Messing with the Middle

America used to be a country that was defined by its middle class. The old “Leave it to Beaver” or “Father Knows Best” television sitcoms of half a century ago each depicts a male breadwinner, a female homemaker and two children being raised in a house with a white picket fence. I actually don’t know anyone who fits that description today… I’m sure they’re around, but the only reason mom stays at home these days is excessive wealth or she lost her job and cannot find a new one.

Elizabeth Warren, a Harvard law professor and head of the Congressional panel with oversight of our TARP program, in an interview with the October 8^th lengthy interview for the Washington Post, noted that the middle class is under a “terrific assault.” With life at the bottom still pretty miserable, and the top one percent earning 16% of the income in this nation, the decompression of the economy has fallen primarily on the backs of a sinking middle class.

Ms. Warren: “When we compare middle class families today with their parents a generation ago, we have basically flat earnings -- a fully employed male today earns on average about $800 less, adjusted for inflation, than a fully employed male earned a generation ago. The only way that families could increase their household income was to put a second earner into the workforce, and, of course that's now flattened out because there aren't any more people to put into the workforce. So you've got, effectively, flat income in this time period, with rising core expenses: housing; health insurance; child care; transportation, now that it takes two cars to get everywhere, two jobs to support; and taxes . . . families are spending a lot more on what you describe as the basic nut.”

Two adults are needed to earn what “daddy” used to make by himself. Feminism notwithstanding, women heavily joined in the American workforce as men were drafted in World War II, but the need for two incomes slid into the American lifestyle in the 60s and 70s until, for most of us, the ability to sustain what we believe is a middle class existence requires the two income family. And if you look at the pressures in our society today, those “basics” of middleclass existence – a home, an education and healthcare – have skyrocketed in the share of our income that they consume, and for the most part of vastly exceeded the cost of living.

So when middle class families stretched to buy that house, the collapse of the current real estate market has taken by far the greatest toll on the middle class… pensions and houses… the middle class savings accounts… tanked in the big fall. Saving for college? Fergitabout. Tuition has always accelerated beyond the ability of middle class families to pay for it. Kids incur massive debt to get what their parents often got for the tiny fraction (in inflation-adjusted money) of current costs paid in their past.

Special interests want to make sure that they extract as much as they can from the biggest market available (with the ability to pay): the middle class. The healthcare burden falls most heavily on those in the middle. If you’re rich, you don’t care, and if you are poor, there have been programs for years.

But look at what special interests are fighting for as we struggle with healthcare reform: “Lobbying by doctors, hospitals and other health care providers, meanwhile, dimmed the prospects of various proposals to cut into their incomes, including allowing government negotiation of Medicare drug prices and creating a government insurer with the muscle to lower fee payments… ‘The lobbyists are winning,’ said Representative Jim Cooper, a conservative Tennessee Democrat who teaches health policy.

“Total health care costs in the last 20 years have doubled to about 16 percent of the economy, with no signs of tapering. Along with universal coverage, Mr. Obama has made controlling those costs a central pillar of his health care overhaul, calling the current course ‘unsustainable.’ The effort is a pivotal test of his campaign promise to break the stranglehold of special interests.” Oct. 12^th New York Times

So here’s the question for the day. If we completely erode the power, strength and viability of the American middle class – the shining exemplar of the “American Dream” – then exactly how is this marvelous experiment in democracy going to survive?

I’m Peter Dekom, and I approve this message.