Friday, August 24, 2012

The Shrinking Middle Class

A study released this week by Pew Research Center bemoans the state of the middle class.  We have less money, we are forced to spend less, and our expectations for our future and that of our children are less optimistic.  Many find it more difficult to maintain a middle class standard of living.  While 32% believe they are better off and 23% report no change, 42% say “their household's financial situation is worse now than before the recession began.”

The most disappointing finding appears near the end of this article where they asked, who deserves a lot of the blame.  The answers were:  Congress – 62%, banks – 54%, big business – 47%, the Bush administration – 44%, foreign competition – 39%, the Obama administration – 34%, and finally, the middle class itself – 8%.  Once again we portray ourselves as victims of big government or big business.  Only 8% are willing to take any responsibility for the situation!  This is disappointing, because by giving away responsibility, how can we fix it?  We become dependent on others.

Why blame Congress?  We all like our Congressman.  He takes care of problems when we call.  He appears at major events and groundbreakings.  He makes sure money sent to Washington gets back to his district.  Sometimes overlooking the big picture and what’s best for America as a whole, he watches out for us, because that’s what gets him reelected.  It can’t be him.  It must be those other 431 incompetent crooks.  Unfortunately, Congress is our fault.  We can’t blame them for acting as they do.  We set up negative consequences for them to act in any other way, and we reelect nearly all the incumbents until they decide to quit.

How about the banks?  Is it their fault that they talked so many people into buying houses they couldn’t afford?  Is it their fault people were lured in by teaser rates and then surprised when the actual costs kicked in?  No, it’s their job to make loans.  It’s our job to be smart enough not to borrow money based on the hope of ever-increasing market values.  We screwed up but don’t want to admit it.

As for the two administrations, the answer is pretty much the same as Congress with added comments from Monday’s posting (Political Campaigns – August 20, 2012) about how we get the candidates we respond to rather than necessarily the most competent or qualified.

The major problem here is that we are once again looking for convenient scapegoats instead of admitting that the problem starts with us and can be solved by us and only us.  Certainly there is plenty of blame to go around.  But anyone who insists on blaming only banks, business, Congress, or past/current administrations must wait for action and take whatever they get.  Those solutions will be more restrictions on our freedom or more regulations on banks and business, making them even less inclined to risk business expansion or increase hiring.  To not take responsibility is asking for trouble, but we continue to do it.

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