Musings about the Middle Class

Even though I’ve listened to Councilman Ed Gallo for years, his inane statements can still stun me. At the end of Wednesday’s City Council meeting, he reported on his attendance at a SANDAG Borders Committee meeting where he heard a report from Go Global San Diego. The item that impressed him the most at that meeting was their assertion that by the year 2030, 66% of the world’s middle class would live in Asia, not in the USA. Ummm. Where to begin? First of all, at the present time the USA has only 4.4% of the world’s population, approximately 320 million. Asia has 60% of the world’s population, 4.3 billion. At the present time, Asia and the South Pacific have a 50% share of global middle-income people. One also needs to bear in mind that the global measure for middle income starts at $10 per day. At the present time North America, with 8% of the world’s population, includes 7% of the world’s middle class. http://www.pewglobal.org/2015/07/08/a-global-middle-class-is-more-promise-than-reality/pg-2015-07-08_globalclass-05/ Now, only 2% of Americans would be classified as poor ($2 or less per day), 3% low income ($10 – $20 per day), 13% Middle income ($20 – $50 per day), and 56% as high income (over $50 per day). So by the global standard that measures the 66% Gallo was speaking of, a majority of Americans have high incomes. http://www.pewresearch.org/fact-tank/2015/07/09/how-americans-compare-with-the-global-middle-class/pf_15-07-08_gmcsocialcards_a/

That being said, there is no doubt that the American Middle Class has lost ground—as Bernie Sanders keeps pointing out. Councilwoman Olga Diaz responded to Gallo’s observation by asking him if that was because we keep shipping our jobs to Asia. She didn’t get an answer. Since 2000, the share of American middle-class households ($35K – $100K per year) has shrunk from 45% to 43% in large part because households have lower, not higher, incomes. The middle income group had shrunk from 53% in 1967 to 45%; in 2000, because more households moved up into higher income groups. http://www.nytimes.com/2015/01/26/business/economy/middle-class-shrinks-further-as-more-fall-out-instead-of-climbing-up.html For the last 34 years, the nation has been experimenting with Reaganomics, it doesn’t work. Unfettered capitalism inevitable leads to inequality of income. Keynesian economics is what brought this country out of the great depression, it does work, empirical evidence makes that clear. But, empirical evidence doesn’t seem to be valued by Republicans—a majority have so little regard for such evidence they question evolution—a scientific theory like the theory of gravity.

The staff presentation of Agenda Item 9: Financial Status Report for Fiscal Year 2014/15 and Budget Adjustment, had few surprises. Even the $131K year-end shortfall of the Reidy Creek Golf Course, was to be expected. The staff noted that the golf industry was suffering a nation-wide downturn. Diaz wondered how long should the City continue to subsidize that golf course—when would the “full cost recovery” rule be applied there? City Manager Clay Phillips responded that there was only so much the City could do, and that the golf course had been developed as a means of providing flood control to the North Broadway area. (Which was another “compromise” with developers—but that’s another story for another blog.) Councilman Mike Morasco opined that the golf industry was in a slump, not dying. Councilman John Masson said he was a little concerned that they continued to subsidize the course.  Mayor Sam Abed took the opportunity to parrot the current Republican talking points, including the myth that the economy is bad and that the country was not going in the right direction. Well, according to Forbes, Obama has done better than Abed’s hero Reagan on the economy. http://www.forbes.com/sites/adamhartung/2014/09/05/obama-outperforms-reagan-on-jobs-growth-and-investing/ 

There was one public speaker on the issue, a young man who suggested that maybe the way to save the golf course would be to close the western half and use it as a park or(?), and create an executive course on the eastern side, and maybe make it more appealing to younger players with night golfing with glow-in-the-dark balls. Diaz responded that she might be interested in playing such golf. Others on the Council didn’t seem impressed. Seemed like a good idea to me—but I know very little about golf.

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19 thoughts on “Musings about the Middle Class

  1. Alex Maclachlan

    If Keynesian economics creates income equality, why has the empirical evidence of the Obama years’ unfettered spending created the largest income inequality in history? Obamanomics has been proven an utter failure so you add his years to Reaganomics?? We had boom times in the 80’s with Reagan/Bush, in the 90’s with Clinton/Gingrich/Kasich tax cuts, reforms, and internet boom, Bush in the middle 2000’s with tax cuts and reforms even at war, yet here we are mired in a no growth economy, 50% of Americans making less than $30,000 a year, 93 million able bodied not working, at a time the government, under Obama,/Reid has racked up 9 trillion dollars in debt in 7 years, and you act as if Obama is a Reaganite? There are scientific theories to explain this level of denial.

