The shrinking US middle class

Here’s a story from The New York Times via Instapundit that should surprise no one if they’ve been paying attention, The American Middle Class Is No Longer the World’s Richest. Because it is The New York Times, it is unable to understand the problem, since it puts it down to rising income inequality as the cause, but then there is hardly any major social issue it is willing any longer to discuss honestly, assuming the kinds of people who write for The New York Times any longer even have a clue what causes what. They do, however, take note of this, in a country with the largest expenditure on education per student in the world:

Americans between the ages of 55 and 65 have literacy, numeracy and technology skills that are above average relative to 55- to 65-year-olds in rest of the industrialized world, according to a recent study by the Organization for Economic Cooperation and Development, an international group. Younger Americans, though, are not keeping pace: Those between 16 and 24 rank near the bottom among rich countries, well behind their counterparts in Canada, Australia, Japan and Scandinavia and close to those in Italy and Spain.

But it’s not just the middle class who are being nailed:

The poor in the United States have trailed their counterparts in at least a few other countries since the early 1980s. With slow income growth since then, the American poor now clearly trail the poor in several other rich countries. At the 20th percentile — where someone is making less than four-fifths of the population — income in both the Netherlands and Canada was 15 percent higher than income in the United States in 2010.

But as pointed out here, the plundering of the middle class from both below and above is now standard in the US. This is not from The New York Times:

Much of America’s moneyed elite has already shifted its allegiance to the Left, especially in cities. Wealthy, educated urbanites hold generally liberal social values and can afford the higher taxes “blue” cities like Chicago impose—especially when those taxes help pay for the upscale amenities they desire. Even when the mayoral administration is less friendly, the urban elite tends to get its needs met. At the same time, the urban poor have remained loyal to the Democrats, no matter how little tangible improvement liberal policies make in their lives. And the various unions, community organizers, and activist groups that advocate for the poor profit handsomely from the moneys directed toward liberal antipoverty programs.

The US is a nation living on its capital and not its income. It will not end well.

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39 Responses to The shrinking US middle class

  1. RodClarke

    The US is a nation living on its capital and not its income

    Exactly! and directly as a result of taxes on human productivity (payroll tax, income tax, etc)

  2. Alfonso

    The end comes when oil is no longer priced in US$s. Being able to print those IOUs for the price of the paper and ink as the world’s reserve currency has allow the US to destroy itself. An IMF drawing rights basket is a replacement that beckons.

  3. Squirrel

    “Much of America’s moneyed elite has already shifted its allegiance to the Left, especially in cities. Wealthy, educated urbanites hold generally liberal social values and can afford the higher taxes “blue” cities like Chicago impose—especially when those taxes help pay for the upscale amenities they desire. Even when the mayoral administration is less friendly, the urban elite tends to get its needs met. At the same time, the urban poor have remained loyal to the Democrats, no matter how little tangible improvement liberal policies make in their lives. And the various unions, community organizers, and activist groups that advocate for the poor profit handsomely from the moneys directed toward liberal antipoverty programs.”

    That is depressingly familiar – the new conspicuous consumption for the first world elites is an exquisite social and environmental conscience, which does much more to make them, rather than the purported beneficiaries of their latter day noblesse oblige, feel good.

  4. Infidel Tiger

    Disappearing middle class, no income mobility and an elite who sneer at anyone who does manual labour. They’re pretty much fucked.

  5. Bruce of Newcastle

    Because it is The New York Times, it is unable to understand the problem, since it puts it down to rising income inequality as the cause

    The progressives are stuck in a timewarp…literally. If you look at income of Americans over their lifetime the story is actually quite different:

    It turns out that 12 percent of the population will find themselves in the top 1 percent of the income distribution for at least one year. What’s more, 39 percent of Americans will spend a year in the top 5 percent of the income distribution, 56 percent will find themselves in the top 10 percent, and a whopping 73 percent will spend a year in the top 20 percent of the income distribution….

    So nearly three-quarters of Americans earn in the top 20% of income at least one year of their life.

    Perhaps the left would be better off by letting them do that in more than one year of their life.

    The “Rich” Are Everywhere

  6. brc

    Disappearing middle class, no income mobility and an elite who sneer at anyone who does manual labour. They’re pretty much fucked.

    Australia is no better in this regard.

    At least in the us you can still buy a decent car for little money. Or even a house on a normal wage. It’s even possible to buy a full strength beer from a man without a clipboard and high vis vest. So there are some positives.

  7. C.L.

    So Obama has destroyed the US middle class.

    Mission Accomplished.

