It is not just absolute, it is absolutely negative. And most Americans, most westerners and, in fact, most connected global citizens live in a relatively positive culture. The glass tends to be half full rather than half empty. The future usually looks bright. Hope is held out, for whatever reason.
But we officially have a 'never' here. It underscores the severity of the economic situation and illuminates why the political atmosphere is so toxic.
Since the Second World War, the US middle class has never had a worse decade than that through which they suffered in the 2000s.
The middle class, the bedrock of the US economy, has lost 10% of its population. From 61% to 51% last year. And make no mistake, 10% is a big number. The word 'decimate' is derived from the loss of 10%. It's root is ancient, 'deci' referring in Latin to ten. The usually invincible Roman legions determined through experience that when a unit lost 10% of its numbers as casualties, it was decimated, meaning that it had been rendered unfit for further combat.
So, the loss of 10% of the middle class may well be contributing to the economy's stagnation. In a consumer driven economy, like that of the US, the loss of 10% of middle class purchasing power and leadership and entrepreneurial activity may have rendered the economy ineffectual. On top of the job losses, the financial insecurities and the increasing concentration of wealth among the top 1%.
In addition, people between the ages of 55-64 have been especially hard hit. These are the pre and early retirees, people who have saved and often prospered, but are now generally past their peak earning years.
This matters because people tend to vote in proportion to their age (approximately 21% of 21 year olds, approximately 55% of 55 year olds...). And this is a Presidential election year. People are angry. At declining incomes, declining net worth, declining standards of living. And given their ages, they are not in a position to make up the losses. Whatever their experience and tacit knowledge, companies, like athletic teams, tend to go with younger candidates. Even if they are willing and able, older people often dont have the technical skills now required.
Interestingly, the report on which this information is based notes that blame is placed on Congress, banks and large corporations. George W. Bush is held more responsible for this state of affairs by those surveyed than any other national leader.
Which may or may not be a political portent for 2012. But that knowledge could be a sign of why business is fighting so hard to elect one candidate rather than another. JL
Anna Fifield reports in the Financial Times:
America’s middle class suffered its worst decade in modern history during the 2000s as net worth and wages declined, according to a report from the Pew Research Center Median household income for America’s middle class fell from $72,956 in 2001 to $69,487 in 2010 (measured in 2011 dollars), the report said, the first time since the second world war that the middle class ended a decade with a smaller income than it started with.
While all sectors of society experienced a decline in income, the middle class is the only one that also got smaller. It shrank from 61 per cent of adults in 1971 to 51 per cent last year.
“The notion that the middle class always enjoys a rising standard of living is a part of the idea of America,” said Paul Taylor, executive vice-president of the Pew Research Center. “Now the middle class has a smaller slice of a smaller pie.”
The lacklustre state of the US economy three years after the recession technically ended is the top issue for voters as the November 6 election approaches. It is also a big vulnerability for the president as he tries to convince the electorate he is better placed to fix the economy than Mitt Romney, the presumptive Republican nominee.
At a campaign rally at a high school in Las Vegas, Nevada, Mr Obama said that his rival’s plan to extend tax cuts for the rich while cutting education spending was one that “shortchanges the next generation”.
“That’s not who we are. That’s not how we built the greatest economy and the strongest middle class in the world,” the president said.
Mr Romney, a multimillionaire former private equity executive who claims only he has the experience to fix the economy, said that if the president were concerned about young people, he should be taking steps not to “pass on trillions in debt”.
“It’s not investing in people to max out the credit card,” he said during a campaign rally at an aluminium casting factory in Bettendorf, Iowa.
Selling such messages to a beleaguered middle class will, however, be difficult.
The country’s middle income tier – adults whose annual household income is two-thirds to double the national median, or $39,000 to $118,000 for a family of three – has “endured a lost decade for economic wellbeing”, Pew said. Its report is based on a new survey as well as its analysis of 2010 census and Federal Reserve data.
An overwhelming majority – 85 per cent – of self-described middle-class adults said it was more difficult now than a decade ago to maintain their standard of living.
They blamed this first on Congress and then on banks and large corporations. Almost half (44 per cent) attributed the problems to George W. Bush, who was president from January 2001 to 2009, but a third (34 per cent) blamed the Obama administration.
While many people reported declining income, even more pronounced was the destruction of wealth as the housing market crashed, wiping out many families’ main assets. The middle class’s median income fell 5 per cent but median wealth (assets minus debt) declined 28 per cent to $93,150.
As the presidential candidates continue their appeals to the middle class, the Pew survey found that Mr Obama was in somewhat better shape than his Republican rival.
About half (52 per cent) of adults who describe themselves as middle class said they thought Mr Obama’s second term plans would help them, compared with 42 per cent for Mr Romney.
0 comments:
Post a Comment