The brittle financial American middle class – 50 percent of Americans would be in financial trouble if $2,000 of expenses came up in 30 days. By 2020 the world’s richest households will control $202 trillion in wealth, 4 times current global GDP.
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This economic recovery has excluded working and middle class Americans which begs the question, what really defines a financial recovery? In past and distant recoveries the economic gains were widely distributed amongst all Americans. Most realize that income gains will never be equal simply because in a market based economy those with certain desirable skills will be rewarded more than others. Yet in the last decade the banking sector has co-opted the government to turn it into a welfare state for the large banks. Desirable qualities are now replaced by predator diseased qualities of ripping off the taxpayer for bad market based bets. That is why recent data showing that nearly 50 percent of Americans are unable to come up with $2,000 in 30 days if an emergency came up is startling. $2,000 for most is the basic monthly expenses on food, home, and other little items. So half our country is living one paycheck away from financial collapse. 44,000,000 Americans are living with food assistance from the government already. Keep in mind the recovery has been going on now for close to two full years. According to the NBER the recession was over in June of 2009. The fact that $2,000 is enough to bankrupt half of American households tells you about the new state of our economic recovery.
Financially fragile
This is a recent survey and the implications are troubling:
“(WSJ) The survey asked a simple question, “If you were to face a $2,000 unexpected expense in the next month, how would you get the funds you need?†In the U.S., 24.9% of respondents reported being certainly able, 25.1% probably able, 22.2% probably unable and 27.9% certainly unable. The $2,000 figure “reflects the order of magnitude of the cost of an unanticipated major car repair, a large copayment on a medical expense, legal expenses, or a home repair,†the authors write. On a more concrete basis, the authors cite $2,000 as the cost of an auto transmission replacement and research that reported low-income families claim to need about $1500 in savings for emergencies.â€
The above data fits into the mold that average Americans are simply falling behind the elusive curve. The average per capita income for the United States is $25,000. People get somewhat surprised when they hear this figure because it seems low for the most wealthy nation in the world. We invented Cribs and Lifestyles of the Rich and Famous for crying out loud. Yet most that are surprised do not live in the bottom half and keep in mind many of these families are in the two income trap. Meaning both spouses have to work in order to keep things moving financially:
Source:Â Social Security
This brings up the question of recovery once again. If half of Americans are teetering on financial disasters and all it would take is $2,000 in unexpected expenses, what do we really mean by a middle class lifestyle? The last two years have not been supportive to the working people of America. The large gains have gone directly to the top 1 percent:
Even with these kinds of gains the income is going to the wealthiest in our country because the current bailouts have rewarded those with large financial positions in stocks:
Now part of this inequality is merely the widespread pillaging of Wall Street on the American public. The banking bailouts that occurred to an industry that turned housing, the largest net worth item for average Americans, into a commodity to be traded and exploited. Most Americans derive their net worth from home values, not stock market gains. So the 100 percent run-up of the stock market has done very little for the majority in the country (this can be seen by the Gallup 19 percent underemployment figure). Do we think that those that are $2,000 away from financial ruin are loading up on stocks in their retirement accounts? They are simply getting by. This is why wealth inequality is now at levels last seen since the Great Depression:
The rich will get richer
An interesting report from Deloitte came out showing that over the next decade the rich in the world will simply get richer by using the current system that pillages the working classes around the globe:
Source: Zero Hedge
“(Zero Hedge) A new study by Deloitte confirms everyone’s worst fear (and every millionaire’s wettest dream): the wealth amassed by millionaire households is set to increase by more than 100% over the next 9 years. From a total of $92 trillion held by the world’s richest in 2011, by 2020 the world’s millionaire households will possess $202 trillion, or roughly 4 times current global GDP. Even though much of move up is attributed to the wealth surge in the developing world, the biggest beneficiary is, you guessed it, the United States where the millionaires (those with net wealth of at least $1 million), who currently account for $38.6 trillion of total wealth, will see their assets increased by 225% to $87.1 trillion! And while a comparable study of how much wealth the lower and middle classes are set to lose over the next decade, we are confident that it will be roughly comparable…inversely. So if anyone harbored any illusions that the current status quo was about anything but the rich getting richer, all those can be promptly swiped aside.â€
The model of exploiting bubbles and financially ruining working and middle class families has worked so well that it is being applied globally by the wealthy and financially connected class. Again the question becomes what do we mean by recovery? Is it a recovery if the majority of American families are left in a financially destitute situation just to bailout too big to fail financial institutions to protect the wealth of the top one percent? Keep in mind these are the individuals that have set fire to the economy and have put a match to the home equity of most Americans. This is the system that is being protected but not for the majority.
