• Sprott Money
    05/06/2016 - 06:03
    The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”

"Three Lost Decades" – How The American Middle Class Is 20% Poorer Now Vs. 1984

Tyler Durden's picture




 

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

Like so many other things in popular American culture, this quaint notion of a “middle class” in the U.S. is at this point nothing more than a myth; a rapidly fading fantasy from a bygone era. As myself and many others have noted for quite some time, the decimation of the middle class began long ago. It really got started in the early 1970?s after Nixon defaulted on the gold standard and financialization began to take over the American economy. Median real wages haven’t increased since that time and the rest is history.

Although the evolutionary process toward oligarchy began long ago, its finishing touches have been applied in recent years. This has been easily achieved by the Federal Reserve and U.S. government’s response to the financial crisis, which was and continues to be characterized by an intentional funneling of all the nation’s wealth into the hands of their patrons; the 0.01%. As the chart below demonstrates clearly (and as I highlighted in the post: Where Does the Real Problem Reside? Two Charts Showing the 0.01% vs. the 1%), it is the tiny oligarch class that is reaping all of the benefits.

Screen Shot 2014-07-30 at 10.38.07 AM

The was further demonstrated in full color recently in a report by Oxfam International, which showed that 85 people have as much wealth as the poorest 3.5 billion on earth. There is nothing moral, decent or “free market” about such an outcome. It can only happen in a world characterized by militarism, exploitation, cronyism and fraud. We are living in a global feudalism.

In case you needed any more proof of our current predicament, the Washington Post notes that:

Nostalgia is just about the only thing the middle class can still afford. That’s because median wealth is about 20 percent lower today, in inflation-adjusted dollars, than it was in 1984.

 

Yes, that’s three lost decades.

 

Now, as you might expect, the middle class has been hit particularly hard by the Great Recession and the not-so-great recovery. It’s all about stocks and houses. The middle class doesn’t have much of the former, but it does have a lot of the latter. And that’s bad news, because, even though the crash decimated both, real estate hasn’t come back nearly as much as equities have. So the top 1 percent, who hold more of their wealth in stocks, have made up more of the ground they lost. But, as the Russell Sage Foundation points out, the slow housing recovery means that, in 2013, median households were still 36 percent poorer than they were a decade earlier.

 

Though, to put that in depressing perspective, it’s still a heckuva lot better than households in the bottom 25 percent, whose wealth never grew during the good times, and then plunged 60 percent during the bad ones. That’s because, for both the middle and working classes, real wages have been stagnant the past 30 years, and housing equity has taken a nosedive.

So what if the stock market is up? Most Americans are too dead broke to own equities, and in fact, an increasing amount need debt and welfare just to survive. Meanwhile, Obama is hosting $32,000 a plate fundraisers all over California, while the median wage in America is only $27,000.

That’s just how the oligarchs like it.

Full article here.

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Thu, 07/31/2014 - 12:16 | 5027654 PartysOver
PartysOver's picture

Winning

Thu, 07/31/2014 - 12:25 | 5027693 power steering
power steering's picture

I blame Nixon

Thu, 07/31/2014 - 12:34 | 5027728 A Nanny Moose
A Nanny Moose's picture

Best I can ascertain, Nixon was just reacting to ~200 years of government monetary horsepiss. Within the Untied States, the ball started rolling with the original Coinage Act of 1792, and pegging of gold:silver at 15:1. Gresham's Law took over from there.

This is not to say that monetary horsepiss does not predated the Untied States.

Thu, 07/31/2014 - 12:59 | 5027867 max2205
max2205's picture

I hope they serve a $32,000 crow for dinner

Thu, 07/31/2014 - 14:01 | 5028206 Juno Rock
Juno Rock's picture

Past due for revolution 2.0

Thu, 07/31/2014 - 15:03 | 5028421 Richard Chesler
Richard Chesler's picture

I can see how this way of dealing with cocksucking CEO's could get some wheels...

http://www.chicagotribune.com/news/local/breaking/chi-police-responding-...

 

Thu, 07/31/2014 - 12:59 | 5027854 Ariadne
Ariadne's picture

Nixon was a patsy.

