By Alissa Quart, Executive Editor, Economic Hardship Reporting Project. Cross posted from the Institute for New Economic Thinking website
feel that being middle class is not what it once was and that we are all running in place as fast as we can to stay the same, to quote Alice in Wonderland’s Red Queen,” Brenda Madison, an art director and graphic designer in Laguna Beach (Orange County), told me. “Never did I think I would worry that Social Security and Medicare may not be available in my future or that a medical injury or unexpected repair would bankrupt us.”
She and her husband, now in their middle years, “are not sure we will be able to retire in our home.”
Patricia Moore is a single mother of three who lives in a two-bedroom apartment in Los Angeles and a licensed vocational nurse working in hospice about to take the licensing exam to be a registered nurse. Due to a shortage of space, she sleeps on the couch and is “still struggling to make ends meet.” Her rent is $1,598 a month, her pay is about $3,200, and her student loan payback is $375 a month. Moore recently has had to resort to a GoFundMe campaign so she could stay home with her daughter during a monthlong health crisis, and has at times had to donate plasma. She said she is unable to provide “the extras for her kids.”
Moore began to enter her youngest son in focus groups in office buildings or hotels in neighborhoods like Beverly Hills. Sometimes he would make $75 an hour and the whole family would eat from buffets, the kind with cantaloupe, and maybe they’d also get a gift card. At first, he tested toys and then video games but also an MRI to map his brain. It was only because of these gigs that Moore could finally say, “Go buy yourself something,” to her children.
The extreme cost of living has forced some California families to take unusual steps like this. As the Department of Housing and Urban Development recently reported, a family of four in the San Francisco metropolitan area making $117,400 a year qualifies as “low income.”
These were Americans for whom the meaning of middle-class life had altered from something stable to implied economic fragility.
Their burdens were the price of health and child care, educational debt or a housing market gone berserk. They wanted job security, pensions and Social Security and unions, but these things seemed like a fantasy out of a mid-century American novel like “The Man in the Gray Flannel Suit.” The middle class’ long historical association with the status quo — strongly identifying with institutions or corporations, rejecting restive discontent — has made their new wobbliness all the more startling to them.
But when did that vulnerability start? Toward the end of the past century into this one, there was a rise in what author Barbara Ehrenreich has called a “fear of falling,” an anxiety among the professional-managerial class about downward mobility. I think of fear of falling as the opposite side of the coin of American individualism and its historic promise of social and economic progress.
Since the 1980s, some members of the middle class have gone “from a kind of security to being reduced to the kind of economic unstable state that working-class Americans have had to experience forever,” explained Caitlin Zaloom, an anthropologist at New York University who studies the middle-class financial experience. The office or academic job started to resemble the precarious work life that working poor Americans have long understood to be their lot, she said. And then there are the robots waiting in the wings to take their ostensible share of middle-class jobs, and soon.
This new fragility is one theory to explain the 2016 election of Donald Trump. Trump voters were sometimes mistaken for all hillbilly elegiac or Rust Belt proletariat. In truth, an estimated 38 percent of white people with bachelor degrees voted for the man — closer to “office worker elegy.” Indeed, as much as Trump’s messaging has been jingoistic or racist, he has also been addressing middle-class anxiety when he continually repeated that the system is “rigged.”
While some have protested that Trump’s success has more to do with loss of status or rank bigotry, Johns Hopkins University sociologist Stephen L. Morgan has conducted studies that reveal one substantial motivator of the Trump vote was economic. He noted that a successful national Democratic candidate would be one who appealed “to people who have not fared well in the postindustrial economy,” such as those in some once-prosperous areas of the Midwest.
Ordinary middle-class people’s struggles can be, of course, ameliorated by broad shifts, such as adopting a form of universal basic income or a flat monthly cash stipend for familial caregivers of their young or elderly kin. And we should at least explore adopting Medicare for all, to address rising health care costs. We also need to more effectively push for longer paid parental leave — or, in many cases, any paid parental leave.
But if we can’t get relief from federal programs or our employers, we will need to craft local or state solutions. Retaining rent stabilization laws is key in our cities, as is building more affordable housing for, say, teachers and municipal workers, so they can continue to live in the places they serve.
Finally, I saw when reporting my book that, when squeezed, people revealed their financial woes to others, they tended to then recognize that their obstacles were partially systemic. That, in turn, meant they didn’t simply internalize their real-world burdens into self-punishment. They seemed more able to patch together personal solutions — small-scale child care fixes like sharing pickup with their neighbors, for instance.
Simply voicing hopes and difficulties, and making them audible for their leaders to name and address, is a small part of what must happen for things to change. Although for some, these needed transformations may seem to be coming too late.
As Madison put it, “We are trying not to think too much about the future.”
This article was supported by the Economic Hardship Reporting Project and was first published by the San Francisco Chronicle.
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My ground level observations indicate that there is a lot of “denial” going on in the minds of the putative ‘middle class.’
One major barrier to the public ‘conversations’ about the economic malaise affecting America today is the still prevalent custom of shaming the victims of bad luck. I see this tying all the way back to the Calvinist theological concept of “Election,” which is an aspect of “Predestination.” In effect, one suffers in life because the Deity chooses to make it so. Thus, those who do well in life can “legitimately” look down on those who suffer. It is a perfect excuse for callousness of heart.
We read Weber’s “The Protestant Ethic and the Spirit of Capitalism” in class in my High School. Written around 1900, it still has merit as a descriptive and predictive tome.
Die wiki: https://en.wikipedia.org/wiki/The_Protestant_Ethic_and_the_Spirit_of_Capitalism
Old ideas die hard.
