thoughts on this piece.