We are number 1 right? USA! USA! No one can beat our wealth creation machine, our economic dynamism, our level playing field and our bastions of higher education. We have a middle class that is the envy of the world, right?
Well, like so much of the “American dream” we have been force fed for a generation or more, this perception is not based in reality whatsoever. Sure it may have been the case for a couple of decades immediately after World War 2. Before the military-industrial-Wall Street complex fully took over the political process, but it certainly isn’t true any longer. Myths die hard and this one is particularly pernicious because it prevents people from changing things.
The statistic that led to this justified rant is that this country’s middle class is 27th in accumulated average net worth.
Why is this? Many explanations are tendered but the middle class’ greatest enemy–rivalling the breakdown of the family–is ridiculously easy access to credit, which includes both home equity and unsecured loans such as credit cards. Today most people price anything much more expensive than a toothbrush in terms of monthly payments as opposed to sale price; access to credit has replaced net worth or even income as a measure of wealth and success. Coupled with the nearly zero return savings have as a result of the Fed’s “zombie economy” policies, and it’s little wonder our net worths have gone into the toilet.
The result of this is that we have shifted from a society of owners to a society of renters, a trend accelerated by the real estate crash. Even though we hold the title to such things as our home and our car, our equity in same is minimal, thus what we pay is de facto rent. That has changed our whole social and political dynamic in ways many of us have failed to grasp, especially on the right. When you “owe your soul to the company store” or more accurately stores, the idea of being aspirational or benefiting from business friendly policies doesn’t resonate very well.
One concept that has died in all of this is deferred gratification. That extends to just about every aspect of American life. People who practice it in any form are considered ridiculous.
How we’re supposed to remain a great country in the face of this for most of our people is hard to understand. Maybe impossible.