Kinks – "Shangri-La" (1969)

The gas bills and the water rates

And payments on the car 

Too scared to think about 

How insecure you are 

Life ain't so happy in your little Shangri-La 

[NOTE: The Kinks are perhaps the least appreciated of the great British Invasion groups, but you best believe that 2 or 3 lines doesn't underrate them.  Any number of Kinks songs would have been worthy of being inducted into 2 OR 3 LINES “GOLDEN DECADE” ALBUM TRACKS HALL OF FAME, but I've chosen to bestow that honor on their 1969 tribute to everyman, "Shangri-La."  What follows is a revised version of my original 2012 post about "Shangri-La."]

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Many American homeowners know exactly how the fictional Arthur – the middle-aged, middle-class British man who is the title character of the 1969 Kinks album on which this song appears – feels.

The cover of "Arthur (Or the Decline
and Fall of the British Empire)"

Arthur has purchased a modest house in the suburbs, not to mention a car and a TV set.  But to be able to buy his "Shangri-La," he had to go into more debt that he really feels comfortable with. 

The little man who gets the train 

Got a mortgage hanging over his head 

But he's too scared to complain 

A few years ago, many Americans were taking advantage of low interest rates to buy houses they really couldn't afford.  When interest rates started to go up and housing prices started to drop in 2006-2007, defaults and foreclosures started to increase.  The bubble burst, the house of cards came tumbling down, the chickens came home to roost – feel free to use the cliché of your choice.

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Mr. Micawber

Remember what Mr. Micawber said in David Copperfield?

Annual income twenty pounds, annual expenditures nineteen [pounds], nineteen [shillings], and six [pence], result happiness.  Annual income twenty pounds, annual expenditures twenty [pounds], ought [shillings], and six [pence], result misery.

For those of you who never mastered old-style English currency, let me help you out.  There were 20 shillings to the pound, and 12 pence to the shilling.  So according to Micawber, the difference between happiness and misery is the difference between spending half a shilling (six pence) less than your 20-pound income, or spending half a shilling more than your 20-pound income.

Half a shilling is 1/800 as much as 20 pounds – that's not much.  But what matters is whether you're running a surplus or running a deficit.  When you have money in the bank – that is, the bank owes you – all is well.

But when you owe the bank, watch out.

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Micawber didn't have the advantage of advanced instruction in economics, so he didn't understand how debt allows you to leverage profits, how it's a good thing when governments operate at a deficit, and so on.  He was operating on the very old-fashioned principle that you should live within your means, and avoid becoming a debtor at all costs.  (Soooooo passé!)

The biggest asset of Americans as a whole is home equity – the value of their homes less mortgage debt.  At the beginning of 2006, total home equity was valued at $14.9 trillion.  By the end of 2010, it had fallen to $6.3 trillion.  Almost a quarter of American homeowners are underwater on their mortgages – that is, they owe more to the bank than their houses are worth.

I was fortunate enough to make the final payment on my mortgage earlier this year.  We bought our first home in 1984 (I was 32 years old) with the help of a 30-year mortgage.  When we moved five years later, we signed up for another 30-year loan.

But when we moved to our current house in 1997, I was wise enough to switch to a 15-year fixed-rate mortgage.  Low interest rates made that decision feasible, and I didn't want to be paying off a mortgage when I was 75 years old – which would have been the case if I had opted for a new 30-year loan at that time.

Those of you who own your home free and clear probably agree that not having a mortgage hanging over your head is very comforting.  Even if worse comes to worst, you'll always have a place to lay your head at night if you've paid off your mortgage.  (Assuming you can handle the taxes, of course.)

Given how low mortgage rates are right now, it's tempting to refinance a house and take out cash to spend or invest elsewhere.

That may be a very profitable strategy, but I don't care if it is.  I like having my house all paid off.  I can't imagine what would make me change my mind and go into debt every again.  

(Actually, I can think of one thing.  I have 25-year-old twin daughters.  It's probably only a matter of time until I have two weddings to pay for.)

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"Shangri-La" is one of those rare rock songs that was written for adults, not teenagers.

I know at least a thousand songs that are about how much it hurts to be in love (or in lust, as the case may be), but I know of no other song which has as its subject the angst of the middle-aged suburban homeowner.  (I personally think it's the best song the Kinks ever recorded, and that's saying something.)

Calling Arthur's modest suburban home "Shangri-La" – the name given to the fictional Himalayan utopia in James Hilton's 1933 novel, Lost Horizon (which Frank Capra turned into a movie) – is pouring the irony on pretty thick, of course, but this is a song that is essentially sympathetic with the concerns of what used to be called the silent majority.

It doesn't trash the middle class for worrying more about the next mortgage payment than about poverty in third-world countries, or global warming, or animal rights, or all the other causes that some so zealously advance.

Instead, "Shangri-La" says "There, there – life's not so bad.  At least you've got indoor plumbing – more than your ol' granddad could say, eh?"

A London suburb

Living on a street where "all the houses . . . look the same" and spending your time washing the car, watching the telly, or simply sitting by the fire in your slippers after dinner may not sound like heaven on earth.  But for many of us, that's the highest "reward for working so hard" that we will attain.  

So "sit back in your old rocking chair."  You've "reached your top and you just can't get any higher."  It may not seem like much, but it's "your paradise," "your kingdom to command." 

Feel better now?  No?

Me neither.

Click here to listen to "Shangri-La."

Click here to watch Ray Davies of the Kinks performing the song with the Crouch End Festival Chorus.

And click on the link below if you'd like to buy Arthur (Or the Decline and Fall of the British Empire) from Amazon.  It's a remarkable album.