  8. Token

    Much of America’s moneyed elite has already shifted its allegiance to the Left, especially in cities. Wealthy, educated urbanites hold generally liberal social values and can afford the higher taxes “blue” cities like Chicago impose—especially when those taxes help pay for the upscale amenities they desire

    This is the political reality that follows affluence and successful economic reform.

    I like the fact that Abbott is trying to curb the control of the crony class which destroy the trust between the middle class and political parties set up with the purpose of defending the interests of this class against the Upper/Lower class attacks.

    Abbott moves on Liberal carpetbaggers

  9. Token

    So Obama has destroyed the US middle class.

    Mission Accomplished.

    Oh no, he is what the morons wanted, they got what they voted for.

    I keep going back to Ed Koch’s words with the supposedly sensible people of New York removed him for David Dinkins…

    “The people have spoken…and they must be punished.”

  10. Driftforge

    60% of Americans marry someone of similar educational attainment, and have done for 3 generations now.

    Both intelligence and the capacity to store wealth are strongly genetically driven.

    Women have, on average, one less child for every four years of education.

    Right there is your increasing inequality. Right there is your decreasing educational outcomes. Add in r-selection from resource rich urban environments, and the tendency to live on its capital and not income that Steve is pointing out… liberalism and democracy, coming home to roost.

  11. Ant

    CL nails it.

    Obama and the ignorantly destructive political class that inhabit his administration are achieving the ‘equality” they’ve been craving for a century.

    Equality in poverty and misery, that is, for everyone but themselves.

    And their only real opposition within the DC Beltway is an equally ignorant Republican establishment class which ruthlessly stomps on any grassroot challengers that come along while enriching themselves with the spoils of office.

    But the writing’s been on the wall for decades and just during the Obama years it’s been flashing in glaringly bright neons a mile high – starting with the type of degenerates he’s appointed as cabinet secretaries, to the judiciary and senior departmental heads.

    Any POTUS who would give AG to Eric Holder and SOS to Hilary Clinton and then John Kerry and SOD to Chuck Hagel, pretty much lays out their intent.

    But, hey, Americans voted to cop it in the clapper twice!

    Some republic.

  12. Token

    Obama and the ignorantly destructive political class that inhabit his administration are achieving the ‘equality” they’ve been craving for a century.

    The stupid Republicans helped Obama by panicking in ’08 when they approved TARP. The $$$$ never ever will go back to pre-TARP levels and the US welfare state & the crony industries have now become critical “job creation” programs (i.e. huge slush funds used to fund DNC election campaigns).

  13. Token

    The progressives are stuck in a timewarp…literally. If you look at income of Americans over their lifetime the story is actually quite different:

    No, too much of the middle class is in a state of mass delusion which allows them to fall for pathetic and transparent rhetorical devices like – Da Rich, Da Murdoch, Da Kochs, etc. They are living a better life then their ancestors who sacrificed could dream about, while whining how bad they have it.

    The rest despair and are demonised as -ists to shut them down.

    One would think that examples like Detroit, much of California & Chicago as warnings of what the future will bring, but they keep voting for more of it.

    I have heard suggestions of running the ’16 RNC convention in the City that Democrat politics unmade – Detroit – to force people to hiding from the consequences.

  14. At the same time, the urban poor have remained loyal to the Democrats, no matter how little tangible improvement liberal policies make in their lives.

    So true.

    It’s a local problem too. Safe Labor seats in this State usually have the worst infrastructure, while marginal ones get all the goodies.

    (I shall just insert a spruik here for my ongoing campaign to make Fremantle a marginal seat.)

  15. Ellen of Tasmania

    Well, this is what has happened to logic and debate at the college level:

    “This year wasn’t the first time this had happened. In the 2013 championship, two men from Emporia State University, Ryan Walsh and Elijah Smith, employed a similar style and became the first African-Americans to win two national debate tournaments. Many of their arguments, based on personal memoir and rap music, completely ignored the stated resolution, and instead asserted that the framework of collegiate debate has historically privileged straight, white, middle-class students.”

    http://www.theatlantic.com/education/archive/2014/04/does-traditional-college-debate-reinforce-white-privilege/360746/

    (Debates are on youtube – but only if you really want to depress yourself.)

  16. H B Bear

    I shall just insert a spruik here for my ongoing campaign to make Fremantle a marginal seat.

    Freo will always have too many hipsters and deadbeats. Only way it will become marginal is if the Greens look like taking it – which can’t be too far away.

  17. Freo will always have too many hipsters and deadbeats. Only way it will become marginal is if the Greens look like taking it – which can’t be too far away.

