

How the Bubble Destroyed the Middle Class - mvs
http://finance.yahoo.com/banking-budgeting/article/113086/bubble-destroyed-middle-class-marketwatch;_ylt=At4mPlCBilFtqaDeVWAOHkK7YWsA;_ylu=X3oDMTE1YTVsNjl0BHBvcwM4BHNlYwN0b3BTdG9yaWVzBHNsawNob3d0aGVidWJibGU-?mod=bb-budgeting&sec=topStories&pos=5&asset=&ccode=

======
IdeaHamster
Here's what I find most interesting about what has happened to the middle-
class in America:

When the middle-class in America was booming, you would have had to be crazy
to leave America. Good job. Nice car. Family and a house? You're set! Why
leave?

Another way of viewing what has happened in the US over the past 20 years or
so, is that the US middle-class is falling back to earth. Now the average
middle-class family in America could move to just about anywhere in Europe and
enjoy a pretty similar lifestyle to what they currently have in the US. Sure,
gas is still more expensive and clothing is still a bit pricy, but it's
nothing like it was in the 80s and early 90s. (I still remember seeing
electric razors advertised for the equivalent of $150 on my first trip to
Germany when the equivalent model in the US would've cost no more than $50.)

Take that one step further, and the average American family could now
potentially consider a move to one of the BRIC or CIVITS nations, and they
would find themselves with only slightly less access to the luxuries they
might expect in the US.

Why is this important? Because I think that for the first time in the history
of human kind, we might just be reaching the point where the choice of where
to live and work could be made based solely on things like the climate or the
culture instead of on things like "Can I eat?" or "Will I have a roof over my
head?"

That would be a world I would want to live in...

~~~
danieldk
_When the middle-class in America was booming, you would have had to be crazy
to leave America. Good job. Nice car. Family and a house?_

Lack of old culture? Lack of proper healthcare for everyone? Lack of decent
unemployment benefits? Being stuck in your own little bubble? (No tastful
bread? ;))

Do not misunderstand me, I do like the US for its nature and kind citizens.
But many would never trade their life for a life in the US. Even if they were
given the choice of a 'booming middle class life'.

~~~
tokenadult
_Lack of old culture?_

Your comment was kind, so please interpret this as a kind reply. When I used
to interpret for official visitors to the United States from China, I could
take them to a cemetery in the city of Boston where there are graves that were
dug before the founding of the Qing Dynasty in China. Harvard University, for
example, dates to the Ming Dynasty.

Similarly, here in the United States we use the ROMAN alphabet, a cultural
survivor now more than 2,000 years old, and the Indo-Arabic decimal place-
value numeral system (just as much of a new upstart in Europe as it is for any
American), and Gregorian chant and other music that precedes the use of
musical notation anywhere in the world. We have plenty of old culture here.

The United States also has new culture such as ragtime, jazz (various genres),
blues, soul, rhythm and blues, rock and roll, and hip-hop music that compare
favorably in the aggregate to traditional music from anywhere in the world,
broadcast media and motion pictures that were largely invented here but now
enjoyed around the world, and this cool thing called the Internet that links
all of us together on Hacker News.

Your point is well taken. A lot of countries offer a lot of interesting
lifestyle features. I would return to Taiwan (where I met my wife, and where I
last lived a decade ago) at the drop of a hat. My oldest son is very
interested in living in Norway, a land my ancestors left for Minnesota a
century and a half ago. It's wonderful that more and more what country a
person lives in is a matter of choice rather than solely a matter of birth.
The trade-offs involved in living in one country rather than another involve
many interesting incommeasurable issues.

~~~
danieldk
_Harvard University, for example, dates to the Ming Dynasty._

I do not disagree that there are no traces of old culture. However, go to any
random city in, say Europe, the middle east, or Asia. Chances are high that
you will easily find artifacts from the roman age until now. Most of the US is
new, in many cities you'll have to work hard to find something older than one
hundred or two hundred years old. This is not a criticism, but many people
appreciate cities and artifacts that are old ;).

Also, with respect to culture in the other sense, the difference is huge. US
city centers tend to be boring (with notable exceptions such as New York),
since much of the activity is in the outskirts, and are only reachable by car.
Compare this to many other countries, where city centres are cramped with
pubs, small theaters, etc, and people tend to hang around until the early
morning. I liked some cities int this respect (e.g. Portland), but in
comparison it's still a bit dull.

 _The United States also has new culture such as ragtime, jazz (various
genres), blues, soul, rhythm and blues, rock and roll, and hip-hop music that
compare favorably in the aggregate to traditional music from anywhere in the
world,_

It's just marketed a whole lot better. E.g. I am into jazz mostly, and
American musicians are the most well-known. But Europe had (and still has) a
lively avant-garde scene, which was at least as progressive is the scene in
the US. In Africa, mostly isolated and in parallel, what resembles modern jazz
developed (e.g. check out the excellent Ethipiques series). One good example
is Getatchew Mekurya from Ethiopia, who developed his own weird flavor of
jazz, that sprung directly from traditional ethiopian music. Anyway, I
digress. The rest of the world had thriving and progressive music scenes, but
often failed to package is for mass consumption.

 _broadcast media and motion pictures that were largely invented here_

Are you kidding? Ever heard of Nosferatu, Battleship Potempkin, Le voyage dans
la lune?

 _but now enjoyed around the world_

Hollywood movies are often looked down upon as superficial, but 'ok if you
want something easy'.

 _and this cool thing called the Internet that links all of us together on
Hacker News._

True, ARPAnet was invented in the US, but the 'interface' that we all use was
invented by a Brit in Geneva ;). Sure, it had its precursors, but the point
is, that in contrast to popular belief, the US did not bring us to modernism.
It's a collective contribution.

------
3pt14159
I hate misleading graphs. First off, that graph should be logarithmic to show
true changes in year over year percent terms (otherwise everything looks
exponential in the long term) and secondly, the y-axis should extend to near
the origin.

