WHO DESTROYED THE MIDDLE CLASS – PART 1

“Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population. Federal policy is increasingly dictated by the wealthy, by the financial sector, and by powerful (though sometimes badly mismanaged) industries such as telecommunications, health care, automobiles, and energy. These policies are implemented and praised by these groups’ willing servants, namely the increasingly bought-and-paid-for leadership of America’s political parties, academia, and lobbying industry.” – Charles FergusonPredator Nation

The Federal Reserve released its Survey of Consumer Finances last week. It’s a fact filled 80 page report they issue every three years to provide a financial snapshot of American households. As you can see from the chart above, the impact of the worldwide financial collapse has been catastrophic to most of the households in the U.S. A 39% decline in median net worth over a three year time frame is almost incomprehensible. Even worse, the decline has surely continued for the average American household through 2012 as home prices have continued to fall. Median family income plunged by 7.7% over a three year time frame and has not recovered since the collection of this data 18 months ago. Even more shocking is the fact that median household income was $48,900 in 2001. Families are making 6.3% less today than they were a decade ago. These figures are adjusted for inflation using the BLS massaged CPI figures. Anyone not under the influence of psychotic drugs or engaged as a paid shill for the financial oligarchy knows that inflation is purposely under reported in order to keep the masses sedated and pacified. The real decline in median household income is in excess of 20% since 2001.

The destruction of the blue collar jobs has been underway since the early 1970s. And the relentless decline in real blue collar wages has followed a bumpy downward path for decades. Sadly, the average person doesn’t understand the insidious destruction caused to their lives by the Federal Reserve generated inflation, as they actually believe their wages today are higher than they were in 1973. The reality is the oligarchy has used foreign wage differentials and the perceived benefits of globalization to ship manufacturing and now service jobs to Asia while using their captured mainstream media to convince the average American that this has been beneficial to their lives. Using one of their 15 credit cards to buy cheap foreign goods made by people who took their jobs was never so easy.  I wonder if the benefits of being able to buy cheap Chinese electronics, toxic dog food, and slave labor produced igadgets outweighed the $2.3 trillion increase in consumer debt, 27% decline in real wages, 7 million manufacturing jobs lost since the mid-1970s, 46 million people on food stamps, $15 trillion increase in the National Debt since 1978, and a gutted decaying industrial base.

young wage high school earners

Not only have the oligarchs gutted our industrial base, resulting in enormous job losses among middle aged industrial workers, but they are now in the process of impoverishing the youth of this country by sucking them into crushing college debt with the false promise of decent paying jobs when they graduate with a degree in feminist studies from the University of Phoenix. The fabricated mantra that a college education guarantees a good paying job and a better future is not borne out by the facts. There are over 4,800 institutions of higher learning in this country, with only about 50 considered elite. There are another few hundred top notch institutions, with a few thousand mediocre schools and hundreds of for profit on-line diploma mills exploiting the easy Federal government debt to lure millions into their profit scheme of bilking unemployed naïve middle aged dupes and eventually the American taxpayer. The average student loan debt per student is $29,000. Student loan debt outstanding has risen from $200 billion in 2000 to over $1 trillion today. The Federal Government is blowing another bubble. They are the issuer, regulator and guarantor of these loans. They are making the loans with teaser rates to the ultimate in subprime borrowers – students without jobs going for worthless degrees at mediocre schools. The taxpayer is on the hook for the billions in loses that will surely follow. The payoff for this quadrupling of debt has been an 8% real decline in wages for college graduates since 2000. The monetary policies of the Federal Reserve and bipartisan fiscal policies of our government have led to this dreadful job market for the middle class.

