Posted on 02/25/2007 9:59:39 AM PST by dialup
Middle class anxiety?
U.S. Sen. Charles Schumer, D-N.Y., chairman of the Joint Committee of the U.S. Senate, thinks so. He plans hearings over the next two years beginning with the subject of “middle class anxiety.”
His reasoning is very simple: “They (the middle class) are not struggling to get by, but they are struggling to get ahead.
“They are unsure of their fortunes ... in an economy and world that is about to change.
“They feel they are alone ... and that government isn’t helping them where they need it.”
Big Brother has arrived and he and his other brothers of the far left in Congress intend to force their Socialist (and worse) policies on the American citizen.
Sen. Schumer’s statements and his announced actions for the future are but an indication of economic problems to come.
Establishing a false premise such as anxiety within the middle class and then offering oppressive solutions such as taxation on the rich, when everyone knows the middle class itself will be hardest hit, becomes nothing more than major government interference with the America’s present robust economy.
What is there to be anxious about?
The consumer confidence index is at 110.3 percent, one of the highest ever; retail sales were up 6.2 percent in January on an average from seven selected retail giants; gross domestic product (GDP) showed surprising growth of 3.5 percent for the fourth quarter, up from 2 percent in the third quarter; and U.S. business productivity rose 3 percent more than expected in the fourth quarter. Unemployment at 4.7 percent was the lowest in 30 years; more Americans own their own homes than at any other time.
What on earth could cause anxiety within the middle class? >p>Leading the real middle class, the baby boomers, Americans born between 1945 and 1964, account for about 39 percent of the U.S. population over age 18.
They built the modern day wealth of today’s middle class.
According to data collected by the U.S. Census and Federal Reserve, as of 2001, the baby boomers controlled 67 percent of the country’s wealth of $28 trillion. Households headed by the 55 to 64 age group have a median net worth of $162,048.
So where is the anxiety?
It is important to note, the baby boomers were not born into wealth. To the contrary, they were born into opportunity provided them by the “greatest generation,” the soldiers, sailors and marines who risked their lives in World War II to guarantee all Americans the liberty and freedom we enjoy today.
Their fathers and mothers got off the returning troop ships with literally the military shirts on their backs.
Their income in the service was on average about $60 to $70 per month. Buck privates were paid $21 per month.
But in a way, they possessed wealth — the wealth of a dream, carried in some cases, perhaps from a fox hole to a jungle tent.
That dream was of returning home to America, marrying, in some cases, the sweetheart they left behind when they went to war, raising a family in the little cottage with the white picket fence.
It was the American Dream.
They put up the ladders of opportunity that their children and generations since could climb in their ascending mobility to the middle class and beyond.
Ninety percent of today’s millionaires came from the lower levels of the economic scale, some from very poor families.
The present robust American economy, perhaps the strongest ever, rests on a foundation that has supported it, with the exception of two brief recessions, for the past quarter century.
That foundation was the brainchild of Nobel Laureate Milton Friedman, described by The Economist as the “most influential economist of the 20th Century, possibly of all time,” and by Alan Greenspan as “having ideas sufficiently original to alter the direction of civilization.”
His political philosophy stressed the advantages of the marketplace and the disadvantage of government intervention.
His economic policies fell on deaf ears all during the “big government-welfare state era” of the 1940s, 1950s, 1960s and 1970s.
He would have to wait until 1980, at age 68, before he found his man.
That man was President Ronald Reagan.
President Reagan had the moral courage to adopt Milton Friedman’s philosophy into a program that became known as “supply side economics.” Simply stated, supply side economics involved an adequate supply of money, increased consumption and the increase in steady employment. Friedman referred to his refinement of the consumption function and the permanent income hypothesis (1957) as his best scientific work.
Milton Friedman was a close advisor and consultant to President Reagan during his entire administration (1981-88).
America has come such a long way in the establishment of an economy that has forward vision offering opportunity to all.
No economy can guarantee equal wealth to all.
That is a function of the initiative of each individual.
One of Milton Friedman’s most memorable quotes is: “If equality is placed before freedom, you will have neither; If freedom is placed before equality, you will have both.”
The far left liberals in Congress will use any means at hand to push economic equality ahead of economic freedom.
No matter how compelling their phony claims seem, such as “middle class anxiety,” they must be exposed and resisted.
Um...cut spending on useless and unconstitutional crap?
Um...cut spending on useless and unconstitutional crap?
People like a lot of the useless unconstitutional crap. So, the responsibility gets kicked back down to the states or local communities who pay for it. When that happens they lose a lot of economies of scale and it gets more expensive. Take the FDA, for example, you'd have 50 different testing facilities for new drugs -- many of them probably with different standards.
