A fixture on the American scene, the middle class, might be irretrievably broken, victim of the soaring home prices that allowed them to finance a certain lifestyle on the back of a belief that times were good and would always remain that way. Unfortunately, high prices never last, and millions of people found themselves trying to survive financially on a level of income hopelessly inadequate to keeping up with their lifestyle. Today, 3.5 years after home prices peaked, and 3 years after a serious recession began, former middle class families are scraping to make ends meet on two paychecks, living one step from financial disaster.
And even those who find themselves still gainfully employed are finding it hard to shake what we’ll call survivor’s stress, asked to pick up the slack of others who have been laid off, never feeling quite certain that the boss bearing a pink slip won’t find them next. Contributing even more to the problem is the refusal of an economic recovery to even begin to show its face. The Federal Reserve continues to print and spend like drunken sailors but business owners aren’t falling for it. As long as unemployment hangs tenaciously steady at 10%, it’s going to take a serious set of changes to make an appreciable difference in the formerly middle class’s bunker mentality.
And even if there are areas of less debilitated job pockets in specific areas around the country, the people who used to comprise the middle class can’t go after them, hamstrung as they are by a deficit in the area of job skills currently in demand. Throw in a rising tide of underwater mortgages, and there is simply no other answer than to hunker down and try to ride the thing out. One thing is certain. It’s going to be a tough row to hoe for middle class America to ever make it back to the sort of comfort and prominence afforded by the decades of the 1970’s and 1980’s.
Then again, America has never been known to shirk from a challenge. Hopefully this time won’t be any different but current events have created a heck of a mess to straighten out, and it doesn’t appear that the leaders holding the wheel have the wherewithal to do any straightening.
So long, middle class, we barely knew you.
The American Monetary Association Team
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