“The rich man in his castle,
The poor man at his gate,
God made them, high or lowly,
And ordered their estate.”
Just so we know our place and stay there
“Capitalism is a that system which has become that which the living are converted to the the living dead.”
Some of what is perceived as shaming, may just be understood as trying to understand how those with good professions etc. end up that way (and no I don’t judge those without “good professions” – I don’t think we choose our fate to any real degree see. It’s just takes more to understand why is all). Now from the inside some good professions are not really, or have become so niche that that is the story but …
Zarlenga spends a good amount of pages in his book “The Lost Science of Money” on how Calvanism got bound up in profit making. It’s a fascinating history. Highly recommend for that as well as its understanding of the chartal-nature of money.
Mod: looks like some issue in the first paragraph
This:”Finally, I saw when reporting my book that, when squeezed, people revealed their financial woes to others, they tended to then recognize that their obstacles were partially systemic. That, in turn, meant they didn’t simply internalize their real-world burdens into self-punishment. They seemed more able to patch together personal solutions — small-scale child care fixes like sharing pickup with their neighbors, for instance.”
commiseration is new, in my experience. not too long ago, one didn’t speak about economic difficulties in polite company…at least in the middle class(poor people, oth, sometimes do)
that they’re finding such behaviour is worrying, as it means the precariousness is spreading…which causes cognitive dissonance, since it’s counterintuitive according the the Narrative we’re all supposed to cling to.
to wit, in my recent exposure to network tv in hotels and dr’s offices, i note that—like in the Matrix–a grand illusion of the late 90’s is laid across the world.
I hear locally upper middle class soccer moms having lunch, and it’s oneupmanship all around…everything’s fine, and we went to the most wonderful resort, in our new suv, and our son married a doctor and they honeymooned as missionaries…(!)…but it’s all nonsense, and everyone knows it.(the quick flash of panic in their eyes, “will the card work?”)
That was the norm not so long ago…all the way down to the dregs of the former middle class. i see the rending of that pretension…the misty veil of utopian just-worldism…as what’s at the root of so many of these dislocations an eruptions of late.
“Believe Real Hard” just doesn’t cut it any more, and those soccer moms don’t know how to think about it.
per Ambrit’s reference to Calvinism, at some point reality intrudes and one must climb down from the pillar.
Becoming They and The Other.
It can’t happen to me— I am a Exceptional! ™ (and white)
Could Compassion be on the horizon– on the wax as more and more realize they are in the global Lemming-fall rat-race to the bottom ?
the craziest bit about my gaggle of moms is that this is a tiny county, population wise…everybody really does know everybody…so everyone knows it’s bullshit,lol.
it’s performative…a game they play with themselves.
like dressing up as princesses.
this behaviour was more widespread, as i said, a big part of “Normal” culture, with everyone trying to play…now it’s limited to a few bank manager’s daughters and the remnants of large ranching families who can still burn up a credit card on occasion.
these, and their mothers, notably, are the devout holdouts in the local gop.
everone else, it seems, has woken up to some degree…although most of them are still in the pre-coffee fuzziness.
church attendance doesn’t seem up all that much among these cohorts, but church sentiment is…as is overt references to religion in public(and seems to be focused on Social Jesus, too, which s also different.)
Things are definitely happening.
someone should write a paper.
They’re not attending/joining churches because that costs money and they don’t have the money. Once there are more “churches” that only cost what people can afford, more people will attend. Just a prediction.
Sadly…first the great suffering must turn into the great awareness that it’s not your fault than love oneself and compassion for all else
If my reading of history serves me well, I believe that the pillar is knocked out from underneath the stylite.
Doing some googling about looking up stylites, I come across Saint Simeon Stylites. This leads me to San Simeon California, where, oddly enough, Hearst’s Castle is located. So, it turns out that Hearst or one of his minions had a classical education joined with a wry sense of humour! Hearst, one of the richest men of his day living on top of a mountain, much like an ascetic on top of his pillar. The irony is too pointed to be accidental.
Anyone who lived openly with Marion Davies can’t be all bad.
i cant think of anywhere else where such a vague western civ reference would be caught so easily,lol
Yoiks and away!
The stylites conceit has much more going for it than appears at first sight. Both iterations of the ‘ascetic on top of his pillar’ include individuals “isolated on high places,” a natural appeal to prejudice. He or her who is “on top” is somehow seen as ‘superior’ to the herd. Also, both are dependent on a social organization for their sustenance and support. The rich man on his mountain has his army of servants who must deal with a wider society in order to gather needed supplies. So too do the supporters of the ascetic on his pillar. Someone must gather the necessities for life together from the surrounding society and bring them to the visionary perched up “closer to the God,” mediating for all below with the God. For the ancient ascetics, the God was a semi-mysterious being that held power over the phenomenal world and thus must be dealt with. For modern magnates, the God is the system that demands that wealth be the arbiter of all value. That may sound like circular logic, but it has an internal consistency.
As the anchorite said to the stylite; “There’s nowhere to go but up!” Both nodded sagely.
Strangely enough, when I despair at the present “supremacy” of the meritocrat class, I am reminded of the story of the death of Archimedes. There is a salutary lesson for us all.
Happy Trails! : https://www.youtube.com/watch?v=x9fOS7PYYt4
it’s not all illusions, a part of the population is doing pretty well, they take vacations and crap (who even has ANY paid time off anymore anyway? not me. even STAYCATIONS are off the table! Heck getting a cold is pretty much off the table ..). But others …
But yea the Big Lie Narrative of these times is that the economy is doing well, Trump’s economic performance will get him reelected (this economy is total garbage, so F trump and the horse he rode in on), unemployment is low and other BS.
