Quiggin gives some historical context for the importance of the middle class in the U.S. and has me thinking more about the political context of tax reform in the last election. The Zombie theory of "Trickle Down Economics" has been debunked but we continue to hear about how taxation for the richest Americans will only stifle economic growth. The Bush Tax Cuts provided a cushion for the those at the top of the wealth period but has also significantly added to our tax deficit due to a lack of revenue during massive military spending increases. Some are defending that the middle class are not actually falling behind and Jim Tankersley takes these claims on in Wonkblog:
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/24/yes-the-middle-class-really-is-falling-behind/
Take a look, I would love some feedback on everyday ways we have seen declines in middle class. Tankersley takes on the increasing costs of gas, healthcare and especially education in a refreshing light.
I don't think we've seen a lot of 'declines' in the middle class,so much as we've seen stagnation. We are in the same median income we've been in since the 60s according to many economists and statisticians. Unemployment is higher than it should be, but this number incorporates people from all socioeconomic backgrounds.
ReplyDeleteThe most shocking data we should be looking at, is upper class income levels, compared to that of everyone elses. The rich have only gotten richer on average. This due mainly to failed neoliberalist Reganistic approches enacted decades past. Wages and income have remained stagnant for everyone below them. This is truly "Zombie Economics" at work, because if trickle Down really worked, we should have seen a correlation between rising income for the rich, tied to RISING rates for everyone else. We simply haven't.
It's also important to take a look at the WSJ editorial that the Wonkblog post is responding to. The rising cost of education and healthcare has eliminated the gains from other items getting cheaper, but many of the other points in the editorial still stand. As the authors point out, the CPI overestimating inflation and excluding health benefits and fringe benefits have masked real increases in average compensation. In addition, new entrants into the labor force who work for lower wages bring down the averages, even though most workers may be making more money over time.
ReplyDeleteWages may not have been increasing like we'd like them to, and the rich certainly are getting richer much faster than the average worker has, but to say that wages have been stagnating is false.
And here's Yglesias making the same point.
ReplyDeleteThe thing that makes the class divisions and the problems they are causing so impossible is that it's hard to enact change that directly affects the very people in charge and in control of that change. Adding to that is the stubborn Trickle Down reasoning preventing some of this change. Just like Quiggin and many of us would argue, it is outdated, but the fact of the matter is, outdated zombie policies and opinions are still very prominent and influential which creates this stand still, stubborn problem. I think much of our country's problems revolve around opinion-based and bias-based arguments and policies. Mostly because the people in control also have their own agendas, which is simple human nature.
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