Middle-Class Dreams

December 29, 2014

Despite a beautiful, sunshine-filled early morning, Monday afternoon finds itself wet once again — rain here on California’s north coast as the NWS terms it ‘isolated rain showers,’ but as reality reveals, it’s not all that remote. Clear skies are expected the rest of the week.

As 2014 winds down, the epitome of the American Dream — the middle class — is in a nasty spasm. One write-in reader from Princeton, New Jersey, at the Guardian responds:

We live in an area where housing and general cost of living are high.
So even though our joint income is high nominally — around the top 1 percent cutoff — we do not feel very rich.
A lot of times, how rich people feel is all relative — ie, by comparing your own income with the people you know such as friends and family.
A lot of our friends and acquaintances have similar income to us and we don’t know many people with a much lower income.
This could potentially explain why we don’t feel like the rich people, but someone from a much lower income social group may think of us as the super rich.

The guy has a reported yearly income of $250,000, and in a household of two people. All of us looking up from down here would view those folks as living way-way good.

Three_WorldsIn this crisis comes bullshit.
Economic writer Robert Samuelson at the Washington Post this morning claims all is needed is confidence:

What the middle class faces today is a crisis of faith.
Being middle class is more than attaining some threshold income.
It also involves embracing a set of beliefs that, unfortunately, have been severely shaken.
Middle-class Americans believe in opportunity, stability, reward for effort, a brighter future and the ability to control their lives, as sociologist Herbert Gans showed in his 1988 book “Middle American Individualism.”
Big government and big companies are distrusted, because they might impose their own imperatives on individuals’ personal preferences.
But government is also expected to provide economic security — a contradiction that’s widely accepted.

(Illustration: M.C. Escher’s ‘Three Worlds‘ found here).

However, Kevin Drum at The Atlantic begs to differ:

This really doesn’t make sense.
When we speak of the “middle class,” we’re nearly always talking about the working-age middle class.
Samuelson surely knows this.
But the only programs he calls out by name are specifically directed at the elderly and the working poor.
Barely a single dollar of those programs goes to middle-class workers.
What’s the point of this pretense?
Beats me. I guess it allows Samuelson to ignore the stagnant middle-class wages and skyrocketing upper incomes of the past 15 years, which is what nearly everyone means when they say the system is rigged against the middle class.
And it allows him to make the truly chin-scratching point that during the aughts, the result of this soaring inequality was basically a massive and fraudulent loan program from the rich to the middle class that eventually—and inevitably—broke down, producing a massive economic recession.
This, in Samuelson’s view, was “an intellectual, political and social climate that legitimized lax lending policies in the name of promoting middle-class well-being.”
If that’s the way we promote middle-class well-being, can I please be transferred to a different class?

This is not a “crisis of faith,” as Samuelson puts it.
It’s a crisis of not having very much money.

And money talks, bullshit walks easier.
A September 2013 Washington Post-Miller Center Poll revealed the shit in the shithouse without income.
Key points:

It’s increasingly difficult to make ends meet.
Almost two-thirds of people express concerns about covering their family’s basic living expenses, compared with less than half the public four decades ago.
One in three say their money worries are with them all or most of the time, and the number who say they worry “all the time” about paying the bills has doubled.

Fear of being thrown out of work is greater than it has been in polls taken since the 1970s.
More than six in 10 workers worry they will lose their jobs because of the economy.
Today’s worries exceed those in 1975, at the tail end of a harsh recession marked by high unemployment and high inflation.
Less than half of Americans expect to move up in their economic class over the next few years.
Slightly more predict they will stay in place — or slip down a rung.
As they struggle to keep up, a majority of people question a basic precept of the American Dream: that the next generation will enjoy a higher standard of living.
While slightly more than half of respondents, 54 percent, say their standard of living is better than that of their parents, just 39 percent believe their children will have a better life than they have.

The big year-end clincher is the robust appearance of the US economy right now:

The Dow Jones has just hit 18,000, a historic peak.
The price of gasoline is down by more than a third from its $4 highs.
The US economy grew at a 5 percent clip in the July-to-September third quarter — a startlingly high number — and 2015 looks to be strong, as well.
Meanwhile, the inflation rate for the last 12 months is a barely discernible 1.3 percent.
And the US budget deficit — remember the horrified cries from those who opposed Obama’s economic stimulus? — is now at its lowest level since 2008.

Next year is next year, however….

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