Job growth in low paying fields
We would expect that a recovery would occur with good paying jobs dominating the new workforce. That is not the case:
Source:Â NELP
As you can see from the chart above most of the jobs being added in the recovery are from lower paying job sectors. The middle class is seeing more and more strains being placed on their monthly budgets. Trading good blue collar jobs in say building cars into burger flipping McDonald’s jobs. Anyone that has followed the trends closely realizes that seeing 50 percent of Americans only $2,000 away from major financial issues is no surprise. In fact 1 out of 3 Americans doesn’t even have a penny to their name! This is the issue at hand and while too big to fail banks leverage the Federal Reserve for zero percent loans and a place to trash toxic waste loans, many Americans do not even share in their rising productivity:
The above is the dumping ground for the big financial elite. Yet working and middle class Americans keep increasing their productivity with no rewards:
No wonder why profits are up and wages are down. Less is being given to those creating the new gains under the guise that things are financially tight. Tight for who? The CEO of JP Morgan that makes 800+ times the median household income of Americans for foreclosing on millions and gambling in speculative investments that hurt the real economy? If you wonder why nothing is done in Washington D.C. the vast majority of representatives support the elite class because they are part of it:
Until people start making these wider connections we will keep rearranging the deck chairs on the Titanic and by 2020 the wealthy will be even wealthier and the middle class will be a shell of what it once was in the United States. This is the new recovery according to the large financial interest that controls our government.
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If you enjoyed this post click here to subscribe to a complete feed and stay up to date with today’s challenging market!16 Comments on this post
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KingofthePaupers said:
Jct: Everyone living 1 or 2 paychecks from calamity because of the greed of the Rothschild gang of global loansharks, the reason everything is done with cutting corners by the lowest bidder after paying the parasites their vigorish. Think that all your nuclear reactors are build by the lowest bidder and try sleeping tight.
May 26th, 2011 at 11:25 am -
tyler said:
Greatest nation on earth for the richest on earth. The other ninety percent of us are screwed.
May 26th, 2011 at 10:43 pm -
tyler said:
should have been 99%
May 26th, 2011 at 10:48 pm -
Anonymous said:
The single most important thing, that any human being can do, right now, today – to bring an end to the ‘globalist’ central bankers’ NWO, is: BUY SILVER. AS MUCH AS YOU CAN AFFORD. EVEN IF ONLY AN OUNCE OR TWO. If 100 million people, ‘globally’ would buy ONE ounce of silver – the central banker parasites would be FINISHED, and humanity could return to living life as God intended them to live it – in FREEDOM.
The Silver Bullet and the Silver Shield
http://dont-tread-on.me/the-silver-bullet-and-the-silver-shield/Crash JP Morgan – Buy Silver
http://www.youtube.com/watch?v=wN0rcNJXFfII’m A Crazy Silver-Bug…Why Aren’t You?
(Or, 33 reasons to buy silver instead of gold)
http://www.roadtoroota.com/public/597.cfmMay 27th, 2011 at 9:55 am -
DerP said:
Shouldn’t have got that arts degree LOL
May 28th, 2011 at 6:58 am -
Martin said:
202 Trillion in 2020 ? Even if 202 trillion was the world’s total GDP in 2020, World wide GDP would have to grow at a blistering pace (12% annually) to ever reach that amount from today. A far cry from recent (actual) numbers of ~3.5%
May 28th, 2011 at 11:06 am -
Dan H said:
It would be interesting to see the financial numbers of the three poorest congressmen and three poorest senators.
May 28th, 2011 at 2:35 pm -
Iggy said:
Never before have so few done so much for so few at the expense of most.
May 29th, 2011 at 6:00 pm -
olddog said:
THERE was a vibrant middle class, that was before nafta, unchecked immigration, of course with INstant benifits..outsourcing,& the planned abandoment of family in favor of a gubment handout! oh and dont forget…..no one owes you crap. you are where you are due to YOUR decisions…not a rich banker, sorry..better figure out what happens when the gub handout stops…
May 30th, 2011 at 8:33 pm -
tom said:
Spot ON. The world’s six biggest banks and their banksters such as the Federal Reserve(no more federal than Federal Express) have literally robbed us blind with the help of Barry Soetoro and the WH, and Congress. Just as Jesus the Christ had expelled the money changers from the temple, we need to do so as well if we are to survive individually and as a nation.