Lots of sad reading here. But seriously – $117,400 a year qualifies as “low income.”? I know that it is true but at the same time that is so stupid on the face of it. I do have to admit here to a weakness for nostalgia – especially for places that I have never experienced but have read about. Sometimes out of idle curiosity I might flick through a few videos like that on America in earlier times and you can see one such clip at https://www.youtube.com/watch?v=ECFH3Pe21oQ or at this one at https://www.youtube.com/watch?v=QOr1fIIHQFk
Having said this, I sometimes wonder what would have happened if neoliberalism had spluttered out during the 1970s as a nonstarter of an idea and instead a different timeline had formed. In this one, instead of wages flate-lining back in the 70s, they had kept apace with GDP like they had the previous thirty years. People, more secure in their wages, would never have embarked on the credit boom like they did when wages dropped. In this timeline too the rich are still taxed at 70% which mopped up all the surplus that would otherwise have instead gone on to founding think tanks and money in politics. With an affluent population, there was never was a need to import so much from China and the unions were still strong enough to stop industries being shipped off to there. It would have been a completely different America.
But that is another timeline and we are instead in one where people will soon be in a position where they have nothing else to lose. And that is a very dangerous proposition that. And they still have potentially a very powerful weapon – their numbers. And their votes.
The 70s were going to be a very tough decade: The loss of our huge post-WW2 advantages in manufacturing, oil shocks, a very expensive war to pay for, and Watergate probably fits in their somewhere.
I am not sure what we did in the 70s and after was exactly neoliberalism, but any restraint shown in the face of the new realities (Carter and his sweaters, Bush breaking his tax pledge) were massively unpopular, and I think that was going to be the case in general – regardless of what path we went down.
The very idea that neo-liberalism was the cause (as opposed to an interaction with) of the root problems I think is indicative of over optimism about our situation. Contrary, I do think it is very reasonable to say that neo-liberalism made the problems worse.
The distinction is important, you can reject our current situation and policies, and still not be particularly convinced that the opposing voices are being more realistic.
After reading “Democracy in Chains” by Nancy MacLean, I’m leaning toward neoliberalism as a cause. It kicked into high gear with Reagan’s election in 1980, and Bill Clinton made sure there was no stopping it.
In reference to this from the original post: “In truth, an estimated 38 percent of white people with bachelor degrees voted for [Trump],” I have to say, I think you call those people Republicans, and don’t kid yourself. They will do it again.
Carla, thank you, exactly so. The technique of it all was quite insidious, as it was an appeal disguised and self righteous to greed to a two groups: baby boomers and their parents sociology primed for such pitches. Once that genie got out of the bottle there was no getting it back in.
So, will the millenials kill-off the Genie for good .. or will they, in their turn, rub that lamp all the more, to parlay their 3 wishes towards other equally speciously sparklely endeavors ??
we can’t ‘rub the lantern’; when those in power in 1981 set off down the neoliberal road, the conditions of their wish were fulfilled by debt-enslavement of everyone who came after them to support enriching those who clawed their way to the top.
the only millennial oligarch is Zuckerberg and I don’t think anyone believes he is going to maintain his power even half as long as, say, Bill Gates. the only millenials who believe in neoliberalism are paid shills for the elite like Ben Shapiro or Charlie Kirk and by the same Zuckerberg:Gates ratio, they have less than half as much power as a Rush Limbaugh.
neoliberalism is dead, we’re in the gramscian interregnum, at this point I just hope and plead with the infinite that we get Bernie in 2020 instead of Cotton/Creshaw primarying Trump or something awful like that because the familyblogging Democrats refuse to pass the torch in favor of one more term of grift.
Rev Kev, who I was responding to, correctly noted that the 1970s were when wages began to drop. Ronald Reagan and Bill Clinton of course come later. This doesn’t mean that their policies were not problematic, but it does make it difficult to blame them as the causal agents of something that started in the 1970s.
If you want to blame Johnson/Nixon and their Vietnam War policies, that would make some sense, but they don’t seem to me to be poster children for Neoliberalism with one being associated with the Great Society and the other the author of price controls to suppress inflation.
When things get a bit tough (and note that in the 70’s for all the hype they were not in fact that tough – until govt policy of a NL kind stepped in) – then you have policy choices. If you go NL, then that is a choice, and causally so. (It was usual to hide this causality in TINA.)
Financialization of the housing market creates obscene rents, leading to less household formation, then the need to “do something” about population decline. Japan is 20 years ahead of us in that regard,
Indeed it does here in the SF Bay Area. The surprise of it all is part of the denial – the wife and I look at our family income (usually 10-20% less than that) and are straight up perplexed that it doesn’t go as far as it “should”. We certainly have a pleasant enough middle-class life, but it feels precarious in a way that we never expected. And we only have that because we have subsidized housing (we live in a house the family has owned for years, so are paying well below the insane market rates). If we had to pay market rates we would be poor, or close to it.
We certainly rant to one another about the systemic issues behind this situation, but there are a lot of California liberals who bitterly cling to questionable ideas like a balanced budget or Kamala Harris.
I’ve been wondering when I’ll hear a candidate advocating lower home and rent prices – where I live we absolutely need that if we’re to keep a semblance of civilization and democracy.
You have hit on a major ‘disrupter’ of the body social. “Civilization and democracy” are being willfully sacrificed to the Gods of Profit. That betrayal is a core part of neo-liberalism.
