“Why a Middle-Class Lifestyle Remains Out of Reach for So Many”—Ezra Klein of the NYTimes Gets it Wrong
Ezra Klein, a journalist and interviewer for who I have the utmost respect, is beating the wrong horse in his evaluation of what went wrong in the American Middle Class. He blames inflation.
Klein notes that “In February of 2020, The Atlantic published a piece on the affordability crisis that was souring a seemingly strong economy. In one of the best decades the American economy has ever recorded, families were bled dry by landlords, hospital administrators, university bursars and child-care centers,” Annie Lowrey wrote. “For millions, a roaring economy felt precarious or downright terrible.”
One thing to consider is for whom the economy roared—a Tale of Two Cities, Wall Street and Main Street
It roared on Wall Street, because the investment community loves a profit and sending production offshore guarantees profits over jobs. Additionally, for foreign investors the dollar is the most secure currency and foreign investors are awash in money, with few places to invest. Wall Street isn’t connected to the inconvenience of long-term ownership. It profits by flash-trades and algorithms that add nothing of value but skim the surface of earnings. It’s a body untethered to a soul.
And yet, for every roar there is a whimper and Main Street has taken a beating no mongrel-dog should have to bear, ever since the 1980s decline of unions and particularly since the 2008 recession, when 10 million homeowners lost their homes to foreclosure. One could almost say Main Street is a soul that is untethered to a body and not be far wrong.
As for the Middle Class, Big Business called in the movers, crated it up and sent it elsewhere
Mostly, as is well documented, it arrived in China, where they used it with an amazingly creative communist foresight to build their own middle class. Bingo! How cool was that? Nixon and Kissinger defused a major military threat in 1973 (one of only two, the other was Russia) by giving China a long-term lease on our Middle Class.
It took a while, as these things do not happen overnight, but the Chinese plan in thousand-year increments, while the West is joined-at-the-hip to the quarterly report.
Based on Pew's income band classification, China's middle class has been among the fastest growing in the world, swelling from 39.1 million people (3.1 percent of the population) in 2000 to roughly 707 million (50.8 percent of the population) in 2018. Think about that for a moment, as you sip a latte in your Chinese-made Nikes and jeans.
It took China, with no observable middle class at all in 1973, 27 years to bring 3% of its population into the middle class—then a mere 22 additional years to grow that percentage to 51%.
707 million is twice the entire population of the United States
In that same 49 years, the decline of America’s Middle Class just about matches up to the swan dive of labor unions and middle-class income in the United States since the 1970s. Our solid Middle Class was never college educated because a production based economy valued hands on tools. Making toasters or cars or refrigerators didn’t require university (with its $40,000 average debt load).
The lesson from that is that a production-based economy moves populations up economically and a consumption-based economy moves them down
We knew that. Big Business simply didn’t give a shit, because great fortunes are always built upon a great crime (Honoré de Balzac). When Caterpillar Tractor moved from Peoria to Beijing, Tianjin, Suzhou and Wuxi in China, they sent their soon-to-be-fired employees to teach the Chinese how to run the assembly lines. That was a ‘go or lose your pension’ threat and just one small item in the magnitude of the crime. But those headlines moved off the media within a week.
Oh gosh, and who owns the media?
When you Google ‘the cause of the decline of the American middle class,’ its answer is ‘the decline of the middle class is a reflection of rising income inequality in the U.S.’ That’s Ezra Klein’s position and a bald-faced lie. Income inequality is a result, not a cause.
Take a few weeks off, Ezra and ask the citizens of a now ghost-town Peoria why they can’t pay their mortgages, send their kids to college, replace their ageing car or retire with decency after a lifetime at Caterpillar. You might ask the same of workers-without-work in Detroit, Salinas, CA, Erie, Johnstown or Williamsport, PA, and not forgetting Santa Fe, Atlantic City or Los Angeles.
Inflation is an easy target, because it doesn’t require any deep reflection
And deep reflection isn’t a major NYTimes strength in these times of laying off journalists, nor does it move the needle on selling online subscriptions. The Times is au courant, aware of what’s going on and tries to be at the cutting edge. As to well informed, Ezra might not have shot from the hip and looked a bit deeper.
Inflation and income inequality are fatherless children.
“Who me? Wasn’t there, pardner, not on my watch, didn’t even see it coming.”
The decline and fall of the unions and working Middle Class in America are different orphans. They have too many fathers to mention, which rates right up there alongside too big to fail. No one, at the NYTimes or any other news media is going to take too close a look at those shadowy figures sneaking down the darkened back alleys of America. But predators they are and predators they will always be.
Yep, we do have class warfare in America, but don’t blame it on the declining white majority or some nebulous argument about inflation. Shine a little light on those shadowy figures, Ezra. They’re easy to identify. They’re the ones who profited from turning the greatest producer-nation in the world into a shopping mall.
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