Thu, 07/31/2014 - 12:35 | 5027740 PrecipiceWatching
PrecipiceWatching's picture

Who is? "Winning"?

Thu, 07/31/2014 - 15:51 | 5028937 Colonel Klink
Colonel Klink's picture

According to Warren Buffet, his class.

Thu, 07/31/2014 - 13:00 | 5027868 tempo
tempo's picture

1 of killers of USC Chinese EE grad student was illegal. Parents having problems coming to USA to pickup body. Open borders, no questions asked if illegal,(that's compassion,love and acceptance per Jesus) but God forbid if someone wants to come here legally.

Thu, 07/31/2014 - 13:29 | 5028001 CheapBastard
CheapBastard's picture

That's one sad story. Walking home after a study session beaten to death with baseball bats by Hispanics ... where's Al and Jesse?

 

Where's Barry's, "If I had a son...." speech?

 

I guess the thugs were hanging out in Jerry Brown's "Safety Zone."

Thu, 07/31/2014 - 12:16 | 5027655 q99x2
q99x2's picture

Bankers stole my money.

Thu, 07/31/2014 - 12:23 | 5027686 James
James's picture

Bankers stole my currency.

I still have my money.

Thu, 07/31/2014 - 12:17 | 5027658 lordylord
lordylord's picture

Stop paying your taxes.  You will be 20-30% richer instantly!

Thu, 07/31/2014 - 12:17 | 5027660 pods
pods's picture

The US on whole has been increasing their standard of living with credit since the 80s.  

At least in 1984 our chocolate rations were higher?

pods

Thu, 07/31/2014 - 12:25 | 5027692 Smegley Wanxalot
Smegley Wanxalot's picture

As were our government cheese rations.

Thu, 07/31/2014 - 12:35 | 5027734 A Nanny Moose
A Nanny Moose's picture

Mmmm...Wood pulp Velveeta

Thu, 07/31/2014 - 15:20 | 5027794 toady
toady's picture

Actually, the govment cheese was pretty good back in the late 70s & early 80's. Real Wisconsin cheddar,  not the "proccesed cheese food" of today.

Reagan years were when they started the "deficits don't matter" stuff. Lots of stuff cutting off middle class related government programs for everyone post-boomer. I particularly remember when they passed the stuff raising the SS retirement age just before my birthday. It was the first time I realized I would never see any SS money.

Thu, 07/31/2014 - 12:49 | 5027799 RaceToTheBottom
RaceToTheBottom's picture

And your meat intake changed from steaks to pink slime....

Progress!!!

Thu, 07/31/2014 - 13:01 | 5027880 SheepDog-One
SheepDog-One's picture

Today 'increased standard of living' = 'bought a bunch of shit you don't need on credit'

Thu, 07/31/2014 - 12:19 | 5027664 Quinvarius
Quinvarius's picture

I think the top 1% is about to catch down with their USD, stock market, and banking system paper based wealth.

Thu, 07/31/2014 - 12:53 | 5027817 PrecipiceWatching
PrecipiceWatching's picture

So can you convince my wife, that my idea to convert a chunk of our Fiat into Missouri Farmland, is actually a good idea?

Thu, 07/31/2014 - 13:58 | 5028190 toady
toady's picture

It's been my experience that there is no convincing the wife. If she doesn't want to do it, she won't do it.

The only thing I've had any luck with is having her mother or friends change her mind.

Like gold and silver. Tried to talk her into buying some many times over many months. I didn't like leaving money sitting in the bank.

She was dead set against it. No reason, no articulating why not, just completely ignoring my reasoning, then saying I'm crazy and dismissing the subject.

So I did it anyway.

Like a year later her mom tells her she heard about buying as a hedge against inflation. She talked to her friends at work and they were mixed, some for, some against.

So she comes to me with this great idea. We should buy some gold! Her mom said so!

She didn't even remember anything I said.

So, if you can convince her mom or friends on the DL, that'll be your best bet

Thu, 07/31/2014 - 14:29 | 5028271 PrecipiceWatching
PrecipiceWatching's picture

Isn't there a song "Hard Headed Woman"

Aren't they all?

