The case of the vanishing middle class

Posted on 08/06/2011 in misc

When I was in high school and college there was a lot of talk about how much better off we'd all be after we shipped all the dirty, labor intensive manufacturing jobs overseas, so we could all live a life of luxury reporting to work every day to do the creative, intellectual work that could never be outsourced.

So how is that working out for you?

Henry Ford overpaid his line workers. Not because he was a nice guy. He wasn't. He was pretty much a class A asshole. However, he was a smart asshole. If he was going to sell a lot of cars, then people had to be able to afford a car in the first place. So he paid them enough to afford to buy one of his products. It's not really rocket science. That basic idea, overpay the skilled labor classes (by international standards) is what built the middle class. It's what built the idealistic 1950s America that Republican's seem to long for. Except of course, Republicans have no idea what caused the 1950s, so we'll never get that lifestyle back following their policies. Henry Ford was a "job creator." Mega rich Wall Street bankers are parasites, leeching off the system for personal gain while doing absolutely nothing to leave a better world in their wake.

A family of 4 needs 80K annually to maintain a middle class lifestyle in Portland, OR. You need about the same in Fredericksburg VA. You need a fraction of that in SE Asia. What both parties are missing (or ignoring) is that middle class people PAY TAXES. Republicans whine about the mythical 50% of people that don't pay taxes, but it never occurs to them to enact policies to create the kind of jobs that create enough wealth so that people have to pay taxes. 40 hours a week at McDonald's will never, ever generate enough income to make those people net taxpayers. Instead, they enact policies to help GE ship the jobs to Indonesia. I have nothing against Indonesia, but I'm not interested in competing with somebody for a job when they can live comfortably on $100 a week.

To be fair, Democrats haven't done squat for the middle class in about 30 years either. Under Clinton, they pretty much decided to sell them out and try to out Republican the Republicans. Obama talks a good game, buy when it gets hot in the White House kitchen he sides with the Wall Street big money. Every.Single.Time.

The record of the last 30 years is very clear. Destroying the middle class by pushing all that income upstream to the wealthy has failed. It hasn't trickled down. It hasn't created prosperity. It hasn't created a better America for 90% of America. Ironically, the Libertarians predicted all of this 30 years ago. They don't have any problem with it, natural order of things and all that. Of course, they are also the ones that tend to stock up on gold and ammo, so maybe they weren't as relaxed about it as they looked. But at least they saw it coming. You can't say that for the idiots actually running the government.

The American economic system requires a relatively prosperous middle class. Middle class people pay taxes. The middle class aspires to self-employment and they start companies that hire other middle class people. It's kind of hard to do that when you are barely getting by on your crappy American job. Today, income disparity is greater than it has been at any time in history. The middle class is ceasing to exist.

So who is going to pay the taxes? Who is going to create the new new companies? Without the tax income from the middle class, how do we pay teachers, fix roads and bridges, or get a man to Mars?

Without a healthy middle class, America as we know it and love it will cease to exist. Or maybe that has already happened.

This post inspired by the July 27th Common Sense podcast.

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