Well I am not economist, but a couple of observations from my own life. Heatlh care cost are killing me. In six months I have a had a daughter break her arm that needed resetting and another child need eye surgery and an MRI. It isn't the overall cost to me since I have health insurance, but just the sum of all the bills piled together on top of my normal family budget. Housing costs are unreal. I bought a new home in Arizona, signed the contract last June. In one year the price of the base model that I bought has risen to more then the total cost of my house, add-ons included. Base model price has increased in one year by more then $45K. An increase of 32%. Part of the problem is investors from out of state are gobbling up all the used houses as investment properties. So basically people with money are driving the prices of homes up out of the reach of the people who need them. Now if health care costs and housing costs have been increasing at a much larger rate then wages, then I am not doing as well as my parents back in 1973. These are the two big ones that jump out at me. Even with the rise of gasonline prices, I think most other goods are similar in price to 1973 when adjusted with inflation. Also, America in 1973 was a cashed based society that paid as you went. Today America is a credit based society that pay later. So the big question, if you took away all credit except for mortgages and car payments; what would happen to America's economy? What would happen if half of America suddenly defaulted, went bankrupt, on all of their credit card debt?
The credit card debt isn't as bad as many people report. While the household average is around 8,000 - only 29 percent have over 1000. source - http://moneycentral.msn.com/content/Banking/creditcardsmarts/P74808.asp I think a lot of rich people use their credit cards like bank cards - rack up huge balances, and then just pay them off when they get their bill. I am scared about the flurry of interest-only mortgages though. I hope you kids are doing well!
Oh yeah, I have one of those mortgages too. Not that I wanted it, but my wife lost her job two months before we closed on our house. Hopefully I will be able to refinance to a 30 year fixed before the bubble bursts. The kids are going well. Never a dull moment with little ones.
actually it is not about Demos and Repubs hell most of the Senators are Rich and Representatives ain't exactly hurting either Rocket River
The article did say that financial security is a thing of the past. It is also titled losing our country. It is hard not to read doom and gloom into it. America still has mostly middle class people. You are talking about examples with mostly very rich and very poor. There is no comparison. I think this is a result of having more focus on being a professional than an entrepreneur. You don't get rich by working for somebody else, you do it by having others work for you. That, combined with the culture of the lower class that does not value education (often even stigmatizing it), when they are the people that can move into the middle class by getting a degree leads to a lack of social mobility. I think it goes far beyond inertia, and ties into our who modus operendi in raising children.
Ha, I do have around 9000 in credit card debt , but it was given to me at 0% for a year. So I figure why not make some money in interest at 3.5%, that is close to 300 bucks.
Sure it is negative - it presents negative economic trends which are undeniable - but you didn't answer the question - why did you specifically read into it the fact that the middle class is worse off in real terms - it does not say this, nor anything remotely approaching that taxes depress real wages, which you were apparently aattmepting to defend? But the america's middle class in relation to it's super rich are becoming increasingly less wealthy - the point is that when capital accumulates at the top (as it did, for example, in thee 1920's) instability results. Likewise, the argentinian economy in the 90's in a broader sense exhibits many characteristics similar to ours right now. If you are claiming that there is "no comparison" you are simply wrong, just like you were wrong about your claim that the article states wages are depressed in real terms.
I didn't say that the article claimed anyone was worse off in real terms. I said that the fact that people are not worse off makes the doom and gloom, sky is falling tone of the article unjustified. From that, you accused me of saying the article made false claims of people being worse off. I also never mentioned taxes depressing real wages. For some reason, you like to attribute views to me that I have not expressed. I would say the problems that arose in the '30s were more a result of a rampant increase in stock speculation on credit, more so than the stratification of wealth. The stock market crashes and a lot of people are in the poor house. If people were not investing money they didn't have, then a) the stock market probably would not have collapsed so badly from everyone pulling out at the beginning, and b) any depression of the stock market would not have led to such an increase in severe poverty. I don't see the same thing happening now, or the precipitous drop a while back would have had a similar disasterous result as the '29 crash. I really don't see modern America as a copy of France at the time of the revolution. We do not have the hordes of starving people and the tiny aristocracy, we have mostly middle class. I haven't studied Argentina enough to talk about that, but if it is anything like your french revolution example, then I stand by my claim of no comparison. Mostly middle class is much different than mostly poor and starving.
If tax-cuts, bankruptcy reform, and death tax do not have an impeding effect on real wage growth for the middle-class, then what is Krugman so concerned about? Those are the specific examples of partisan ppolicies he writes in his article. No one here has explained to me why the afformentioned "partisan" policies would have a impeding effect on real wage growth. It's also a little hypocritical to accues the right-wing partisans of name-calling when Howard Dean is the chairman of the DNP.
But it goes both ways. In the other thread I mentioned Karl Rove calling Democrats dumb, and Tom Delay has said they have 'no class'. He went on to say that Republicans helped the nation get over 9/11 while democrats did nothing. It isn't a pleasant state of politics, but Howard Dean isn't doing anything different.
I totally agree with you. The crap flies both ways. I'm just trying to point out Krugman's article for what it is - another partisan editorial. I remember that I had to read on of his books or something for my econ degree (forget which one) - and I knew he had political leanings (everyone does). I just didn't know it had gone this far.
Replace "stock market" with "housing market" and you get a pretty good snapshot of today's perilous economy, with the rest of things that you described soon to follow. But the real question is, if you are not one of the super rich, why are you so adamant about defending an inequitable situation, other than blind partisan loyalty? In other words, why do you think the middle class should NOT become better off at the same proportionate rate as the super wealthy?
Because I am not so egocentric as to be unable to take an unbiased view of things. People who innovate and take risks, investing their time and money to create a business are the people that grow the economy. Somebody working as a machinist, an actor, or a secretary keep everything going, but it is the factory owner, the producer, and the entrepreneur that give them those jobs and expand the economy. Since they are the one's creating new wealth, I have no problem with them getting a disproportionate cut of the new wealth created. We also have to consider that while the middle class as a proportion of the population may be pretty stagnant, the raw number of people in the middle class is increasing with the population. It is the rich that are providing the jobs for those workers. If the upper class were causing the middle class to become less wealthy, then I would agree that the situation is unteneble and we are quickly moving toward a country of haves and have-nots. As it stands now we are a country of haves and have-mores.
For the fifth time, why are you fabricating an alleged effect on real wage growth? I thought we went over this.
Sam- it's pretty obvious you're just saying that because you know you can't defend Krugman's claims. His article clearly claims that real wage growth has been stagnant since 1973 and clearly blames republican policies for making it so. If right-wing partisan policies have not hurt middle-class income, then what is Krugman complaining about?
It is more and more likely that I will vote Dem in the next election...congressional and presidential.