V for Victory! You are the resistance against big bankster highway robbery and TSA sticking their hands down our pants tyranny. Join at:
May 30th, 2011 at 10:43 pm -
Vellach Samie said:
When we are living day to day we cannot afford to buy gold or silver. and buying it only helps those rich people holding all those gold and silver to sell at a higher price due to the increased demand.
The only answer is to become self sufficient. as much as possible. stop buying luxury goods such as smartphones or expensive branded cloths or even spend on private schooling. try not to borrow. If we all can go back to the original way of self sustainability. The Globalist will be forced to their knees.May 31st, 2011 at 1:58 am -
TAD said:
@Martin: the article said $202T is 4X the GDP for 2020. So the numbers do add up.
If you want this to end, buy locally from small business owners. Those business owners reinvest in the community providing jobs for locals. Wal-Marts try to invade, but local city council blocks them. Then develop your own non-fiat based currency and you have an economy that is separate from the global slave wage operation we have today. Also don’t bank in any fractional reserve system with fiat currencies. Start your own community based bank backed by gold and silver. Charge outsiders 3X more to bank there, but locals get preferred loan discounts etc.
May 31st, 2011 at 9:50 am -
tysm said:
Sorry folks….most of us are in this bind cause we are greedy and stupid.
borrowing money for stuff we dont really need…..new truck/car/boat, expensive vacations, electronic junk…
my family..we saved first…clipped coupons, worked two jobs when we could…(despite being a high payed IT professional – I worked a second job weekends and some vacation days to pay my sons college costs for four years)
you reap what you sow….
grasshopper and the ant.
this ant is enjoying life…dont owe the banksters nuthin and i avoid the obama communist gangster govt as much as i can…..June 4th, 2011 at 3:05 am -
Steve Adams said:
“Everyone living 1 or 2 paychecks from calamity because of the greed of the Rothschild gang of global loansharks”
Really? Don’t individuals have some responsibility to save to avoid the 1-2 paychecks from calamity situation? I know quite a number of 20 something’s that don’t earn very much but have lots of cool gear – phones , iPads, a nicer car then I have at 41.
Yes, credit cards and similar debt instruments are dangerous but how much of those problems are from the culture that people accept and could be avoided if they chose different habits?
June 4th, 2011 at 6:02 am -
stk33 said:
I think, the deep reason for these trends is in the fact that the economy itself is becoming less and less productive. When those middle class people were actually creating new science and new technologies and new products, 20-30 years ago, the whole society climate was healthier. By now, the fraction of those who actually create values, has decreased, and is continuing to decrease, while bigger and bigger fraction of the middle class is engaged in various marketing scams, in artificial businesses serving artificial made-up demands (take for example the huge administrative sector of the healthcare), in the fake “security-industrial complex”, then finally in the government itself – where people are already making twice more on average than in private sector, while government’s inefficiency, bureaucracy, and often direct subversive nature towards the citizenry is surprise to noone. The manufacturing has been shipped overseas, more and more people who work here are working on various “financial services”, in multilevel subcontracting, and 1,000 other ways “to shake money from one pocket to another” (Mike Rivero). Put it all together, and you have one big sick society with economy largely based on scams, and in such an atmosphere, all these destructive trends are only natural.
June 7th, 2011 at 7:11 am -
70's college graduate said:
Let’s do this….stop going to football games, baseball games, movies, get rid of the thousand cable channels you never will watch. Then run for office and get rid of the rich elite in this country. We have very well educated people in this country. Stop whining and act like the founders of this country. Get rid of the internet at home, use the library get rid of the stupid cell phones…and electrnoics. Start running for political offices all over the country and prosper yourselves. Run these perverted elite out of this country. Start food coops, open your own food shops…not that hard…If you do get into office change the laws…Keep it simple stupid….The boomers are getting old and need the new blood to show some feisty leaders…who will fight for their rights as well as ours. Get rid of this Corporate Proffesional Politicians…take their jobs….I am deeply saddened by all these loans our younger generation that is suffering under this regime as well as we are….start connected face to face and not on facebook…get out and really meet people….talk in person..not on phones…Either that or we all move to Mexico and take that piece of crap country over….Get rid of the partier politicians and banksters
June 16th, 2011 at 3:32 pm