Re; lower home and rent prices. For the last 40 years, as the prosperous Great Lakes region became the rust belt, we who live here have been constantly told: if you want a job, just MOVE to where the jobs are.
Now are we allowed to say to the mortgage-or-rent-impoverished middle class folks who live on the coasts, “If you want lower house and rent prices, just move to where the lower priced houses and apartments are” ? We got plenty of room for y’all here, honest. And we’re mostly midwest-nice, too.
You can and should tell ’em! It was about 2014 when I started telling friends that it just wasn’t worth their while to move to coastal California, and to try the Midwest instead. And really, if we didn’t have four aging parents here in the Bay Area and below-market housing, we just couldn’t be here either.
I lived in Michigan for many years, and it was great!
Unfortunately a candidate advocating for lower prices of housing will likely be defeated by thr NIMBY types.
If you are very lucky, and I mean lucky, you might find an old junior one bedroom apartment for the low, low price of $1,500 a month. No patio, no dishwasher, no nothing except a parking spot. This is not exaggeration, sarcasm or humor, but reality. In some places in California it’s closer to three thousand dollars.
Most of us Californians do not make even fifty thousand and, if we do, we have to live closer to the cities where the well paying jobs are. I keep waiting for the housing bust to arrive for last time the rents dropped as much as thirty percent. Hopefully, I will still be in my apartment, or at least in an apartment when that happens.
Another factor is cities not allowing for higher density housing. If somebody has a brownstone or something similar, they will fight tooth and nail against that 6 story apartment building that would allow a lot more people to live in the neighborhood. Under-investment in rapid mass transit also hurts workers commuting to jobs and forces far more cars on the roads and parking spaces.
Was the American Middle Class a Cold War thing?
it was certainly precarious in the great depression, seems to thrive in boom periods. the white middle class, and some of the black middle class did well in the 50’s and early 60’s. that was when the us was economically at the pinnacle of the world, and i think that was because most of the other first world economies were rebuilding from the rubble of ww2.
The only item I can think of that was an import from the Soviet Union and on retail shelves for sale here during the Cold War, was Stolichnaya vodka, and as far as the Peoples Republic of China goes, fireworks.
If I didn’t finish the food on my plate, my parents would admonish me with tales of people starving to death in China, and indeed they were.
For me as a child, the starvation place was Africa. I wonder about the psychological motivations that made our parents ignore the suffering right nearby in our own neighborhoods and focus instead on some far away place.
Today, that starvation is all around us. I personally feel guilty now that we cannot give very much to beggars and homeless etc. due to our own straitened circumstances. The myth of “The Exceptional Ones” (TM) is still a strong part of the social narrative today.
I try to do my infinitesmal part, ambrit .. by taking any surplus from the garden, when there IS a surplus that is .. and donate it to the local foodbank. Last year it was 5 full lugs of grapes fresh off the vine, a few yrs before that it was an over abundance of beets. This season it might be potatoes … THATs My lifestyle !
All on less than a $35,000 yr combined income. But that means no trips to Cancun, no new Car every couple of years, no DeathCare expeditures, and no mort gage.
I feel humbled every time I make a delivery, especially when I see families in obvious distress w/ young children .. looking for sustenance that they cannot otherwise afford to buy .. it breaks my heart.
Yes to that. We got a bumper crop of ‘volunteer’ Muscadines last year. They made good jelly. I should build a trellis or wire support network for the vines this year. With this weather, we should get another good crop.
Living the ‘prepper’ life has it’s compensations.
Our’s were primarily muscat as well, what we donated. I ended up canning the rest, turning them into muscat conserves… half of which we’ve already given away to friends and aquaintances. The other grapes, the Mars variety, became raisins, for home consumption.
Everyone should learn how to can .. cuz you never know when just-in-time .. just STOPS !
re: American Middle Class Cold War thing?
Possibly this was a major influence. When the USA had identified large foreign enemies that must be countered (Russia and China) there was an impetus to build in America and keep the USA population engaged with the Russian and “Red” Chinese threat.
The USA was also an oil exporter until 1971, which allowed some control of oil prices.
Globalization was not prominent and I remember the poor quality Japanese tools of the 1960’s (and Chinese manufactured stuff rarely seen by me (firecrackers?))
Furthermore we had two large countries that economically were not as advanced as the USA and were not viewed as particularly successful with their flawed Communist systems.
Effectively, China and Russia were playing the game with one hand tied behind their back.
This may also have allowed USA unions to be strong, increasing wages for union and non-union workers.
Perhaps the USA is currently making some other countries focus inwardly on their countries as the USA did in the 1950’s and 1960’s.
By forcing sanctions on various countries (Iran, Russia, Venezuela) the USA may make them less dependent on global resources and more like the more self sufficient USA of the 50’s and 60’s.
Very, very possibly. Thanks to Project Gutenberg, I’m reading a lot of fin de siècle novels and literature, e.g. Booth Tarkington. The British middle class seems to have been mostly people living on investments — not in the manorial style, but with enough to have a flat, and a servant — in a style that you might associate with Sherlock Holmes. A middle class that included people with jobs definitely seems post-WWII, and, of course, since the wage stagnation starting in the mid 1970’s, it’s mostly ended by now.
Middle class always had servants because cost of labor was low. Middle class households sometimes had boarders & often elderly or unmarried relatives.
“While some have protested that Trump’s success has more to do with loss of status or rank bigotry, Johns Hopkins University sociologist Stephen L. Morgan has conducted studies that reveal one substantial motivator of the Trump vote was economic. He noted that a successful national Democratic candidate would be one who appealed “to people who have not fared well in the postindustrial economy,” such as those in some once-prosperous areas of the Midwest.”
