This chart jibes with other analyses I have run here showing that the economy peaked around 2000, and the so-called Bush “recovery” was completely phony. What happened was that Fed Chairman Greenspan, re-appointed by Bush and backed by him, panicked after 9/11/2001 and inflated the dollar to record highs, which caused inflation. That’s why gas today costs four times what it did in 2000.

The inflation also goosed stock prices — but it all was fake. The Great Recession didn’t begin in 2007 or 2008, but in 2001.

President Obama and Fed Chairman Ben Bernanke only have continued the Bush-Greenspan inflationary folly. And new Fed Chairperson Janet Yellen so far is giving us even more of the same.

It’s mainly Republicans who are responsible for this. Reagan’s tax cuts of 1981 and 1983 sparked the huge increase in the real value of stocks, as with the rest of the economy, as the chart shows. Then in the late 1990s, the Republican Congress, led by House Speaker Newt Gingrich, worked with Democratic President Bill Clinton for tax cuts and budget restraint.

But Bush, Greenspan and Bernanke all are Republicans. And the Republican congresses of the early half of the 2000s — after Gingrich left — also were in charge and could have changed things, for example by putting us back on the gold standard.

Republicans’ campaign slogan this fall should be, “Give us more seats in the House and control again of the Senate so we can be just as irresponsible as we were 10 years ago.”

“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.

“The U.S. homeownership rate, which soared to a record high 69.2 percent in 2004, is back where it was two decades ago, before the housing bubble inflated, busted and ripped more than 7 million Americans from their homes.”

Home ownership is at an 18-year low. That takes us back to 1995, under President Bill Clinton.

And the 2004 “high” number was only because of the Bush-Greenspan “bubble economy” based on massive deficits from wild spending, lower interest rates, easy money and lax lending rules from Fannie and Freddie. Even Bush’s tax cuts were bogus because they were temporary.

Obama — who should be remembered as Bush III — has continued the anti-middle class policies of Bush II.

Humorously, Obama has been touring some areas boasting about how he was helping the embattled middle class. Well, he could start by repealing the 2 percentage-point FICA tax increase of Jan. 1 this year, which he agreed to with “anti-tax”/really tax increase Republicans in the House. And which boosted the middle class’s taxes by $1,000 a year. Then he could agree to repeal Obamacare. Then…

Oh, what’s the use. If you’re in the middle class, both parties just want to gouge you to line the pockets of themselves and their Crony Capitalist masters.

By John Seiler

It’s not just the recent economic and political nonsense by both parties that’s hurting the middle class. It’s more than four decades of it. A new study finds:

“The median net worth of American households has dropped to a 43-year low as the lower and middle classes appear poorer and less stable than they have been since 1969.

“According to a recent study by New York University economics professor Edward N. Wolff, median net worth is at the decades-low figure of $57,000 (in 2010 dollars). And as the numbers in his study reflect, the situation only appears worse when all the statistics are taken as a whole….

“Fully 85 percent of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living. Of those who feel this way, 62 percent say “a lot” of the blame lies with Congress, while 54 percent say the same about banks and financial institutions, 47 percent about large corporations, 44 percent about the Bush administration, 39 percent about foreign competition and 34 percent about the Obama administration.”

Typical of these polls, the real culprit was not fingered in the question: The U.S. Federal Reserve Board. In 1968, Richard Nixon — native of Orange County, Calif. — was elected to protect the “silent majority,” as he called it, a/k/a the middle class. In 1971, the fool took us off the gold standard.

Since then, the Federal Reserve Board has waged an unrelenting assault on the middle class by debasing the currency, with the dollar’s value dropping from $35 an ounce of gold in 1971 to $1,711 today. That’s a loss of 98 percent of its value.

In the 1970s, tax rates remained the same — meaning the middle-class was jammed up into higher-income tax brackets, where they remain. Reagan indexed the rates to inflation, but only as of 1985. It wasn’t retroactive.

So, in 2012 Mr. & Mrs. America  pay the high tax rates of millionaires of 1971.

Reagan’s tax cuts, although needed, mainly went to the wealthy. The middle class got tax cuts from the Gipper. But he also increased the FICA/Socialist Security tax as part of the Greenspan Commission in 1983. Those tax increases essentially repealed Reagan’s middle-class tax cuts.

And inflation is why the middle-class in California pays the staggeringly regressive state income tax rate of 9.3 percent, which in the 1960s only affected millionaires.

Greenspan later, of course, became the inflationist head of the Fed, his policies especially destroying the dollar when he panicked after the 9/11 attacks in 2001.

Today, President Obama, Democrats running the Senate and Republicans running the House don’t really care about the middle class. If they did, they would take retiring Rep. Ron Paul’s advice to “End the Fed.”

And they would roll back middle-class tax rates to 1971.

If you’re in the middle class, as I am, here’s your future: