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The Middle Class Can’t Keep Up With Persistent Inflation Forever

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It seems unlikely that one issue — indeed, one chart — could define the politics of the last several years and even the last decade. Yet the pattern seems clear.

A recent Wall Street Journal article explained how the middle class feels increasingly squeezed by post-pandemic price hikes. Quotes from families seeking the light at the end of the tunnel show how American households feel stuck in an ever-growing vise by prices rising faster than their incomes can keep up.

A fascinating graphic in the article, taken from University of Michigan consumer survey data polling the middle class, shows how families’ perception of their personal financial situation has deteriorated:

Photo credit: Wall Street Journal

The trendlines in the graphic show the strength of the economy in President Trump’s first term, when majorities said they felt better off personally, and only about 15-20 percent of households felt worse off in the years before the pandemic. They explain why Trump won his victory over Kamala Harris last fall; roughly two times as many people felt worse off than better off after four years of “Bidenflation.” And they also provide a clear reason for Republicans’ electoral losses this November, because the middle class’s mood has changed little since the 2024 election.

So how can conservatives respond? Trying to claim inflation doesn’t exist won’t cut it because people see price increases with their own eyes. I see it every week when I go to the grocery store: A pack of raisins previously priced at $2.99 now goes for $3.29 (a 10 percent bump); the toilet paper that was $5.99 now retails for $7.29 (a 22 percent jump); the package of bratwursts that used to cost $3.50 now goes for $5.00 (a 43 percent increase). I consider myself luckier than most, having paid off my mortgage years ago, but the weekly shop still feels painful. (Read more from “The Middle Class Can’t Keep Up With Persistent Inflation Forever” HERE)

Photo credit: Gage Skidmore via Flickr

American Billionaires Grew Wealth by $340B in 2021; Middle Class Shrunk in Mandate-Crazy Economy

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The richest billionaires in the United States grew their wealth by more than $340 billion over the last year, while the wealth held by the American middle class shrinks.

U.S. billionaires Elon Musk, Jeff Bezos, Bill Gates, Larry Page, Mark Zuckerberg, Sergey Brin, Steve Ballmer, Larry Elison, and Warren Buffett grew their combined wealth to about $341 billion in 2021, according to figures published by CNBC. . .

At the same time, the American middle class has seen a dramatic drop in wealth. The middle class includes 77.5 million U.S. households with an annual income of $27,000 to $141,000.

In October 2021, Breitbart News reported the top one percent of income earners in the U.S. now hold more wealth than the entire American middle class. Specifically, the middle class has seen its share of national wealth plummet to just 26.6 percent while the top one percent’s share of wealth has grown to 27 percent — the first time in U.S. history that the top one percent’s share of wealth has outpaced the middle class’s share of wealth. (Read more from “American Billionaires Grew Wealth by $340b in 2021; Middle Class Shrunk in Mandate-Crazy Economy” HERE)

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Middle Class Decline Looms Over Final Years of Obama Presidency

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By Howard Schneider. Barack Obama enters the final two years of his presidency with a blemish on his legacy that looks impossible to erase: the decline of the middle class he has promised to rescue.

The revival of middle-class jobs has been one of Obama’s mantras since he took office in 2009 fighting the worst economic crisis in generations. It was a major theme of his last State of the Union address and is expected to feature in the one scheduled for Tuesday.

Administration officials said on Saturday the president would propose higher capital gains taxes, new fees on large financial firms, and other measures to raise $320 billion for programs and tax breaks aimed at the middle class . . .

But for the middle class the scars of the recession still run deep. Federal Reserve survey data show families in the middle fifth of the income scale now earn less and their net worth is lower than when Obama took office. (Read more about the middle class decline HERE)

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Majority of U.S. Schools Poor Enough for Lunch Help

By Reuters. The share of public school students who qualify for free or reduced lunch in the United States has grown to 51 percent, in an indication of growing poverty, according to a report released on Friday.

