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Begin forwarded message:
> From: Bill Totten <shimog...@ashisuto.co.jp>
> Date: March 28, 2016 at 7:59:03 AM EDT
> To: Ugly New World <uglynewwo...@lists.mcgill.ca>, a-list
> <a-l...@lists.riseup.net>
> Subject: [a-list] What Killed the Middle Class?
> Reply-To: shimog...@ashisuto.co.jp
>
> by Charles Hugh Smith
>
> Of Two Minds (March 23 2016)
>
> If the four structural trends highlighted below don't reverse, the middle
> class is heading for extinction.
>
> Everyone knows the middle class is fading fast. I've covered this issue in
> depth for years, for example {1} and {2}.
>
> This raises an obvious question: what killed the middle class? While many
> commentators try to identify one killer cause (for example, the US going off
> the gold standard in 1971), the die-off of the middle class is more akin to
> the die-off in honey bees, which is the result of the interaction of multiple
> causes (factors that increase the toxic load dumped on bees and other
> pollinators by modern agriculture).
>
> Longtime collaborator Gordon T Long and I discuss the decline of the middle
> class and other key topics in a new 29-minute video {3}.
>
> So where do we begin this detective story? With the engine of all real
> prosperity, productivity. This chart reveals that wages stopped rising with
> productivity around 1980.
>
>
>
>
>
> Here's another look at the same phenomenon:
>
>
>
>
>
> Productivity has been slipping since around 2003 {4}.
>
>
>
>
>
> Cause #1: Declining productivity, which means the pie of real wealth is no
> longer expanding.
>
> Exhibit #2: Middle class wage earners have not received any of the gains.
> Wages as a percentage of GDP have been falling for decades, with occasional
> blips up in tech/housing bubbles:
>
>
>
>
>
> Inflation-adjusted household income has dropped back to levels first reached
> in the 1980s:
>
>
>
>
>
> More recently, wages have actually declined, regardless of educational
> attainment:
>
>
>
>
>
> Income gains have all flowed to the top ten percent, with most of the gains
> being concentrated in the top five percent and top one percent:
>
>
>
>
>
> If the middle class didn't receive any of the gains, who did? Corporate
> profits have soared to unprecedented levels:
>
>
>
>
>
> Cause #2: All the gains in the economy have flowed to corporations and the
> top ten percent of financiers, managers and technocrats.
>
> But wait a minute - hasn't the rising stock market enriched the middle
> class?Short answer: No. Middle class household wealth has absolutely cratered
> since the top of the housing bubble in 2007, and hasn't recovered.
>
>
>
>
>
> Why? Middle class wealth is based not in stocks but in the family home. The
> middle class does not own enough financial assets to have participated in the
> latest stock market bubble, while the majority did not recover the wealth
> lost in the housing bubble bust. This is the cost of allowing the financial
> sector to financialize housing and mortgages in the 2000s.
>
>
>
>
>
> Cause #3: The middle class doesn't own the "right" assets to benefit from
> systemic financialization and financial speculation.
>
> How about rising costs? The federal agencies tasked with measuring inflation
> assure us inflation is near-zero. But these measures underweight big-ticket
> costs like healthcare and higher education, where costs have exploded higher,
> greatly increasing the burden on the middle class:
>
>
>
>
>
> Cause #4: Soaring costs of big-ticket expenses such as higher education and
> healthcare. Saving $10 on cheap jeans imported from Asia does not make up for
> 135% jumps in tuition and college fees, and $100 decline in the cost of a
> laptop computer does not make up for healthcare insurance and out-of-pocket
> expenses in the tens of thousands of dollars per household.
>
> Correspondent Kevin K submitted this article {5} and accompanying note:
> Colleges with the biggest tuition hikes (my alma mater University of
> Hawaii-Manoa clocked in with an increase of 137% since 2004):
>
> It looks like the article linked above didn't do much research since:
>
> University of California Davis
>
> 2004 in-state tuition $5,684
>
> 2015 in state tuition $13,951
>
> Percentage increase 145 percent
>
> There is no way middle class households with declining real incomes can pay
> soaring costs imposed by state-enforced cartels and gain ground financially.
> If the four structural trends highlighted above don't reverse, the middle
> class is heading for extinction, the victim of financialization, the
> glorification of financial speculation via central bank-central state
> policies, the decline of productivity and rising costs imposed by
> state-enforced cartels.
>
> Gordon T Long and I discuss the decline of the middle class and other key
> topics {3}.
>
> Links:
>
> {1} http://www.oftwominds.com/blogdec15/shrunken-middle-class12-15.html
>
> {2} http://www.oftwominds.com/blogdec13/middle-class12-13.html
>
> {3} https://youtu.be/-BBL-fJd9Lo
>
> {4}
> http://mishtalk.com/2016/03/21/greenspan-worried-about-inflation-says-entitlements-crowding-out-investment-productivity-is-dead/
>
> {5}
> http://www.sfgate.com/news/article/Colleges-with-the-biggest-tuition-hikes-6908022.php
>
> http://charleshughsmith.blogspot.jp/2016/03/what-killed-middle-class.html
>
> https://billtotten.wordpress.com/
> http://www.ashisuto.co.jp
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