You may have missed this info graphic in the WSJ over the weekend.
click thru for full interactive graphic
Source:
Are You Better Off Now Than Eight Years Ago?
Kelly Evans
Real Time Economics, April 19, 2008, 12:31 am
http://tinyurl.com/3zm6xf
Middle Class Squeeze
Under “Taxes and Costs”, note that the effective Federal Tax Rate has fallen while “Personal Saving as a Percentage of Disposable Personal Income” has evaporated. Maybe the problem is us! Do we as a society try to own too many material things, as if they are what makes life happy? Do we expect the government so solve all of our problems, as if we have no responsibility?
I am much worse off.
I was able to cash out the net present value of my life at a premium, live in a house I could not possibly afford, finally get that escalade I have always wanted.
But best of all the difference between my existence and Bill Gates is nothing more than a massive depreciating pile of trash called US dollars.
it looks like that in 2008, 2012, or 2016 our country’s going to make a hard turn to the left economic interests will break the Republican social conservative/fiscal conservative coalition and convince the 99% of the population that the current fiscal/taxation schemes in their interest.
In 08, Obama (for better or worse depending on your politics) has a chance to start his own version of FDR-esque reforms if he and Clinton don’t mutually destroy each other in the primaries.
But Democrats have always managed to snatch defeat from the jaws of victory so for all you Republicans out there your day of reckoning may be delayed past 08.
I save value as material goods under my control, as opposed to bank accounts “earning” .5% nominal interest rates or less… If the goods i buy are also useful capital investments (tools, etc), all the better.
To John’s point–plenty of accountability to go around. Given all those good paying middle class jobs shipped off to China, helping corp. profits to be stronger (as % of GDP) than they were during the Reagan or Clinton booms, there’s definitely something wrong with that picture of median income over the last 5-6 years.
Maybe corporate America needs more “job creating tax breaks”, that will fix it all.
The basis of the display, “Household Income” (Median or otherwise) is not a measure of anything.
A misleading presentation.
.
So what ?? America is built on having lots of
poor people and having wealth concentrated in
the hands of billionaires.
This is what true amercian capitalism is all about. Bernanke and Greenspan have done a good job.
This is old news.
We will need a different political system if the common folk(the working poor) are to have their interests represented.
I’m looking forward to the infographic showing housing values against numgers of fires destroying houses. The Googlemaps will be fascinating.
Cinder mail?
Americans can be such whiners! Yes, the WSJ graphic shows that the middle-class standard of living has eroded slightly, but it is still near all-time highs on all world-historical parameters.
John,
The problem isn’t us unless you are speaking about greed in general. In that case, you could say, as Arthur C. Clark used to say, that the killer ape got too mean for his own good. As a child I once put a snapping turtle in a large wash bucket with eight or ten window well frogs. I came back an hour later. All the frogs were dead. None of them had been eaten. The turtle couldn’t help himself. I let the turtle go and felt awful about the frogs. Getting back to your preoccupation about our materialism, we first must define what is “too much” and what is “enough”. The fact is that if you’re not a poor person in Haiti (yes there are some very rich people there too), most of your purchasing choices go beyond the basic necessities. Who decides how much is enough? If every single person is entitled to 1,000 square feet of living space, x gallons of water, y pounds of food, free medical care and a computer with an internet connection, what would be the effect on society? I don’t know. But I do know that ever since Nixon closed the gold window and devaluated the dollar, saving money has been an illusion. It’s not that people don’t want to save; it’s that if you are middle class you don’t have access to interest premiums that match inflation. You’ve got to run like hell to stand still. Have you ever tried to use a credit card or get a bank loan to buy an appreciating asset like gold bullion? Don’t bother.
We in the middle class are like the whipping boys that child monarchs used. You couldn’t whip the king (the rich), so when the child king misbehaved, the whipping
boy (the middle class) was beat in the child’s presence. I’m not holding my breath for any changes but I won’t stand for the old “Blame the victim” garbage.
Roger,
It’s called Fire Equity Withdrawl…FEW, coming to a neighborhood near you.
This was obvious 2 years ago. I like cinder mail also. Cute!
Think about this. Most homes are grossly over insured thanks to so-called replacement cost. Insurance and taxes are being paid out of escrow by the servicer. It could be scary for P&C insurance carriers.
All you liberals are the same.
Of course we’re better off then eight years ago.
1). We’ve almost won the war against evil.
2). We’ve help Jesus punish the fornicating harlots.
3). We’ve gotten even with “those people” for what they did to our parents with the help of “you liberals”.
What MORE could any patriotic peasant WANT?
But Democrats have always managed to snatch defeat from the jaws of victory
Praise Jesus!
“Insurance and taxes are being paid out of escrow by the servicer. It could be scary for P&C insurance carriers.”
Uh, gee, you think that might become a problem for us middle class types? My homeowners has gone up about 25% in two years for no apparent reason, though I suppose it could be a delayed affect from the San Diego fires a couple years ago.
Don’t kid yourself – when insurers lose money we all take it up the ass. Come to think of it, we usually take it up the ass from insurers even when they don’t lose money.
Much like Obama and his grass roots campaign, we the people need to take back the country one individual at a time. Every person that is fiscally conservative or makes the choice to start down that road is the answer to our current woes. Empowerment begins with the individual. Saying yes to saving and no to consumption just might empower us little guys to make it through these tough times. BTW, I am a McCain kind of guy!
Americans can be such whiners! Yes, the WSJ graphic shows that the middle-class standard of living has eroded slightly, but it is still near all-time highs on all world-historical parameters.
Posted by: TempusFugit | Apr 21, 2008 7:09:27 PM
??????????????????????????????????????///
can you site your source ??
