Deflating The Middle Class Dream

The dream of the middle class is that the majority of people will be able to comfortably cover their basic needs by working a reasonable number of hours at a probably unspectacular, but useful and therefore, respectable, job. A middle class life means a secure place to live, good food to eat, adequate medical care, the ability to purchase clothing and transportation services suitable to maintaining employment, and a stable environment for your children to grow up in so they can do as well or better.

Today, the entire concept of the middle class is being effectively scrapped in an environment where that level of economic security may often require desperate measures, or a six-figure income. Why? Because no new jobs were created between 1999 and 2009, completely deflating the wage economy.

In Avedon Carol's words, "Our owners are telegraphing that some magic formula dictates that we have to be made miserable. Of course, what's making us miserable isn't magic - it's them." Productivity will likely continue to rise, but its benefits won't be shared down the economic ladder, they'll be used as collateral to cash out productive enterprises and fire their workers.

The Thomas Friedman piece Carol wrote those comments in response to, discussing what Friedman thinks should be an era of service and benefit cuts, really offers neither relief nor a coherent worldview on how to make things better. But I quote it here because it seems to really sum up the attitudes of the economic elites about their responsibilities to the peasants:

... Yes, sir, we’ve just had our 70 fat years in America, thanks to the Greatest Generation and the bounty of freedom and prosperity they built for us. ...

... Indeed, to lead now is to trim, to fire or to downsize services, programs or personnel. We’ve gone from the age of government handouts to the age of citizen givebacks ...

... The president needs to persuade the country to invest in the future and pay for the past — past profligacy — all at the same time. We have to pay for more new schools and infrastructure than ever, while accepting more entitlement cuts than ever, when public trust in government is lower than ever. ...

Cuts to correct past profligacy? Maybe Friedman means the $72 billion in government subsidies over 7 years paid to fossil fuel companies that, much like the health insurance industry, impose enormous health costs on the public. Maybe he means letting Wall Street gradually looser of all reasonable restraint (link not safe for work,) then blaming the resulting problems and bubbles on letting brown people and women do better, but not actually putting the banksters back in the box. Maybe Friedman meant the $12 billion of cash loaded on pallets, shipped to Iraq, and never accounted for again, or all the fraudulent defense contractor charges we paid to the Bush administration's friends while delivering Friedman's message of "Suck. On. This." to the people of the Middle East.

But no, silly me, Friedman didn't mean any of that profligacy, and probably wouldn't dream of using the term "entitlement" to refer to tax breaks for millionaires or companies with 10-figure profits. When he talks about people paying, he probably doesn't mean the people who brought us either the housing bubble or the about-to-pop commercial real estate bubble

By entitlement cuts, the official Washington world Friedman represents means things like Social Security (the retirement system everyone pays into), Medicare (the old age and disability medical plan everyone pays into), and unemployment benefits (the job-loss insurance plan which every worker pays into.) Indeed, dazed former members of the middle class can now sometimes expect joblessness to last for years, and around 5 million more of them will lose the unemployment benefits they've been paying into their whole working lives in June. These are the people who need to absorb service cuts while the investor class has pocketed obscene profits running the scams that fleeced them?

Cutting any of that is so unpopular, at least anywhere that isn't the D.C. Beltway, even Republicans won't propose it.

And combining an accusation of profligacy with these programs suggests that Friedman thinks it was irresponsible for the US government to offer countercyclical support to its citizens, whether the reduced circumstances they're in are temporary, permanent, or even caused by events beyond their control. Yet the era of the Greatest Generation he refers to built the country's prosperity on nearly full employment, expansions of public assistance, readily available medical care and pensions, as well as heavily subsidized college educations.

The prosperity Friedman refers to was built by a Greatest Generation whose society was supported around the edges by the New Deal, kicked into overdrive by GI assistance programs and federally-funded research.

Yes it's true, the government of that era built a lot of infrastructure and educated a lot of people, though this was a means to providing them with a better quality of life. All that infrastructure and all those schools weren't an investment in an abstract ideal of prosperity down the road, they were an investment in the public itself and a near immediate expansion of services provided. Perhaps now that the Cold War is over, it isn't as important to fight a live-action PR war against communism by harnessing capitalism to improve people's lives.

All that time, we thought our overlords just liked us, but no.

So instead of focusing on creating full employment, or addressing the alarming decrease in household wealth, they're going to worry about imaginary inflation and a fake deficit freak-out that's designed to reinflate the real estate bubble.

Altogether, an all-out war has been declared on the middle class and the economic establishment has been leading the public relations charge:

... Economics today is not just a science without a purpose. Economics, as the professions now exists, is to science what Fox News is to the news media. Just like the purpose of Fox News is to misinform the public, the purpose of economics today is a PR con to justify inefficient and immoral policies that defend the status quo and keep mankind from advancing.

Manufacturing and industry, the great drivers of the American middle class for over 100 years, didn't die by accident. There was a deliberate decision made in the late 1970's to favor finance over industry. ...

Who can say exactly why the US' experiment in middle class prosperity, with its dream of economic security and class mobility, is being canceled. I don't care. I'd just like it started back up again.

This last weekend, I was cleaning out some old papers. The kind you accumulate because someone printed important personal information on them and you never got around to getting a shredder. I found an old pay stub of mine from June, 1998, when I was a lowly office worker at an enormous manufacturing company. I netted $16 more that month than I will gross this month, February, 2010, and almost all of this month's check will go to debt servicing. (Which I can afford because my dry cleaning expenses are low and my husband is paying the rent.) I can't get it out of my mind. It makes me feel like I'm worth less as a human being, like I have very little to contribute to my household or to loved ones in difficult circumstances.

Some people may think that decreased wages and living standards uniquely disturb men, but I can assure you that this phenomenon is not exclusive to a gender.

Where's the economy I grew up in? The one that let me take a few night classes and springboard my way into a good IT job less than a year after landing my first full-time, permanent position with a good company. Could someone please stop the DC distraction machine and bring that economy back so I at least, even if this decade is lost to me, don't have to look forward to the soul-crushing ignominy of making the same amount in 2018 that I made in 1998? Because this brave new economy we've got going here really sucks.

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future