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    1. mmliles Post author

      Unfettered spending? You’ve got to be kidding me! The Republicans carped forever about the steps Obama took to keep the economy from going into a serious depression. The Reagan years and the Bush years saw extreme increase in the deficit, the deficit has decreased in every year of the Obama administration. The last surpluses we had were during the Clinton administration. There has been job growth for the last 60 months. The reason for income inequality is because the redistribution of wealth–necessary to maintaining a middle class, the availability of advancing through affordable education, all have been dismantled over the last 35 years. Reaganomics is idiocy! What this nation needs, as Nobel laureate Krugman keeps pointing out is government investment into the infrastructure, education, and research and development–paid for by a progressive tax system. The major increase in debt over the last 15 years is due to the Bush’s idiotic war to liberate the oilfields of Iraq and enrich the coffers of Halliburton. That’s a fact. The crisis in the world’s situation is also due to that moronic war.

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      1. Alex Maclachlan

        Oh my, what a cop out. Obama got 800 billion dollars for infrastructure and the crony socialist siphoned it off to his friends. Krugman’s complaint was it didn’t waste enough, he wanted 2 trillion wasted to stimulate the economy. And the 8 yr old blame Bush cliches have pretty much run their course after Obama kept the wars going, gave back Iraq to ISIS and now has to go back in with boots on the ground to cover up his mess. It really must kill the left that they got everything they wanted only to have all their theories proven so wrong, they must re write history to cover it up. Soon as ObamaCare is allowed to be fully implemented (when it can’t hurt Barack politically), the last mistake will be realized to seal the Obama era as the failed experiment of progressive ideology. Then history will record true “idiocy”.

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  2. mmliles Post author

    I’m going to end this conversation here, because it is obvious that you listen to too much FOX news, and not enough real news. There is no evidence about the “siphoning off” you speak of. Two trillion would have stimulated the economy–not wasted it. Roads and bridges could have been repaired. National Parks could be maintained. Youngsters could be educated. People could have better healthcare. We are the only industrialized nation without a national health care–you need to think back to you economics 101 class where you should have been taught the capitalism does not properly value education, or the environment, and health care. It is obscene that health insurance companies are profiting at the expense of the nation’s health. Bush’s war is what increased our debt beyond recognition–that’s the fact of the matter. It was an idiotic war, it will go down in history as the worst decision in the history of the USA. Obamacare is succeeding, but Medicare for everyone would be better. Socialistic capitalism works, Reaganomics clearly does not. But you will not be convinced until history proves you wrong, as I’m sure it will.

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    1. Alex Maclachlan

      What’s strange is your arguments are pre 2009. ObamaCare can’t even fully implement because its so flawed, socialistic capitalism isn’t working and hasn’t worked anywhere (Europe still in recession), and if almost a trillion was wasted on pork and paybacks instead of “shovel ready jobs” then I guess another trillion is all we need to throw at it for the corrupt to become honorable. Now that would be idiocy. No matter how hard you try you can’t rewrite history to change the success of the 1980’s under Reagan. Reagan was handed a much worse situation than Obama and he turned it into a roaring success where even the poor were lifted instead of left behind like today. You don’t learn progressive economic controls in Econ 101, you learn them in poly sci and psychology. Capitalism is learned in the streets, not the classroom, that’s why there are so many college educated people so ignorant of markets, capitalism, and economics, its a wonder they have a roof over their heads. Maybe that’s why so much effort is put into distorting markets, capitalism, and economics with government regulation so the un talented can place themselves in the way of all three and become a toll booth on society.

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        1. Alex Maclachlan

          End of 1979: 14% inflation and 20% unemployment rate, with double digit interest rates vs end of 2008: 0.1% inflation, 7.2% unemployment rate, with 3% interest rates. Maybe it was just people ignoring the empirical evidence and espousing partisan rhetoric?