But this is circular reasoning, why would people in the “middle class” think that Trump’s policies are better for them than Clinton’s policies?
It’s not like Trump is a sort of middle class guy himself, in facts H. Clinton is probably more “middle classey” than Trump.
Plus, what does the term “middle class” mean specifically? How are these people different from “working class” or small bourgoise?
Middle class to me growing up, meant that the school custodian across the street and 3 doors down from us, could afford to buy a home, or you played little league with the son of a gas station owner, who made enough from his 2 service bays always full (cars weren’t nearly as reliable in the 60’s) to also own a home.
Thanks for the answer.
My doubt about the middle class is this: it is a term that various schools/sociologists/economists used to mean very different things, so when someone speaks of the middle class it’s difficult for me to understand what he/she is speaking about.
For example:
1) In marxism it generally means the small bourgoise, meaning the small shopkeeper, the farmer who owns his land etc;
2) at times, it just means people of the working class who have good jobs, that is different from the definition (1). The disappearence of the middle class just means the disappearence of good jobs;
3) sometimes (wrongly IMHO) “workers” are supposed to be only blue collar and only without high education, so “middle class” means people who have a degree and are white collars;
etc.
At times these categories can somehow mix but the class interest of someone who is a small business owner is different from the class interest of someone who has a good employee job which might be different from the interest of someone who could have a degree and a sucky white collar job.
So this very general idea of middle class is very confusing IMHO.
@MisterMr — I think that because EVERYTHING in the good ole US of A is about money, the understanding of a term like “middle class” becomes just about money, too.
When I was young (yes, a long time ago), I was given to understand that “middle class” meant basically people with white collar jobs or jobs that required some professional accreditation: teachers, nurses, lawyers, accountants, etc. “Working class” meant people with blue-collar jobs, even if some of them regularly made more money than a teacher or, say, a nurse. “Upper class” included high-earning professionals, CEO’s, and of course those with inherited wealth. Poor, then as now, was the one thing you definitely didn’t want to be.
But, as I said, money has obliterated all those fine distinctions of snobbery. Now there is only one: $.
The label of “Middle Class” in America can be used as either for the social class or for the economic class with the white collar workers generally being both and the blue collar workers being, before the 1950s, working class with working class wages. For about two decades the high and low ends of the income range collapsed with most people being squeezed into the economic middle class regardless of social class.
Now, income disparity has destroyed the economic middle class and the classic pyramid shaped map of the social and economic system reappearing. The tiny wealthy elites; the slightly larger service and professional class providing what the elites want; the small number of bureaucrats, lawyers, doctors, mechanics, religious workers and so that any large societies need just to function at all; the greatest numbers are the laboring class, and I don’t mean the working class.
The mental map of most Americans is stuck on the almost flat pyramid of 1970 in which all classes were getting wealthier collapsing together economically, with the exception of the wealthy not gaining wealth at the same rate as the bottom 99%. Even the poorest blacks finally started to improve economically.
That picture is buried somewhere deeeep in our collective heads where the only real differences was what type of job you were going to have and where mistakes, failure, and disaster did not mean poverty. At worst, it meant a change of work or a temporary set back or a change of social class but not economic class.
Find that image in your head, yank it out, put a stake in its heart, burn it, and scatter the ashes. That picture died around 1973. Whatever the truth of that image it is long dead.
But too many people are trying to pretend that we are not living in a zero sum game of winner take all.
Trump had the advantage that he was not tagged, directly or indirectly, with Bill Clinton’s NAFTA, welfare reform or supporting “Free trade” that seemed to only work well in economists’ minds (TPP).
Clinton also supported the Iraq War, Libya and other military adventures, and Trump couldn’t vote for/against these operations that directly affected their communities.
Campaigning Trump called these wars “mistakes” while Hillary C would not.
Someone summed the election as “With Hillary you know you are screwed, with Trump you might not be.”
Thanks, however it is a fact that a situation of bad economy and increasing inequality, that ideally is supposed to be the main reason to vote left, is causing an upsurge in right-leaning populism instead.
And not only in the USA.
One could argue that the USA reluctantly moved left in the Great Depression while Nazi Germany and Italy moved right.
In the USA, recently the left has been cast as weak and ineffectual.
The left doesn’t “bring home the bacon” in the minds of many.
Bernie is popular, but the knives are out from the establishment pols (of both parties) to do him in.
In the USA, moving to the populist right, to me, seems quite understandable.
there is no populist right that brings home the bacon in the U.S. either as far as I can see. Theoretically there could be, but theoretically a lot of things, including much more plausibly and likely the rise of a left that brings home the bacon. IOW the trains don’t even run on time now.
The Austrian historian Walter Scheidel has claimed that though out much of recorded history, inequality has increased until a large shock happens:
Note, Scheidel is an historian not an economist, so he is somewhat outside the usual go-to source for economic advice.
From https://www.economist.com/open-future/2018/09/10/can-inequality-only-be-fixed-by-war-revolution-or-plague
“IN AN age of widening inequality, Walter Scheidel believes he has cracked the code on how to overcome it. In “The Great Leveler”, the Stanford professor posits that throughout history, economic inequality has only been rectified by one of the “Four Horsemen of Leveling”: warfare, revolution, state collapse and plague.”
If this premise is correct, political efforts, from the left or right will have little impact in the USA.
It will take a large shock to the USA system to make significant change.
I don’t see that the political reaction to “The Donald” will be it.
