Chart Of The Day: The Death Of America's Middle Class

Tyler Durden's picture

There is one chart that everyone should see that is part of Reuters' must read special series: The Unequal State of America: Redistributing Up - it is the chart we have said over the past 4 years is the only one that matters for America - that showing the flattening of America's wealth distributon Gaussian curve, aka the plunder and accelerating destruction of America's middle class, at the expense of the poorest and the wealthiest. This is nothing but the inevitable outcome of a co-opted, conflicted and controlled marionette government, which does the bidding of the wealthiest lobby powers (read corporate shareholders and Wall Street), partitioning the bulk of the wealth to the richest, while sending the scraps to the poorest in order to keep itself in power due to the power of the ever poorer, democratic majority. Alas, since there is never a free lunch, and since the Fed does not create wealth but through its currency debasement merely accelerates the transfer of wealth, someone ends up footing the bill? Who? None other than that part of the US population which made the United States of America the greatest country in the world, and is now watching it implode first slowly, then fast.

The chart in question:

How does Reuters frame this ever so critical topic that only impairs the ever more disenfranchised, ever declining middle class, and thus few actually bother discussing:

In the town that launched the War on Poverty 48 years ago, the poor are getting poorer despite the government's help. And the rich are getting richer because of it.

 

The top 5 percent of households in Washington, D.C., made more than $500,000 on average last year, while the bottom 20 percent earned less than $9,500 - a ratio of 54 to 1.

 

That gap is up from 39 to 1 two decades ago. It's wider than in any of the 50 states and all but two major cities. This at a time when income inequality in the United States as a whole has risen to levels last seen in the years before the Great Depression.

 

Americans have just emerged from a close presidential election in which the government's role as a leveling force was fiercely debated. The right argued the state does too much; the left, too little. The issue is now at the center of tense negotiations over whose taxes to raise and what social programs to cut before a Jan. 1 deadline. And the government's role will be paramount again next year if Congress takes up tax reform.

 

The federal government does redistribute wealth down to struggling Americans. But in the years since President Lyndon Johnson took aim at poverty in his first State of the Union address, there has been an increasingly strong crosscurrent: The government is redistributing wealth up, too - especially in the nation's capital.

 

The beneficiaries are not the billionaire financiers and celebrities who
have come to personify income inequality in the 21st century. Yet the
Washington elite are just as much part of the trend, having influenced
laws and decisions that alter the entire country's distribution of
income.

Read more here.

In summary: crony capitalism for the wealthiest, scrappy socialism for the poorest, and everyone else (that soon to be extinct creature known as the middle class) left to fend for themselves.

Some other charts:

 

And:

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akak's picture

Nobody tell AnAnonymous about the REAL --- and dying --- American middle class. In his twisted and moronic mind, the American middle class is the "king class", the mattering thing, the epitome of the 'american' hobbo, the crustiest bit of US 'american' citizenism, the parangong of blobbing-uppityness, etc.  Too bad it had its crown stolen a long, long time ago.

centerline's picture

Shhhh.... that guy is like a rash that won't go away.  He's probably poking pins right now into a pair of Barbie and Ken dolls while chanting "die America, die!"

akak's picture

Is that before or after he woks the dog, forces blame to the exterior, kicks the can and monolizes the speeching means?

TheFourthStooge-ing's picture

centerline said:

Shhhh.... that guy is like a rash that won't go away.

This crisis has confirmed this region of the world on that path and they even managed to get much more than blobbing up.

He's probably poking pins right now into a pair of Barbie and Ken dolls while chanting "die America, die!"

The cavalry was indeed late for one reason: the US has had this song called theft done through a proxy and that proxy was hiding genitalia behind thin air.

Your version could have charm because it would show the total disrespect US citizens had for taking the matter in the hands.

TheFourthStooge-ing's picture

akak said:

Nobody tell AnAnonymous about the REAL --- and dying --- American middle class. In his twisted and moronic mind, the American middle class is the "king class", the mattering thing, the epitome of the 'american' hobbo, the crustiest bit of US 'american' citizenism, the parangong of blobbing-uppityness, etc.

Without the American middle class, the king class of US citizenism, who will farm the poor? Will the current crop of poor go unharvested and, if so, will the fields of extortion simply lie fallow as the unharvested poor wander about them aimlessly?

Too bad it had its crown stolen a long, long time ago.

Smithian economics infracturestructure exploitation is profitable, once one had good King Georges the Third to foot the bill of the can kicking hobbo scheme somehow.

