Obituary For The Middle Class

[Shemp Howard]

Read it and weep.:(

http://smallbusiness.yahoo.com/advisor/obituary-american-middle-class-155040791.html

[JustRalph]

This is very telling. It also illustrates the absolute lies being told by the Admin and a corrupt press who supports the admin in their cherry picking of data.

"While the media and politicians keep telling us the housing market has turned the corner and is healthy again, the delinquency rate on single-family residential mortgages at all commercial banks in the second quarter of this year stood at 9.41%—that’s 558% higher than the delinquency rate in the first quarter of 2005. (Source: Federal Reserve Bank of St. Louis web site, last accessed September 4, 2013.)"

The above could bring the economy down completely

[LottaKash]

What we could really use right now is a "comforting-graph".....:jump: ...A BIG-ONE too...!

[Marshall Bennett]

He mentions low interest rates. When interest rates stay so low for so long, that should be a good indication that things aren't going well. I suppose if the fed keeps printing money, people don't seem to notice.
It will all come crashing down, eventually. It almost has to.

[sally]

From the same article...

"As it stands today, the U.S. government and our central bank is working to bring “calm” to the deteriorating middle class by keeping interest rates artificially low and by printing trillions of dollars in new money to save them. But unfortunately, the newly created money is finding its way to the big banks that, instead of taking the money and lending it the middle class using softer lending practices, are investing in the stock market."

So you can blame the Administration and more so Congress, for allowing the Big Banks to have their way...

It always points back to those Bankers....

The devil have em.

[Clocker]

He mentions low interest rates. When interest rates stay so low for so long, that should be a good indication that things aren't going well. I suppose if the fed keeps printing money, people don't seem to notice.
It will all come crashing down, eventually. It almost has to.

It is a fundamental foundation of Keynesian economics that low interest rates always result in increases in investment spending. Obama and his economic advisers and Bernanke are true believers in that faith. Even with real interest rates near zero, businesses are not increasing investment. They don't know what else to do, so they just keep repeating the same thing, expecting a different outcome.

[Clocker]

"As it stands today, the U.S. government and our central bank is working to bring “calm” to the deteriorating middle class by keeping interest rates artificially low and by printing trillions of dollars in new money to save them. But unfortunately, the newly created money is finding its way to the big banks that, instead of taking the money and lending it the middle class using softer lending practices, are investing in the stock market."



The author appears to be confused. Big Banks don't lend money to the middle class. There are 2 kinds of banks, commercial banks and investment banks. Commercial banks accept deposits from individuals and businesses, and lend money to their customers. Investment banks (the evil Big Banks) do not take deposits, they manage investment accounts. They don't make commercial loans, they invest in stocks and bonds. Those bonds are loans to large companies, not to small businesses run by the middle class.

The Fed increases the money supply by buying Treasury bonds in the open market, usually from Big Banks. Those banks are under pressure to earn returns for their investors. With interests rates near zero, the only other option is the stock market. So it is the Federal Reserve's low interest rate policy that is driving investment money into the stock market.

[Marshall Bennett]

So if you're part of this merry-go-round that feeds the stock market you survive, otherwise you miss out and fall by the wayside?

[Zydeco]

It is a fundamental foundation of Keynesian economics that low interest rates always result in increases in investment spending. Obama and his economic advisers and Bernanke are true believers in that faith. Even with real interest rates near zero, businesses are not increasing investment. They don't know what else to do, so they just keep repeating the same thing, expecting a different outcome.

This is the definition of insanity, right?

[thaskalos]

The war against the middle class has been going on for many years...but we were too stupid and too distracted to notice.

[Clocker]

The war against the middle class has been going on for many years...but we were too stupid and too distracted to notice.

The worst part of it is that the war against the middle class is an unintended consequence of people who believe that they are doing good.

It has been known for hundreds of years by those who objectively study such things that big government, bureaucracy, and increasingly burdensome regulation results in increasing income inequality and the decline of the middle, entrepreneurial class. Modern understanding of this dates at least as far back as Adam Smith in the 18h century.

British historian Niall Ferguson discusses the problem in detail in his book, "The Great Degeneration". He says, building on the work of Adam Smith, that the institutions of a society dictate its economic development. He talks about it briefly in a recent article:

A year ago, according to Gallup, economic confidence in the United States plunged, touching bottom in late August. It then rallied, only to start sliding again with the arrival of summer. Sunshine doesn’t seem to work like it used to.


What is going on?


The answer is that much of the developed world, including the United States, is stagnating. The founder of economics, Adam Smith, had a term for this. He called it “the stationary state.” In his day it was China that looked stationary: a once “opulent” country that had simply ceased to grow. Smith blamed China’s unfavorable institutions—including its bureaucracy—for the stasis. He also noticed how the stationary state favored the super-rich and civil servants, leaving poor laborers to slide toward subsistence wages.


Now the boot is on the other foot. It is Westerners who are in the stationary state, while China is growing faster than any other major economy in the world. The World Bank expects the European economy to contract this year and the U.S. to grow by just 2 percent. China will grow as much as four times faster than that.




