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Posts Tagged ‘The New Deal’

What is the American Middle Class Anyhow, and Why Should We Care?

January 14, 2011 2 comments

The American Dream

First, a little history: In Feudal times, there were three classes, or estates. They were the aristocracy, the clergy, and the peasants.  These classes were conferred at birth and the amount of social mobility was nil. As the market economy began to emerge in Europe and the New World this began to change. For the first time a moneyed merchant class rose up from the peasant class. These merchants came, for the first time, not from the landed aristocracy but from the common people. As their buying power increased so did their influence on the affairs of the day.

But, even at that, there were still large income inequalities. These inequalities lasted through the gilded age and continued into the 1920s.The American middle class as we know it today rose up as a result of the economic policies of Franklin D. Roosevelt and the New Deal. This is the origin of the American Dream, which consists of home ownership, a decent education, and a job with a future and a large enough salary to enjoy the good life. The social safety net created by the New Deal made this dream possible for millions of people.

Though poverty was still endemic in certain areas the overall condition of the people was lifted up. The middle class also provided something to aspire to if you weren’t there yet. Every year there were newly minted graduates of universities that could say “I am the first in my family to finish college.” And the implied promise of the social contract was fulfilled-as graduation rates went up, so did incomes. The professions, formerly the bastion of rich white males, were forced to open there doors to everyone else.

They bounty was not confined to white collar workers. Through strong unions and a powerful manufacturing base the working class too joined into the American Dream. As did small business owners of all kinds. This new middle class were able, due to increases in standard of living, to pay more taxes, which built up cities, counties, and states. It also funded the safety net to protect those who were still behind in the game from real destitution. Neither hunger nor homelessness were big problems in those days. In fact, they were almost non-existent.

It would seem that having a large powerful middle class forming the glue of society would be considered a good thing all the way around. But there were those that thought differently. I am not going to discuss reasonable criticisms of the American Middle Class in this post, for instance the criticism of American over-consumption and waste, though I will discuss these in future posts. In this instance I am speaking of the elite class, defeated (in their own minds at least) by the New Deal policies that allowed the middle class to rise up to begin with.

The class war actually began around 1980, with the election of Ronald Reagan. It was slow and quiet at first, and always surreptitious. Slowly the market was deregulated, the jobs outsourced, the safety net eaten away. The apotheosis of the “free market” created a new body of “common knowledge”. The mental institutions shut down and the inmates were ‘set free’ to freeze and starve on America’s streets. And the price of education shot through the roof, as did the cost of medical care. As a new, now global, class of corporate elites formed, the luster of the American middle class began to fade.

The coup de grâce came in 2007 with the completely avoidable sub-prime crisis and the collapse of the economy, at least for us ordinary folk. The stock market itself came back very quickly, as did the million dollar bonuses. But not the jobs or the tax base. Now the rest of the safety net is in great peril, both from attacks by the elite and from being overwhelmed by millions of new ‘customers’. The middle class, once the greatest source of funds for services to the poor are now in need of such services themselves. And the elite class is not willing to foot the bill. They believe, along with Marie Antoinette, that we should “eat cake”

Here are some informative links:

http://www.youtube.com/watch?v=5kwA-CwFK5A Paul Krugman discusses the origins of the American Middle Class

http://www.youtube.com/watch?v=akVL7QY0S8A Elizabeth Warren on the coming collapse of the middle class

http://www.alternet.org/economy/41192/ Thom Hartmann on the war against the middle class