THE CRISIS OF MIDDLE-CLASS AMERICA (WHICH IS MOST OF US)

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Dear You--

The chart shows the Inflation Adjusted Percentage Increase in Mean After -Tax Household Income Between 1979 and 2005. It is only one of many examples that demonstrates that the National Cake is being sliced to favor the few - to this Nation's great disadvantage.

It is my absolute belief that the U.S. is in serious trouble at present, but that the majority of people is still alarmingly unaware of the scale and scope of the problems, and even less well informed as to the possible solutions. I started feeling such concerns, and conducting ongoing research, in 2002, and commenced writing Titanic Nation: How To Avoid Icebergs: The Case for Fundamental Change In The American Way of Life in 2007 so I guess I’m a little disturbed – though I should know better - that the implications of our plight don’t get more coverage in the U.S. media as a whole. However, some foreign observers are certainly aware - as this extract from a lengthy piece in the U.K. Financial Times of July 30 2010 shows. It only covers one sector of concern although that is scarcely minor. The full piece The Crisis of Middle-Class America is worth reading.

“The slow economic strangulation of the Freemans and millions of other middle-class Americans started long before the Great Recession, which merely exacerbated the “personal recession” that ordinary Americans had been suffering for years. Dubbed“median wage stagnation” by economists, the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973 – having risen by only 10 per cent in real terms over the past 37 years. That means most Americans have been treading water for more than a generation. Over the same period the incomes of the top 1 per cent have tripled. In 1973, chief executives were on average paid 26 times the median income. Now the multiple is above 300.

The trend has only been getting stronger. Most economists see the Great Stagnation as a structural problem – meaning it is immune to the business cycle. In the last expansion, which started in January 2002 and ended in December 2007, the median US household income dropped by $2,000 – the first ever instance where most Americans were worse off at the end of a cycle than at the start. Worse is that the long era of stagnating incomes has been accompanied by something profoundly un-American: declining income mobility.” 

Farewell for the moment. Write soon. I miss your wit and your company.


Victor.