Full article. (http://www.thedailybeast.com/newsweek/2012/07/15/niall-ferguson-the-cure-for-our-economy-s-stationary-state.html)

[burnsy]

The war against the middle class has been going on for many years...but we were too stupid and too distracted to notice.


The smartest post on this subject. I can research economic stats for the last 30 or more years showing a stagnation in wages, a decline in "middle class" careers and low interest rates. People are so "asleep" they think this happened over night. (its Bush and Obamas fault:lol: )...This has been coming for decades, they are doing everything they can to "hide it" or support the economy so things don't look so bad.(that only works for so long) So what happens?????? Interest rates stay artificially low , but no one has squat to demand anything because they are lucky to pay their energy bill and eat. People and their opinions are mostly laughable, when you take politics out of it and stick to economic science. The government and CORPORATIONS that own the government wanted "free trade" without "planning" or pure capitalism through out the world.(we forced this issue)......thats how they did it and this is what we got. The middle class is the "secret" to our entire economy. One guy buying a Bentley means sh!t, 3 million people buying fords is thousands of well paying jobs. Empty houses are a drag, new houses and occupied houses create thousands if not millions of jobs. Without a STRONG middle class you can make interest rates 0% and many people still won't be able to afford payments...........its one big cycle...if non ones BUYING, then no one will INVEST (at least they won't invest in these parts), the US economy will just keep coughing and hacking along which affects the entire world. People act like this is "new"....try reading a history book.......they can put JC himself in there...this ain't moving for a while folks. If we have "slave wages", we will have a "slave" or "third world" economy. The middle class is the only thing that keeps this ship floating. When the middle class booms, we boom, when it shrinks, we shrink...that simple. You can put Donald Duck in there if the economy is firing right. As it stands, its pretty sick now.

[sammy the sage]

The war against the middle class has been going on for many years...but we were too stupid and too distracted to notice.

NO....just THOSE who think rigid party lines are...I've been posting for a decade ABOUT this.... :mad: :bang: :(

[sammy the sage]

From the same article...

"As it stands today, the U.S. government and our central bank is working to bring “calm” to the deteriorating middle class by keeping interest rates artificially low and by printing trillions of dollars in new money to save them. But unfortunately, the newly created money is finding its way to the big banks that, instead of taking the money and lending it the middle class using softer lending practices, are investing in the stock market."

So you can blame the Administration and more so Congress, for allowing the Big Banks to have their way...

It always points back to those Bankers....

The devil have em.

very ACCURATE post...the repeal of .G/S in 1998 w/both party's HOLDING hands w/THE banks tells ALL...

[hcap]

The war against the middle class has been going on for many years...but we were too stupid and too distracted to notice.Approximately 40 years

http://assets.motherjones.com/politics/2011/inequality-p25_averagehouseholdincom.png

[HUSKER55]

Mom and Pop stores spent their money locally and the banks lent it out locally. Mom & Pop were also able to invest 10% at a decent return.

Enter the Wal-Marts, and national banks and now the money goes out of state, maybe even out of our country.

Until that changes, the middle class is done for.

If you don't stop buying from national retailers and stop banking with national banks, and start buying locally and banking locally then change is not going to happen.

Those people on top have not done anything wrong. But they have access to vast amounts of cash because of how they operate. Mom and Pop have 1 store, they have 1500.

States have got to tax them more or it is all over.

JMHO

[Clocker]

States have got to tax them more or it is all over.



Businesses don't pay taxes. They pass them on to their customers.

Businesses don't pay minimum wage increases. They pass them on to their customers.

[JustRalph]

Businesses don't pay taxes. They pass them on to their customers.

Businesses don't pay minimum wage increases. They pass them on to their customers.

Exactly! :ThmbUp:

[HUSKER55]

God Point Guys,

obviously one cup of coffee does not do the trick anymore. :D

These mega companies are taking money out of the state. They are not paying in enough to keep local economies moving. Wages are spent just to live.

Small business built America and the mega retailers and banks are going to make serfs out of everyone.

Is my point really that far off? More money has to stay in the state. People have to earn enough to be able to save.

[Dave Schwartz]

Water seeks its own level.

When you raise taxes on the Corp, it goes to whatever jurisdiction offers the lowest tax and combined best deal. Sure, when necessary the costs are passed on to the consumer, no doubt. However, if only company "A" is being taxed they cannot pass the cost on to the consumer or else they risk being too high-priced when compared to the competition.


This is why so many companies have moved offshore: to level the playing field with companies that were paying less (or no) taxes.


The only way to protect us from this is via tariffs on "imported" goods. Of course, that would have to begin with a definition of "imported."

Before you say that "imported" is obvious, there are now situations where it isn't so obvious, such as an automaker that "makes" its cars in another country but has them assembled here.

IMHO, our country has been sold out in the name of the "global economy." This sell-out began decades ago when cars being "imported" no longer had significant tariffs attached to them right on the dock.

[badcompany]

Can we please stop with this romanticizing of the Mom & Pop? I spent my high school years working for one. My memories are low pay, no bennies, and no room for advancement.

[HUSKER55]

I was referring to a type of store, single proprietor, local, and etc.

Perhaps you know of a more PC way to say it?