I recently changed positions and had a > 15 percent increase in my salary. The market is so hot that I get approached by recruiters weekly and friends who have been looking for months are having lots of interviews.
You offer no statistics and have to ask what the CPI is. Obviously I will take your fact filled assertion with great weight.
You don't sound like much of a conservative.
Want to know the REAL problem?
You have a "News Media" Establishment that has given up any pretense of objectivity. BETTER Economic Numbers under Bush then those under Clinton are reported COMPLETELY different.
When Clinton finally had a 5.6% Unemployment rate in 1996 the Press went into verbal hysteric acting like it was wholly Bill Clinton's accomplishment and the greatest economic accomplishment ever.
NOW when they have to be dragged kicking and screaming to the table to report BETTER economic numbers under Bush. The same Junk Media, EVERY time, Reports the news as "Well here is some really good economic news but the numbers are not as good as expected". What is NEVER said is WHO expected the numbers to be better?
So basically under a Democrat here is how Economic Reporting is done. "Here is some so so news which we are going to hype and misrepresent and exaggerate for two pages. Under both Reagan and Bush BETTER Economic numbers would be reported "Well here is some really good news now we will spend the next 10 paragraphs manufacturing reasons why you the middle class voter should think the good news really isn't good news". You cannot fight that sort of agitprop with a "Conservative Media" that would rather spend all it's time whining because everything is not perfect then every actually attacking the Democrats on ANYTHING. Another example. Clinton regime always over inflated the numbers then came back months later and quietly lowered them. The Media simply screamed the lie and never made much of the correct. The Bush team reports the actual estimate and has consistent revised the numbers UP after the real data is finalized. The Media down plays the 1st and totally ignores the 2nd.
What Conservatives better wake up to soon is they are being played for utter fools. Instead of mindlessly accepting the Economic Disinformation that is screamed at them by a corrupt Media Establishment, they better lean they are at war with a political blood foe here and need to be fighting EVERY day against the disinformation machine laughingly called the "US News Media"
You mean the declining debt? YET ANOTHER GOOD ECONOMIC STATISTIC NOT COVERED BY THE MEDIA.
Since 1994, the national debt has expanded by 6 percent while the economy has grown by 35 percent. This has reduced the debt burden from 49 percent to 38 percent. In fact, the current debt ratio is below the level for every year of the 1990s. Thus, it is not surprising that recent budget deficits have not devastated the economy.
http://www.heritage.org/Research/Budget/bg1820.cfm
Being a conservative doesn't mean making blanket statements or offering aphorisms for highly complex problems. Slogans are nice, but a bumper sticker never solved a single problem.
People like a lot of the useless unconstitutional crap.
-- Do they like it enough to pay for it themselves? Or do they rely on the government to force their neighbors to pay for it?
I agree with you on the debt thing. That is good news, but the level is still too high. It needs to come down more.
They want their neighbors and themselves to pay for all the unconstitutional crap.
Fact is, we could cut taxes and balance the budget just by eliminating pork-barrel spending, freezing growth on some more minor programs, and working towards privatizing Social Security.
I asked you what the CPI is, because you apparently believe in it. I don't.
We do use rhetoric around here. LOL
Fact is, we could cut taxes and balance the budget just by eliminating pork-barrel spending, freezing growth on some more minor programs, and working towards privatizing Social Security.
I've always questioned the "pork barrel" thing. One person's pork is another's bacon. I don't have any hard evidence, but I suspect many of those pork barrel programs are funded inefficiently. If they were brought into the open, debated and studied, then folks might still get many of those programs, but at a lower cost to taxpayers.
Rhetoric, but not facts. Great!
>>
Women were not allowed on troop ships. What revisionist bilge.
<<
My mother served in the Navy and had two troop ships torpedoed out from under her. Her experience may have been an exception, but that is what happened.
This part is completely true.
Did you, however, read the whole article by Jubak? His point is that a "net rise" of 110,000 jobs is often created by the loss of 220,000 jobs and the gain of 330,000 jobs.
In other words, there is much more "churn" in the job market than before--so the stability isn't there.
Think also of Jack Welch's "we didn't give them lifetime employment, we gave them lifetime employability" or Carly Fiorina's "no American has a right to a job" or numerous other companies' "there are no qualified Americans, so we are letting you go. But first, train in your replacement from India for half your pay, or you get no severance."
(E.g. mega-consultancy firm McKinsey & Company was explicitly paid by one of the Indian states to generate 1 million new jobs in India by 2008.) Try my vanity on outsourcing here, or use the FR search on "As the World Turns" in the title for more of my articles on the US economy vs. other emerging powers.
Cheers!
Still waiting for something besides navel gazing... Or do you gain wisdom from crystals and gongs?
Thank you very much!
