The death of the middle class in America has become so painfully obvious that now even the New York Times is doing stories about it. Millions of middle class jobs have disappeared, incomes are steadily decreasing, the rate of homeownership has declined for eight years in a row and U.S. consumers have accumulated record-setting levels of debt. Being independent is at the heart of what it means to be "middle class", and unfortunately the percentage of Americans that are able to take care of themselves without government assistance continues to decline. In fact, the percentage of Americans that are receiving government assistance is now at an all-time record high. This is not a good thing. Anyone that tries to tell you that the middle class is going to be "okay" simply has no idea what they are talking about. The following are 28 signs that the middle class is heading toward extinction...
If we don't understand the problem or the dynamics that are generating the problem, it is impossible to reach a solution or practical plan of action. The four points of ignorance below doom us just as surely as the actual underlying dynamics of insolvency, corruption, debt servitude, and Tyranny of the Majority.
It’s NEVER to Protect Us From Bad Guys
Malodorous taper emanations and bankruptcies are a toxic mix for munis
- Tough Question for Fed: Time to Act? (Hilsenrath )
- Merkel Begins Third Term Strengthened by SPD Partner Backing (BBG)
- Wary of Roma, Europe cold-shoulders its new eastern workmates (Reuters)
- New Medicines Emerge, but Few Blockbusters (WSJ)
- SIP in the crosshairs: U.S. Exchanges Near Deal for Infrastructure Upgrade (WSJ)
- Secret Inside BofA Office of CEO Stymied Needy Homeowners (BBG)
- AIG Said to Near Sale of Plane Unit to AerCap (BBG)
- Inside the Saudi 9/11 coverup (NYPost)
- Russian Bank Chief Weighs Firings as Costs Absorb Revenue (BBG)
- Video Boom Forces Verizon to Upgrade Network (WSJ)
- Chinese Manufacturing Slows (AP)
There are multiple signs of a top forming. And even stock bulls are sitting on cash. What's next?
By standards of previous generations, the middle class has been stripmined of income, assets and purchasing power. So what does it take to be middle class nowadays? A recent paper used Census data to discuss what sort of income it takes to qualify as middle class but income is not the only the metric - indeed, it can be argued that 12 other factors are more telling measures of middle class membership than income.
With the mainstream media inundated with tales of low paid workers demanding higher minimum wages (thus theoretically expecting to be paid more than a market rate for their services), we thought a look at the other end of the scale was worthwhile (where, some might argue, the following 10 CEOs are also paid above market rates for their 'ability')...
This brings me back to an earlier point, that profits and earnings are likely peaking. All of these point to a top forming.
For anyone who still suggests, incorrectly, that Larry Summers was the "wrong" choice for Fed Chairman just because he would promptly end QE the second he was elected as the erroneous popular meme goes, we have one soundbite from his recent Bloomberg TV interview refuting all such speculation: "if you had to say, should we have used this tool or should we not have, I think the answer is overwhelming that we should have." He had some other amusing logical fallacies (including discussing whether the market is in a bubble) all of which are transcribed below, but the best one is the following: "I think it does bear emphasis that the people who were most appalled by it are the people who have been predicting hyperinflation around the corner for four years now and they have been wrong at every turn." And let's not forget that "subprime is contained" - until it isn't. Then again, the last time we checked, the history on the biggest monetary experiment in history - one in which both the Fed and the BOJ are now openly monetizing 70% of gross bond issuance - has certainly not been written. Finally, in the off chance Summers is indeed correct, what history will instead say, is why instead of monetizing all the debt from day 1 of the Fed's inception in 1913, and thus pushing the stock market into scientific notation territory, did the Fed leave so many trillions of "wealth effect" on the table?
Sickcare is unsustainable for a number of interlocking reasons: defensive medicine in response to a broken malpractice system; opaque pricing; quasi-monopolies/cartels; systemic disconnect of health from food, diet and fitness; fraud and paperwork consume at least 40% of all sickcare funds; fee-for-service in a cartel system; employers being responsible for healthcare, and a fundamental absence of competition and transparency. Obamacare simply speeds up the coming collapse. The neutron bomb has gone off, unseen by politicos and the Elites who wrote the bill. It is already undercutting fulltime employment, and it will soon add momentum to the free-fall erosion of small business growth and employment.
The "aggregate demand is God" Keynesian Cargo Cult fetish of focusing on holiday sales is worse than meaningless--it is profoundly misleading. Counting on strong holiday retail sales to "boost the economy" is like eating triple-paddy cheeseburgers and fries to lose weight. The last thing a debt-dependent economy needs is more borrowing to buy excess consumption, and the last thing an economy that imports most of the junk being purchased needs is empty-headed economists declaring that the purchase of more low-quality, mostly needless junk is anything other than a waste of money and resources.
For those curious what Bernanke's market may do today, we flash back to yesterday's AM summary as follows: "Just as it is easy being a weatherman in San Diego ("the weather will be... nice. Back to you"), so the same inductive analysis can be applied to another week of stocks in Bernanke's centrally planned market: "stocks will be... up." Add to this yesterday's revelations in which "JPM Sees "Most Extreme Ever Excess Liquidity" Bubble After $3 Trillion "Created" In First 9 Months Of 2013" and the full picture is clear. So while yesterday's overnight meltup has yet to take place, there is lots of time before the 3:30 pm ramp (although today's modest POMO of $1.25-$1.75 billion may dent the frothiness). Especially once the market recalls that the NOctaper FOMC 2-day meeting starts today.
IBM tried to come up with a panic-free explanation for the sudden collapse of hardware sales in China, but the Chinese government had warned of the coming fiasco in mid-August
"The government’s bailout plan destroyed capitalism. In a capitalist system, those who stood to gain–and already made off with large gains—would have to bear the risk. The bailouts represented a corruption of capitalism. Crony capitalism violates the spirit of democracy established by the Founding Fathers of the republic known as the United States." - Janet Tavakoli
All of the suffering and hardships the majority of Americans are experiencing today are directly related to the coup pulled off by the crony financial oligarchs in the fall of 2008, and all of the media and political minions that helped them do it. People realize we have become a Banana Republic and they have now lost all hope.