college graduate wages

The mainstream media dutifully reported a few key highlights from the Federal Reserve report and moved onto more important issues like Snooki’s pregnancy and the octomom’s new porno gig. We certainly couldn’t expect business journalists at Bloomberg, CNBC, NYT, or CNN to actually analyze the data, produce an intelligent dialogue of the causes, and reach a conclusion that the affluent and influential on Wall Street and in Washington DC caused the average family in this country to endure tremendous hardship while the oligarchy plundered and pillaged the countryside, stuffing their pockets with ill-gotten gains. Each of the ideological camps within the oligarchy trot out the usual suspects to blame the other ideological camp, while doing nothing to change the existing paradigm. Krugman and Carville are assigned the task of blaming Republican policies and dogma for the demise of the middle class. Obama and his minions already had their press release prepared, blaming George Bush and claiming the median family has made tremendous strides since he assumed command in2009. Mitt Romney (worth $250 million), whose pocket change exceeds the annual median household income of $45,800, feels the pain of the average American family and proposes a tax decrease for billionaires and less overbearing regulation on the honorable Wall Street banks in order to help the average family. It’s nothing but Kabuki Theater as the characters play their assigned parts in this elaborate display. Gary Wills cuts right to the chase:

“Yet while the rest of the populace was suffering, the rich just got richer. In 2009 and 2010, years in which millions were unable to find work, the top one percent reaped 93% of the ‘recovery’ income, and corporations are making more than they ever did. And the Republicans can still propose even further cuts in the taxes of ‘job creators’ whose only job creation has been for their own lawyers and lobbyists.”

What you will not receive from the corporate mouthpieces in the mainstream media is an explanation of where the money went, who stole it and why it happened. The theme from the media is the loss in net worth and decade long decline in household income was unavoidable and due to circumstances beyond anyone’s control. This is a false storyline perpetrated by those who have stolen your money. It’s been a bipartisan screw job and it was initiated by Clinton, Rubin, Gramm and Leach, who deregulated the banking system in 1999 by repealing the Glass-Steagall Act, but made it clear the Greenspan Put would always be in place to protect the banks from their own recklessness, greed and hubris. As a result, Wall Street could go ahead and take irresponsible financial system destroying risks in pursuit of vast riches, knowing they could count on the unlimited checkbook of Uncle Sam if things went south, and that’s exactly what happened. Heads they won, tails you lost. It’s good to own the politicians, regulators, and media.

Dude, Where’s My Net Worth?

“Sometime around the year 2010, Xers will hit a hangover mood like that of the Lost in the early 1930s and the Liberty in the late 1760s: a feeling of personal exhaustion mixed with a new public seriousness. The members of this forty- and fiftyish generation will fan out across an unusually wide distribution of personal outcomes, reminiscent of a night at the bingo table. A few will be wildly successful, others totally ruined, and the largest number will have lost a little ground since the days of Boomer midlife.” – Strauss & Howe – Generations – 1991

Neil Howe and Bill Strauss wrote their first generational theory book six years prior to their epic Fourth Turning prophecy. It appears they nailed it. Generation X households saw their net worth crushed, with a 54% loss in three years. The Baby Boomer households also took a beating in this banker engineered financial collapse. The Silent generation has survived this downturn relatively unscathed.  Most of the Silents traded down from their primary residence at or near the top of the housing boom. As Neil Howe points out:

“Most sold or annuitized their financial assets at a much better moment in the history of the Dow. Even if they didn’t, they are more likely than Boomers or Xers to be getting retirement checks from defined-benefit corporate or government plans that are unaffected by the market.”

The Millenials and late Xers did not lose much because they didn’t have much to lose. Most did not own a house or stocks. As the economy continues to deteriorate the generational tension builds. The Silents and Boomers, who vote in large numbers, have not and will not vote for anyone who attempts to reform our entitlement system and make it economically viable over the long-term for young people just entering the job market.

The false storyline about the 2007 through 2010 being an aberration in the long term path to prosperity for the average American family is refuted by the following chart.

This chart paints a long-term picture of generational inequality that has been going on over the last three decades. Over three decades the Silent generation has seen their median real net worth increase by 133%, while GenX has seen their median real net worth decrease by 55% compared to the same age cohort in 1983. Only those 55 and over have seen a real improvement in their net worth over the last 27 years. Considering this period encompassed a seventeen year bull market and the GDP grew from $3.5 trillion to $15.7 trillion, a 450% increase, a few bucks should have trickled down to the average household. Even on an inflation adjusted basis, GDP has risen 125% since 1983. Evidently the economic policies supported by both parties across decades have not floated all boats – just the yachts. Age is only part of the equation. Class is the other piece. There is a class war being waged and the Buffett, Dimon, Blankfein, Romney, Clinton, Koch and the rest of the ultra-wealthy oligarchs are winning. We are now in the midst of a Fourth Turning and the corrupt, dysfunctional, amoral social order will be swept away before the climax of this Crisis.