That was interesting. In my opinion, anxiety is basically a matter of philosophy. You choose to be anxious, or not to be anxious, by the way you categorize your environment.
The more things you put in the category of "things I need to be able to control or predict, but can't," the more anxious you will be.
Get back to me when you're sober.
Are you reading chicken entrails? Observing the stars? Judging the length of womens skirts?
Nope -- just distrusting the government perfesser....
Get back to me when you have something to say that is factually based and not simply empty rhetoric.
You'd better add globalization and the falsely named "free trade" to your list. They're the reason for high taxes.
See that wasn't hard. I must reply that your reluctance to provide an honest arguement supported by facts clearly is not my comprehension deficit.
Now you actually have presented some facts for your arguements. I am proud that my encouragement to you resulted in this growth in your horizons! This is a real learning experience for us both!
So you resent that the government tried to have a more accurate CPI? Oh, poor screwed senior!!! Speaking as a senior myself, I just want the government to make decisions on accurate measurements. I'm planning on being screwed by the Social Security system and I would definitely like my kids to not be screwed, so lets use the best, most accurate economic measurements to make the best decision for all of us.
By the way, I used to read your cartoons.
Did you read these?:
http://www.freerepublic.com/focus/f-news/1773119/posts
http://www.freerepublic.com/focus/f-news/1788502/posts
http://www.freerepublic.com/focus/f-news/1775286/posts
Like you, I've been around long enough to know better than to believe everything I read, and I've also had enough experience with government to distrust it.
If the Fed says it is aiming for 2% inflation and sets interest rates at 5.25%, it wouldn't surprise me at all if the true rate of inflation is pretty close to 5.25%.
1) Unwillingness by the consumer to borrow or by the banks to lend. We have reached that point with subprime fear spreading to other lenders.
2) Falling asset prices. Autos, homes have plateaued and already started down.
Once psychology changes there is little the Fed can do to reverse it in the short term. For a peek at the future just look at Japan.
BUMP
Lighten up, Francis.
The *extent* of churn has increased; and "no real base in factual reality" sounds like a chat-room sound byte.
How old are you anyway? You sound like you have been spoon-fed college course agitprop.
Of course there used to be the opportunity to work at one place for an entire career, or at least for 10-20 years at a stretch. Not for everyone, but for most white collar workers, provided they were competent.
It was not universal, but it was widespread--as was the practice of defined-benefit pensions.
I know people who had been doing quite well in the telecom industry for > 10 years, and then got hit by mass layoffs. And lost hundreds of thousands of dollars trying to stay afloat while applying for literally hundreds of jobs over two- and three- year stretches.
Or if you surfed the chat rooms near the end of the 2000-era tech boom, you would find complaints that Americans could *NOT* get hired at "name" companies, unless they had near 4.0-averages from places like Stanford.
The times, they are a'-changing.
And all due to two things:
multiculturalism (e.g. Ford's Nasser saying "we have too many white engineers)
cheap labor (Microsoft's Brian Valentine: "Think India! Two for the price of one!")
Short-term thinking due to shallow, "next-quarter" thinking MBA's.
Cheers!
I'll just reply to one of your cites.
These include such absurdly dishonest practices as: Excluding those price rises that are considered “too volatile” or “statistically disruptive” Reducing actual prices to reflect some arbitrary “increase in quality” Ignoring quality decreases An amazing assumption that as prices of certain items rise, consumers will turn to alternatives, so allowing for such “awkward” items to be excluded from the calculation The exclusion of government subsidies from certain prices If all that does not add up to a cooked book, I do not know what does.
-----Excluding those price rises that are considered “too volatile” or “statistically disruptive”
Just last month 70 percent of the Califoria orange crop was ruined. http://www.tdn.com/articles/2007/01/16/biz/news04.txt Orange juice - likely part of the CPI - will become more costly. Should we be including that rise in the consumer price index? How about high oil prices after hurricanes damage underseal oil pipelines? Prices can go up (and come down) due to real reductions in supply. The CPI isn't meant to measure this.
I consulting in supply chain forecasting processes and it is standard practice to filter out identifiable unique supply and demand events. The goal is to measure the real trend, not noise. When making their annual reports, companies are required to make comments about this kind of event on their business operations by the government and might even produce a pro forma report excluding the unique factors. This is not absurdly dishonest, it is sound statistical analysis.
---Reducing actual prices to reflect some arbitrary “increase in quality”
Sorry, while quality is slightly harder to measure, do you not agree that a 2006 Toyota Corolla embodies more value than say a 1985 Ford Pinto or Chevy Cavalier? How many years did a Pinto last? They are both 4 wheeled motor vehicles, they are approximately weight etc., but the quality improvement of the Toyota (which itself results from investment in engineering research and improved (more costly) production line processes) results in its increased price, not simply an increase in the money supply!
