America's lumpen middle class... - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 2 May 2014
PRINTER FRIENDLY | ARCHIVES
America's lumpen middle class... A  A  A

Gualfin, Argentina

Yes, dear reader, the chattering classes are upset by "inequality." One man has a lot. Another has a little. Naturally, the man with little is jealous. And the fixers come forward with yet more fixes.

Jesus said that "the poor will always be with us." But do there have to be so many of them? And what about the middle classes? They seem to be disappearing; their share of national income has gone down shockingly.

Rich? Poor? We've been both. And we don't really give a damn. But everybody wants to be the hero of his own story. Our goal here on the ranch is to make the enterprise profitable...and to hire more people and raise wages. People will be better off, financially, and we'll be loved by one and all. Maybe the local people will erect a monument to "Don Bill"...or at least remember his name when he dismounts for the last time. We'll let you know how that works out over the next few years.

Meanwhile, let's moan together about the plight of America's lumpen middle class. But first, we will give you a 'heads up.' Unlike Thomas Piketty, we will not blame capitalism; the free market is merely the aggregated choices of free consumers, workers, producers, and investors. Nor, like Paul Krugman, will we blame hard-hearted Republicans; it is the soft heads of both parties whom we hold responsible. Yes..we lay the blame where it belongs...

...on the jackasses who created today's ever-expanding credit bubble. Johnson...Nixon...Reagan...Greenspan...Bernanke...

Advertisement
Myth: It's Impossible to earn Triple Digit Returns from Safe Blue Chips...

Blue Chips are some of the safest investment opportunities in the stock market. However, most investors believe that Blue Chips cannot deliver Big Returns.

However, we've been debunking that myth for more than a decade now!

And we've already delivered returns like 189% (5 Years and 11 months), 2,740% (7 years and 2 months), 315% (4 years and 4 months) and 777% (6 years and 6 months)... amongst many more, from some of the safest stocks in the market!

So why miss out? Just Click here for full details and Join Today...

Note: As soon as you join, you will get our Latest Special Report with full details on Equitymaster's Top 5 Blue Chips for 2020. Click Here to Claim Your Copy...

The destruction of middle class incomes is just one of the miseries their policies wrought. Here's the Washington Post on the subject:

    Wages aren't stagnating, they're plummeting

    Many economists have expressed concern that median wages have stagnated since the 1970s....

    But it's actually worse than that. The best recent work on changes in male wages has been done by Michael Greenstone and Adam Looney of the Hamilton Project, and they have found that median earnings for men have actually declined since 1969:

    ... median earnings for men in 2009 were lower than they were in the early 1970s. And it gets worse. The decline shown above is actually too mild, because it doesn't take into account the massive exodus from the workforce of men since that period. Between 1960 and 2009, the share of men working fulltime fell from 83 percent to 66 percent, and the share not making formal wages tripled from 6 percent to 18 percent. When you take all men, not just those working fulltime, into account, the slight decline in the above graph becomes a plummet of 28 percent in median real wages from 1969 to 2009.

But wait. There's more. Ted Bauman reports:
    Last week, The New York Times lobbed a bombshell: the U.S. middle class is no longer the world's top earner. Many countries' middle classes now bring home more real income than ours. That includes our neighbor to the north, Canada (good news for Canada Day, July 1). The Dutch and Norwegians, who already earn more than the bottom 50% of Americans, are close behind.

    When we look at net worth per capita for the U.S. middle class, we find that it's not just the Canadians who beat us. Just about every developed country does. Middle class households in the U.K., Japan, Australia, and - get this! - Italy have more than doubled the wealth of their U.S. counterparts. Luxembourg, Belgium, Iceland, Singapore, Austria, Qatar and Kuwait are all also ahead of the U.S. Overall, we're 24th.

    But the true picture is even worse than that. Calculations of per capita net worth for the U.S. include personal retirement plans like IRAs and corporate pensions. In most of the countries that are ahead of the U.S., citizens receive excellent public pension benefits, which aren't included in personal net worth. As a result, they tend to save a lot less for retirement than we do. And yet they still have greater net worth than us.

    In other words, not only is the American middle class earning less than those of other countries - it's also getting poorer.
Surely this is a great oddity too. The feds create a credit boom that adds $33 trillion to national spending (and debt) over the last 40 years. This is the greatest stimulation program of all time. And it is an economic disaster. Middle class incomes go down. Debt goes up. Real wealth deteriorates. Real capital disappears. Growth declines.

Result: people get poorer.

Reaction of the elite: criticize capitalism for causing 'inequality.' And demand more control by the feds!