“Through the Third Turning and into the initial stages of the Fourth, the Silent will prosper, Boomers will cope with declining expectations, and Gen-Xers will get hammered. Throughout history, we have argued, inequality both by class and by age reaches its apogee entering the Crisis era. Indeed, part of the historical purpose of the Crisis is to tear down dysfunctional institutions, vacate positions of entitlement and privilege, rectify the inequality, and create a tabula rasa on which the rising generation can build something new.” – Neil Howe

The reason for the epic collapse of middle class net worth is quite simple when viewed from a 10,000 foot elevation. The great descent in net worth was primarily due to the bursting of the Federal Reserve created real estate bubble. The Case Shiller Home Price Index plunged 28% between 2007 and 2010. The wealth destruction was concentrated among the working middle class because their homes accounted for the vast majority of their household net worth. For the wealthy, housing is a fraction of their vast net worth, while for the lowly poor; homeownership is now only a dream. Of course, between 2000 and 2007 anyone that could fog a mirror was encouraged by George Bush, Barney Frank, the National Association of Realtors, Alan Greenspan, and Wall Street shills to “own” a home. With home prices having fallen an additional 7% since 2010, the middle class has seen a further decline in their net worth. Meanwhile, Ben Bernanke’s ZIRP, QE1, QE2, Operation Twist, and the upcoming “Operation Screw the Middle Class Again” have succeeded in expanding the net worth of millionaires, billionaires and the bonuses of Wall Street bankers, while destroying the fragile finances of little old ladies and middle class risk adverse savers.

case shiller and snp500

Once you dig into the details beneath the thin veneer of Bernaysian obfuscation, you realize the corporate mainstream media storyline of middle class decline has a veiled storyline of a powerful, connected 1%, enriched at the expense of the middle class.

In Part 2 of this three part series I will examine who stole your net worth and in Part 3 why they stole your net worth. Part 4 will require pitchforks, torches and a guillotine.

survival seed vault

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Anonymous
Anonymous

@ADMIN Response from University of Phoenix is hyterical.

Do you plan to visit Jan during office hours? Or, are office hours virtual like the diplomas and jobs they promise?

Colma Rising
Colma Rising

I’m sure Jan VonSproinklenerd has a Master’s in Dutch Ovens.

Zarathustra

Which one of you fucks is a closet phoenix, as well as a snitch?

ThePessimisticChemist

Like Colma said earlier, the shit may be getting worse and ruining lots of people, but in the end those that faced the economy head on will come out winners.

Me and my wife are doing pretty damned awesome, we are going to come out of this recession like a fucking rocket (assuming the economy doesn’t completely tank, at which point I’ll be screwed).

Zarathustra

Llpoh says:

:”DPZ comes back with some of thwe stupidest shit ever. No proof whatsoever does he provide that rich Jews ar putting Israel first (maybe, though, as a standard of loyalty does tend to be God first, then country). He demands that Israel allow an accounting of their nukes. Hey – while we are at it, why not demand the US do the same, for the same reasons! And Russia. And Pakistan. And India. And if they do not, let’s cut off diplomatic relations with them.”

By assassinating iranian nuclear scientists and unleashing viruses such as flash and stuxnet on the world, Israel as proven itself a terrorist nation. If we are ever nuked during peacetime, it is a near certainty that a vaporized piece of the weapon’s shell beared the writing, “made in israel.”

Zarathustra

Llpoh, what do you suppose would happen to these people if Israel couldn’t deport them due to war?

http://news.yahoo.com/israel-put-thousands-africans-detention-camp-184419459.html

Nonanonymous
Nonanonymous

Zara, I’m not sure what Israel has to do with any of this, except in a biblical context, of which Jerusalem was the site of Solomon’s temple, the temple of Israel.

Now, the Supreme Court and other official buildings are literally temples of the Illuminati, bought and paid for by the Rothschilds. Biblically speaking, Israel is being ruled by a King who follows after Baal, but that is OT.

