Posted on 02/20/2014 12:46:02 AM PST by 2ndDivisionVet
The biggest issue facing the American economy, and our political system, is the gradual descent of the middle class into proletarian status. This process, which has been going on intermittently since the 1970s, has worsened considerably over the past five years, and threatens to turn this century into one marked by downward mobility.
The decline has less to do with the power of the “one percent” per se than with the drying up of opportunity amid what is seen on Wall Street and in the White House as a sustained recovery. Despite President Obama’s rhetorical devotion to reducing inequality, it has widened significantly under his watch. Not only did the income of the middle 60% of households drop between 2010 and 2012 while that of the top 20% rose, the income of the middle 60% declined by a greater percentage than the poorest quintile. The middle 60% of earners’ share of the national pie has fallen from 53% in 1970 to 45% in 2012.
This group, what I call the yeoman class — the small business owners, the suburban homeowners , the family farmers or skilled construction tradespeople– is increasingly endangered. Once the dominant class in America, it is clearly shrinking: In the four decades since 1971 the percentage of Americans earning between two-thirds and twice the national median income has dropped from 61% to 51% of the population, according to Pew.
Roughly one in three people born into middle class-households , those between the 30th and 70th percentiles of income, now fall out of that status as adults.
Neither party has a reasonable program to halt the decline of the middle class. Previous generations of liberals — say Walter Reuther, Hubert Humphrey, Harry Truman, Pat Brown — recognized broad-based economic growth was a necessary precursor to upward mobility and social justice. However, many in the new wave of progressives engage in fantastical economics built around such things as “urban density” and “green jobs,” while adopting policies that restrict growth in manufacturing, energy and housing. When all else fails, some, like Oregon’s John Kitzhaber, try to change the topic by advocating shifting emphasis from measures of economic growth to “happiness.”
Other more ideologically robust liberals, like New York Mayor Bill de Blasio, call for a strong policy of redistribution, something with particular appeal in a city with one of the highest levels of income inequality in the country. Over time a primarily redistributionist approach may improve some material conditions, but is likely to help create a permanent underclass of dependents, including part-time workers, perpetual students, and service employees living hand to mouth, who can make ends meet only if taxpayers subsidize their housing, transportation and other necessities.
Given the challenge being mounted by de Blasio and hard left Democrats, one would imagine that business and conservative leaders would try to concoct a response. But for the most part, particularly at the national level, they offer little more than bromides about low taxes, particularly for the well-heeled investor and rentier classes, while some still bank on largely irrelevant positions on key social issues to divert the middle class from their worsening economic plight.
The country’s rise to world preeminence and admiration stemmed from the fact that its prosperity was widely shared. In the first decades after the Second World War, when the percentage of households earning middle incomes doubled to 60%, it was no mirage, but a fundamental accomplishment of enlightened capitalism.
In contrast, the current downgrading of the middle class undermines the appeal of the “democratic capitalism” that so many conservative intellectuals espouse. In reality, capitalism is becoming less democratic: stock ownership has become more concentrated, with the percentage of adult Americans owning stock the lowest since 1999 and a full 13 points less than 2007. The fact that poverty — reflected in such things as an expansion of food stamp use — has now spread beyond the cities to the suburbs, something much celebrated among urban-centric pundits, is further confirmation of the yeomanry’s stark decline.
How our political leaders respond to this challenge of downward mobility will define the future of our Republic. Some see a future shaped by automation that would “permanently end” what one author calls “the age of mass human labor,” allowing productivity to rise without significant increases in wages. In this world, the current American middle and working class would be economically passé.
One would hope business would have a better option that would restart upward mobility. Lower taxes on the investor class, less regulation of Wall Street, and the mass immigration of cheap workers — all the rage among investment bankers, tech oligarchs and those with inherited wealth — does not constitute a compelling program of middle-class uplift. Nor does resistance, particularly among the Tea Party, to make the human and physical infrastructure investment that could help restore strong economic growth.
Fortunately history gives us hope that this decline can be turned around. The early decades of the Industrial Revolution saw a similar societal decline, as once independent artisans and farmers became fodder for the factory lines. Divorce and drunkenness grew as religious attendance failed. But a pattern of reform, in Britain, America and even Germany, helped restore labor’s place in the economy, and rapid growth provided the basis not only for the expansion of the middle class, but remarkably improvements in its well-being.
