Publisher's Note: This article originally appeared in the Beaufort Observer.
We read that the Census Department is reporting that over the last several years the middle class has been shrinking. Some of 'em have apparently moved up to become 1 percenters and the others have moved down into the poorer class. People move up and people move down. Thomas Sowell has telling us that for a long time. Apparently the Dems. don't focus much on Thomas Sowell, preferring instead the likes of Paul Krugman, or John Maynard Keynes, or Saul Alinsky.
Sowell has been telling us for a long time that the poor and the rich are not static cohorts. Instead there is a great deal of mobility between the two extremes. Clearly a 'Whacko" conservative. But now, here comes the National Bureau of Economic Research telling us in a study prepared by a Harvard Economist, several folks from UC Berkeley, and a Treasury Department official that "Young Americans from low income families are as likely to move into the ranks of the affluent today as those born in the 1970s." The study, published this week by the National Bureau of Economic Research, runs counter to the widespread belief (and Dem. "Talking point") that a widening gap between rich and poor has made it harder to climb the economic ladder.
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Regardless, median income for the "typical" middle class family has reportedly been shrinking. These things despite having a Prez who professes to work more and harder for the middle class than any Prez in memory. (Well, that's what he said, anyway. Sounds like more of the "You can keep your Health Insurance if you like it - or your doctor" spiel.) The sad part is that a lot of folks will believe him even though the middle class has, indeed, lost more ground since he has been Prez than for a long time before.
Maybe it's because all that work for the great middle class goes on in between his $35,000 per plate fund raisers and his golf games and his private discussions with the Russian Prez Putin or the new Iranian president. It isn't clear how much time that leaves, but clearly it is not enough - at least it's not enough to result in any concrete accomplishments we have seen
It is certainly easy to conjecture that the Anointed One's Fed Chairman has been a large contributor to the situation. He has been keeping the interest rates so low that seniors who have skimped and saved to set aside a small nest egg (or a large one for that matter) are barely able to earn one percent (if that) on their CD investments . Until the Anointed One put his Union pals ahead of the secured bond holders in the auto bailouts, secured bonds were reportedly a fairly safe and attractive investment. The risk of losing capital was quite low - even in bankruptcy situations as we used to know them. That would be before the Anointed One reinvented the process to take care of his friends and heavy contributors (the Unions in case you were wondering) - largely at the expense of the secured bond holders. So secured bonds may not be such a safe investment any more.
So how has Mr. Bernanke contributed to the demise of the middle class?? Well, how about the fact that he has been holding the interest rate down (to near zero) and then printing money like there is no tomorrow (somewhere around $85B per month). With the money, he buys Govt. bonds which puts dollars into the hands of the wastrels and myrmidons who for the time being are in charge of the Government. If history is any guide, when bonds are not an attractive investment, investors migrate from the bond market to the stock market pushing stock prices up. When bonds are an attractive investment (i.e. when interest rates are high), money tends to migrate from the stock market to the bond market. Guess who is advantaged when the stock market rises as the result of a poor bond market. Could it possibly the already well-to-do (i.e. those with money to invest in the market or maybe those who can afford to lay out $35K for the honor (??) of breaking bread with the Anointed One?? Short answer: likely. So we end up with a Prez who keeps talking about supporting the middle class, but whose spear carriers keep doing things that help the "one percenters". So much for the great middle class. Too bad about them...
Wait a minute. That's most of us!! There must be something we can do about it.