The new poor
Uncertainty and struggle are what we most often associate with poverty. Not knowing if you can still afford to pay next month's bills and worrying over how much more you can cut back when you're already barely getting by. This way of life has become more associated with the middle class than with those at the very bottom.

The statistic that shows that average black household worth is at $4,955 while average white household worth is at $110,729 is often quoted, but these numbers are not comparing similar things. Comparing the naked numbers is as misleading as comparing the average salaries in Tokyo and Bombay. What matters is not how much money you have, but how you live.

The $110,729 and $4,955 don't reflect different standards of living; but different ways of living. Much of that $110,729 is home equity. But why do you need to shoulder the burden of a mortgage, when the government will just give you housing for free?

It's misleading to think of the $110,729 families as privileged and of the $4,955 families as oppressed.

The $110,729 and $4,955 families both have large flat screen televisions, smartphones and the usual baseline consumer toys. They could both eat equally well, except that the $4,955 family doesn't bother watching its food budget. It just takes whatever it wants off the shelf and worries about prices later.

In terms of personal satisfaction, the $4,955 family is happier than the $110,729 family. To understand this, think of the "Cloud". You can buy a laptop powerful enough to store all your programs and data. Or you can get by with a mobile device whose apps connect online to a "Cloud" of someone else's servers which store your data. The laptop is heavier to carry than the mobile device, but makes you more independent. Or you can just live in the "Cloud" confident that no matter how you mess up your device; your data will be backed up.

America is being divided between the workers and the dwellers in the government cloud. The $110,729 families are independent while the $4,955 families are living in the cloud. Their cloud is "Social Capital". Social Capital is their support system within their extended families and the government. Instead of using real capital, they use the collective Social Capital of family resources and government aid.

The $110,729 family pays for everything. The $4,955 family pays for very little. The $110,729 family earns and saves money because that is its medium of exchange which it uses to obtain food, shelter and clothing. The $4,955 family uses money for luxury goods like televisions or sneakers. It doesn't need to save money because cash is just bonus points. Its necessities like food, medicine and shelter are covered by the social capital of the government.

...The middle class has become the new poor. The old economic uncertainties of the households at the bottom of the ladder have fallen squarely on it-- with none of the sympathy, which is still reserved for their welfare wards.

The middle class is trapped by its own aspirations. Those aspirations are weighed down by a political system that exists for the benefit of the upper and lower classes. Though the middle class still has the majority of the vote, it has the least political influence because it has the least disposable time and wealth, and lacks a dedicated political class to represent its interests.

The United States is no longer a middle class country. It is a country whose political establishment answers to the operatives of the very rich and the very poor, the donor class and the welfare class. Politicians have a vested interest in catering to very rich donors or welfare voters because they have the time, money and organizations to get their way. And what they want is wealth redistribution upward and downward from the middle class.
And not just the USA

Posted by: g(r)omgoru 2013-11-04