America Without a Middle Class

[Better Believe It]

America Without a Middle Class
By Elizabeth Warren
December 3, 2009

Can you imagine an America without a strong middle class? If you can, would it still be America as we know it?

Today, one in five Americans is unemployed, underemployed or just plain out of work. One in nine families can't make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month. The economic crisis has wiped more than $5 trillion from pensions and savings, has left family balance sheets upside down, and threatens to put ten million homeowners out on the street.

Families have survived the ups and downs of economic booms and busts for a long time, but the fall-behind during the busts has gotten worse while the surge-ahead during the booms has stalled out. In the boom of the 1960s, for example, median family income jumped by 33% (adjusted for inflation). But the boom of the 2000s resulted in an almost-imperceptible 1.6% increase for the typical family. While Wall Street executives and others who owned lots of stock celebrated how good the recovery was for them, middle class families were left empty-handed.

The contrast with the big banks could not be sharper. While the middle class has been caught in an economic vise, the financial industry that was supposed to serve them has prospered at their expense. Consumer banking -- selling debt to middle class families -- has been a gold mine. Boring banking has given way to creative banking, and the industry has generated tens of billions of dollars annually in fees made possible by deceptive and dangerous terms buried in the fine print of opaque, incomprehensible, and largely unregulated contracts.

And when various forms of this creative banking triggered economic crisis, the banks went to Washington for a handout. All the while, top executives kept their jobs and retained their bonuses. Even though the tax dollars that supported the bailout came largely from middle class families -- from people already working hard to make ends meet -- the beneficiaries of those tax dollars are now lobbying Congress to preserve the rules that had let those huge banks feast off the middle class.

America without a strong middle class? Unthinkable, but the once-solid foundation is shaking.

Read the full article at:

http://www.huffingtonpost.com/elizabeth-warren/america-without-a-middle_b_377829.html#st=e%3DAOG8GaDv0AjRarTvVd8Je4lbOwFIVPN45idyLxMpT86%252FEEDTQe04l%252F5pvWPRRHua43a0j%252Bk9HnSSm0H85J%252B0Ni0nq8pF5XrbEgpPTUP419g2orzYFnpc%252B3VSeHLSj8%252F%252BQj7Mmfnu%252FpaX8vu%252FfO93LxCXF4hMve4PatFbkIhswxdtgbN%252FIWwhlNcpz6bYWAEZpnCUfZGXHnjg1%252Byb8rDB0pnLVC3cwNIQi22oBewhbTw6p98MkfUkgh%252FexJOgMz9esFXub2SUcBgiQW8dxMbPq15C%252BCNh5Bg6M3%252FEYqtwUBvxypHRuoHbq%252FU%253D%26c%3Dpeoplesense&rpctoken=88656618&

[applegrove]

1. America without a middle class is Mexico.