WHITHER THE AMERICAN MIDDLE CLASS?

With much fanfare in the offing concerning "promise zones" as a solution to the lingering problem of poverty in America, it is to be hoped that, somehow, the challenges facing the great American middle class do not get lost in the shuffle.

It was no so long ago that a common assumption was that one could gain employment with a corporation and, after a career of 35 or 40 years, receive an adequate pension, complemented by Social Security, and be set for life.  Such expectations, except perhaps for government workers, are no longer valid.

American society is unique in its trust in the principle that a growing middle class will sustain its dominant position in the world; however, 21st century America is vastly different from its historical counterpart of 50 years ago, and American dominance, along with middle class standing, is no longer to be taken for granted.  In fact, a continuing decline of middle class standards of living may very well presage a parallel decline of American global prestige and power.

In terms of dollars adjusted for inflation, the average middle class family of 2013 was $4,000 poorer than its equivalent in 2000.  And this is a trend that has been building since the 1980's.  With the advent of emphasis on a global economy and a redirection toward service and knowledge-based industries, American corporations have been restructuring in various ways to promote efficiency.  And, quite frequently, the restructuring has adversely affected the middle class.  In re-engineering corporate structure, value has increased; but, to be sure, that value did not benefit a slimmed-down workforce, which, more often than not, was now expected to reinvent itself periodically in order to remain competitive and employed.

The theoretical basis of American capitalism has seen a sea-change from the 1950's and 60's to the 21st century.  This transformation of thought has moved from a time in which prominence was given to the maintenance of a loyal, long-standing workforce to one in which dividends for stockholders and the availability of more stock options for management became overriding concerns.  In the process, management began a sharp reversal in what tenure, benefits and remuneration could be expected by its employees.

Consequently, the middle class has been squeezed by traditional pension funds being replaced by IRAs and 401(k)s, while shouldering  increasingly heavy tax burdens.  Concurrently, with government schemes driving up the cost of health care and employers jettisoning employer-provided health insurance, the future for the American middle class does not appear to be appreciably brighter.

The assumption that there would be continuous upward mobility in America came crashing down with the housing bubble preceding the great recession.  To suppose that those who were significantly below the median could be expected to maintain even sub-prime mortgages and somehow be elevated into the middle class proved to be a disastrous fallacy and an even greater economic blunder, inasmuch as it would be the middle class that would suffer the greatest consequences of resulting economic decline.

America is now at a crossroads.  It is obvious that our society is much the worse for moving in a direction in which there are two segments of America, one thriving  while the other falters.  On one hand, we have a government which places great store in an ideology of redistribution.  But a study of the outcomes of redistributionist efforts throughout history is far from encouraging, as they invariably waste  resources and remove assets from economies  On the other hand, those who are considered to be of a more economically conservative bent would favor free-market solutions.  And, indeed, capitalism does grow economies and promote efficiency, but clearly, under the current circumstances, there are no guarantees that a rising economic tide will lift all of our societal boats.

As a nation, we have a history of performing best when we are challenged.  At present, all too many of us seem not to recognize the seriousness of the economic challenges facing us.  In short, we are distracted by the false rhetoric of elements that would seek to disunite us with flawed cries for the equality of first one cause or segment of our population and then another.  Somehow, anger has superseded reason and common sense, bringing on an even larger sense of frustration.  Only when our challenges become apparent to the greater part of the whole, will we have the potential to recognize the necessity of undertaking innovative measures to preserve our middle class and, thus, to preserve a dominant role for America in the world. In the meantime, we cannot afford the luxury of unlimited concessions and expenditures to assuage shortcomings perceived by disparate parties.  Our future is too important to be lost and sacrificed on an altar of political correctness and multiculturalism. 

Deo Vindice!

God bless Texas, and may the Lone Star State remain forever red!