The Inevitability of the Destruction of the Middle Class – War on the Middle Class

A father opens the door in the early evening just as the family has finished dinner. The sharp explosions of gunshots break the peaceful silence in a quiet neighborhood and a normal family ends its existence. The police investigate and find no reason for the tragedy. No apparent enemies, a simple family with a simple life. Stories like these find their way on to the front pages of our newspapers with increasing frequency. An unknown killer choosing a house at random in places where “these things just do not happen!”

We discussed these events over a plate of Cincinnati Spaghetti. Incredulous, we wondered what is happening to our world. My profession requires that I study tendencies and perceptions. I am subjected to hours of financial programs and news services. Some interesting things have been published recently. Raw data that may explain what would drive a person to knock on the door of a stranger and kill a family in cold blood without a moment’s hesitation:

Over the last 10 years the increase in earnings of the top 0.5% was more than the total earnings of entire bottom 20% of the population.

Greenspan and others state that inequality in earnings has been going on for 100 years. It is inevitable and cannot be stopped.

Successful people say that they work harder or have sacrificed more than people who are less successful. This is a fallacy. Success, as measured by earnings, has a great deal to do with social status, education and opportunity (knowing other successful people creates opportunities).

Legislation allows financially stable individuals to take advantage of difficult times. Financial institutions are allowed to charge usury rates on loans on credit cards. This reduces the disposable income of the lower income or rising classes. The result is less demand for products that can then be purchased with cash at significantly lower prices. A simple example is that one individual does not pay bank fees, credit card dues or any other type of utilization costs while an individual with a lower salary will pay 50$ annual dues, 12$ monthly service fee, 18% interest which can accelerate to 30% even though the debtor is making the payments in accordance with the contract. These fees can be the difference between eating dinner and going hungry for many families.

Rich people get bailouts from government when they make bad investments while working class gets bankruptcy.

The US working class mentality sides with the rich on policy because they believe they will become rich (the lottery syndrome).

Government uses tax dollars to protect America’s interests (only rich people). The latest example is the mortgage bailout. The only people helped by the various plans suggested will be the investors in bank stocks.

Government allows powerful individuals to close US production facilities and move their facilities to poor countries to avoid health and safety standards. They will say it is to reduce labor costs but the only real reason to produce outside the US is to avoid regulation.

It seems that the world is stacked against the working class. It is tough to make it to the end of the month much less think about the future. Should this individual get sick they are hit with a double whammy, healthcare costs they cannot afford and must go into debt just to stay alive and loss of wages since sick leave has been practically eliminated. God forbid that an individual should become part of the 35% of Americans who are not employed. They will be homeless in a few weeks and left to die.

With this type of future, always present in the mind of 98% of Americans, the pressure is intense. It is a short road from despair to anger against the world thus any door in quiet neighborhood is the perfect place to express that anger.

Free Markets work under enlightened self interest. They can last for centuries but take away the enlightened part and free markets bring their own type of enlightenment. We have seen it over the centuries with all great empires. The French Revolution, the fall of the Roman Empire, Macedonia, Egypt, Napoleon all learned why all members of society must have hope for a better future for themselves and their children. Perhaps the US is simply another fallen empire learning a lesson in humanity.