The great middle-class identity crisis

[Thailandnotes]

http://www.ft.com/cms/s/2/04179370-4...#axzz2kK3GltEk

[lektrode]

Re: The great middle-class identity crisis

was going to attempt the 1st comment on this one....

but... OH!

where to begin and its waaaay too late to even start.

after a day toiling away in the yard, us J6P's need our rest...

;)

[doom&gloom]

Re: The great middle-class identity crisis

http://www.ft.com/cms/s/2/04179370-4...#axzz2kK3GltEk

I often wonder where my boys will end up as they get older. The older of the two (so far) is on an engineering path in school, but who really knows. The younger likes math, but has the attention span of a gnat for anything but online video games. The older can easily do the college work, the younger will struggle, but do I push him in the direction of a trade even though he is bring enough to handle most anything? What will be the job demands of the future? How many software programmers will we need? No one aspires to be a 'barista', yet the world is full of these underpaid (mostly) kids who have no future.

The WSJ had a column out about how a college education is more of a determinant of future success and a dividing line between the future haves and have nots. Yet how many college grads are now those 'baristas' and bookshop workers?

I was in the employment biz from 1983-2007 and saw a lot of 'disruption' of careers. Middle managers and older workers without significant skill sets always seemed to take it in the shorts harder than others. Maybe because others had not build up such a grand lifestyle of display for their peers.

Perhaps the on-line identity is the answer to over-consumption? For many the money will never be there anyway.

[don]

Re: The great middle-class identity crisis

In how many eras has America had a large middleclass?

Following the Civil War and the triumph of industrial capitalism over slave-based agriculture, the country experienced tremendous industrial growth. Workers and the growing white collar class both benefited but the former especially was countered with massive immigration that more often than not swamped industrial labor needs.

Following the Great War America, the financial victor, saw a decade of affluence, aided in great part by financial speculation. Massive immigration again offset real labor/white collar income gains. Then came the collapse.

Following the Second World War, which dealt the US an unprecedented flush hand, pent up demand, a ramped up industrial capacity, a permanent wartime industry, and the foresight to (selectively) rebuild Europe for American goods, created the great American middleclass. It had about a two decade run.

Many of us see life as relatively smooth sailing with occasional squalls and a rare storm or two. Others argue that those period of serenity are the exception, not the rule. Does that also apply to America's middleclass?

[ddn3f]

Re: The great middle-class identity crisis

To remain optimistic, I think your boys will grow up and make major changes in the world as the world goes through turbulent times. The circumstances of the young make them highly adaptable and able to thrive in the new world. They are young and full of energy and with almost nothing to hold them down. It will be the old that can not adapt to whatever comes next.

Heck if I am not optimistic about the future, I would have had my first child last year.

I often wonder where my boys will end up as they get older. The older of the two (so far) is on an engineering path in school, but who really knows. The younger likes math, but has the attention span of a gnat for anything but online video games. The older can easily do the college work, the younger will struggle, but do I push him in the direction of a trade even though he is bring enough to handle most anything? What will be the job demands of the future? How many software programmers will we need? No one aspires to be a 'barista', yet the world is full of these underpaid (mostly) kids who have no future.

The WSJ had a column out about how a college education is more of a determinant of future success and a dividing line between the future haves and have nots. Yet how many college grads are now those 'baristas' and bookshop workers?

I was in the employment biz from 1983-2007 and saw a lot of 'disruption' of careers. Middle managers and older workers without significant skill sets always seemed to take it in the shorts harder than others. Maybe because others had not build up such a grand lifestyle of display for their peers.

Perhaps the on-line identity is the answer to over-consumption? For many the money will never be there anyway.

[Penguin]

Re: The great middle-class identity crisis

I agree with some of what you say Don.

Immigrations has always been, and continues to be, a way to put a lid on what the working class can acquire. This was the reason that the Democratic Party (up until they turned their backs on the labor movement and embraced identity politics) historically opposed large scale immigration. Alas, once that decision was made the die was cast. Now I am not sure that immigration ~can~ be brought under control. For those like me who dearly love the outdoors and wild places the thought of having half a billion souls on this continent in this century is chilling but I see no way it can now be avoided.

As far as the middle class goes? I understand it may not be popular now but to make a list of reasons for middle class formation and not to include the labor movement is just plain wrong. There would have never been such an animal if you didn't have folks at the bottom of the ladder simply say "enough is enough" and force the system to cut them in on the wealth that their labor helped create. Not everyone grew up in the Appalachian coal fields where the storied history of the Coal Wars are dispensed with your mother's milk. But it is a story worth reading. The middle class began forming a long way prior to the 2nd World War.

