Is the U.S. Ready for Post-Middle-Class Politics? | Hacker News Reader

Is the U.S. Ready for Post-Middle-Class Politics?

nytimes.com

42 pointsnoamhendrix39 comments

The Fed economic policies of strict inflation control have had a big part in holding down wages for working people. We all know when there is very strong job growth the Fed increases interest rates to slow the economy. This is done to limit inflation but it's executed at the very point when the "working person" would otherwise have the chance to get ahead. If interest rates were held lower longer strong job growth would elevate competition for labor... thereby increasing wages. This strategy caries with it a more pronounced risk of a spike in inflation but I would suggest that risk is worth it. If you look at the stagnation in real wages it starts around 1980, not coincidentally 1 year into Paul Volcker's term as fed chairman (whose clear mandate and legacy was controlling inflation at any cost).

Totally disagree. We’re sitting at almost zero percent interest rates because the fed can’t take their foot off the pedal. More isn’t going to help bring back the middle class. Volker broke the stagflation of the 70s and is probably the only decent chairman. Bad trade deals, runaway education and health costs, regressive taxes, foreign wars, etc. have done more to decimate the middle class than interest rates being too high. If anything, the fed has helped accelerate / fund much of this mess with ridiculously low interest rates for decades. Certainly it will hurt when rates go up, but it hurts to pay off your credit cards too. Cheap money funds malinvestment, flows to the politically connected, and aggravates income inequality. It’s just tough to notice. You may get a raise at work but don’t realize the bosses mansion/stock just appreciated 100 times more than your raise. You feel good but your ability to purchase things decreased.

While I agree that limiting inflation seems to be a laudable goal for economic stability, I disagree that enough is being done about it.

Inflation has gone /rampantly/ uncorrected for those who are able to make the most prominent political contributions. This is evident in the widening growth gap mentioned in this very article.

Yikes the fed from the 1970s called and wants you to come join them!!!!!

Seriously, low interest rates for too long back then made inflation almost hit 20%. I'm sure that's going to help the working class.

Anyone interested in this idea should check out the Fed Up campaign: http://whatrecovery.org

It's probably a victim of over thinking and too much marketing. The forces which shape this allergic reaction to these phrases are the ones also turning voters away and towards the Sanderses and Trumps who are less afraid of plain populist/democratic speech.

It should be of little surprise to establishment showrunners this is happening, after all the blue collar middle class are an afterthought when it comes to economic policy -- quite the opposite of say China, who cater to the blue collar middle class.

Yes, on the whole we have benefitted from trade deals but we've made very few accommodations for the part of the middle class which loses out --be I outsourcing yesterday and today or automation tomorrow.

>on the whole we have benefited from trade deals

Despite the amount of rhetoric I see claiming this, I have yet to see any empirical evidence.

Corporate profits have benefited greatly which thus benefits all who own stocks (top 20%). Wages have been crushed which negatively impacts the other 80%. [1] Personally, on a whole I feel we’ve lost as Americans and disagree with the parent. You can argue about cheaper goods or more competition, but most these trade deals seem fairly lopsided with the main beneficiaries being other countries getting jobs and corporations getting cheaper labor.

1. http://www.cnbc.com/2016/03/29/hillary-clinton-cannot-win-us...

Corporate profits have benefited greatly which thus benefits all who own stocks (top 20%).

This is extremely misleading. Most of that 20% own it via their 401(k) or IRA or whatever retirement plan they are enrolled in. Those people will benefit from the ownership at some point if the market doesn't crash just before or during their retirement.

Also, the wealth of almost all those 20% depends strongly on their labor income. Almost all the stock is owned by people whose wealth depends almost entirely on investment returns. So those corporate profits are helping the top 20%, but mostly by helping the top 1% (mostly by helping the top 0.1%...).

This is a good interview with economist Gordon Hanson on trade, poverty and US job losses: http://www.vox.com/2016/4/20/11466868/trade-poverty-economis...

Well the fact that the global population has begun the climb out of poverty is a pretttttttty good indicator. You may be approaching from the protectionist side, of course, but I'm not and so the happy truth is plain to see.