~~~
fhars
You will have to scroll a _long_ way to get near the origin on a logarithmic
graph.

(Or, the two parts of you advice on how to enhance the graph are mutually
exclusive, the origin on a logarithmic graph is at minus infinity.)

~~~
3pt14159
I specifically said "near" to avoid this heckle. :)

------
orofino
While this is interesting, I think it misses the fundamental issue, our
(American) view of wealth. If people looked at a home as a consumable with
nominal value, this wouldn't be a problem. The article hints at the core
issue, middle class families have on average $100K in savings. If, instead of
purchasing large houses out in the suburbs with large yards, they purchased
something more modest and within their means, the house wouldn't be the center
of their financial universe.

~~~
nhaehnle
I do believe the article is spot-on about why there is no recovery from the
crisis that actually reaches the population at large.

The headline is a bit misleading, however. It's not that the bubble destroyed
the middle class. The bubble was a way for the middle class to continue living
a happy life despite the fact that there income share was continually being
reduced. Instead of consuming on income, they consumed on the housing bubble.

So it's not the bubble that destroyed the middle class - the article basically
says so itself - it just delayed the inevitable and made the decline much more
spectacular.

------
kemiller
I don't know why people keep thinking class is about personal income.

Edit: this is relevant because their evidence that the middle class is
shrinking comes in the form of a drop in the share of total income earned that
accrues to the middle quintile, from 17% to 15%. That's an interesting result,
but it doesn't really say anything interesting about the "middle class". In my
book, if you have to go into work every day or you can't pay the mortgage,
you're middle class. You have a job, you have secured debt, you own your home,
and your income comes from employment. I will bet you that a much larger span
of that spectrum, up to and including most of the top 5%, meet that
description. Those at the top might be "upper middle" and enjoy a lifestyle
that others envy, but that doesn't make them upper class.

~~~
knieveltech
Probably because class is about personal income.

~~~
kemiller
No, it's not. It's certainly not about which evenly-spaced quintile you're in.
It's about HOW you make your money, and what you spend it on.

Consider: do you really think everyone making 88K or more should be considered
"upper class"?

~~~
knieveltech
I fail to see the relevance of how one makes one's money to the class
discussion and 88k is an arbitrary number.

The classic "American Dream" lifestyle is typically defined as home ownership,
two cars in the garage, three squares a day and sufficient disposable income
to be able to comfortably afford to raise children and save for retirement.

So, assuming this works as a definition of "middle class", anyone not capable
of all of the previous due solely to financial constraints is therefore "lower
class".

Based on my experience, $120k annual household income in a low cost of living
area barely squeaks over the bar if you use this metric. $175-$200k annual
household income seems more realistic to me given the retirement clause.

Where the line gets drawn for "upper class" is harder to define, but I think
we can all agree an upper class exists.

------
julnepht
"off topic" But I cannot remember when was the last time that an article from
yahoo.com got over 50 votes on HN !

------
wccrawford
I really hate it when reporters use words incorrectly.

"And make no mistake, the middle class has been ruined: Its wealth has been
decimated, " ... They only lost 10% of their wealth? That's not so bad. Oh
wait, they mean completely destroyed, not decimated.

~~~
jonnathanson
The writer and history buff in me loves that you have pointed this out. But I
think the word "decimate" decoupled from its original meaning sometime between
the fall of the Roman Empire and today.

~~~
njharman
As fellow history buff, I was fascinated to learn that decimation was used as
recently as the 1930's. By Italy against Libyan tribesmen.

But, I agree with you decimate has long had alternative meaning of "destroy
almost completely"

~~~
jonnathanson
That is interesting. And it would make sense, given that 1930s Italy was run
by a dictator who had a personal obsession with proclaiming himself the heir
the Roman Empire. This is a fun tangent. And apologies to everyone else who's
trying to stay on topic. This is why I love nested comment systems.

------
dotcoma
Bullshit. If America had a great middle class, ordinary folk would go on
vacation in the summer, not to the movies like they do now and have done for
decades. In the US, movies come out in the summer; even Newsweek used to have
a Summer Movies special. In Europe, they come out in November or December,
when the weather's shit and there's nothing better to do.

~~~
dgabriel
Um, lots of families do BOTH of these things.

~~~
dotcoma
Thanks for leaving a comment. A lot of (pretty fascist, imho) people seem to
have just down-voted me instead.