It is no accident that you can plot union membership and middle class fortunes on the same graph and not be able to tell them apart.

That said, just because that it played so large a part in middle class formation previously does not mean that it is the only way it can be revived. But the 'service economy', the 'knowledge economy', the 'global economy', and any other goofy economic theory that does not include a large dose of national independence in terms of produced goods and services is a doomed ship. You just cannot have a healthy economy that runs huge, chronic trade deficits. And let us be honest, free trade is simply not possible between nations with vastly different trade, labor, and environmental standards.

I don't claim to know all the answers but I do know this, as regards the middle class current economic theory is far too leaky a vessel for any man to put much faith in. (hat tip to Gus McCrae)

Will

[don]

Re: The great middle-class identity crisis

The productive economy creates wealth. The service economy can and does provide necessary services to the productive economy. FIRE extracts wealth, redistributing it while creating none. For the middleclass it's a scenario with little hope.

As a footnote to your labor comments, only organized labor can provide any meaningful brake on the current system. Distasteful to many 'tulipers, it's simply the way it has been and I suspect the way it is.

[vinoveri]

Re: The great middle-class identity crisis

stable families and communities provide solid bases of culture - all these negative manifestations can be traced to the shift from local control to central control IMO.

America became rich and successful for many reasons, but one of the main ones is freedom of opportunity coupled with the safety net of family and community. When I has in junior high we read Thoreau and Emerson, which together for me highlighted the relationship between freedom and self-reliance.

The society is centrally managed and top-down controlled by bureaucrats which is anathema to a free and resilient people. Look, ever since the Feds got involved in overseeing and increasingly directing "education", american academic excellence has plummeted and we have a dumbed down population generally - and now we have the "common core curriciluum" foisted on states from middle-age loser bureaucrats who can't teach so that have to administer policy, and we just keep getting more stupid and less resiliant. I am so glad my wife and I decided to home school our children.

We can continue to debate what band-aids to use to help stem the misery, but sustainable culture and economy requires strong communities (you know organically produced one family at a time) not some disaster "it takes a village" hive mentality, but unfortunately that is where we continue to head and it is going to get a lot worse ... the gov will get bigger and more authoritarian

[RebbePete]

Re: The great middle-class identity crisis

I agree with some of what you say Don.

Immigrations has always been, and continues to be, a way to put a lid on what the working class can acquire. This was the reason that the Democratic Party (up until they turned their backs on the labor movement and embraced identity politics) historically opposed large scale immigration. Alas, once that decision was made the die was cast. Now I am not sure that immigration ~can~ be brought under control. For those like me who dearly love the outdoors and wild places the thought of having half a billion souls on this continent in this century is chilling but I see no way it can now be avoided.

As far as the middle class goes? I understand it may not be popular now but to make a list of reasons for middle class formation and not to include the labor movement is just plain wrong. There would have never been such an animal if you didn't have folks at the bottom of the ladder simply say "enough is enough" and force the system to cut them in on the wealth that their labor helped create. Not everyone grew up in the Appalachian coal fields where the storied history of the Coal Wars are dispensed with your mother's milk. But it is a story worth reading. The middle class began forming a long way prior to the 2nd World War.

It is no accident that you can plot union membership and middle class fortunes on the same graph and not be able to tell them apart.

That said, just because that it played so large a part in middle class formation previously does not mean that it is the only way it can be revived. But the 'service economy', the 'knowledge economy', the 'global economy', and any other goofy economic theory that does not include a large dose of national independence in terms of produced goods and services is a doomed ship. You just cannot have a healthy economy that runs huge, chronic trade deficits. And let us be honest, free trade is simply not possible between nations with vastly different trade, labor, and environmental standards.

I don't claim to know all the answers but I do know this, as regards the middle class current economic theory is far too leaky a vessel for any man to put much faith in. (hat tip to Gus McCrae)

Will

The big question, then, is what killed the labor movement? Where was it when factories were packed up and sent to China? Why do the leaders support FIRE interests over the good of their members?

I think I know the answer, do you? Follow the money.

[don]

Re: The great middle-class identity crisis

The big question . . . Why do the leaders support FIRE interests over the good of their members?

Good question, seldom asked on the 'tulip. Partly due to the macro/micro paradox. Our personal interests - financial survival and hopefully better - hardly ever mate directly with the larger historical context.

