Elizabeth Warren has a great article in Harvard Magazine about how polarization by wealth in the United States is increasing under Republican rule. (The coming bursting of the mortgage bubble is one piece of this puzzle, thanks to “Bubbles” Greenspan pushing the Adjustable Rate Mortgage. The Man in the Grey Turtleneck has had his hair on fire on this one for some time.)
If you think of “making it” in the United States today as walking a tightrope, what the Republicans are doing is forcing you to do more tricks on the rope, while they’re also yanking the rope to make you fall off, and removing the safety net so that when you fall, you never walk again. Yes, there is class warfare. And most of us are losing it, without even knowing we’re at war.
Here’s her conclusion:
Every day, middle-class families carry higher risks that a job loss or a medical problem will push them over the edge. Although plenty of families make it, a growing number who worked just as hard and followed the rules just as carefully find themselves in a financial nightmare. The security of middle-class life has disappeared. The new reality is millions of families whose grip on the good life can be shaken loose in an instant.
During the same period, families have been asked to absorb much more risk in their retirement income. In 1985, there were 112,200 defined-benefit pension plans with employers and employer groups around the country; today their number has shrunk to 29,700 such plans, and those are melting away fast.
For younger families, the picture is not any better. Both the absolute cost of healthcare and the share of it borne by families have risen—and newly fashionable health-savings plans are spreading from legislative halls to Wal-Mart workers, with much higher deductibles and a large new dose of investment risk for families’ future healthcare. Even demographics are working against the middle class family, as the odds of having a frail elderly parent—and all the attendant need for physical and financial assistance—have jumped eightfold in just one generation.
From the middle-class family perspective, much of this, understandably, looks far less like an opportunity to exercise more financial responsibility, and a good deal more like a frightening acceleration of the wholesale shift of financial risk onto their already overburdened shoulders.
For those of us who are middle class—not all of us, I know—I think Warren’s description matches our worries if we’ve been lucky, and our experience if we have not been.
She also goes into some of the causes. Interestingly (to me, at least) much of her analysis conforms to my general sense that everything went to shit in the mid-1970s; that’s when the rules changed. (And, coincidentally or not, that’s when the winger billionaries started to fund the VRWC
.) Read more
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