Yesterday I posted on the fact that in general, over the last 30 years people at the top of the economic strata have become much better off, people in the middle have pretty much stagnated, and people at the bottom have fallen further behind.
Today I’d like to carry that conversation forward and talk about the effects the great middle class squeeze has had on our politics, and how the rich have gotten away with it.
The punch line is fairly straightforward: as middle class people have felt themselves increasingly squeezed, they have grown ever more reluctant to pay for social services like welfare, and schools, and roads, and public transport, and yes, even higher ed. Indeed, many have grown profoundly resentful of making such payments, which is at least part of the explanation of the intensity of the tea party movement these days. Or of the “take a drug test to get welfare” meme I discussed yesterday.
Of course part of this “squeeze” is entirely the middle class’ fault. Somewhere along the line many otherwise perfectly well off people began to feel left behind if they didn’t own a 4000 square foot house by the time they were 40, and didn’t have SUV’s with flat screen TVs in them so their children could watch DVDs on one of their endless shuffle trips around town, and didn’t have 60 inch flat screen TVs with surround sound systems in their man caves at home. It is, of course, possible to live a perfectly lovely life with slightly less than these top end amenities. Once people got caught up in the consumerist fantasy that happiness could be bought at WalMart, they were candidates for messing up their own lives all on their own–as we have seen with the chickens coming home to roost in the Great Recession and concomitant credit crunch.
But it is also the case that the squeeze is self-generating. For example, one of the aspects of the middle class squeeze is the increased difficulty many people have in paying to send their kids to college. This difficulty largely comes from decreased state aid to colleges and universities–at least public ones. When states cut higher ed budgets, universities jack up tuition. This means that rather than distributing the costs of higher ed across all taxpayers in the state, the costs are concentrated on current students and their families. Then, once they (hopefully) graduate, those students have big debts that: 1) keep them compliant at work since they can’t afford to lose their jobs; and 2) squeeze their budgets, making them immensely unwilling to pay higher taxes to subsidize “new” students’ higher educations. It’s a death spiral that, among other things, portends the end of public higher education in America.
As I noted yesterday, though, almost all the benefit of tax cuts in the last 30 years went to the most well-off in society. Moreover, these cuts had nowhere near the job-generating effects that their advocates claimed they would. The rich save rather than spend (it’s part of the reason they’re rich); and they invest globally, not just in the US. Thus US tax cuts have in part funded China’s boom, and India’s.
So why, then, is the middle class mad at the poor rather than the rich? This is an ironic side effect of the American Dream. Poll after poll, generation after generation, has shown the same thing: most Americans imagine themselves getting rich one day, not poor. They are far more worried about protecting their potential future wealth than worrying about their declining current condition–much less about becoming poor. In addition, Americans have an innate sense that rich people earned it–they did the work, they had the ideas, they should keep the money. This is, of course, sometimes true, but vast amounts of the wealth in the US is inherited by people who did nothing to earn it. The idle rich abound, and are really, really idle.
Thus in the US the great squeeze has encouraged middle class people to adopt ideas and strategies that both guarantee the squeeze will continue to tighten, and that the rich will keep on getting richer for very little effort of their own. Which is why, as I have mentioned before, someone invented the brilliant concept called “irony.”
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