    O ye of little faith. All that needs to happen is a decent redistribution.

    1) Expand inland and slightly north to encompass Bicton, some more of the east end of Palmyra and some bits of Melville (aspirational).

    2) Cut off the southern section and lump it in with Willagee, another safe Labor seat.

    I live in hope.

  18. Petros

    Alfonso, that was one of the reasons given for the US wars in Iraq. Apparently Saddam Hussein was going to start selling oil in euros. The Yanks didn’t like it, understandably. Chavez had similar ideas as well.

  19. Robbo

    It seems to have escaped the attention of most Americans that their nation is now on the brink of becoming a wholly owned subsidiary of the Peoples Republic of China. Well done to Obama in bringing his once wealthy nation to its financial knees, and for doing it in just six short years.

  20. Fisky

    If you want to get a sense of the confusion surrounding this issue, pick up a copy of the New York Times. In the Science/Technology section, they’ll have articles about how robots are going to destroy all working and middle class jobs and make most of the population redundant within 20 years if we’re lucky. In the News/Politics section, they’ll be making the case that the American economy desperately needs 12 million Mexican day labourers to become full citizens and Democratic voters (ok, they won’t say the last three words openly, but that’s what they’re really after).

    Whatever you do, don’t listen to Leftists, because they have nothing to contribute to this issue.

  21. Joe Goodacre

    The US is a nation living on its capital and not its income. It will not end well.

    Maybe. Sounds a bit like other alarmist predictions though (i.e. global warming or that the world will run out of food, oil and minerals).

    The US has seen through world wars, communism 20% interest rates in the 1970′s and a range of governments that have had different opinions regarding the role of government.

    The standard of living of the average person has increased over this period as well.

    Yes the current government is very left, is spending a lot and is engaging in dangerous foreign policy. That’s happened in the past though as well. It seems to me that things aren’t that bad. The tide of public opinion will swing more towards a smaller government at some point in the future. Reagan was elected after the New Deal and the War on Poverty. Someone more freedom inclined will be elected after Obama.

  22. Myrddin Seren

    Glenn Reynolds at Instapundit had a headline a little while back along the lines of

    ‘FBI refuses to testify to Congressional committee investigating IRS scandal.’

    Officers of the Executive branch are now plainly naked political partisans openly shunning the Legislative branch.

    I figure that real historians ( not the Obama cheer-squad type ) will date the overt death of the Republic to around 2013/2014.

    They are now trying to change the Electoral College system to entrench permanent Democrat presidencies.

    The President now rules by decree ( Executive Order – ‘I have a pen and a phone’ ).

    I thought repeal of the 22nd Amendment would be on Team Obama’s second term agenda too, but it now looks like Obamacare is too big an FU to go the leap to a President-for-Life in this term. President Clinton will probably have that on her first term agenda, so that by 2020 it will be the USA of Hunger Games.

  23. Andrew

    The stupid Republicans helped Obama by panicking in ’08 when they approved TARP.

    I think you’re confusing TARP with Stimulus. TARP cost literally nothing and added nothing to the structural deficit. It also helpfully avoided 5 more Lehmans the following month and then a true Great Depression.

    Obummer did one useful thing – enact the non bank equivalent (TALF etc). Markets then recovered and credit reopened in a functioning financial system.

    What do you do when GD has been averted? Pretend it hasn’t – do a massive, corrupt fiscal package. Give it to Big Green and building unions.

  24. Chris M

    Those between 16 and 24 rank near the bottom among rich countries, well behind their counterparts in Canada, Australia, Japan and Scandinavia and close to those in Italy and Spain.

    In fairness I suggest Australia may not rank so well if we had 20% Aborigines and another 20% or so illegal immigrant Afghans or something.

    Also their middle class may not have the income ours does but $60k income in the US is equivalent to at least $100k here due to our exorbitant costs and housing bubble.

  25. Grumbles

    I see hypocrites.
    They walk around like regular people.
    Some of them don’t even know they are hypocrites.

    Rich leftists are basically people or families who crossed the bridge of opportunity, and now want to burn it so no one else can cross.

  26. Boambee John

    At what stage will the “Red” states decide enough is enough and secede?

  27. Notafan

    You could live like a king on 60,000 k in the USA. You just need to pick the right state and the right county.

  28. Anne

    I hope these women are not representative of Melbourne housewives.

    We have two adults, three school girls and a simple minded dolt. Two self made women and four who have ridden to ‘success’ on the coat tails of their husbands’ talents.