Yes, your approach is probably the correct one.

Alternatively, if I can get one of the Fox Red Eye or The Five mouthy goofballs to pontificate at length on the wisdom of real assets, specifically farmland then I might get somewhere.   LOL.

Thu, 07/31/2014 - 16:19 | 5029152 Chief Wonder Bread
Chief Wonder Bread's picture

You have to make appeal to the female's 'Nesting Instinct'.

"hedge against inflation". See, that works.

"Gold going to $5,000/oz." Doesn't register.

Come to think about it...

Thu, 07/31/2014 - 14:52 | 5028486 froze25
froze25's picture

You need to make her want to do it.  You can't do it through logic and reason thats not the "woman" way.  Gals its just true, you listen to strangers before your husbands.  You PrecipiceWatching need to do it in a way she will respond.  Go on vacation there, do some "farming"/gardening on your own property.  Show her the beauty of the area, how nice the folks are...Do a class or some shit with her there.  Its not about what you do its about that you are doing it together.  

Thu, 07/31/2014 - 12:56 | 5027840 yogibear
yogibear's picture

Having down weeks used to normal. Now people freak out with a few down days.

The Federal Reserve has created  this rigged market that has to keep going up.

Thu, 07/31/2014 - 14:41 | 5028413 froze25
froze25's picture

And thats not good, the 1%ers are the inovators with a stake in the success in the country.  They create the buinsesses. They have wealth but not enough to be Global, they can't just up and leave.  The .01%ers are the ones that need to be dispised if they deserve it. 

Thu, 07/31/2014 - 12:23 | 5027678 oudinot
oudinot's picture

A few weeks of markets like today's and the 1% problem will be solved.  They will lose all their money and we can all be equally poor.

Schadenfraude anyone?

Thu, 07/31/2014 - 12:22 | 5027682 dobermangang
Thu, 07/31/2014 - 12:23 | 5027684 Smegley Wanxalot
Smegley Wanxalot's picture

I get the point and have no doubt it is true, but the scale for the brown and blue lines at the bottom of the Income Inequality chart is ridiculous.  They could have quintupled and still looked flat as a board.  They could have also have fallen 99.9% and still looked flat as a board.

Thu, 07/31/2014 - 12:26 | 5027698 starman
starman's picture

And this is exactly how one goes from Capitalism to Socialism!

Obama was really the sign if the times thus the reason for he's election by the masses!  

Thu, 07/31/2014 - 13:10 | 5027914 JimS
JimS's picture

Starman: Our USofA has not operated under capitalism since the Fed was established in 1913. We've been run under a Banking Oligarchy since. Whenever a select group of people (in this case bankers) obtain the privilege to create and regulate money this is what you deserve: booms, bubbles, and busts. This cycle is operated for a very, very small group, who are wealthy beyond comprehension. This credit-creation money system has been operational for 600+ years. This system operates perfectly under a precious metal "money" system as well. Read the "Lost Science of Money" and you will see why.

Thu, 07/31/2014 - 12:29 | 5027712 LawsofPhysics
LawsofPhysics's picture

Just wait.

Thu, 07/31/2014 - 12:34 | 5027731 NoWayJose
NoWayJose's picture

A body in motion will accelerate downward - especially when pushed by bankers.

Thu, 07/31/2014 - 12:31 | 5027720 Bear
Bear's picture

I'm finally glad to out of the Middle Class ... I never like that description anyway. 

Thu, 07/31/2014 - 12:32 | 5027727 Atomizer
Atomizer's picture

Another failed quagmire

NWO Dead on Arrival

Thu, 07/31/2014 - 12:35 | 5027729 I Write Code
I Write Code's picture

One thing, the bottom 25% may have no "wealth" but I guess they never did, and they are for the most part much "better off" today being eligible for all kinds of welfare and subsidies.  Of course they haven't paid any income tax for twenty years - but do pay social security if they work, on the books.  But overall I believe they are somewhat better off today than in 1984, it's the middle-class, say about 33 percentile to 98 precentile, who have really been impacted.

It was STEM workers and construction workers who have seen their wages most impacted, but I guess there is a whole class of administrative white-collar types, who are now almost entirely unemployed.