Trump’s economy is scarcely better than Obama’s (depends on which year though, in the worst of the Great Recession only then was it worse). So if it’s really about the economy: then Trump will lose the next election.
IMHO it IS about the economy, but not in the direct sense we mean: if the economy goes on as it is, Trump will be able to spin it as good, whereas a democrat would be toast.
But I expect a recession to hit earlier, in which case I think Trump will not be re-elected.
Whenever I read articles illustrating the dawning awareness of the middling classes to their extreme precarious social status, I can’t help but marvel at the audacity of elites jumping to the front of the protest line proclaiming their desire to “lead” the distraught masses. Even more so, those same distraught workers giving their oppressors the opportunity to do so. That is the definition of a dysfunctional society- rewarding failure. The elites might think themselves clever, and exceptional, for dreaming up such scams, but that dynamic alone goes a long way to explaining the rapid decline of America’s prominence in the world.
America is consumed by a cynical rot that has firmly entered into the body politic. There is no easy way to excise this cancer, but the answer must lie in some form of national mission. The current American leadership have chosen a militaristic vision of conquest for the nation masked with a marketing program of bringing democracy to the world. This contradictory scam will not work, and there is ample evidence showing just how destructive and impotent this strategy truly is. The rest of the world is moving on, and if Americans don’t wise up to the the destructive nature of their system, they will be left behind.
Corporations must be in the service of the nation, not the other way around. Corporations must be allowed to die and change, the nation, and its people must prevail over time. It is an obscene contradiction that the American system is reversing this dynamic. The people are allowed to die, while the corporations, and those that control them are allowed to persist.
As a working class American, my only desire at this point is for an American elite leadership that has a vision larger and broader than worshiping a bank account. If American workers don’t demand a better leadership, history will show them to be worse than peasants, they will be proven to be willful consumerist dupes.
America is in an identity crisis- a cultural crisis. That does not bode well for the nation and makes it ill equipped to deal with other nations and the world’s problems- let alone our own.
“The current American leadership have chosen a militaristic vision of conquest for the nation masked with a marketing program of bringing democracy to the world.”
That train officially left the station around 1898.
agree although the date closer to 1620 when the militaristic conquest of nations began.
“masked with a marketing program of bringing democracy to the world.”
For the USA, those thoughts didn’t get put into action until post Civil War…
“There is no easy way to excise this cancer, but the answer must lie in some form of national mission.”
here lies the way to better angels and there is no shortage of things that must be done
As someone on social.coop said the other day, “they’re not ‘elites,’ they are ‘the predatory class’.”
“Corporations must be in the service of the nation, not the other way around.” Bingo! As long as corporations have the constitutional rights of “persons,” they will continue to pummel those of us for whom constitutional rights were intended. Please urge your congress critter to sign on to cosponsor the We the People Amendment and implore your senators to introduce companion legislation in the U.S. Senate:
https://legiscan.com/US/bill/HJR48/2019
Note: Tulsi Gabbard and Ilhan Omar are original co-sponsors in the 116th Congress, but not yet AOC, so if anyone from her district is reading, give her office a call !
P.S. For those of you who had concerns about it, a section 3 has been added to the original resolution: “Nothing contained in this amendment shall be construed to abridge the freedom of the press.”
Strictly speaking, this was unnecessary: the press has, and has always had, its first amendment rights BECAUSE it is the PRESS, not because of its corporate form. But people’s inability to make that distinction caused so much angst that the sentence, redundant as it is, was added to the proposed amendment.
Thank you for posting this.
1. The author doesn’t really explore how rent extraction through housing is the single biggest destroyer of American household wealth, with housing costs outpacing wages almost everywhere.
2. “Explore” Medicare for all? Build “affordable” housing, but only for certain deserving individuals like teachers?
It’s disappointing that the author chooses to end this with such centrist Dem proposals.
There needs to be a right to housing, which means a right to build housing: abolish any zoning that excludes dense residential development. Seize land by eminent domain if necessary.
===There needs to be a right to housing, which means a right to build housing: abolish any zoning that excludes dense residential development. Seize land by eminent domain if necessary===
Thanks Joe. While I am not an expert in housing, the lack of affordable housing seems to be tied to:
1. As you say zoning laws that exclude dense residential development.
2. Land Use regulations which are probably tied to #1 above.
3. The high costs incurred by residential developers in navigating the byzantine and bureaucratic maze of permits and regulations at the federal, state, and local levels.
4. The speculative nature of the housing market i.e. IMO the housing bubble is driven by monetary policies and the actions of “behind the scenes” lever pullers. If housing is treated as a commodity by the finance sector then the machinations of Wall Street can impact housing prices as they did in the 2008 crash.
5. To my point above, in the far northwest suburbs of Chicago there is a lot of empty office space and light industrial space. So excess supply would tell you that the prices for these properties should go down. Not the case. They are still expensive. If a homeowner is trying to sell their house they will lower the price until it is sold or not sell it. But the same rules do not apply to businesses.
To #5 above, again if we “believe” what we are told in Econ 101 about free markets and supply and demand then an excess supply should result in a downward price drop until the excess supply is cleared. God help me! I just typed the previous sentence from memory as if verbatim from my Econ 101 class 30 years ago!! #head on desk! So if office and industrial prices are not dropping then someone has to be holding the “bank notes” as is not concerned about if or when they sell.
Basically in short it seems zoning issues and cost issues are the big obstacles in dense residential development. I am not an advocate of relaxing regulations which could result in shoddy and unsafe construction but maybe there is a middle ground. Something needs to be done.