The problem is most acute in Mississippi where 71 percent of students were in that category, according to the report from the Southern Education Foundation.

The group identified the share of students from low-income families by analyzing 2013 federal data on children who qualify for free or reduced lunch at school, which is offered to those from families at or below 185 percent of the federal poverty level. For a family of four, the poverty level is less than $24,000 a year and 185 percent of that figure is about $44,000. (Read more from this story HERE)

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Biden: In Obama’s Economy ‘The Middle Class Has Been Left Behind’ (+video)

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Photo Credit: Daily CallerVice President Joe Biden attended a rally Monday for Iowa Democratic Senate hopeful Bruce Braley and, in talking about the economy, inadvertently slammed the Obama administration as a failure for the middle class.

He praised “55 months of growth and there’s 10 million new jobs,” then he added. “But you know the truth – the middle class is still in trouble, the middle class is still in trouble. You don’t have to know the numbers, you can feel it. You can feel it in your bones.”

Read more from this story HERE.

Democrat Mark Pryor Thinks $200K Is Middle Class

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Expect to see this gaffe get plenty of playtime in attack ads and on cable news: Arkansas Democratic Senator Mark Pryor apparently thinks that the middle class makes $200,000 annually.

Pryor made the comment during Tuesday night’s Arkansas Senate debate when asked to define the middle class. “Well you know, under the law there’s a lot of different definitions of middle-class, but when I think of the middle class I think of most of Arkansas, and maybe that goes up to $150,000, $200,000, there’s different ways to judge it.”

Read more from this story HERE.

In the Future We’ll All Be Renters: America’s Disappearing Middle Class

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Photo Credit: The Daily Beast

Photo Credit: The Daily Beast

In ways not seen since the Gilded Age of the late nineteenth century, America is becoming a nation of increasingly sharply divided classes. Joel Kotkin’s The New Class Conflict breaks down these new divisions for the first time, focusing on the ascendency of two classes: the tech Oligarchy, based in Silicon Valley; and the Clerisy, which includes much of the nation’s policy, media, and academic elites.

The Proleterianization of the Middle Class

From early in its history, the United States rested on the notion of a large class of small proprietors and owners. “The small landholders,” Jefferson wrote to his fellow Virginian James Madison, “are the most precious part of a state.” To both Jefferson and Madison, both the widespread dispersion of property and limits on its concentration—“the possession of different degrees and kinds of property”—were necessary in a functioning republic.

Jefferson, admitting that the “equal division of property” was “impractical,” also believed “the consequences of this enormous inequality producing so much misery to the bulk of mankind” that “legislators cannot invent too many devices for subdividing property.” The notion of a dispersed base of ownership became the central principle which the Republic was, at least ostensibly, built around. As one delegate to the 1821 New York constitutional convention put it, property was “infinitely divided” and even laborers “expect soon to be freeholders” was a bulwark for the democratic order.

This notion of American opportunity has ebbed and flowed, but generally gained ground well into the 1960s and 1970s. The very fact that the United States was more demographically dynamic, notes Thomas Piketty, naturally reduced the role of inherited wealth compared to Europe, most notably in France, where population growth was slower. Mass prosperity hit a high point in America in the first decades after the Second World War, the period where the country achieved its highest share of world GDP at some forty percent. By the mid-1950s the percentage of households earning middle incomes doubled to 60 percent compared with the boom years of the 1920s. By 1962 over 60 percent of Americans owned their own homes; the increase in homeownership, notes Stephanie Coontz, between 1946 and 1956 was greater than that achieved in the preceding century and a half.

Read more from this story HERE.

The American Middle Class Is No Longer the World’s Richest

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Photo Credit: NYT

Photo Credit: NYT

The American middle class, long the most affluent in the world, has lost that distinction.

While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.

After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.

The numbers, based on surveys conducted over the past 35 years, offer some of the most detailed publicly available comparisons for different income groups in different countries over time. They suggest that most American families are paying a steep price for high and rising income inequality.