NT is the grace administration, and the pouring out of God’s spirit upon all who chose to accept it. In the not too distant future, the book of Daniel and Revelation speak about what is to occur.

So, yes, in this context, Israel was the center of the known universe in biblical times, and will likely play a central role in future events. However, Israel is only relevant in biblical terms.

I forget, Zara, are you anti-Semitic? If you are, you’re on the wrong side of history, and prophecy. That would make you a dog. How does it feel?

Nonanonymous
Nonanonymous

DPZ, or Zara,

I’ve read through the thread, and see you have an ax to grind about Israelis. If I was you, I would be more concerned about the new world order and global police state, than about the nation of Israel.

Israel is important from a biblical perspective, and is a prize. The battle is between Jesus and his army against the Kings of the world.

“For they are demonic spirits, performing signs, who go abroad to the kings of the whole world, to assemble them for battle on the great day of God the Almighty. (“Behold, I am coming like a thief! Blessed is the one who stays awake, keeping his garments on, that he may not go about naked and be seen exposed!”) And they assembled them at the place that in Hebrew is called Armageddon.
(Revelation 16:14-16 ESV)

Man cannot defeat the great deceiver, it is only by God and his Word that will deliver salvation to the world through Jesus Christ. Grace and peace to all.

Zarathustra

Nonanonymous, I was talking about a government and not a fucking religion. Fuck off.

backwardsevolution
backwardsevolution

Superb writing!!!!! Thank you so much for laying out the ugly truth. Quite frankly, I cannot for the life of me understand why people are not angrier, at least the middle class. I know I am. Rise up, people!

Novista

Stewards of the public purse …

In the ‘you can’t make this shit up’ category, Miami-Dade county bought a fleet of 300 vehicles, mainly Prius five years ago — and misplaced them.

http://www.autoblog.com/2012/04/25/hundreds-of-5-year-old-municipal-vehicles-found-in-miami-that-we/

Novista

flash

You are truly the poster child for cognitive dissonance and language debasement.

When a neocon, or corrupt politician, or a multiational in current times uses the phrase ‘free trade’, it is obvious what their true meaning is. The 1946 era was somewhat different, that was then.

I find it amazing you did not start the deconstruction of Bastiat first, and with others’ doing the heavy lifting. It’s babe and bathwater time, folks. One aspect of Hazlitt’s book is, yes, free trade. But what of his opposition to price controls and monetary inflation and government stimulus? Obviously, when you smother the text, you approve of the converse of those.

bob
bob

I knew this was coming because of Lyndon LaRouche. He knows the answers. He forecasted this financial collapse ages ago. I’m better off for it. Everyone I knew thought i was crazy for listening to him and now, now they say I was right. “Yeah I say and how did it help you?” Being right doesn’t really help. Get with LaRouche people. He was the first to call for restoring the Glass Steagall Act of 19333 which is now HR1489. Of course your news medidiots have informed you of this fact I take it. No?

Zarathustra

Oh goody, a LaRouchie. This could get fun.

RUSS SMITH

Hi!, Patrons Of The Burning Platform Et Al:

If the middle class is suppose to be the class in-between the lower class and the aristrocracy, it appears to me there’s never been a middle class at all. There’s been a class of strugglers who have tried to use their Unions & Constitutions to gain the grounds complementary to a middle class but what this has done mostly is create a windfall for the Union bosses and government regulators via their efforts they thought were aimed at their establishing a middle ground or middle class but it’s never happened in the history of this country from what I can see. While the proposed middle class has been trying to gain an education towards geting ahead to establish themselves as middle class, the Aristocracy is busys already producing billions in profits. So, comes along the rise of communism, collectivism or socialism but they don’t meet out change either, because to survive to produce efforts at establishing themseves towards their goals they all end up unavoidably dependent upon the Aristrocracy to fund them with jobs, money, status, recreation, housing, shopping, fuel, transportation and everything else in-between. If we ever had a self sustaining middle class at all in the United States, it sure eluded my observation that’s for sure. You can’t destroy something that NEVER existed can you? I would call all these attempts “the dependant classes” that couldn’t even have tires on their vehicles, if they didn’t depend upon the Airstocracy to supply them to them.. We might like to immagine we’ve experienced having a middle class that’s been and is being exploited but that’s a fantasy in motion. The world’s Aristocracy has forced the dependant class to use their paper money worldwide escaping the responsibilities of the US Constitution which could NEVER have happened, had there been a true middle class in the first place to keep them in check. Actually, this free for all run of the country over rulling the dependant classes proves that the middle class is only a very dull figmant of immagination or the middle class would have kept the Aristocracy in line with their Constitution. We not only have a rulling Aristocracy rulling we the dependant classes who once thought there was a design for us to become a middle class but now not only are we being rulled by OUR Aristocracy but for how many years have the dependant classes not even been able to purchase their own house but instead are so dependant that they live off of food stamps being provided by their Aristocacy and even relinquished having a legitimate job due to their Aristocracy forcing them onto 99 weeks of unemployment. Now the dependant classes are again being fed the pablum that they can appeal to their Aristocracy for a change, by again attempting to redress their grievances of no middle class through a balot box which is a very cheap way for their Aristocracy to tell the dependant classes: “NO!” NO CHANCE FOR CHANGE! Doug Casey hits the nail on the head, when he comes out and tells us OUR? country is being run by the psychopaths but what do the Aristocrates care about the psychological settings; as long as they remain the rulling class over and above their constituant depandants?

RUSS SMITH, CALIFORNIA
[email protected]

Novista

That’s one hell of a paragraph, Russ …

The Gold Standard

I keep trying to tell people that these so-called “booms”, and busts, such as in housing, dot coms, etc. are all created by the Powers-That-Be. But this is VERY hard for the average person to believe this because they’ve been dumbed down by the likes of American Idol and reality TV.

They’ve been told by the financial media and by their 401k benefit advisors that they should keep all their money in stocks for at least 30 years.

Alan Greenspam, yes, the misspelling is intentional, has said himself that the average American needs to increase their financial education “EXPONENTIALLY”. He didnt say “a little” or “a lot”, but “exponentially”. He knew that most don’t know that they are being screwed, or how they are being screwed.

eb
eb

You all should read Ayn Rand’s book “Atlas Shrugged”. I read it as a teenager (1970’s) and just re-read it. When you finish you will see that you are living what she described in her book (written in the late 40’s/early 50’s).

All living creatures have three choices when their “environment” changes: Adapt, migrate or die.

Richard
Richard

From the inane responses to what should be a serious discussion it is obvious what some of the reasons are for our problems are. However, does anyone remember a man named Ross Perot? he is famous for saying “that giant sucking sound you will hear is the sound of jobs leaving America”. I blame the American Military…. they swear an oath to defend us against ALL enemys, foreign and DOMESTIC they have not done so. They are busy defending us against phoney terrorism in the middle east. Therefore they are foresworn.

Frank James

I’m old enough to remember when I almost didn’t have to ask for a raise. There was something called a “cost-of-living” increase. In 1973 my otherwise smaller salary paid for everything I needed and then some. After Reagan and his ilk, bosses responded to a raise with, “Are you crazy?”. Of course, they got their increases. It was all of that which got me looking for the real answers. I found them after many years of searching and they were along the lines of this article, a good one. I haven’t seen a real decent salary increase for decades. That was part of their plan to destroy the middle class too. You’d better believe it’s class warfare, a term the elite are afraid to hear. Mention it and you will hear nothing but denials.

Buy commodities, collectibles – tangibles – if you can and don’t waste money is my best advise.

Ulysses
Ulysses

The net worth chart using 2007 as the benchmark year is completely misleading because it is based on the illusory bloated house prices at the peak of the bubble and probably is just another concealed attempt at placing the blame on Obama. One should go back to at least 2000 to get a better picture.

SSS

@ Novista, who said, “That’s one hell of a paragraph, Russ.” I was going to give Russ Smith an English 101 lesson, but your response was a hell of a lot better.

@ eb. Pls check the right hand column of stuff on this website that is highlighted in blue. Scroll down to the topic of Admin’s recommended books. #3 on the list is “Atlas Shrugged.” Scroll further and you will also find Ayn Rand’s “The Fountainhead.” Many of the people who visit this site have read one or both. If you are a fan of “Atlas Shrugged” and agree with Ms. Rand’s philosophy, you are among friends here. This will not, however, exempt you from being hammered mercilessly if you say something stupid, the definition of which is extremely fluid.