It’s not just dense housing, it ALL housing .. in terms of livability (environs with nature as an active component), and Affordable design/construction with energy efficiency in mind .. on a large enough scale to benefit the public ! There is, for all practical purposes none of that to be had. As it currently stands, you have to be richer than God to do ANYTHING other than the unimaginative and wasteful development that has been built up to this point.
So instead of “Where’s My flying car??” .. the question might now more accurately be “Where’s My passive solar, earthen-berm, strawbale, rammed-earth, or cob house/apartment???”
4. The speculative nature of the housing market
to expand and maybe add onto this, AirBnb/vacation rentals + rental ‘business as income’ (at institutional eg Berkshire Hathaway and the associated securitized offerings as well as individuals and small biz creating the ‘income stream’ via LLC pass through) is a major driver affecting the speculation. What happened to all the foreclosures from a decade ago? They were turned into rentals, they still exist.
I am all for an affordable housing mandate, but not in an Obamacare fashion by building tons more housing at crappy inflated prices with some means-tested voucher all so the rentiers can keep their profits. Destroy the rentiers and make housing right, make it a policy that is enforced with regulations and limits on numbers of rental units.
Thanks Super.
==AirBnb/vacation rentals + rental ‘business as income’ (at institutional eg Berkshire Hathaway and the associated securitized offerings as well as individuals and small biz creating the ‘income stream’ via LLC pass through) is a major driver affecting the speculation===
To your point there was a recent article on NC that discussed your comment above.
https://www.nakedcapitalism.com/2018/08/wolf-richter-comes-second-wave-big-money-buy-rent-scheme.html
Across the street from the townhouse subdivision where my wife and I live is a subdivision of $275K – $350K houses. One of the more expensive houses was sold a year ago to a company that uses it for a rental.
I talked to the previous owner frequently while walking our dog, and he sold the house after it had been on the market for only about a month. As far as the previous owner was concerned the house sold for close to his asking price so he was happy. He had no concern about selling the house to a company that was going to use it for a rental. The previous owner had been living in that house in that neighborhood for 25 years and seemed to know most everybody in his subdivision. He and his wife raised their two sons in that house and also put a lot of time and effort into the landscaping around the house.
The rental company that bought the house does the absolute minimal landscaping of the house and barely mows the lawn on a semi regular basis. The company clearly does not have any regard for the “appearance” of the house or the neighborhood. Which is a shame because the other houses near it are well maintained which, due to the lack of landscape maintenance, makes the “rental company” house an eyesore as far as grass, weeds, etc. are concerned.
I do not begrudge the previous owner for selling to the rental company. His asking price was met so he was happy. And in the last few years, other houses in that subdivision have taken 1-2 years to sell. What I have an issue with is these vulture rental companies acting as mercenaries and treating houses and the neighborhood as so much fodder on a balance sheet.
One could also make the argument that without the rental company sticking it’s nose where it does not belong, the (ahem, cough, cough) free market would have been allowed to work somewhat. By that I mean if this particular house had also taken a long time to sell like the others in that neighborhood, and had subsequent price reductions in order to sell it, then maybe the average housing price in that neighborhood/town/suburb would have gone down helping affordability.
From the Business Insider published today:
“In fact, the typical CEO made a whopping 312 times their median employees’ salary in 2017, according to the Economic Policy Institute.”
Note that is vs median salary not lowest paid.
The self serving disconnect between the management class and labor class is truly amazing.
Work is not valued. And the contribution to productivity is extracted and given to ownership. It’s not income inequality we should emphasize but simple fairness. Let’s call it Income Fairness.
“fairness” is too vague and insubstantial a concept around which to base any kind of rights, much less what some should get or we should do as a society.
we once thought it was “fair” as a society to enslave people. after we stopped that (and not because it wasn’t “fair”, but as a political move), we thought it was “fair” to continue to deny them many of their rights because they weren’t “white”.
huge numbers of us still think it is fair that people die from various issues caused by their “unwillingness to work” or “unwillingness to work smarter”. how many times do people say “if you don’t get more education, you can just shut up about earning enough to live on. working at McDonald’s, you are slacking and therefore can not demand anything. go to school, fool!” people argue all of the time that a “living wage” is not fair, because a person who does low-value jobs isn’t making enough money for their employer to justify the wage (basically, profit produced by that employee would either be nil or zero). and that is perfectly “fair” to these arguers.
fair is the idea that some deserve more and some less, due to something being “earned” by someone. it is a nice idea to teach children. real world morality is much more complicated than that, and a society of justice and laws and policies and bureaucracies can not be based around that. waaay too nebulous, and open to interpretation. everyone -knows what “fair” is- when they see it, because everyone’s definition of “fairness” is different. as some kind of lofty ideal, it is fine. in practice, it is meaningless.
Is this simply a Rip van Winkle account of the middle-class situation that has been well-reported and vigorously commented upon for some time? What am I missing?
The shift came when ol’ Rip realized that the rumbling sound he heard was not the sound of the ghostly sailors bowling but the sound of distant cannon fire.
The middle class stands upon the floor provided by the working class. And that floor is failing, as the human capital of society is gradually, but with increasing rapidity, plundered, from the bottom up.
The poor used to have more than they do now, and be less dependent on government redistributions of income.
Even the middle class owns less productive capital, as the small business owners who used to populate the main streets of American towns have been driven out of business by the Walmarts. Those businessmen were the social elites of their communities, giving those communities leadership, shape, structure and dimension.
Owning less productive capital, their communities pretty much hollowed out, the middle class have lost much of their self sufficiency, and have become increasingly dependent on the whims of distant oligarchs. First the Walmarts. Now the Amazons. And there will be even fewer resources available to support the necessary services local communities provide.