That's a result of technology, not trade policy. Not only that, but I can't think of rising, developing countries that have free trade policies. Brazil, China, and the rest are all protectionist. Further, the the notion is that we in the US have benefited from free trade.

So the answer is none of the above.

I agree with you, but would dispute that Brasil is rising at the moment

Well to be fair "the whole" isn't fully visible yet so we don't actually know the plain truth. Maybe trade deals are better for everyone overall. Maybe they aren't.

Maybe they have sustainably and permanently lifted millions of people out of poverty and it's a long term step forward on the path to a better life for everyone. Or maybe they have served to increasingly concentrate capital into fewer and fewer hands to the point the entire world will be eventually perpetually enslaved with no path out and this causes very bad things for the human race to happen. Not to mention the destruction of culture (or is this a positive? I never know) and destruction of ecosystems (I'm pretty sure this isn't a positive).

The point is, we don't know the full story yet. The jury is still out. But I'm always wary of concentrated power. Distributed power seems to produce much more good IMOP.

> the campaign planned to “shy away from the characterization ‘middle class’ — because, her advisers say, the term no longer connotes a stable life

This should infuriate everyone who reads this. Somehow being an average, in the middle of the income scale, means that the majority of Americans should expect an unstable life. That seems so wrong on so many levels.

I don't think you understand. It's better for the billionaires, Wall Street bankers, and venture capitalists this way. Therefore sacrificing a middle class country and way of life is worth it.

There are still lots of options for the former middle class: we could have autocracy like China or grinding poverty like Bolivia. But broad prosperity just wasn't working out for the big money donors and had to be abandoned.

That's missing the point. Everyone knows the middle class has been gutted to benefit the one percent. The problem now is: how does a national political campaign appeal to the vast population without referring to them as the middle class, or as something realistic but depressing, or with some sort of hollow and transparent euphemism like "everyday Americans"?

Whenever "everyone knows" something so complicated, you can be certain it's a religious belief, not a fact

I wish I could respond to each of the other two comments responding to you (by auntyJemima and ffnewfkjewf) with a referral to the other:

   - "Whenever "everyone knows" something so complicated, you can be certain it's a religious belief, not a fact"
     - "Are you crazy or in denial? Are you not aware of the many publications released about how we are no longer even close to the prosperity of the 1940s-1970s as regular Americans?"
        - "According to who?"
     - "According to who?"
        - "Are you crazy or in denial? Are you not aware of the many publications released about how we are no longer even close to the prosperity of the 1940s-1970s as regular Americans?"

Are you crazy or in denial? Are you not aware of the many publications released about how we are no longer even close to the prosperity of the 1940s-1970s as regular Americans?

Properity measured how? On average Americans are far better off now than in the 1970's if you think about income.

Measured by the amount of labour required to live a comfortable life? You say we're better off now but can a typical skilled or semi skilled worker today support a family in a secure home as was the case in previous generations?

Measured by the amount of labour required to live a comfortable life?

How do you define a "comfortable life"? I'm thinking the goal posts are constantly moving and that's why people think things were better back in the 1970's. Not blaming anyone for it, it's the human condition to always want things to be better.

Let's see: 1940's - WW2, America is just coming out of a 15 year recession 1950's - Constant threat of nuclear war, Korean War, economically things are looking up 1960's - Numerous race riots, economy is still doing relatively well 1970's - Rampant inflation, rather stagflation, gas shortages

I've asked my family (older generations) and they agree things are way better now. And they aren't what you'd even call middle class.

Yes. I can support a family and own a house with an average income in the Midwest. I also don't have to work in a factory or destroy my body physically.

I can do it all from the comfort of a temperature controlled office.

Many people seem to think they need to live in New York or San Francisco to live the good life.

Here, I did 30 seconds worth of work for you:

https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e...

read some of that. you might find it helps you know what you're talking about.

According to who?

What makes you think that the 'billionaires, wall street bankers and venture capitalists' don't want broad prosperity?

The data on billionaires appears to be fairly mixed (50-50): http://www.politifact.com/truth-o-meter/article/2014/jun/23/...

No really, middle class for our parents sat smack in the middle of being able to achieve the "American Dream", house on a cul-de-sac, 2.5 kids, etc.... Now that sentiment does not ring true with most 'middle class' citizens.

