[Josh]

Someone posted this on another forum in a discussion about "buying American," and it struck me as kind of an interesting (albeit quite scary) thought:

The bigger question is 'was the middle class growth from the late 40's through the 70's an anomoly'? My answer would be yes... a once in 500 year sort of thing that never happened before on a large scale (as far as I know) and probably won't happen again in another 20 generations.

One of the big problems IMO is that people think the sort of '30 years and out with a great retirement' was a sort of status quo through history. It was not. The middle class growth (i.e., millions of unskilled people making 'skilled' wages) IMO was a 'bubble' and an unsustainable allusion.

You guys all know way more about financial growth and trends than me, and I'm curious as to what you have to say on the matter. What do you think?

 

[stealthtastic]

That's really interesting, nice find.

 

[jaxadam]

It's a very interesting perspective, and it sounds like it could possible hold water. There are not a lot of statistical models to compare something like this to, due to the fact that a lot of documentation on individualized citizens and families didn't really exist a few hundred years ago.

If you think about it, most of civilizations we have learned of had very few wealthy (kings, dictators, etc.) with a large majority of the population living as a lower class as servants and workers, not meeting the standards of the middle class in any way these days.

A hundred years ago, it would have been nearly impossible for a skilled trade to become a wealthy entrepreneur and charge exorbitant rates, much less all skilled trades following the trend. This is what has happened over the past few decades with the free market we see; the fact that there is more exposure via media and other communication outlets, it is easier for entrepreneurship to thrive, creating an ability for a middle class to exist.

 

[Drew]

The problem with that analysis is that there HAS been a clear, distinct trend towards greater global wealth since, well, at the very least the spread of democracy and capitalism and the start of the Industrial age.

I disagree, but I also think the American "dream" probably isn't sustainable in a globalized economy - Americans are FAR wealthier than the rest of the world, on average, and as globalization continues to spread that'll have to change. I think more of the world will become middle class and that there'll be a very large global middle class, but also that the kind of conspicuous consumption that came with it in America will have to go away, and a hundred years from now "middle class" will mean something else to Americans than it does today.

 

[Reverend 7 Strings of Hate]

money is fucking evil. it used to be cruelty and violence that oppressed people, now its peices of fucking paper.

 

[105]

Money is only evil if you don't have it.

 

[jaxadam]

Money is only evil if you don't have it.

This is true. It's the people that have it that become evil once they get a lot of it.

 

[stealthtastic]

Money doesn't make you evil.

 

[Josh]

But in all seriousness, is the idea of the middle class (work 30 years then retire) something that is doomed to die with our parents? Or will we pull through this recession and return to things the way they were?

 

[jaxadam]

Money doesn't make you evil.

You'd be surprised...

 

[eleven59]

YouTube - Bigelf - Money, It's Pure Evil

That song was epic live :hbang:

 

[stealthtastic]

You'd be surprised...

How so? Buffet and Gates don't seem to be too evil..

 

[ohio_eric]

Money doesn't make you evil.

Correct. It just exposes the asshole underneath. Lincoln said that if you want to test a man's character give him power. Money can really test someone's character.

In so far as the middle class being unsustainable. I think it's bullshit. Sadly though we have limited historical data to draw any conclusions from. Every time a new class has risen up and closed the gap between the have nots and the have everythings something has happened to eliminate them. The rising merchant class of Europe was incorporated by the monarchies. The unions and strong middle class here were chipped away by cheap foreign labor and free trade agreements. Coincidence? I doubt it.

 

[stealthtastic]

Correct. It just exposes the asshole underneath. Lincoln said that if you want to test a man's character give him power. Money can really test someone's character.

That makes much more sense.

 

[Soopahmahn]

Money is simply the most salable good in an economy - the medium by which goods and services are priced against each other. Acquiring a vast sum implies that you, or your relatives before you, have provided great economic worth to society in mutual exchange.

If not, you robbed somebody who did, or you won the lottery :lol:

The lottery example certainly illustrates ohio_eric's "asshole underneath" assertion. Happens quickly.

I think the last sentence of the OP quote jumps a couple of steps in its conclusion, but up until that I was more or less on board. The problem with the middle class is that it's hated by both the poor class (jealousy and envy) and the elite (fear of competition). Sort of a Huxley argument, but it works for me.

