Authored by Charles Hugh Smith via OfTwoMinds blog,
Rounding up the usual suspects won’t restore a vibrant middle class.
What killed the middle class? The answer may well echo an Agatha Christie mystery: rather than there being one guilty party, it may be that each of the suspects participated in the demise of the middle class.
If you doubt the middle class has expired, please consider the evidence:
The Middle Class Is Shrinking Everywhere — In Chicago It’s Almost Gone
People tend to self-report viewing themselves as middle class, but by the standards of previous eras, they lack the basics of middle class prosperity. I laid out 12 core characteristics of classic middle class security in What Does It Take To Be Middle Class? (December 5, 2013)
By these standards, perhaps one-third of American households have the same security and assets as previous generations who identified themselves as middle class: Honey, I Shrunk the Middle Class: Perhaps 1/3 of Households Qualify (December 28, 2015).
The ten primary drivers of the erosion of the middle class are:
1. The shifting of pension and healthcare costs and risks from the state and employers to employees. (see chart below)
2. The decline of safe, secure high-yielding investments as central banks have driven savers into risky, crash-prone assets such as stocks and junk bonds.
3. The decline of scarcity value in college diplomas that were once the ticket to middle class security. How Many Slots Are Open in the Upper Middle Class? Not As Many As You Might Think (March 30, 2015).
4. The inexorable rise in big-ticket costs: higher education, healthcare and housing. Even as wages stagnate, these costs continue rising, claiming an ever-larger share of household incomes, leaving less to save/invest.
5. The transition from a stable economy with predictable returns to a financialized boom-and-bust economy that wipes out middle class wealth in the inevitable busts but does not rebuild it in the booms.
6. The regulatory and administrative barriers to self-employment, forcing most of the workforce into wage-slavery and/or dependence on the state. Endangered Species: The Self-Employed Middle Class (May 2015).
7. The rising exposure of the U.S. workforce to highly educated, lower-cost competing workforces in a globalized economy.
8. The decline of labor’s share of the U.S. economy: the slice of the pie distributed to earned income is declining.
9. The share of the earned-income slice going to the top 5% is rising.
10. The wealth of the middle class is tied up in the family home, a non-income producing asset prone to the wild swings of housing bubbles and busts. Stagnation Nation: Middle Class Wealth Is Locked Up in Housing and Retirement Funds (October 25, 2017).
That’s a lot of knives plunged into the middle class. Rounding up the usual suspects won’t restore a vibrant middle class; that will require a systemic transformation of the U.S. economy and society from the ground up.
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The ten primary drivers of the erosion of the middle class are:
How Capitalism KILLS Nations
https://www.youtube.com/watch?v=EkcRXl7QD4M
There are three major factors that caused the death of the Middle Class:
1. Central and fractional reserve banking that created trillions of unearned, fraudulent wealth that was transferred from honest workers to a paraistic gangster elite. This “elite” received these unearned dollars which they used to buy and corrupt just about everything including Congress, establish a system of cartels and monopolies, and suppress interest rates. In the process, they turned the housing market into one gigantic speculation, driving up prices and making houses almost unaffordable for Middle Class Americans. Savings and pensions were also stolen by an inflation rate that ranges between 8 and 12%, not ~2% put out by the corrupt BLS.
2. The shipping of manufacturing jobs and technology to sweat shops in Asia and elsewhere where products are produced for a fraction of the labor costs in America and sold in the US creating huge profits. This was all carried out under so-called “free trade” agreements which are little more than crony trade deals that enriched corrupt corporations while impoverishing American workers, all carried out with the blessing of a bought-and-paid-for treasonous Congress.
3. The importation of cheap laour from the third world drove down wages and benefitted the big coprorations while the economic costs of immigrants, estimated at over $300 billion per year by the National Academy of Science, were downloaded unto the American Middle Class in the form of higher taxes and reduced services.
Solution: hang the traitors who occupy the highest offices in the land and take back control of the US from the Rothschild bankers and globalists who now control America. This will not be achieved at the ballot box because the entire system is rotten right to the core.
https://www.youtube.com/watch?v=jTW0y6kazWM
Nice video, Flash! Kind of a visual for the wdg comment……posted 2 minutes after but has rec’d not one upvote but mine !
annuit coeptis novus ordo seclorum- the ‘national motto’…..but yet ‘logos’ only sees the masonic theocracy as being the benefactor of mankind ! DC is the Den of Corruption; the pagan stronghold of the world !
Prosperity and debt are killing the middle class.
Prosperity because being middle class shouldn’t be the goal unless you are poor. I was raised poor by my single mom because my father left us with nothing to be with his girlfriend.
I started with very little but following the teachings of my faith and advice of my depression-era grandparents moved from poor to middle/upper middle class and hope to retire comfortably in a few short years. My house is nearly paid for, my kids’ college is all or mostly funded, and my wife has been a stay at home mother because we chose to live on less than we make.