I’ve travelled in western europe, finland,
germany,greece,,,, and I don’t think the US stands out in terms of healthcare and labor rights for the avg middle class out there.
But if you count Africa and Middle east, sure, the standard of living is much better in the US.
As usual, the WSJ can’t help it to praise Bush’s tax cuts while omitting a crucial piece of the puzzle, that is the total tax burden as a % of total income 2007 versus 1970.
That is where middle-class Americans are getting royally screwed, along with health care costs, transportation costs and mortgage expenses.
Everything is there:
http://www.youtube.com/watch?v=akVL7QY0S8A
The Coming Collapse of the Middle Class
Prof. Elizabeth Warren
Jefferson Memorial Lecture Series
UC Berkeley
Very instructive to say the least
Inside the Middle Class: Bad Times Hit the Good Life
http://pewsocialtrends.org/
9 Apr 08 A new survey finds that most Americans say that in the past five years, they either haven’t moved forward in life (25%) or have fallen backward (31%) – the most downbeat assessment in nearly half a century of polling by the Pew Research Center and the Gallup organization. But at the same time, two-thirds say they have a higher standard of living than their parents had.
Other findings:
About half of all Americans think of themselves as middle class. They are a varied lot: four-in-ten Americans with incomes below $20,000 say they are middle class, as do a third of those with incomes above $150,000.
Nearly eight-in-ten Americans say it is more difficult now than five years ago for people in the middle class to maintain their standard of living.
Since the 1970s, middle-income Americans have been making absolute economic progress while enduring relative decline. But since 1999, they have not made economic progress.
as to those Pew numbers, average national numbers mean nothing at all. $80k in Mississippi is good, $80k in Silicon Valley is not even middle class. I don’t mean “median income”, I mean “able to live the life people think of when they think of middle class”.
Here’s another good article from this weekend that nails it …
http://www.nytimes.com/2008/04/20/weekinreview/20uchitelle.html
As older $22+/hr employees are bought out or layed off, the infrequent mfg hourly jobs that I see appearing to replace them all pay $8-10/hr. Who can live on $16-20k/year? Where the changes were signed off on in collective bargaining, its sad to see the younger folks getting sold out so easily by the older crew.
My Teamster’s wage fresh out of high school was $14/hr (a whopping $30/hr in today’s dollars) and eventually paid for 4 years at a land grant university. That was 25 years ago. Could someone do that today? I doubt it.
Amazing how passive folks are. I teach to students who pay in tuition ten times what I did (state university) and they don’t peep when budgets get slashed and tuition soars. It amazes me. It’s like under the rhetoric of ‘individualism’ we’re a bunch of patsies for rich Republican elites. This is American character? Wow.
Stagnant incomes that have fallen in real terms. Inflation that had openly progressed from cost-push to traditional monetary based. Layoffs beginning to trickle in … if oil and other commodities remain high the trickles will power into streams and floods since nobody will be able to afford anything other than basic necessities anymore. Goodbye wealth effect unless you are long commodities …. most people aren’t.
Note to FOMC .. don’t change rates next week and do talk about inflationary expectations going to the moon in the statement. If the EIA pundits are correct and oil is not in a bubble, then there will be no effect. Otherwise, prices should sink like a bag of cats tied to a brick, and parasitical speculators will be just about as happy as the cats. This is the inflation you were hired to fight.
dissent, I couldn’t agree more. I really can’t figure how folks just lose their health care or pension and they just roll over. I would have expected quite a few CEOs to be victims of bitter employees going postal.
Shit, the drummer for Ted Nugent just committed suicide here in Atlanta “due to excessive medical bills”. WTF is wrong with this country.
So what do we do? If we raise marginal tax rates on the top 1%, they’ll just bribe members of Congress to introduce more tax loopholes.
When it comes to compensation and motivation (which, I was told by my Representative, require stock options and the continuation of the loophole that allowed companies to avoid recording stock options on their balance sheets, even if they really are compensation, and not recording them reduces transparency and hurts outside investors), I have to confess I am not on the same page as Wall Street, nor was it taught the way WS sees it at the University. What is the avg tenure for a CEO these days, about 5 years, and how many millions, for what exactly? My nature tends to side with business people and entrepreneurs that see the bigger picture – that want to keep the business running, the people employed, the environment healthy, and the community served – and how to implement sustainable practices to maintain a quality planet, country, community, family. The organizations whose people apply the principles come in all sizes, and industries. Buffet of course, John Bogle, John Templeton, Jim Goodnight, Michael Crooke, and the heirs of Dr. Bronner, to name a few. I hear the sound bites, from the media, politicians, and scolds, but they make no sense in reality, other than to divide (and conquer). In the marketplace of ideas, I sure wish the emphasis was on intelligently discussing important topics and not whether one wears a lapel pin, and other nonsense.
Guess my neighbor would say he’s worse off, layoff after 30 years. Wasn’t there a joke during Reagan’s term, “I know Reagan created more jobs, because I’m working two of them”. If it was two then, what do you suppose it is now? I know folks who lost their jobs, and the husband and wife together aren’t making what one was making prior. You see them incrementally reducing costs to save any semblance of family. First their prescriptions, medical, then the life insurance, etc. They say yes to every hour they can get, even if it means they work the entire weekend. There’s another saying, “it’s a recession when your neighbor loses his job, it’s a depression when I lose mine.” The sad part is when they keel over with a heart attack because they reduced their medication, and the surviving spouse doesn’t have the life insurance. She does get Social Security until the kids turn 18. It use to be until they were out of college, but Reagan reduced it – and doubled it for the self-employed. Gee wasn’t Greenspan the chairman of the Nat’l Commission on Soc Sec reform back in the early 80’s ;-|