Wonderful world.

All what matters is to be aware of what things.

Peter Pan's picture

I think the author meant the destruction and plunder of the middle class for the BENEFIT of the lower and higher classes and not AT THE EXPENSE of the higher and lower clases.

F. Bastiat's picture

It's called socialism. Despotism couched as altruism.

Look, the ideas of the Constitution have basically been replaced by the superstitions of the Communist Manifesto.  The inevitable result is the destruction of civilization.

cossack55's picture

Since it is the TBTF and the TBTJ running it all, would it not be more accurate to label it fascism?

Lord Koos's picture

Accurate, schmacurrate -- this is Zero Hedge.

alien-IQ's picture

Forget it...he's on a roll.

"Was it over when the Germans bombed Pearl Harbor? Hell no!!!"
Bluto - Animal House

Catullus's picture

Looks to me like there are a greater number of jobs paying over $100k a year. This actually suggests that the middle class are getting paid more. Whereas less than 15% of the population got paid more than $100k, now more than 20%.

If there are 150m people working, that means easily 7 million more people are earning over $100k a year than 20 years ago. And here's a shocker -- those people in the middle tiers 20 years ago, probably migrated up to getting paid more now. That speaks extremely well for upward mobility in this country.

The thing that's really fucked up is that $25k just doesn't go as far anymore because of inflation, but you can thank the Fed and US Treasury "need" to bailout the banks over these past two decades

akak's picture

 

Whereas less than 15% of the population got paid more than $100k, now more than 20% ... that means easily 7 million more people are earning over $100k a year than 20 years ago.

I feel the need to point out that $100,000 today is equivalent, in purchasing power, to around $45,000 20 years ago.  So the fact that less than double the number of people (particularly ignoring population growth in those 20 years) are making $100,000 today compared to then means that in actuality the REAL (not nominal) mean income has fallen, not risen.

Spastica Rex's picture

But what did an iPhone cost in 1992?

centerline's picture

I remember when Plasma TV's first came out they were like $10k.

Anyone have a good plasma tv recipe?

SilverRhino's picture

No but the fresnel lens in a rear projection TV makes a DAMN good solar furnace. 

akak's picture

 

But what did an iPhone cost in 1992?

I'm not sure, but I can tell you what it costs today (aside from the cash cost): serenity, sanity, and a more civil and more MEANINGFULLY socially-connected society.

cxl9's picture

True, the cost of communication was much higher back then, but the amount of drivel was correspondingly lower.

In the beginning, there was the handwritten manuscript. Rich men paid scribes to make copies of books worth copying. Since that was an expensive process, drivel tended to not be reproduced.

Later came the printing press, which dropped the cost of reproduction and made mass communication possible. Drivel expanded.

Then came radio, TV, Internet, Twitter, Facebook. Drivel explodes expontentially as the cost of communication approaches zero.

Eventually the cost of communication will reach zero, and the universe of information will be composed entirely of drivel.

Spastica Rex's picture

Yes - SNR is getting pretty dismal.

I was joking.

The Joker's picture

All I know is I miss my phone bill from the 90s.

akak's picture

Akak's Law:

The more that is said, the less that is said is worth saying.

Catullus's picture

Then the bar chart is bullshit because it says adjusted for inflation.

I bet if they brought this back to 1975, it'd be just as "alarming".

blunderdog's picture

USUALLY when you see a chart that claims to be "adjusted for inflation" it refers to the gummit-provided stats, so it's pretty distorted.

(It just occurred to me it'd be interesting to see what everything looks like if you use the Austrian inflation definition--what was total M2 in 1980 vs. today?  Heh.)

Catullus's picture

Yeah. I've seen these charts since undergrad labor Economics. I don't think it's real economics. It's more sociology than anything else. They have a lot of data, but not a lot of insights.

mwarden's picture

it is also bullshit because it is using household income and making conclusions as if it's per-earner income. divorce rate confounds this data big time.

mwarden's picture

the chart is not nominal

Seer's picture

Do you know how many people think like that person?  And he/she is, by the planet's standards, WEALTHY.  Scary...

This, however, should be kept in mind when any of us feel so inclined to spout off more on emotion than from meaningful information.  We need to keep in mind that things aren't necessarily simple (TPTB rely on the sound-bite world to control us).

Thank you for taking the time to inject rational input.

Catullus's picture

Oh balls! I didn't read the article below the chart. This is DC!