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

Disclaimer:
The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Get The Daily Reckoning directly
in your mail box.
Just enter your e-mail address » 

Read our Privacy Policy and Terms Of Use.

Equitymaster requests your view! Post a comment on "America's lumpen middle class...". Click here!

5 Responses to "America's lumpen middle class..."

krishna ghosh

May 3, 2014

NOT ONLY INDIAN MIDDLE CLASS ARE SUFFERING, AMERICAN MIDDLE CLASS ARE ALSO SUFFERING. THE INDIAN GOVT. IS NOW FOLLOWING AMERICAN CAPITALISM. IT IS A WORRYING FACT WHAT WOULD HAPPEN TO INDIAN MIDDLE CLASS IN FUTURE?

Like 

krishna ghosh

May 3, 2014

NOT ONLY INDIAN MIDDLE CLASS ARE SUFFERING, AMERICAN MIDDLE CLASS ARE ALSO SUFFERING. THE INDIAN GOVT. IS NOW FOLLOWING AMERICAN CAPITALISM. IT IS A WORRYING FACT WHAT WOULD HAPPEN TO INDIAN MIDDLE CLASS IN FUTURE?

Like 

krishna ghosh

May 3, 2014

NOT ONLY INDIAN MIDDLE CLASS ARE SUFFERING, AMERICAN MIDDLE CLASS ARE ALSO SUFFERING. THE INDIAN GOVT. IS NOW FOLLOWING AMERICAN CAPITALISM. IT IS A WORRYING FACT WHAT WOULD HAPPEN TO INDIAN MIDDLE CLASS IN FUTURE?

Like 

krishna ghosh

May 3, 2014

NOT ONLY INDIAN MIDDLE CLASS ARE SUFFERING, AMERICAN MIDDLE CLASS ARE ALSO SUFFERING. THE INDIAN GOVT. IS NOW FOLLOWING AMERICAN CAPITALISM. IT IS A WORRYING FACT WHAT WOULD HAPPEN TO INDIAN MIDDLE CLASS IN FUTURE?

Like 

RS Rathore

May 2, 2014

Village : Pipalia Kalan, Dist. Pali, Rajasthan State.

Dear Friends,

After going through Bill Bonner’s America's lumpen middle class, I too do affirm, US middle class is not in good shape like merry wives of Windsor and are hardly able to maintain their long 3-decades’ cheap praising & pomp shows. A few wives & children from this class could be noticed as pampered as well. The concerted efforts to stick to the track more or less have turned futile, but I must confess that snail like disappearing US Middle Class with their share of national income gradually going down is yet far-far better than their counterparts of many a developed or developing nations. However, exceptional like Dutch, Norwegians and Similar class from Canada, Belgium, Singapore, Austria, Kuwait & to some extent Italy cannot be counted. On the contrary, India is struggling hard to materialize their planning in a way to reach some what near to the so called “poor” of US to effortfully feel a sigh of relief and ecstasy – two containments at a time !

I am now making it a mixture in my own way with my views on US middle class & Indian Middle Class as under -

I, at times, question myself as to why RBI is not creating a credit boom like Fed? I feel, I am kidding. The emerging stock market of India has been a reaping market for FIIs, who make entry at a tumbling down blast & quit at its boom leaving Indian Retailers disappearing in a Black Hole, who are no less than a solitary reaper! But in the long run it is Company Management, who in fact have to give results. In India, “inequality” & “enviousness” can widely be seen.

Eventually, India needs to uplift the down-trodden class, which is likely only when constructive planning is done mainly on Health, Education & Hygiene and side by side discover employment to the professional literates to accelerate the economy with all sincerity & diligence plus passing of a Common Rule by post-elections Regime of New Govt at the Centre, New Delhi for control on ever-growing population of 125 millions !! Thus, there can be a way out of progressing India. Isn’t it fanciful? Stock markets in India then, need not to say, will boom & turn promising for the many to fetch snow balls, but right now No Laurels for any one, for I am not putting up my views here from Alice’s Wonderland !!!

RS Rathore
India


Like 
  
Equitymaster requests your view! Post a comment on "America's lumpen middle class...". Click here!

Recent Articles:
Deep State First
August 23, 2017
Nowhere was the darkness deeper than in the nation's capital. There, no light shone. No flicker of awareness...observation...learning...or reflection appeared.
A Darkness Is Spreading Across the US
August 22, 2017
Today, we are attacked by one preposterous thing after another, each of them even more absurd than the last.
Dear PM Modi, India is Already Land of Self-Employed, and It Ain't Working
August 21, 2017
Most Indians who cannot find jobs, look at becoming self-employed.
Trump Takes a Beating
August 18, 2017
Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.