--An amazing assumption that as prices of certain items rise consumers will turn to alternatives
My amazing wife makes an amazing decision when the price of amazing lettuce reaches an amazing level. She amazingly decides not to buy it. We amazinging eat very little amazing steak because its amazingly expensive. What was the author trying to pull here?
-- The exclusion of government subsidies from certain prices
You got me, what's he talking about --health care?
Orange juice is high? It will go down someday, leave it out.
Gasoline is high? It will go down someday, leave it out.
Electricity is high? It will go down someday, leave it out.
Natural gas is high? It will go down someday, Leave it out.
Beef is high? It will go down someday. Leave it out.
Pork? Chicken? Milk? Tires? Etc. Etc. Etc.
There's always something or other that's extra expensive because of a real, or manufactured, shortage. If such spikes were included in the CPI, then, and only then, would we get a true picture of the economy we live in.
While a product today may be better than a previous one, I don't see that as a reason to diminish the selling price of today's item, for CPI purposes, unless we also diminish wage increases to reflect increased productivity. In other words, if the govt. says that wages increased, on average, 4%, and that productivity increased 3%, then for comparison sake they should say that real wages increased 1%.
As for govt. subsidies, I'd guess he's talking about goods whose price masks a "hidden tax" (owing to govt. support) which will ultimately be borne by the consumer, but which would not be factored into the CPI.
--If such spikes were included in the CPI, then, and only then, would we get a true picture of the economy we live in.
So the Federal Reserve should make decisions about the money supply based on catastrophic weather, hurricanes, Mississippi floods, unusually warm winters, unusually cold springs, Chinese steel consumption, fires in refineries, coffee crops in Brazil, chicken flu? Are they bankers or agricultural commodity traders? Perhaps they could change the prime rate two or three times per day so we could get a true picture of the economy we live in.
--As for govt. subsidies, I'd guess he's talking about goods whose price masks a "hidden tax" (owing to govt. support) which will ultimately be borne by the consumer, but which would not be factored into the CPI.
I think you have it backward. If the government is supporting a price of an item that is included in the CPI, then the CPI is overstated not understated.
Hmmm......
..... milk price supports (the heart of a consumer basket) http://www.usda.gov/documents/DAIRY_POLICY.doc
http://www.boston.com/news/local/vermont/articles/2004/11/22/future_looks_bleak_for_dairy_price_supports?mode=PF
....gasoline price supports http://www.gmu.edu/departments/economics/wew/articles/04/gasoline.html
.... sugar tariffs....
http://www.accidentalhedonist.com/index.php/2006/01/24/tariffs_and_subsidies_the_literal_cost_o
We may have no inflation at all!
Oh so that's the beef.
You are still chafed that the overestimated inflation numbers were boosting your social security check.
http://www.aarp.org/research/economy/trends/aresearch-import-326-DD51.html
Even though seniors have disproportionately more wealth than other age cohorts.
http://www.drpolitics.com/articles/seniors.htm
http://todaysseniorsnetwork.com/seniors&wealth.htm
Right, well the screwing for years has definitely been in the posterior of those not getting consistently inflated social security payments.... and being at the tail end of the baby boom, I will continue to get screwed when SS runs out of funds. Using an innacurately high CPI just makes that day come sooner. You are welcome for the years of wealth transfers.
Nope, I'm not on SS yet, and don't plan to be anytime soon.(not saying I couldn't)
However, I don't like to think that folks, who are on SS now, are getting cheated.
And I don't like to think that workers, whose wages may be tied to COLAS, are getting cheated.
Ignoring spikes in prices for essential goods is kinda like giving the producers a wink while telling the consumers to grin and bear it, because it really doesn't matter to their overall cost of living. It's nonsense.
In 1999 gasoline dropped to $ 1.23 per gallon.
http://www.cnn.com/US/9910/10/gas.prices.dip/index.html
Hundreds of oil industry workers lost their jobs ---many in my town. Because I had to sell my home at that time, I lost tens of thousands.
Low prices of oil were accompanied by low prices of commodities world wide.
http://www.aei.org/publications/pubID.10162/pub_detail.asp
http://hotel-online.com/Trends/PKF/Special/Feb99_DefalationPKF.html
After a period of over-production of housing, we now have a slowdown -- a decrease in prices. Now who is losing the producers or the consumers? And this is not a "spike", it is a predictable and measurable trend.
If you think that prices only go up, you have been sleep walking for the last few years.
As for ignoring spike, you didn't answer my question, should the fed begin changing interest rates a couple times a day? If they are going to respond to spikes, they would have to be that responsive -- don't you understand signal to noise ratio?
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