The Summer Of Love happened in SF because a working class family could get an affordable mortgage and buy a home there in 1967. Nineteen year olds working as shop clerks could get a decent apartment on their own. Now homes cost $1.5MM+ and nineteen year old Americans can't even get jobs without a college degree; entry level jobs go to immigrants willing to take under minimum wage and live four-to-a-bedroom.

SF isn't the entire country, though. Surely there are cities worth living and dreaming in beyond this bubble.

Silicon Valley ideologues always preach the concept of "exit." Well, maybe it's time to exit Silicon Valley.

The problem is you can exit silicon valley, but you can’t exit the silicon valley mindset. Where can you go work where you can believe that your employer has your best interests at heart, where you don’t have to worry about them outsourcing your job to increase profits by a couple percent. In the quest for ‘shareholder value’, business leaders have taken an overly cut-throat and self-centered approach to employees and their obligations to the country. Politics is the only way to reign this in and that is exactly what’s happening.

That's not the Silicon Valley mindset, that's the Wall Street mindset, which was unfortunately exported to Silicon Valley sometime between the dot-com boom and the mid-2000s. Corporate raiders started dismantling the labor/capital social contract in the 80s.

I would also be very skeptical of any politician who claims to be the solution to this. They're using you; economically frustrated masses are a very good way to gain power.

The people I know who actually manage to cobble together fulfilling lives today usually do it by thinking locally: developing local friendships, local business relationships, consumption preferences that reflect what they want, and then opting out of the national conversation.

nostrademons, love your name and comments but disagree with a few points.

>>> That's not the Silicon Valley mindset

Having grown up in the heart of the valley, Palo Alto, traveled the country and the world in the military, and now back working in tech, my observation is that this mindset is more SV than people give it credit for. It’s better packaged as meritocracy and innovation but the results are fairly apparent in the disparity of economic outcomes. I like a lot of aspects of the SV mindset (engineer focused, innovation focused, risk and failure tolerant) and know a lot of good people in SV, but I wouldn’t imbue it a purity above Wall Street, or Hollywood, or D.C. or any other power center. All are fairly dismissive of flyover country and self-assured in their wealth, power, and status.

>>> skeptical of any politician… They’re using you;

I got used by the military for a decade and assume everyone is using me. Haven’t seen much change in SV. But I’m also a sucker for trusting people. Life ain’t easy.

>>> Economically frustrated masses are a very good way to gain power.

Yes, but they are also the primary internal way to change power structures. And democracy allows us to do this in a controlled fashion through law.

>>> thinking locally… opting out of the national conversation

While I agree with the ethos of thinking locally, to the extreme it can also be taken as, "Don’t worry about the big things, leave that too other people. Don’t worry about what the hirer-ups are doing, just do your job. Don’t worry about the country, you can’t change anything” As a Veteran, I disagree with the attitude of total disengagement. I got sent to war by politicians. Only two presidential candidates are saying the Iraq war was stupid. That gets my vote. These decisions are life and death for people.

SF isn't the entire country. True.

Large swathes of the country it is very difficult to find any work at all. Never mind work with pay one can exist on.

>Large swathes of the country it is very difficult to find any work at all.

That's not true at all. It's just that all the jobs are now temporary and part-time. . . sorry, I meant to say contract and flexible scheduling.

This is an added value! People value flexibility in their employment, and millennials don't want to be tied down by full-time employment. Problem solved!

Known sales guru Grant Cardone continually makes the point there is no middle class. It was a marketing campaign post-war to entice consumption and sell homes.

His stance is that you're either rich or poor.. there is no in-between.

The post-war middle income people had and continue to have legitimately comfortable lives and could afford higher education, single family homes, annual vacation, etc.

Today's middle income people can barely afford to raise children and have neither retirement savings nor the promise of future pension. They have miraculous pocket computers and unlimited streaming entertainment, but they're only a paycheck or two from desperation and they feel powerless to make real decisions in their lives.

Maybe today it's a hollow marketing campaign, but in the 1950s there really was a group of people who had a significant degree of choice about how to spend both time and money. They were better off than the poor and worse off than the rich, a true middle class.

It's not nearly as simple as being in the middle of an income scale. The rest of the articled describes what "middle class" might actually mean.

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