    Andrea is arrogant and intelligent but emotionally unstable. A quick google search reveals a previous alleged public meltdown, where she allegedly, verbally abused her husband and others.

    The problem with Narcissistic Personalities, if that is what she has, is that the so afflicted lack insight and emotional maturity while craving success and admiration. I’ve no doubt she went on this show to promote her husband’s practice and flog her book.

    Sadly, she has probably done more to negatively advertise her husband’s practice than any malpractice suit could do.

    Some tips:
    Andrea, the ‘C’ word is slang for Vagina not “external female genitalia”, that would be the Vulva.

    Lydia, the Louvre is in Paris not London. Also your plane is not a jet.

    Janet, it’s just sad that a 60 year old woman is having a one night stand with a 35 year old man. Have some dignity woman.

    Gina and Chyka, please don’t dignify this freak show by returning for another season.

    Jackie, I predict you will enter politics reaching your zenith as Minister for Global Shining in the Australian Glorious Greens Government of 2043.

  29. .

    Yeah. Gina is too smart for that show. Poor woman gets abused for being a useful member of society.

  30. Anne

    Oh dear!

    I’ve posted this by mistake Steve. I’m terribly sorry.

    Would you remove it please.

  31. Infidel Tiger

    Anne, a great summary.

    I’ve been watching that car crash under much sufferance.

  32. Anne

    Aaaarrrrghh.!

    My shameful secret revealed!

  33. Anne

    I swear I only tuned in on the weekend because I know someone who knows one of the husbands and I wanted to see what his wife looked like. Then I got absorbed in the ghastlyness of the Four and the cool grace of Gina and had to watch them all on YouTube.

    Will you be watching the ‘Reunion’ on Sunday night IT?

    Should we have a Forum? Hahaha…

  34. Andrew

    There’s an open thread, but by the sound of those people this is highly relevant to one or more topic threads.

  35. Elizabeth (Lizzie) B.

    No, too much of the middle class is in a state of mass delusion which allows them to fall for pathetic and transparent rhetorical devices like – Da Rich, Da Murdoch, Da Kochs, etc. They are living a better life then their ancestors who sacrificed could dream about, while whining how bad they have it.

    Holding the RNC in Detroit would simply mean that the ‘uncaring’ Republicans would be blamed for the mess of Detroit. Just watch that luvvie media go for it. It would be painted as a failure of Capitalism. The RNC should always project an image of US prosperity and hope: attainment, achievement and fairness for effort (‘you did make that’), with more jobs, under less government control and taxing.

    America will survive; it has been through a lot, and has still come out well enough after the various corrections and responses. A strong Republican leader, admirable and communicative, would help.

  36. Craig Mc

    I just finished reading Chuck LeDuff’s “Detroit”. It’s the left-wing model for the entire country.

  37. Bruce of Newcastle

    Some Keynesian fun in the US:

    The Fed’s Farcical Forecast Fiasco

    How very Einsteinian of them, doing the same thing over and over expecting a different result.

  38. Demosthenes

    Holding the RNC in Detroit would simply mean that the ‘uncaring’ Republicans would be blamed for the mess of Detroit. Just watch that luvvie media go for it. It would be painted as a failure of Capitalism.

    The far left have always blamed capitalism for Detroit. This guy thinks it’s what one of what he calls ““sacrifice zones” — the first areas forced to kneel before the dictates of the marketplace”. No word on whether capitalism was responsible for its earlier success. Seriously, I first thought I’d stumbled onto satire.

    What has taken place in these sacrifice zones — in postindustrial cities such as Camden, N.J., and Detroit, in coalfields of southern West Virginia where mining companies blast off mountaintops, in Indian reservations where the demented project of limitless economic expansion and exploitation worked some of its earliest evil, and in produce fields where laborers often endure conditions that replicate slavery — is now happening to much of the rest of the country. These sacrifice zones succumbed first. You and I are next.
    Corporations write our legislation. They control our systems of information. They manage the political theater of electoral politics and impose our educational curriculum. They have turned the judiciary into one of their wholly owned subsidiaries. They have decimated labor unions and other independent mass organizations, as well as having bought off the Democratic Party, which once defended the rights of workers. With the evisceration of piecemeal and incremental reform — the primary role of liberal, democratic institutions — we are left defenseless against corporate power.
    ……………………….
    A handful of corporate oligarchs around the globe have everything — wealth, power and privilege — and the rest of us struggle as part of a vast underclass, increasingly impoverished and ruthlessly repressed. There is one set of laws and regulations for us; there is another set of laws and regulations for a power elite that functions as a global mafia.

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