Middle class fading away…

Middle class fading away…

Greenspan, wikimedia 2The middle class in California and the rest of America keeps fading away under assaults from Republicans and Democrats, Presidents Bush and Obama, Govs. Schwarzenegger and Brown. The latest from AP:

“Since 2008, the number of people who call themselves middle class has fallen by nearly a fifth, according to a survey in January by the Pew Research Center, from 53 percent to 44 percent. Forty percent now identify as either lower-middle or lower class compared with just 25 percent in February 2008.

“According to Gallup, the percentage of Americans who say they’re middle or upper-middle class fell 8 points between 2008 and 2012, to 55 percent.”

There are many bipartisan culprits. But let’s just finger one here: the Federal Reserve Board. The Democrat Paul Volcker, Fed chairman from 1979 to 1987, was the last one with decent policies. He was appointed by Democratic President Jimmy Carter. Volcker crushed the “stagflation” — stagnation plus inflation — of the 1970s with tight money and high interest rates. Prosperity ensued, also due to Republican President Reagan’s 1981-83 tax cuts.

Volcker gradually cut interest rates. But he kept rates always about 2 percentage points above the inflation rate. That way, people could save money in their passbook savings accounts. They could build for the future.

Reagan mistake

He was replaced in 1987 when Reagan appointed fellow Republican Alan Greenspan as Fed chairman. Greenspan later was re-appointed seemingly endlessly by Republican President George Bush Uno, Democratic President Bill Clinton and Republican President George Bush Dos.

Greespan was good for a while. But after the 9/11/2001 terrorist attacks, Greenspan panicked, inflated the dollar and cut interest rates to zero for most of his term. Doing so funneled too much money into the supposedly fragile economy. But meant the middle class couldn’t save money on its passbook savings accounts. Inflation came rushing back — that’s why 99-cent gasoline in 2000 now is $4.00 — also crushing the middle class.

Bush Dos appointed the next Fed chairman, Republican Ben Bernanke, in 2006. Democratic President Barack Obama re-appointed Bernanke in 2010. Bernanke continued the Greenspan policies. Along with the other bad policies by presidents and Congress (not covered here), the Greenspan-Bernanke zero percent interest rate policy set the middle class up for the Sept. 2008 economic collapse.

Zero percent

Zero interest rates mean money cannot be saved the normal way. With inflation at least 2 percent (probably more like 8 percent), the middle-class’s savings are drained away. Credit-card interest rates of up to 30 percent also gouge the middle class.

With people unable to save the normal way, they lose money on passbook savings, don’t invest or put what little money they might have into stock market speculation. The Fed inflationism also pours artificial money into stocks. Hence, the record stock prices of recent years, mainly benefitting the rich. But the “prosperity” all is fake, based on money creation and low interest rates.

Obama just appointed Democrat Janet Yellen as Fed chairperson. She said she will continue the Greenspan-Bernanke zero interest rate policy “for some time.” So the Fed will continue to gut the middle class, which just can’t save to lift itself up.

The middle class gets gouged for everything and by both parties: Zero percent interest rates on passbook savings, 30 percent interest rates on credit cards, preposterous college debt, declining pay levels and high inflation.

It’s a bipartisan, 13-year ripoff of the middle class.

And eventually this house of cheap credit tricks will fall down.

24 comments

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  1. NTHEOC
    NTHEOC 5 April, 2014, 08:13

    If it were up to the tea party repiglicans then they would completely destroy what’s left of the middle class! We need to go after the upper class and top hog earners, there is no reason we need quad millionaires around. The gov’t needs to step in and impose hefty taxes,fines,and any penalties against companies that have millionaire owners who hide their money,offshore jobs, and fail to provide a decent pension and wages for the workers! Take away all these so called “write offs” from them, you know, like the range rovers,benzes, bmw’s and 150k trucks that are so called, for work! Raise the minimum wage as high as possible and start making it hard on these hogs that get rich off the backs of the workers without taking care of the workers! Eliminate the ability of these people to use their blood money for political purposes. Unionize all workers!!!!!!!!!!!!!!!

    Reply this comment
    • Rex the Wonder Dog!
      Rex the Wonder Dog! 5 April, 2014, 21:41

      If it were up to the tea party repiglicans then they would completely destroy what’s left of the middle class!

      It was Big Business with repugs and public troughers/unions wit democrats that wiped out the middle class.

      Big Business and public troughers/unions are by far the biggest threat to middle class and poor Amerikans today.

      There was a trough feeding firewhiner in SacTown that pulled down $437K in salary ALONE last years, 15 TIMES the states median f/t salary in the private sector.

      Reply this comment
    • Tough Love
      Tough Love 5 April, 2014, 23:22

      That’s one heck of a speech considering YOU belong to the BIGGEST class of moochers that exists …. PUBLIC SECTOR WORKERS.

      But us taxpayer are determined to get even …. by reneging on those fat pensions and Cadillac retiree healthcare promises.

      Reply this comment
      • NTHEOC
        NTHEOC 6 April, 2014, 12:19

        tough love says,
        But us taxpayer are determined to get even …. by reneging on those fat pensions and Cadillac retiree healthcare promises.
        ——————————
        We already have reform in place tough love, so your welcome! But go ahead and stop paying your taxes and let me know how that reneging works out for ya….

        Reply this comment
      • NTHEOC
        NTHEOC 6 April, 2014, 13:31

        Tough Love says,
        But us taxpayer are determined to get even
        ——————————–
        Sorry tough, but we have the support of the people far more than you! PROP32 ring a bell???

        Reply this comment
  2. SeeSaw
    SeeSaw 5 April, 2014, 09:33

    Give bank tellers full-time jobs with benefits; make it illegal for public agencies to schedule part-time workers 39 hours/week with no benefits! Start firing the 60,000 closed factories back up.