The middle class are right to be afraid. The distant oligarchs and their bankers will only allow so much debt before they pull out the rug.
Too bad no one paid attention what was happening to the working poor. Long ago, the 1% used to command 7% of the nation’s income. Now they command 21%. That 14% had to come from someone.
With almost 40 years of work under my belt, I have been passing along some advice to my kids to help them navigate the current “middle class conundrums”:
1. Owning a home is unlikely to make you wealthy. With just a few major city core exceptions, don’t expect it to go up by more than inflation over the decades. So buy or rent just what you need and do real analysis of what you need and why.
2. Only live in a big expensive city if you need to for your chosen career. The smaller cities have a lot of opportunity for people with good work habits, even in the “Rust Belt” and the living costs are far lower.
3. College degrees are useful. Getting them with large debt loads is a bad idea though. Don’t take on more student debt than about 2/3 of your expected starting salary for a four year degree and take on little or not debt for a 2-year degree.
4. Going to a name-brand school is worthwhile if you don’t have to rack up significant extra debt. Otherwise, pick college and university by major and cost. Your internal traits make a far bigger difference than the school you went to.
5. Only go to graduate school if your desired career path requires it. Otherwise, you are losing years of earning power while incurring costs and debt. If you want a grad degree just for the joy of it, do it as night school as a hobby.
6. Start a Roth IRA with monthly contributions early, even if it is only $50/month. It builds habits and over the years will likely ensure you are in the top 25% in assets.
7. We are in a golden age of investing right now compared to 30 years ago. You can have worldwide, multi-asset class diversified investments at an annual expense ratio of 0.25% which was unheard of at the beginning of my career. So inexpensive Target Date funds or similar vehicles from companies like Vanguard mean you can do fire-and-forget investing while you focus on the rest of your life.
8. Don’t assume the full value of a company or state pension will be there when you retire. These are rife with deliberate and accidental mismanagement and partial defaults are likely with many of them. Instead save so that you are not reliant on them for a basic acceptable standard of living.
8. You don’t need financial advisors for investing, just to help you with personal finance instead. But that is not what they are usually selling, so 99% of the purported financial advisors are to be avoided as they are hazardous to your finances.
10. Try to get a positive cash flow in your life as early as possible to dramatically reduce stress. That is difficult if you have kids, large student loans, or large mortgage/rent costs, so those are the big decisions you need to make on life-finance balance.
Regarding Social Security, it is currently structured to provide 75% to 80% of its current benefits starting in 2034. That is still a significant safety net, but would require Congress to act to get it back to around 100%.
Medicare is just part and parcel of the US healthcare cost issues. If the US can get down to less than 14% of GDP in healthcare expenditures while providing universal coverage, then the Medicare/Medicaid funding issue effectively goes away. This is not impossible as the US is the only developed country that is above 14%.
Elizabeth Warren had a good speech at UC-Berkeley. She focused on the middle class family balance sheet and risk shifting. Regulatory policies and a credit based monetary system have resulted in massive real price increases in inelastic areas of demand such as healthcare, education and housing eroding purchasing power. Further, trade policies have put U.S. manufacturing at a massive disadvantage to the likes of China, which has subsidized state-owned enterprises, has essentially slave labor costs and low to no environmental regulations. Unrestrained immigration policies have resulted in a massive supply wave of semi- and unskilled labor suppressing wages.
Recommended initial steps to reform:
1. Change the monetary system-deleverage economy with the Chicago Plan (100% reserve banking) and fund massive infrastructure lowering total factor costs and increasing productivity. This would eliminate
2. Adopt a healthcare system that drives HC to 10% to 12% of GDP. France’s maybe? Medicare model needs serious reform but is great at low admin costs.
3. Raise tariffs across the board or enact labor and environmental tariffs on the likes of China and other Asian export model countries.
4. Take savings from healthcare costs and interest and invest in human capital–educational attainment and apprenticeships programs.
5. Enforce border security restricting future immigration dramatically and let economy absorb labor supply over time.
Video of UC-B lecture:
https://www.youtube.com/watch?v=akVL7QY0S8A&feature=youtu.be
As I have said in other comments, I like Liz Warren a lot within the limits of what she is good at doing (i.e. not President) such as Secretary of the Treasury etc. And I think she likes the media spotlight and to hear herself talk a little to much, but all quibbling aside, can we clone her??? The above comment and video just reinforce “Stick to what you are really good at Liz!”.
I am not a Liz Warren fan boi to the extent Lambert is of AOC, but it seems that most of the time when I hear Warren, Sanders, or AOC say something my first reaction is “Yes, what she/he said!”.
The priority for the GOP has been making a massive gift to corporate America to spend on share buybacks, the one thing also Trump stood for that Hillary did not that made him electable was no more pointless wars, however he seems to have been turned around on this one. Even the massive gift to corporate America could have been justified if it was done buy taking a lot of the healthcare costs off their shoulders rather than cutting tax, now a huge chance to both improve healthcare and stimulate the economy has been missed.
Tulsi seems to be the only candidate on the no more silly wars ticket, this alone can fund a huge part of the middle classes solutions. Expect the DNC to rig the race in favour of a pro war for Israel candidate …
the FIRE sector is not your friend.
Banks exist to lend money.
In paper money when they have a unmentionable bailout guarantee there is not limit to credit creation – as long as collateral prices keep going up – which they will because there is no way to protect the value of ones savings except in bank collateral assets.
This is logical consequence of paper money.
The Fed has exacerbated America’s new housing bubble – Financial Times