Think life is not as good as it used to be, at least in terms of your wallet? You’d be right about that. The standard of living for Americans has fallen longer and more steeply over the past three years than at any time since the US government began recording it five decades ago.
Bottom line: The average individual now has $1,315 less in disposable income than he or she did three years ago at the onset of the Great Recession ”“ even though the recession ended, technically speaking, in mid-2009. That means less money to spend at the spa or the movies, less for vacations, new carpeting for the house, or dinner at a restaurant.
In short, it means a less vibrant economy, with more Americans spending primarily on necessities. The diminished standard of living, moreover, is squeezing the middle class, whose restlessness and discontent are evident in grass-roots movements such as the tea party and “Occupy Wall Street” and who may take out their frustrations on incumbent politicians in next year’s election.
[i]The diminished standard of living, moreover, is squeezing the middle class, whose restlessness and discontent are evident in grass-roots movements such as the tea party and “Occupy Wall Street” and who may take out their frustrations on incumbent politicians in next year’s election[/i]
Well yes of course: but here is the presenting question that frustrated voters better ponder for one heck of a long time before they pull a lever, or push a button out of that frustration:
What version of America accounted for the greatest standard of living in the world, up until the last three years? The version embraced by the Declaration of Independence and the Constitution which is individual liberty and an equal opportunity to be the best you can be? Or, the OWS version which is to call for even more Federal Govt coddling that has stiffled liberty and freedom and ossified the economy and destroyed personal initiative?
Because the answer will determine whether we break the strangle hold on our country or we tighten the knot even tighter.
Well said. I would also add that Capitalism is tempered by the fact that Capitalist can fail and loose their money. If Governments protect Capitalists from the results of their folly then the free market and Capitalism is skewed.
In Florida’s Insurance Receivership statute the claims of policyholders are paid first, the claims of shareholders, the Capitalists, are paid last, if we ever got that far. That’s as it should be.
Capt., your warning is important. I would just say I think the roots of the decline go back much farther than 3 years ago. Pres. Obama does most things wrong, IMHO; but the government hasn’t distinguished itself for a long time now. Medicare and SS are huge factors in our current economic mess, and they go way back. But yes, we should definitely take pause to consider whether we want more liberty or more suffocating gov’t micromanagement.
I’m neither an economist nor prophet. But I recall some discussions I had with my wife several years ago about the world economy (at least to my inadequate understanding.) The gist of my perception was that as other economies mature (China, India, Brazil, etc) there will be more demand for resources, meaning higher prices all around; and more incentive to have worked performed where labor is less expensive, resulting in an outflow of jobs from the US; and an opening of markets for US companies in other parts of the world, sometimes meaning a physical presence and more jobs being exported; etc… And if you believe that capitalism is not just an economic model, but implies certain “laws” of economic behavior, there’s little one can do about any of those. Protectionist govenment might slow things down, but won’t really change things in the end, and invites retaliation. If you’re a capitalist, even an American one, how can you blame a corporation for having its work done in a less expensive place, and maximizing profit? And how can you stop it anyway?
The net effect of this, I surmised, was that our standard of living would inevitably decline, even as other economies saw theirs increase, seeking a sort of equilibrium.
It looks like this is what’s happening, including the equilibrium part. I read last week that some parts of the manufacturing sector are starting to rebound in the US, as China (most notably) is willing and able to pay more for our better-equipped labor, since our “cost” has relatively gone down relative to their increasing “costs.”
It may just be that the “American Dream” was never a God-given right, and we had a good run that’s come to an end. Doesn’t mean we can’t compete, but we may have to adjust our expectations as a society.
The problem is not Wall Street but we in the middle class have set out standers too high. by living above our means and abandoning thrift. We all became entitlement two year olds with a dose of narcissism, envy and lust. All of financed by cheap credit, low interest, no interest till next year regardless of your credit. I do see the middle class losing but being forced to live with in ones means.
Do blame the banks, we all signed on the dotted line with red ink.