"Is it more important that I get a heads up on a possible bail-in where my savings are parked or do I really need to know what stage of monopoly capitalism we're in."

Sorta like that . . . .

[Penguin]

Re: The great middle-class identity crisis

The big question, then, is what killed the labor movement? Where was it when factories were packed up and sent to China? Why do the leaders support FIRE interests over the good of their members?

I think I know the answer, do you? Follow the money.

Oh as far as I remember they were fighting the moves and warning of the consequences. For the most part they were absolutely powerless to stop it. Wage arbitrage was disguised as globalization, policy changes to trade and tax codes were made, the move proceeded. The public didn't really react strongly... I suspect union excesses had exhausted a lot of good will that the public once had. The right was quick to exploit this.

I don't know of many unions who do support FIRE interests. Their pension funds maybe? Lord knows that FIRE has their hands on it but I don't know how you can avoid that nowadays.

I'm not ~that~ old. But one of the things that stands out to me is how things played out as the middle class has been weeded out has been this: It takes years and sometimes decades for the consequences of actions to play out economically. And it is really surprising how the underlying damage that many of these policies had was masked behind a global credit bubble. I see right and left alike point to the glory years of this or that administration or congress and when those who they revere were doing so much damage to the middle class.

I don't know all of the answers and don't claim to. But I am firmly convinced that the middle class didn't 'just disappear' any more than it just 'came into being'. Policy had a great deal to do with allowing it to form and policy had a great deal to do with wiping it out.

Will

[Woodsman]

Re: The great middle-class identity crisis

Oh as far as I remember they were fighting the moves and warning of the consequences. For the most part they were absolutely powerless to stop it. Wage arbitrage was disguised as globalization, policy changes to trade and tax codes were made, the move proceeded. The public didn't really react strongly... I suspect union excesses had exhausted a lot of good will that the public once had. The right was quick to exploit this.

Exploit it? Man, they were leading the charge.

Look at the Powell Memorandum if you want to find culpability. It was written by former corporate lawyer, intelligence agent and Supreme Court Justice Lewis Powell and established the outlines of a right wing and corporate plan to roll back the postwar consensus that brought us unprecedented prosperity and an expansion of liberty formerly denied to so many.

Not a year after writing the memo, Powell is put on the Supreme Court and in less than 10 years, he, Renquist and the rest of the right wing are upending longstanding law in favor of FIRE and corporations, generally. This starts with First National Bank of Boston v. Bellotti where corporate money is found to be the same as citizens' protected speech. It ends with with Citizens United, which is little more than the appendix to First National Bank of Boston v. Bellotti.

[Penguin]

Re: The great middle-class identity crisis

Maybe I was being a bit understated. Blame it on the lead time for caffeine activation.

But yes, I do agree that they were looking far in advance to roll back a lot of the New Deal and its partitioning of rewards for growth. In a lot of ways the right has never gotten over that series of laws. But getting the normal folks to accept this is where the true genius of the right comes to the fore. The coalition that they formed boggles the mind.

Seriously. I grew up in about as literalist a Southern Baptist environment as one could imagine. Granted we were way behind the times, but it amazes me that they could shoehorn that kind of religious sensibility into a far right, business subservient, globalized party platform. They did it and it still amazes me decades later. And Ayn Rand as prophet and intellectual leader of said movement? Great googley moogley!

The use of resentment to lay the groundwork for the right to exploit. And in ways that ran directly counter to the interests of those they recruited? That was as beautiful a Machiavellian masterstroke as I have ever witnessed.

And this coming from an unrepentent populist of the highest order, lol.

Will

[don]

Re: The great middle-class identity crisis

Power never sleeps . . .

That doesn't excuse it from history, however.

They just generally act more quickly and more decisively.

Check out any counter-revolution.

Mercy won't be found in the syllabus.

[ProdigyofZen]

Re: The great middle-class identity crisis

The big question, then, is what killed the labor movement? Where was it when factories were packed up and sent to China? Why do the leaders support FIRE interests over the good of their members?

I think I know the answer, do you? Follow the money.

The scenario of the 1970's killed the labor movement. Rising oil prices lead to rising prices in the overall economy which led to rising wages (from union power) which lead to rising interest rates culminating in 1981 with the deliberate recession and output gap caused by Volcker raising rates 300 bps over the prevailing rate of inflation.

That era destroyed the unions and we have had 30 years of falling interest rates, inflation and union membership. And now 10 years of falling real wages as the FIRE economy sputters along until the final crisis resets the system.