And of course public sector workers are doing pretty well on their wages, and ABSURDLY well on their retirement packages - which may escape being capture on some of these statistics, which is a good thing as they would make it look like private enterprise workers are doing much better than they are.

Thu, 07/31/2014 - 12:36 | 5027745 tickhound
tickhound's picture

What we need to do is lift all boats.
Without our help they couldn't get LOANS for CARS.
It could be much worse.
We need to invest in education.
Once corporations start hiring...
Recovery is around the corner, the market tells us this.
We can help solve this crisis by fixing roads, bridges, infrastructure.
It's all because of a few fat cat bankers.
We need to change Washington.
How hypocritical of people protesting corporations and banks when they own iPhones and use debit cards.
What is it these people want?
Seriously?
We need more philanthropy.
It's the healthcare system that's the problem.
There are plenty of opportunities out there.
Corporations are now hiring.
We need more skilled workers.
Low interest rate LOANS for higher education.
Now that we are out of recession and QE has been taken off the table...

Thu, 07/31/2014 - 12:38 | 5027749 oudinot
oudinot's picture

Without a robust middle class, and the US does not have that now (Canada is not far behind), the tax receipts will slowly dry up, there is no more room to tax higher : economic implosion is inevitable.  When? 

Sometime in the future.

Thu, 07/31/2014 - 12:42 | 5027758 junction
junction's picture

Everyone of the 316 or so million Americans has one right where they are equal to the .01 %: their share of the 17+ trillion dollar National Debt.  Today, that works out to $55,301.64 per American.

This message is approved by The Man From Kenya.

Thu, 07/31/2014 - 13:31 | 5028020 oudinot
oudinot's picture

It's only $19,560.00 per American if we include our dogs and cats.

Thu, 07/31/2014 - 12:43 | 5027768 SmittyinLA
SmittyinLA's picture

(excluding debt)

Thu, 07/31/2014 - 12:44 | 5027770 madcows
madcows's picture

Is Hildaleast in the top 0.1 or 0.001%.  Must be the top 0.1.  she's poor.

Thu, 07/31/2014 - 12:56 | 5027835 Ariadne
Ariadne's picture

Yes she is. 99% have more time left than that wizened beastie.

Thu, 07/31/2014 - 12:48 | 5027791 Postal
Postal's picture

See, they're doing it wrong. We should all get a gov't job to grab seed money for a phantom corp to be listed on the NYSE. :)

/sarc

Thu, 07/31/2014 - 13:01 | 5027878 Itchy and Scratchy
Itchy and Scratchy's picture

20% poorer? I'll take it!

Thu, 07/31/2014 - 13:24 | 5027962 Cthonic
Cthonic's picture

  From the article: "But there's a big caveat here. Households don't necessarily stay in the same percentile from one year to the next, let alone for 30 straight."  Then they spin how people go to school and save... implying upward mobility.  So you know, that just the opposite thing is socially taboo and unmentionable, because it is so prevalent: downward mobility.  That's the new normal that the mainstream dances around.  There was an Edward Jones advisor wandering the neighborhood yesterday~ I just looked at him like he was a plague/ebola/smallpox victim and stepped back inside.

Thu, 07/31/2014 - 13:09 | 5027919 AnAnonymous
AnAnonymous's picture

It is funny. An 'american' middle class can never go poor enough to be considered no longer middle class.

The 'american' middle class is not going poorer. The 'american' middle class is decreasing in numbers, those who were middle class are turning to the poor.

The 'american' middle class way of life has saturated the world, there is not enough resources to sustain an 'american' middle class that large.
Therefore, for the 'american' middle class tp survive, some of it must be sacrificed.

'Americans' consider their 'american'middle class status as some sort of radioactive marker that shall last for thousands of years.

When you were middle class and now poor, you are no longer middle class, you are poor.

'American' societies are not supposed to work to the benefit of the poor, poor in an 'american' society exist to be farmed and increase the welfare of the middle class.

Thu, 07/31/2014 - 13:54 | 5028152 PrecipiceWatching
PrecipiceWatching's picture

Fuck off.

 

Know nothing fool.

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