Although economic growth in the United States continues to be as strong as in many other countries, or stronger, a small percentage of American households is fully benefiting from it. Median income in Canada pulled into a tie with median United States income in 2010 and has most likely surpassed it since then. Median incomes in Western European countries still trail those in the United States, but the gap in several — including Britain, the Netherlands and Sweden — is much smaller than it was a decade ago.

Read more from this story HERE.

New York Times *Finally* Tells its Readers: Obamacare is Awful for the Middle Class

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Photo Credit: Adam Jeffery

Photo Credit: Adam Jeffery

The New York Times is starting to get a bit nervous about this health care law thing.

Ginger Chapman and her husband, Doug, are sitting on the health care cliff. The cheapest insurance plan they can find through the new federal marketplace in New Hampshire will cost their family of four about $1,000 a month, 12 percent of their annual income of around $100,000 and more than they have ever paid before.

Even more striking, for the Chapmans, is this fact: If they made just a few thousand dollars less a year — below $94,200 — their costs would be cut in half, because a family like theirs could qualify for federal subsidies.

So much so that they’re now gingerly starting to tell their readers what you and I already know: “While the act clearly[*] benefits those at the low end of the income scale — and rich people can continue to afford even the most generous plans — people like the Chapmans are caught in the uncomfortable middle: not poor enough for help, but not rich enough to be indifferent to cost.” I welcome this sudden decision by the New York Times to join us here in Reality Non-Unicorn, and hope that they enjoy their visit. Indeed, the Old Grey Lady is more than welcome to settle here permanently.

Read more from this story HERE.

Middle Class Get ObamaCare Sticker Shock

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Thousands of Californians are discovering what Obamacare will cost them — and many don’t like what they see. These middle-class consumers are staring at hefty increases on their insurance bills as the overhaul remakes the healthcare market. Their rates are rising in large part to help offset the higher costs of covering sicker, poorer people who have been shut out of the system for years.

Although recent criticism of the healthcare law has focused on website glitches and early enrollment snags, experts say sharp price increases for individual policies have the greatest potential to erode public support for President Obama’s signature legislation.

“This is when the actual sticker shock comes into play for people,” said Gerald Kominski, director of the UCLA Center for Health Policy Research. “There are winners and losers under the Affordable Care Act.” Fullerton resident Jennifer Harris thought she had a great deal, paying $98 a month for an individual plan through Health Net Inc. She got a rude surprise this month when the company said it would cancel her policy at the end of this year. Her current plan does not conform with the new federal rules, which require more generous levels of coverage.

Now Harris, a self-employed lawyer, must shop for replacement insurance. The cheapest plan she has found will cost her $238 a month. She and her husband don’t qualify for federal premium subsidies because they earn too much money, about $80,000 a year combined.

“It doesn’t seem right to make the middle class pay so much more in order to give health insurance to everybody else,” said Harris, who is three months pregnant. “This increase is simply not affordable.”

Read more from this story HERE.

Who Killed The Middle Class?

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Photo Credit: DonkeyHotey “It is our generation’s task, then, to reignite the true engine of America’s economic growth – a rising, thriving middle class.” So said Barack Obama in his State of the Union address.

And for one of his ideas to reignite that engine, Republicans applauded. “And tonight, I am announcing that we will launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union – because trade that is free and fair across the Atlantic supports millions of good-paying American jobs.”

One wonders if any of those in the hall who rose robotically at the phrase “free and fair” were aware of the trade results just in from 2012. What were the 2012 figures for the European Union?

U.S. exports to Europe fell, imports from Europe rose, and our trade deficit with the EU shot up 16 percent to $116 billion. We ran a trade deficit with Italy of $20 billion, with Ireland of $25 billion, with Germany of $60 billion. The Europeans are eating our lunch.

What about South Korea, the country with whom we signed a free-trade deal in 2012? U.S. exports to Korea fell last year, and due to a surge in imports our trade deficit in goods with South Korea soared 25 percent to $16.6 billion.

Read more from this story HERE.