America Without a Middle Class

Discussion in 'Economy' started by Bfgrn, Sep 15, 2010.

  1. Bfgrn
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    Bfgrn Gold Member

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    Can you imagine an America without a strong middle class? If you can, would it still be America as we know it?

    Today, one in five Americans is unemployed, underemployed or just plain out of work. One in nine families can't make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month. The economic crisis has wiped more than $5 trillion from pensions and savings, has left family balance sheets upside down, and threatens to put ten million homeowners out on the street.

    Families have survived the ups and downs of economic booms and busts for a long time, but the fall-behind during the busts has gotten worse while the surge-ahead during the booms has stalled out. In the boom of the 1960s, for example, median family income jumped by 33% (adjusted for inflation). But the boom of the 2000s resulted in an almost-imperceptible 1.6% increase for the typical family. While Wall Street executives and others who owned lots of stock celebrated how good the recovery was for them, middle class families were left empty-handed.

    ...

    Through it all, families never asked for a handout from anyone, especially Washington. They were left to go on their own, working harder, squeezing nickels, and taking care of themselves. But their economic boats have been taking on water for years, and now the crisis has swamped millions of middle class families.

    The contrast with the big banks could not be sharper. While the middle class has been caught in an economic vise, the financial industry that was supposed to serve them has prospered at their expense. Consumer banking -- selling debt to middle class families -- has been a gold mine. Boring banking has given way to creative banking, and the industry has generated tens of billions of dollars annually in fees made possible by deceptive and dangerous terms buried in the fine print of opaque, incomprehensible, and largely unregulated contracts.

    Pundits talk about "populist rage" as a way to trivialize the anger and fear coursing through the middle class. But they have it wrong. Families understand with crystalline clarity that the rules they have played by are not the same rules that govern Wall Street. They understand that no American family is "too big to fail." They recognize that business models have shifted and that big banks are pulling out all the stops to squeeze families and boost revenues. They understand that their economic security is under assault and that leaving consumer debt effectively unregulated does not work.

    Families are ready for change. According to polls, large majorities of Americans have welcomed the Obama Administration's proposal for a new Consumer Financial Protection Agency (CFPA). The CFPA would be answerable to consumers -- not to banks and not to Wall Street. The agency would have the power to end tricks-and-traps pricing and to start leveling the playing field so that consumers have the tools they need to compare prices and manage their money. The response of the big banks has been to swing into action against the Agency, fighting with all their lobbying might to keep business-as-usual. They are pulling out all the stops to kill the agency before it is born. And if those practices crush millions more families, who cares -- so long as the profits stay high and the bonuses keep coming.

    America today has plenty of rich and super-rich. But it has far more families who did all the right things, but who still have no real security. Going to college and finding a good job no longer guarantee economic safety. Paying for a child's education and setting aside enough for a decent retirement have become distant dreams. Tens of millions of once-secure middle class families now live paycheck to paycheck, watching as their debts pile up and worrying about whether a pink slip or a bad diagnosis will send them hurtling over an economic cliff.

    America without a strong middle class? Unthinkable, but the once-solid foundation is shaking.

    Whole article...

    Elizabeth Warren is the Leo Gottlieb Professor of Law at Harvard and is currently the Chair of the Congressional Oversight Panel.
     
  2. loosecannon
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    loosecannon Senior Member

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    I am afraid that the American Dream of a massive middle class living at such luxurious standards was a pipe dream. Esp the pensions and retirement expectations included in that dream.

    Esp true since globalization's basic purpose was destroy all of that. I still can't believe that mere mention of the word "globalization" doesn't spark riots in the USA.

    Froth, bubbles, globalization; such cuddly terms. Almost endearing.
     
  3. Bfgrn
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    Bfgrn Gold Member

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    I grew up in the 50's and 60's. It was never 'luxurious standards', but it was a situation where a family could meet expenses without the need to go into debt. Buying a house was the only debt taken on. My family and all my friends families had a father that worked, and a mother that stayed at home. My grandparents never had a credit card, and my parents never had one until my dad was forced to have one in order to book a flight to attend his 11th Airborne reunion.

    What defined this nation was the middle class. But along came the pied piper to serfdom...Ronbo Reagan.
     
  4. Oddball
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    Oddball BANNED Supporting Member

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    [ame=http://www.youtube.com/watch?v=FQ5ob9B9yD4&feature=related]YouTube - Gloom despair and agony on me[/ame]
     
  5. william the wie
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    william the wie Gold Member

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    I am going to rain on this doom and gloom parade American demography is the in the world.

    Are we going to see really bad times for the next 10 years? Very much so, the downslope has not even really started. The real down leg in real estate of 50% below the inflation and amenties adjusted 1969 price for a house is not yet in sight and that point will be hit before real estate recovers. The Dow will sell for an ounce of gold and a 6% dividend yield before that bottom is reached.

    Why is this going to happen? Well for the past 40 years the rest of the world has been caught between a rock and a hard place when it comes to having and educating children. In fact is have or educate children because the resources to do both don't exist for the rest of the world. The really big economies have had to automate everything but buttwiping to deal with the resulting labor shortages. The maintenance workers for the automated factories that pay for the nursing homes of China, Japan, ASEAN, EU, Russia and probably India will be found here as the aging of the northern hemisphere picks up speed. The southern hemisphere is not in that great a shape either. Relatively speaking the US, New Zealand and Sweden are the places where the people to run those automated factories will be found.

    But the real labor force crunch is a decade away.
     
  6. rdean
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    rdean rddean

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    We don't have a strong middle class now. Republicans and greedy CEO's have ruined it.
     
  7. loosecannon
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    loosecannon Senior Member

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    None of this would matter if the economy wasn't dependent on exponential growth and on a next generation to support the entitlements of the previous.
     
  8. Stephanie
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    Stephanie Diamond Member Supporting Member

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    Well, with the Progressives-Commies in control of our Guberment. we won't have to WORRY about a middle class. We'll all be THE POOR CLASS. Except for our slave masters in the Guberment, they will be living high off the ole hog and laughing their asses off at us.

    isn't that sumthing to look forward to.
     
  9. Bfgrn
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    Bfgrn Gold Member

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    Here's your problem...the growth of the middle class began during FDR's New Deal, and boomed through LBJ's Great Society. The death of the middle class began when the conservative revolution took control, starting with Nixon and then the great socialist Reagan began nailing the coffin shut.
     
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  10. syrenn
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    syrenn BANNED

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    What has killed the middle class is the instant gratification culture of being ENTITLED to anything and everything they want.. More, more, more, now, now, now, I want, I want, I want.

    The idea of working for what you have, has become a thing of the past. The idea of buying it now on credit and paying for it later( somehow) rules the day. The knowledge that the state will catch you if you fall flat has become a insane safety net. The idea of saying " i cant afford it" has become a forgotten phrase.

     
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