Fuck everything I said above. This is because of the rise of parasite class in DC. These are more lobbyists, aides, think tanks, consultants, aging government workforce, contractors and subcontractors. They're all over DC. Check out the suburbs of DC: riches counties in America. This is the result of pigs feeding at the trough.

A quarter of the DC workforce makes more than $100k a year? Seems about right. Is there any real industry or commerce in DC? Nope.

lunaticfringe's picture

So they get the marbles now...but guess what? No more fucking marbles left to get.

The elite have killed their golden goose. You gotta leave the bourgeois a little dough to buy your shit. I'll go ya one better. I can end all wars right now. I got the formula. http://thecivillibertarian.blogspot.com/2012/12/when-god-needs-hit-man-h...

SheepDog-One's picture

Killed the Golden Goose...now they're ripping apart the carcass wondering where all the eggs went, thats all this is. They'll realize their fukup soon.

Seer's picture

That's the question that I've been asking for years now.

I just don't see that it's in their interest to have complete control when having most control was sufficient.  The ONLY reason I could see is IF in fact, which I believe the case, that TPTB know the entire economic structure is going to fail (BIG=FAIL).

Not thinking that the extra marbles are going to be worth much to them (as you note it'll probably be an albatross around their necks).

MethodMan's picture

There's some counter-productive serious WTF-age here.

The percentage of people in the lower/middle INCOME brackets is going DOWN and the percentage of those over 100K is going UP. How is that bad? What if all the brackets below 100K go to 0% and the 100K+ go to 100%? That's even better.

Where this fails is that the graph needs to be extended out to 1M ... a "middle class" income starts at 80K for crissake in many areas. Then you see the redistribution to the real "rich" brackets. Lame trying to lump everying in a 100K+ bracket.

SheepDog-One's picture

Problem is your $100,000 will soon only buy a few dozen eggs like in Zimbabwe. People want to believe this just goes on no problem, but it doesnt.

MethodMan's picture

Not my point, which is that the bar chart shows something positive: that more people as a percentage are moving into the 100K+ brackets. That is, they moved into higher brackets. So this is not where the real probem is, which is that 250K+ brackets on banking crony and fedgov teat "jobs" have increased on the backs of the real middle class.

Seer's picture

Do you not understand the REAL function of the middle class?  It's been to PROTECT the upper class from the lower class.  Take some time to ponder which of the two (remaining) classes one would better off being in. (always keep in mind that things change- if you're not one of TPTB now you're sure as hell not ever going to be; and only these people have some sense of security)

Sometimes people get so caught up with the trees that they can't see the forest...

Jack Burton's picture

Corporate profits are at record levels, even though the US economy went through a financial crisis starting in 2008, a giant housing bubble burst and real unemployment is high.

It appears corporations have found the secret to record profits in an economy in deep trouble. Thais a real feat, no wonder compensation for top executives is sky high!

HD's picture

Fire everyone possible and borrow all the cheap cash you can. Screw capex - just buy back shares and issue special dividends.

Of course when every company does it - margins top out soon enough and all those unemployed/underemployed SOBs can't buy your shit anymore...then what?

alien-IQ's picture

It's pretty simple really:

1) Break the law for massive profit.

2) Get caught, pay fine equal to 5% of what you profited.

3) Repeat steps one and two Ad infinitum.

mwarden's picture

actually, this happens during every recovery

gwar5's picture

And the UN just said: "2012 was the best year ever for wealth redistribution."  Yeah, we get it.... full steam ahead for Obama. BHO, our next UN Sec'y General and tba, first President of the New World Order.

 

 

 

Mercury's picture

Incentive: get a higher paying job.

Spastica Rex's picture

Looks to me like $100K and you're over the hump.

The 1% needs all the support they can get - nobody could expect them to rule the world without support.

pragmatic hobo's picture

thing is ... the whole middle class phenomena was an aberration, an artifact of distortion created by world-war 2.

Seasmoke's picture

Tie your left arm to a truck going west and tie your right arm to a bus going east and let me know how your middle looks when they arrive at their destination.

Dre4dwolf's picture

Call me when its time to use the pitchforks and torches, otherwise nothing is changing honestly.

Count de Money's picture

One thing that the geniuses at Reuters don't understand: When looking at income, statistics don't count non-cash benefits.

Food Stamps are a non-cash benefit and aren't counted. Medicaid is also not counted in lieu of health insurance premiums. Ditto for a welfare recipient's rent money because that gets paid directly to the landlord. Same for subsidized housing projects.

It says something that the number one health problem among poor people is obesity.