Debt because so many are willing to trade future earnings at pennies on the dollar for immediate gratification. Americans buy too much house, too much car too frequently, and clothing/vacations/toys instead of living within our means. Then, when things get tight we blame the bankers that loaned us the money to support an unrealistic lifestyle because we compared our lot in life to our neighbors who were in debt up to their eyeballs but had nice stuff.
Henry Ford CREATED a market which had not existed when he paid his employees $5.00 per day when the average wage of the day was around $1.25 per day. His premise was not entirely altruistic as assembly line work was monotonous; a way had to be found to retain employees, as well. Of course, the wall street types and the banksters howled that Ford’s wage rates would destroy capitalism (as they knew it-those at the top reap all of the benefits while the proles are forced to live on a bare subsistence wage, due to the machinations of those at the top).
Guess what??
The OPPOSITE happened. Henry Ford knew one of the basic tenets of a truly free, capitalistic society, that a well-paid work force would be able to participate and contribute to a strong economy, unlike what is taught in business schools today-that wages must be kept to a bare minimum and that the stockholder is king. Our free trade politicians have assisted the greedy wall street types and banksters in depressing wages on the promise of cheap foreign labor and products.
A good example of this is the negative criticism that Costco receives for paying its employees well above market wages. These same wall street types praise Wal-Mart for paying its employees barely subsistence wages while assisting them in filling out their public assistance (welfare) forms.
Any sane person KNOWS that in order for capitalism to work, employees need to make an adequate wage. Unfortunately, this premise does not exist in today’s business climate.
Henry Ford openly criticized those of the “tribe” for manipulating wall street and banksters to their own advantage, and was roundly (and unjustly) criticized for pointing out the TRUTH. Catholic priest, Father Coughlin did the same thing and was punished by the Catholic church, despite his popularity and exposing the TRUTH of the American economy and the outsider internationalists that ran it . . . and STILL run it.
Our race to the bottom will not be without consequences. A great realignment is necessary (and is coming) . .
https://www.youtube.com/watch?v=5KTW0nOGIP4
Eventually we become a system based on caste.
The smartest and best are never top dog.
One simple root cause – the immense power of the federal and state governments over the lives, money, economy, business operations, freedom, and liberty of the American public. Without this power, and its application on behalf of the vested interests, NONE of the above listed items would have been possible (or their impact would have been drastically limited by free market choices in other directions).
Its really not that complicated. Government has ALWAYS been the problem. FREEDOM has always been the solution.
Herd animals define ‘freedom’ as guaranteed high herd status. Nice white men are the root cause of your correct root cause. Animal weakness invites animal attack. We are trapped in the Book of Esther. Bigoted white men made the west, egalitarian white men threw it away. I am unemployable and keeping my hate alive it the best I can do today.
The word progressive applied to political causes was the first example of Orwellian doublespeak, Though preceding Orwell himself, It is a purely reactionary effort to sell the end of individual liberty as the benefit of increasingly powerful and intrusive government. The resulting absence of freedom is the principle constraint.
Good points all, but one vitally important issue is absent.
The tax burden on the middle class continues to grow as the government(s), already too large, expands its efforts to be all things to all people.
The wealthy can afford schemes to avoid taxes and an ever expanding percentage of lower income people pay near nothing at all.
gd paul–
“The wealthy can afford schemes to avoid taxes and an ever expanding percentage of lower income people pay near nothing at all.”
which means that most taxes are paid from $ that would have gone to the working & middle class–
which is why ALL tax increases should be opposed–
Imagine blaming capitalism for the ills of central banking (in reference to other comments, not the article). Those two are antithesis. Capitalism has problems but that’s like complaining about chicken-pox when you have AIDS.
The super rich have become the plague on the Earth, not the poor.
How the hell do you think the super rich got rich? The poor make a great cause and a great army of useful idiots. A plague is an excessively large quantity of parasites. Oh, that’s Christian love of the poor. Gotcha. And Jesus loves you too.
https://www.nytimes.com/2019/03/05/us/border-crossing-increase.html
https://thenationalsentinel.com/2019/03/05/confirmed-california-is-protecting-over-5000-illegal-alien-criminals-by-refusing-to-hand-them-over-to-ice/
I saw this coming in 1975/76 and it hit me hard by 1984 ! Spent the next 30 years scrambling and hustling to make good . Ultimately my wife and I did OK however those working government jobs did excessively well in comparison along with the members of the big club . The circle jerk of Wall Street to K-Street to Capitol Street really struck gold manipulating the system as a whole and of course leaving the bulk of middle Americans in a hole holding the bag of debt the club circle jerk created while they got TARP plus bonus middle America got a blue tarp with a coupon from harbor freight .
Now the tax base that supported those government employees is snuffed out and the government pensions are $7 trillon short and government wonks in the courts (judges ) are ruling these pensions must be paid in full regardless of where the money comes from guess where ? The middle class home owner is about to be fucked out of their real property by taxiation so government employees can retire in their mid 50’s by legal edict . See how well socialism works for a few as it crushes the life out of the many .
This is not going to be fun at all .
Does anyone really wonder about gun control leading to confiscation , really ??