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  3. Rick B

    In your article you said that $50 a day was high income. But assuming 8 hour work day that would be $6 an hour. So anyone making minimum wage would be consider high income. That doesn’t seem right.

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  4. kirkweffinger

    First, Reidy Creek IS an executive golf course. That suggested solution isn’t one.

    Second, reduction in deficit spending isn’t the same thing as reducing DEBT. The national debt has increased exponentially under the current Administration.

    Third, we could build all those bridges and fix all those roads, etc., if we seriously undertook efforts to reduce the bloated bureaucracy and redundancy within our federal government and applied the savings to it.

    Fourth, accusing someone of watching too much “Fox News” because they have a different opinion than you is “idiocy” (to use your favorite term), and a weak, dismissive liberal cop-out. You really have no idea whether those opinions are forged through slavish Fox viewing, or may have been developed by reading and viewing many sources through eyes that don’t have the “Blue View”. Readers could just as easily say to you that your devotion to MSNBC is glaring.

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    1. mmliles Post author

      The historical evidence supports Krugman’s theories on economics not supply-side economics. The debt was increased under Obama because of the recession caused by the loss of Glass Steagall and other banking regulations. Both parties are to blame for that nonsense–a problem of too much money in politics. Several studies have indicated that viewers of FOX are less informed than those who get most of their news from other sources. http://mediamatters.org/blog/2011/11/22/seven-surveys-make-a-trend-for-fox-and-viewers/167217. The idea that “capitalism is learned in the streets” ignores the science that is practiced by the large corporations to their advantage. Republicans are always talking about limiting the bureaucracy, but do little to do so. I get my news mainly from the L.A. Times, KPBS, NPR, and the BBC. I’ve a scientific background, so I make my decisions based on empirical evidence. I’ve lived in Britain for two years, and traveled many times to Western Europe over the last ten years. Their socialistic capitalist societies work better in my opinion, based on what I observed. If the European nations would follow Krugman’s advice, they would be better off. But, the entire world needs to change its economic philosophy to one that recognizes that we live in a finite world, that cannot support infinite growth as anyone who isn’t ignorant, stupid, insane, or an economist should be able to figure out. Sustainability should be the new norm.

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      1. kirkweffinger

        “I’m going to end this conversation here, because it is obvious that you listen to too much FOX news, and not enough real news…Several studies have indicated that viewers of FOX are less informed than those who get most of their news from other sources.” -Your statements imply that, if someone makes a statement you disagree with, they MUST be dedicated Fox watchers, to the exclusion of everything else. That attitude is condescending, and wrong.

        You point to your own life experiences and background as major resources informing your point of view. So do I, mine. And, for what it’s worth, I don’t watch Fox, or read the Drudge Report, etc.

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        1. mmliles Post author

          You know, after consideration, I must agree with you. My comments were a rude emotional response to what I considered an attack on the value of higher education–something very popular with FOX fans. I respect Mr. Maclachlan’s views, even though I disagree entirely. We must agree to disagree on this matter.

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  5. Alex Maclachlan

    I’m confused, above you said America’s debt was caused by “Bush’s war”, now you say the debt increase was the fault of Glass Steagall. Europe did use the Krugman model, that’s why they got in so much trouble with Greece, Italy, Spain and Portugal’s socialistic capitalism. Spain and Germany’s environmental infrastructure overbuilding weakened them too. Scandinavia and Britain was thankful they didn’t join the Euro currency but they’ve all been in trouble because of their socialistic capitalist model can’t handle all their promises or immigration influxes the size they saw after the Wall came down in 1989. Sweden is experiencing a new wave from Syria just like other European countries and a whole new wave of debt and racial disharmony is ensuing, while they are in or still near recession levels. Krugman has never run a lemonade stand and he never will, since the fraud would only be exposed and lose his undeserved awards

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    1. mmliles Post author

      Actually, both are a cause of the debt, along with a multitude of other problems. The recent banking crisis and resulting recession were a direct result of the loss of Glass Steagall. I am sorry about my FOX comment, that was rude. I will not convince you to change your mind about the economy, nor you mine–as I’m more impressed with what Krugman has to say than any one from the Chicago School of economic theory.

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  6. Alex Maclachlan

    No problem, I value economists’ predictions only in the macro sense as just one piece of many pieces of information, since they are wrong most of the time.

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