The average American ( Mom & Pop Middle Class Who Votes) has seen their standard of living drop, dramatically in just the past year or so. We are seeing the greatest drop in the US standard of living since 1960. The current tea part conservative trend to demonize those who have lost jobs – or to appear to be demonizing them, the way Herman Cain is doing, is a recipe for abject disaster in 2012.
“…What has led to the most dramatic drop in the US standard of living since at least 1960? One factor is stagnant incomes: Real median income is down 9.8 percent since the start of the recession through this June, according to Sentier Research in Annapolis, Md., citing census bureau data. Another is falling net worth – think about the value of your home and, if you have one, your retirement portfolio. A third is rising consumer prices, with inflation eroding people’s buying power by 3.25 percent since mid-2008.
“In a dynamic economy, one would expect Americans’ disposable income to be growing, but it has flattened out at a low level,” says economist Bob Brusca of Fact & Opinion Economics in New York…With disposable incomes falling, perhaps it’s not surprising that 64 percent of Americans worry that they won’t be able to pay their families’ expenses at least some of the time, according to a survey completed in mid-September by the Marist Institute for Public Opinion. Among those, one-third say their financial problems are chronic….Even recently some Americans could tap the equity in their homes or their stock market accounts to make up for any shortfalls in income. Not anymore. Since 2007, Americans’ collective net worth has fallen about $5.5 trillion, or more than 8.6 percent, according to the Federal Reserve….”
Heather MacDonald (one of the truly vile libertarians in The Pink Flamingo’s humble estimation) has a piece in the City Journal, entitled Get a Job. That’s nice. I agree, shut up and get a job. BUT – what happens when we’re dealing with about 20% real unemployment?
Then there is the fact that most of the vile occupiers are employed!
“…“Get a job!” wouldn’t apply to most of them. Half of the respondents are already employed full-time, and an additional 20% work part-time. Just 13.1% are unemployed–not a whole lot more than the national average….”
Who wants to hire a stinking person (literally) full of piercings, tattoos, and a lousy attitude? Before I go any farther, I want to mention something. If a person is disparate for a job, they are going to do things to conform to the social norms. I know, it’s a bummer, but life sucks.
We are told that the Occupy Wall Street people are just plain wrong. But are they – on a few things? I agree with this commentary about AIG.
I told a friend that Herman Cain’s plan could be like squeezing blood from a stone. Someone else told me it was like he does not like anyone who isn’t rich. I was emailing back and forth with a very wise person who reminded me that we do change how we see things.
Maybe I have.
“…“I might like to think that I’m middle class, but I’m not. I’m not anymore,” said Rae-Anne Crotty, a customer service manager at the store. She now shops for groceries at discount stores, she said, and buys gifts for her children at Christmas but not on their birthdays.
It remains the prevailing view of economic policy makers that economic activity will eventually return to the same trajectory as before the recession. Bernanke and others have said that they see no evidence of any permanent change in the economy. Previous bouts of economic pessimism, as in the early 1980s and early 1990s, went away once growth picked up….”
This is so deceptive.
“…To put that change in perspective, under the current tax structure a company that earns $1 billion in the United States pays $350 million in corporate taxes, leaving the shareholders with a net profit of $650 million. If the 9-9-9 plan were in place those same shareholders would instead enjoy a net income of $910 million, fully $260 million more, or 40% more money in their pockets. The resulting rate would be amongst the lowest in the world and would make the United States an investment magnet for investors and companies from around the world.
Then of course there are jobs. I began this post talking about how the poor would not be negatively impacted by 9-9-9. Actually they will be positively impacted. What is the single most powerful way to turn poor people into middle class taxpayers? More and better paying jobs, of course. With a 9.1% unemployment rate there is little incentive for companies to increase the wages of their employees. There are simply too many people willing to step in and fill the shoes of any disgruntled employee. At an unemployment rate of 4% the dynamic is turned on its head where employees are far better positioned to demand and get wage increases. As economic growth creates millions of jobs and as demand for workers begins to outstrip supply, the value of those employees increases and their compensation follows suit….”
What is the solution? Rick Perry has the right idea with a flat tax. I gather he is working with Steve Forbes on it. This says it all.
“…Inez Stallworth, an underwriting assistant for a financial services company, recently gave up her car, in part because of rising costs for gasoline and groceries.
“I can’t fit it in,” said the 27-year-old Chicago resident, who said most of her extended family was getting by “paycheck-to-paycheck.” Consumer prices rose 3.9 percent in the 12 months through September, the fastest pace in three years.
With gasoline prices high, consumers have less to spend on other things.
Moreover, a rise in overall prices saps economic growth, which is typically measured in inflation-adjusted terms….”
If, indeed, it all comes down to high prices at the pump, it could be that Rick Perry’s energy plan is the way to get us out of this fine mess, not Herman Cain’s disastrous 9-9-9 plan.