Thursday, October 25, 2007


Want to know the direction that American society is headed? Pull out any 7th grade world history textbook and find the chapter on the Middle Ages. More accurately, look at our own history from the late 19th century. Over one hundred years ago there was no such thing as an American 'middle class', per se. Anything resembling the middle class was more of a 'professional' class: doctors, lawyers, small businessmen (aka 'the merchant class'), etc. The vast majority of people inhabited the working class. At the very top were the 'robber barons' of the guilded age. The income tax didn't even exist yet.

During the first half of the 20th century, the pendulum swung slowly but steadily toward more income equality. First the reform movement, then the beginning of the federal income tax, the New Deal, the rise of labor unions and the War on Poverty all contributed to income equality that reached it's high point in the early 1970s. In 1970, the bottom 80% of income earners in the U.S. - basically the entire middle class and the poor - earned 56.8% of aggregate national income and the top 5% earned 16.6%. In 2006, the bottom 80% earned 49.4% and the top 5% earned 22.3% (source: U.S. Census bureau). So, over the last 36 years, the vast majority of Americans have gone from earning a fair majority of aggregate income to earning slightly less than half. This combined with the steady erosion of the social 'safety net' over the last 25 years, the steep rise in costs for healthcare and education all portend a rather grim future for almost all Americans - and their children.

In today, Robert Reich has touched upon this as it relates to changes in tax policy over the last 50 years. He also points out that the supposedly more 'populist' Democratic party probably won't do much about it:

"At the very least, you might think that Democrats would do something about the anomaly in the tax code that treats the earnings of private-equity and hedge-fund managers as capital gains rather than ordinary income, and thereby taxes them at 15 percent -- lower than the tax rate faced by many middle-class Americans. But Senate Democrats recently backed off a proposal to do just that. Why? It turns out that Democrats are getting more campaign contributions these days from hedge-fund and private-equity partners than Republicans are getting. In the run-up to the 2006 election, donations from hedge-fund employees were running better than 2-to-1 Democratic. The party doesn't want to bite the hands that feed." ( 10/25/07)

Obviously, at this point, neither party in this country is on the side of the shrinking middle class, despite what they say.

Maybe this trend will stop and even slowly reverse itself in the years and decades ahead. If history is any guide, as was the case a hundred years ago, the trend won't reverse without a certain measure of violence and bloodshed. Hopefully, the Democrats or some, yet to be, third party will live up to it's populist rhetoric and forestall this need.


David Kendall said...

Good job. Blame it on the Democrats. Blame it on the Republicans. Blame it on everybody and anybody but yourself. This seems the "middle-class" perspective, overall, though it doesn't seem very effective in producing any sort of improvement.

Do you really WANT "improvement", Mr. Middle-Class Whoever? Or do you prefer your finger up your ass, right where it is now?

Genuine change begins with cooperative terms like "me" and "we" -- not with fatalistic terms like "they" and "them".

Please do get back to us when you've cleaned off your finger and your mind, will you?

Thank you...

Rensee said...

Thank's For Your Article...(^_^)..he..3x

Anonymous said...

David, spoken like a non-middle-class type.

Dave said...

Hmmmm.......I'd enjoy this post more if the comments were moderated/censored; and I'm not necessarily referring to Mr. Kendall's comments. ;-)

Frank Eeckman said...

A new middle ages is the best scenario. Human history is a lot more cyclical than people imagine. The straight line, progress-view sounds good but there is very little evidence to support it.