A pro-growth program today could take several forms that defy the narrow logic of both left and right. We can encourage the growth of high-wage, blue-collar industries such as construction, energy and manufacturing. We can also reform taxes so that the burdens fall less on employers and employees, as opposed to those who simply profit from asset inflation. And rather than impose huge tuitions on students who might not finish with a degree that offers employment opportunities, let’s place new emphasis on practical skills training for both the new generation and those being left behind in this “recovery.” Most importantly, the benefits of capitalism need be more widely shared if business hopes to gain support from the middle class for their agenda.
I have yet to hear one of the kool-aid drinking free trade crowd give me a logical reason as to why China, who has missiles pointed at us, should get the same trade treatment as Japan, who is a steadfast ally.
true!!!
Japan holds as much US Treasuries as China. One trillion dolars or so. They do this as a favor to us, due to us defending them against China. Under George Bush this works. Under Obama this quid pro quo is unreliable
When a hot war comes with China and/or Russia the “Free Traitors” will be hanging foirm the light poles everywhere.
Do away with withholding and make everybody write a quarterly check like the self employed do, that would change some minds. Also set up the tax code so ANYBODY/EVERYBODY who works pays something. No more 47-50% with no skin in the game.
Exactly! There is a severe lack of trust of government. Why take the risk when at any time some agency will descend upon you? Especially when you are not of the ‘right mind’. See GM dealers who lean Republican that were closed by ‘restructuring’ from the Bailout.
Some people just look the other way.
All true. Meanwhile, the runaway proliferation of law and regulation buries the small business person and stacks the deck against him in favor of big companies. Estate taxes force the sale of family farms to the benefit of big corporate farming.
The Democratic Party and Establishment Republicans are fully deserving of any horrible, painful, miserable demise that the American people can deliver on them.
Actually that means to me, the sort of investment which is currently (and has been going, for the last two decades at least) to Asia.
Everyone is sending investments to Asia.
For an entire generation, everyone has been selling out America.
America won the second world war, and is now selling out everything to Asia.
Everything.
We won the war, and we’re now losing.
It is absurd, but it is true.
Tell that to Chrysler.
Liberal democrats are destroying the middle class.
I think thats the plan Stan. The fundamental transformation of America. In five short years Bam and company have nearly destroyed the middle class.
Why do you think Barry never looks upset or stressed out about the unemployment? Thats the plan. Everybody on the dole and/or working 29 hours per week.
its the goal of the elites to make themselves further elites...period...people with money want more of it and they don’t care if billions in the world go hungry to do it....
Exactly.
Bump. Someone gets it.
There is very little “middle class” left. It is either up or down. Not much in between any more.
Reign in the FedGov taxing and regulatory burden, those jobs will come flooding back...
Until then, ain’t nothing coming back
The problem is, where are the Republicans?
Republicans really need to start advocating for Americans once again.
For over an entire generation, we have been sending American jobs elsewhere.
Bring them back. Now.
GOP do something. Stop stalling, and stop sitting on the sidelines.
The author is actually describing the later stages of the Industrial Revolution, circa 1840, that culminated in the revolutionary year of 1848 and the penning of the Communist Manifesto. In that Marx and Engels predicted the increasing immiseration of the proletariat, decreasing profits, decreasing productivity, increasing illiteracy (by definition the real proletariat is illiterate) - none of these things took place. Instead, the proletariat became more literate - literate workers need less training - profits increased, production increased, and the proletariat as classically defined were wiped out by class mobility, becoming the despised petit bourgeoisie, which is really what the modern working class is. Proletarians don't own cars, TVs, or union pension funds.
Marx and Engels were right about one thing: a petit bourgeoisie so invested in capitalism because it was what had increased their quality of life, was a massive barrier against revolution that made the same promises (and never brought them to pass, but that was for the future to reveal).
It's still the case. The middle class, which is, actually, the taxable working class in America, must die in order for another model to flourish, the Marxist model, where a wealthy ruling class doles out largesse to the impoverished masses who by their very dependency cannot say "no". To effect this death the current ruling class must redistribute the income of the middle class to the dependent classes, purchasing the support of the latter while permanently addicting them to the payments. Progressives stoutly deny the existence of this ruling class while not so secretly yearning to join it. "They intend to rule wisely, but they intend to rule."
It is in this sense, I think, that the author intends the statement that the middle class is "turning" - it is actually being turned - "Proletarian", that is, is being impoverished, marginalized, demonized, and forced into dependency. I am inclined to believe that no set of economic programs will be enough to stop this sort of deliberately induced decay, that on the contrary, the most likely strategy to stop it is to strike at its promoters, discredit, disempower, and disenfranchise those who are causing it. That is a necessarily political act; it may be a necessarily violent act as well. The author is too polite to point this out. I am not.
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