Tags: Death of the Middle Class

“Three Lost Decades” – How the American Middle Class is 20% Poorer Now vs. 1984

Screen Shot 2014-07-30 at 11.16.01 AMLike 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.

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Home Equity Loans Jump 8% as Broke American Serfs Scramble for Cash

Screen Shot 2014-05-30 at 3.15.18 PM With real incomes stagnant and the cost of everything from food, school tuition and healthcare premiums skyrocketing for millions of Americans, it appears that borrowing against one’s home is once again a key source for consumption, if not survival, for the nearly extinct socio-economic demographic known as the middle-class.

The Wall Street Journal reported yesterday that home-equity lines of credit (Helocs) had increased at a 8% rate year-over-year in 1Q14. Some banks are more aggressive than others, and perhaps we shouldn’t be surprised to see TBTF government welfare baby Bank of America leading the charge, with $1.98 billion in Helocs in the first quarter, up 77% versus 1Q13.

From the WSJ:

A rebound in house prices and near-record-low interest rates are prompting homeowners to borrow against their properties, marking the return of a practice that was all the rage before the financial crisis.

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Hard Data on the Death of the American Middle Class

Here is a good, brief  article from the NY Times demonstrating the death of the middle class in America using new Federal Reserve data.  Not that we need the Fed to tell us about the destruction of the economic and social fabric of the nation, after all, it is their policies that are most responsible for the damage.  Perhaps the most telling line in the article is: “the survey illuminates problems that continue to slow the pace of the economic recovery.”  Hmmmm let’s think about that.  The middle class of a nation is being driven into the ground and we are calling it a “recovery.”  We need to start to develop new criteria on what constitutes an economic recovery.  Call me crazy but when the crony capitalist oligarchs steal from the productive middle class via government contacts and then use the same government to pay off the poor with food stamps that’s not recovery…it’s theft.

Key Quotes:
The recent economic crisis left the median American family in 2010 with no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity, the Federal Reserve said Monday.

The Fed found that middle-class families had sustained the largest percentage losses in both wealth and income during the crisis, limiting their ability and willingness to spend.

The share of families saving anything over the previous year fell to 52 percent in 2010 from 56.4 percent in 2007. Other government statistics show that total savings have increased since 2007, suggesting that a smaller group of families is saving more money, while a growing number manage to save nothing.

Families with incomes in the middle 60 percent of the population lost a larger share of their wealth over the three-year period than the wealthiest and poorest families.

Full article here.