 

[SBelmont]

:rant::rant::rant::rant:
The middle class bubble is just too broad to really brand as unsustainable. The baby boomer era experienced an unsustainable growth of a distinct form of wealth and consumerism. The economy was a tremendously different machine in the post-war era. The goods and services exchanged were different and provided different entrepreneurial opportunities.

The boom from the 40's to the early 70's had a lot to do with massive industrial growth and the increase in need for workers both skilled and unskilled. Military spending went through the roof because peace time armies were now needed to deter belligerent nations yesway:Cold War:yesway. These companies in turn fueled Wall Street and the investors began to reinvest their money to build buildings and so on.

But more importantly, the post war economic boom was fueled by major institutional changes on the global front. The Bretton Woods system specifically. This system facilitated free trade and allowed for cheaper goods to make it to the consumer. In a very small nutshell. Until the 1973 oil crisis, and then the BW system collapse and ensuing recession, all went well.

The 1990s has another boom. The dotcoms. Now a different kind of middle class emerged. Instead of manual labor, it was the dude in the cubicle experiencing the boom. Absolutely unsustainable...how many googles, ebays and amazons can there be? Then after that leveled off, we hit our current recession.

Yes it sucks now, but the economy will eventually recover and we will experience another distinct type of boom as the economy mutates and new technology establishes a new market to exploit. For the near future--until a major economic shift--there will always be an accessible middle class. We shouldn't worry about it too much. We should worry more about the taxes we're going to have to pay to keep funding all the ridiculous city and state employees' pensions.

 

[296]

i think its funny where it says "unskilled people that make 'skilled' wages" because its true. i know so many people that are "middle class" and they dont entirely know what they do at work.

 

[Drew]

The 1990s has another boom. The dotcoms. Now a different kind of middle class emerged. Instead of manual labor, it was the dude in the cubicle experiencing the boom. Absolutely unsustainable...how many googles, ebays and amazons can there be? Then after that leveled off, we hit our current recession.

I would totally buy that argument, except for two factors - one, that the dot com bubble burst in 1999 and the following rececssion was over by maybe 2001, and two, the current recession has almost unanimously been attributed to a real estate bubble, driven by a flight from risk (in the wake of the dot com bubble) and cheap credit.

Also, Bretton Woods may have allowed global trade, but in a very different manner than the current globalized marketplace - China, India, Indonesia, and the like have only become major commodity producers in the last decade or so, and we're just now beginning to see the downward tug on wages as they move from manual labor to semiskilled professions.

 

[sami]

Raise your hand if you are drowning


*raises hand*




:rant:

 

[SBelmont]

the current recession has almost unanimously been attributed to a real estate bubble, driven by a flight from risk (in the wake of the dot com bubble) and cheap credit.

Oh absolutely. I wasn't trying to imply the current recession was related to the dot com bubble. :yesway: to my awesome expository writing skills. I was just giving examples of different boom economies that have failed only to be followed by another successful upswing. When I said "after that leveled off" I was make a sweeping summary of the millennial downturn and post 9/11 dip that was followed by the mortgage backed security boom.

Also, Bretton Woods may have allowed global trade, but in a very different manner than the current globalized marketplace.

Again, I clearly cannot express myself lol. I was actually trying to say exactly that. The BW system was a completely different economic mechanism than modern models. And yes, while the asian economies have only been commodity players in recent years, the BW put into place the IMF and World Bank and allowed numerous developing nations to peg their currency on the US dollar. So while we may not have been importing commodities and products like we have been in the past twenty or so years, tons of nations were essentially buying the US dollar from the treasury to use as their trading currency--a huge benefit to our economy, and something that has become far less common in past ten years.

Basically, you are absolutely right. I was merely trying to say that we have these periods of boom that create these bubbles, which then pop and allow for a new bubble to form. And yes we are better off today than people were 500 years ago, but the people 500 years ago were better off than the people 1000 years ago. Our growth line may be rocky, but it is still going up.

Now I don't think the middle class bubble is infinitely sustainable. Our economic policy is very much "here and now" and built on a model of infinite growth. Down the line we will hit some major roadblocks as today's essential resources grow scarce and the current models cease to be effective. But thats not happening yet. We probably--hopefully--have a few more bubbles left. It would be nice if we could prepare for shitstorms like that, but federal economic policy is rarely preventative. We have to experience universally disastrous downturn (downturn that permanently damages the top 3-5% of Americans) before economic infrastructure is changed.

Again, I think I stopped making sense somewhere in there.