Novista

Richard

Some of us here were having serious discussions when you were a twinkle in the one-eyed snake.

SSS

@ Richard, who said, “I blame the American Military.”

Really? The MIC (Military Industrial Complex) destroyed the middle class? Please make your case.

C.A
C.A

Mr. Quinn, I was your admirer before “The Burning Platform” became a website. You are an extraordinarily gifted analyst and writer. When you use obscenities and insults to discredit those who express differing opinions, you debase yourself and lower the appeal of your otherwise wonderfully informative website. “Fuckwad?” Surely, Mr. Quinn, you are capable of more articulate and persuasive replies to dissenters.

Colma Rising
Colma Rising

C.A:

Perhaps you don’t realize the volume of purely nonsensical drivel that shows up in the comment section?

After about the thousandth time of having a conversation interrupted by a gibbering miscreant, simply ignoring or nicely answering the schizophrenic musings of tiring theories and ignorant, repetitive attacks, don’t you think the term “Fuckwad” is an understatement?

The Burning Platform is not a tea and crumpets party… It is more like a noisy pub.

Your choice, C.A:

“Milk for babes, meat for strong men….”

Colma Rising
Colma Rising

You won’t be disappointed, administrator.

You’ll finish in a day or two.

I have a post that never seems ready… Believe it or not, Heinlein had a lot of answers if a mind can wrap around metaphors. Explaining the metaphors clearly?

I fall short and delete volumes often.

Maybe a bit at a time is a better approach.

Looking at the story from a 4th Turning perspective is outright eerie. It’s all in there, not even between the lines more often than not.

Colma Rising
Colma Rising

Yeah… just looked at my latest crack at it.

Specious garbage. Not even what I wish to express.

DE-LETE

I’ll try it again after I burn this fever off.

Novista

C A

Maybe there should be a warning ikon with the banner” No PC here!

Alternatively, there is always the advice of the Good Book: “If thine eye offend thee, cast it out.”

But Colma’s analogy is most correct: a noisy pub. Think! would you accost the loudest of a bikie gang in a pub, :”Sirrah, I object to your language.”

Connor
Connor

We of Gen-X have a very important task to accomplish before we depart this world: we need to save the best of Western Civilization. The Baby Boomer politicians have wrecked so much and left us with some very difficult problems. This current and third Boomer president is arguably the worst yet. Times will certainly get very difficult for many. Gen-X and the Millennials need to take the lead, pull this country together and save the best of our culture. The problems (of the NATO countries) are much bigger than the financial troubles.

Colma Rising
Colma Rising

Connor:

I am glad you commented here instead of that old article.

You missed some threads about that very subject.

Beware of the backlash… You are aware of Strauss and Howe?

Joe Smith
Joe Smith

In US (and over the world) Jewish people tend to form highly organized minorities for seeking power and riches. By and large this happens by infiltrating certain high-end jobs (law, finance, corporate management and media) and promoting each other to influential positions within the guild. Next stage is using the riches to buy institutional support from the politicians – Jewish banks get saved, Jewish law firms have better odds at winning against the state, etc. This gives them vastly disproportionate (to their electoral numbers) influence into the decision making process of the state, creating a center of misplaced, unaccountable power.

The presence of a powerful rich minority with its own code of conduct and disproportionate access to power, which is unaccountable to the normal process (elections for people and trade law for corporations) is the very definition of hereditary aristocracy. The Jewish people may scream all they want about how oppressed they were, etc, but the matter of the fact is that they seek positions at the top of the state, push their agendas and when things fail are never accountable.

Jonathan Moore

Loved reading this – you touch on many points close to my heart. There are some who think that this disingenuous inflation creep does not affect the working class because their salaries rise in lock-step with inflation… not this time round.

Not only is the middle class disappearing, the working class is being trodden into the turf.

Thanks for the write up.

terry b
terry b

when you named those responsibe for housing bust you left out

chris dodd,maxine waters and her good friend franklin

barney frank,chris dodd and maxine waters are a team

they are the king queen and prince of fannie and freddie

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