    Reply this comment
  3. Donkey
    Donkey 5 April, 2014, 19:22

    The Bolsheviks are out of the gate quick after this story. Of course the squeakers are RSAGWUS feeding trolls who believe it is everyones responsibility to take care of their lifestyle.

    The middleclass is disappearing because government is out of control at all levels. Every person that works in government is overpaid, over benefited, over pensioned, and under worked. 🙂

    Reply this comment
  4. Donkey
    Donkey 5 April, 2014, 19:38

    John, the cost of government is the reason people are unable to save. How is having $500,000 homes a good thing for a citizen.

    Look, I have lived the American Dream, as have all my siblings. My Pops a WWII Purple heart Vet worked a Blue Collar Union job and retired at 62, His Pops was a sharecropper from Oklahoma and saw everyone of his children and Grandchildren attain greater success. The cost of government has hampered every private sector citizen from saving for vacations, homes, or hobbies, and the debt the RAGWUS has accumulated puts the entire financial system at risk of collapse. 🙂

    Reply this comment
    • S Moderation Douglas
      S Moderation Douglas 6 April, 2014, 12:24

      True enough. If I didn’t have to pay those dang taxes, I could buy a NEW CAR every year.

      Of course, there wouldn’t be any roads to drive on.

      Reply this comment
  5. Rex the Wonder Dog!
    Rex the Wonder Dog! 5 April, 2014, 21:38

    Never refer to Greenspan as anything except “Mr. Bubble”, he was a disaster.

    Anyone with half a brain in the early 2000’s could see his policy of low interest rates was the driving force behind the real estate bubble. He is a kook, and blinder than a bat.

    We had had a ZIRP for lose to 2 decades now, and we are in terrible economic condition, terrible, Still no construction jobs or residential housing after 8 friggen years of recession. Only residential construction will pull us 100% out of recession.

    Reply this comment
    • NTHEOC
      NTHEOC 6 April, 2014, 12:32

      rex says,
      Still no construction jobs or residential housing after 8 friggen years of recession. Only residential construction will pull us 100% out of recession.
      —————————–
      Are you kidding! The construction industry is absolutley BOOMING right now. Have you looked around lately? I am seeing huge neighborhoods going up now, tons of commercial,etc.So yes, residential construction is going strong again but the private sector pigs in the real estate field will crash it again! We need to eliminate agents and private mortgage companies first off!

      Reply this comment
      • Rex the Wonder Dog!
        Rex the Wonder Dog! 6 April, 2014, 14:48

        Are you kidding! The construction industry is absolutley BOOMING right now

        I was specifically referring to residential construction and building, which is the driving force in construction, not commercial, which is very limited. Go back and read my post again.

        Reply this comment
  6. Ulysses Uhaul
    Ulysses Uhaul 5 April, 2014, 23:19

    Nothing can turn off Donkey……no mas!

    Reply this comment
  7. billybs
    billybs 6 April, 2014, 04:57

    I love it, give everyone a job with benefits, open all the closed laundromats, put a pay phone….well, everywhere. Make everyone smart?

    Reply this comment
  8. NTHEOC
    NTHEOC 6 April, 2014, 12:26

    billybs says: I love it, give everyone a job with benefits.
    ————————-
    You damn right billybs!! When billion dollar corps such as walmart are able to RAPE the workers by paying them so little that they have to be on welfare,gov’t assistance, and food stamps costing taxpayers millions then they need to be delt with. A union would be the first choice, but a complete gov’t takeover of these types of corporations and siezure of all their assets until they provide a decent pay package would be ok also!

    Reply this comment
  9. billybs
    billybs 6 April, 2014, 16:17

    You propose the same solution as post Czarist Russia. What is that called? Hint, your solutions are what Vladimir Lenin implemented. They sure played some great hockey in the 60’s and 70’s.

    Reply this comment
  10. Steele,Ted
    Steele,Ted 6 April, 2014, 17:19

    bill bs– your knowledge of Russian history is pretty skimpy little buddy—please google more.

    Reply this comment
  11. billybs
    billybs 6 April, 2014, 18:45

    Don t need to google. Grandpa 1st cousin in gulag as well as Treblinka. Met as him as young boy. He got back here shortly after Gary Powers. FOFF.

    Reply this comment
  12. billybs
    billybs 6 April, 2014, 18:52

    In his memoirs, he noted in pre ww2 Russia, how Communists blamed all economic problems on capitalism. Hey jerk, we know communism.

    Reply this comment
  13. Queeg
    Queeg 6 April, 2014, 18:56

    Billybubba

    No need to be crass and cross….we accept you……Teddy just has a unfortunate penchant for truth telling…..he is brilliant and forgets we are mere vassals with marginal intellect.

    Reply this comment
  14. billybs
    billybs 6 April, 2014, 19:40

    The truth is history, recorded fact. We are in interesting times, and what beckons, only God knows. God Bless America.
    Sorry for harsh words.

    Reply this comment
  15. billybs
    billybs 6 April, 2014, 19:41

    Sybil is here.

    Reply this comment
    • Ted Steele, CEO
      Ted Steele, CEO 7 April, 2014, 17:36

      Poor BillBS— Grandpa notwithstanding so far you have posted no evidence of ANY knowledge of post ’17 Russian history….zzzzzzzzzzzzzzzzzzzzzz

      Reply this comment
  16. Queeg
    Queeg 7 April, 2014, 21:07

    There was no middle class…..it is indentured slaves and globalists…that’s it.

    Reply this comment

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Tags assigned to this article:
Alan GreenspanBen BernankeJohn SeilerJanet Yellen

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