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Store window with going out of business signs.
You don't have to be an economist to see one of the most disturbing aspects of growing income inequality—the shrinking middle class. Just ask a retailer.
As politicians and pundits in Washington continue to spar over whether economic inequality is in fact deepening, in corporate America there really is no debate at all. The post-recession reality is that the customer base for businesses that appeal to the middle class is shrinking as the top tier pulls even further away. [...]

Although data on consumption is less readily available than figures that show a comparable split in income gains, new research by the economists Steven Fazzari, of Washington University in St. Louis, and Barry Cynamon, of the Federal Reserve Bank of St. Louis, backs up what is already apparent in the marketplace.

In 2012, the top 5 percent of earners were responsible for 38 percent of domestic consumption, up from 28 percent in 1995, the researchers found.

Even more striking, the current recovery has been driven almost entirely by the upper crust, according to Mr. Fazzari and Mr. Cynamon. Since 2009, the year the recession ended, inflation-adjusted spending by this top echelon has risen 17 percent, compared with just 1 percent among the bottom 95 percent.

Ninety percent of the increase in consumption between 2009 and 2012 came from just 20 percent of the population; the fraction of the population that has been doing just fine in the great recession, thank you very much. While all this conspicuous consumption is helping to keep the economy afloat, it's not sustainable, as one of the economists, Fazzari, points out: “It’s going to be hard to maintain strong economic growth with such a large proportion of the population falling behind. We might be able to muddle along—but can we really recover?”

It's hard to see how a nation recovers when the purchasing power of the nation is concentrated in 20 percent of the population. After all, we can't all be employed producing luxury goods, working at high-end restaurants and hotels. With every mid-range retailer, restaurant, or hotel that closes, the jobs go with them. That means more unemployed formerly middle-class people, more people who don't have extra money to spend, and less demand for the businesses that are still standing.

Originally posted to Joan McCarter on Mon Feb 03, 2014 at 11:45 AM PST.

Also republished by Daily Kos Labor and Daily Kos.

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Comment Preferences

  •  The quality of goods (28+ / 0-)

    that are generally purchased by the middle class, from clothing to cat litter, appears to be going downhill as well, as manufacturers and retailers try to hold on by their fingernails as customers try to rein in their spending. Maybe that's a UK phenomenon though.

    "The 'Middle' is a crowded place - that is where the effective power is - the extreme right and left might annoy governments, but the middle terrifies them." Johnny Linehan

    by northsylvania on Mon Feb 03, 2014 at 12:03:17 PM PST

    •  chained cpi at work (15+ / 0-)

      inflation isn't inflation if you can replace the more expensive something with a cheaper something else.

      Nice theory - it might work once, but it doesn't work year after year, year in and year out.  

      •  capitalism (0+ / 0-)

        When communism failed in the soviet union in 1989 I stated that capitalism was next. people laughed at me.

        Capitalism does not pass the test of national empathy or compassion, therefore karma will play its hand not as  punishment but as a lesson in life.

        Somehow Americans don't believe in karma. to them sacrifice thing 2000 years ago eliminated karma I guess.

        Example a nation that has on going wars around the world will soon have on going political and economic wars of  division within its  own nation.

        As long as  the capitalists allow Americans to buy their military assault guns and shop at their wal marts and entertain them with their sit coms, capitalism will continue on for quite some time.

    •  There's a huge amount of really low-quality crap (16+ / 0-)

      ...here in the U.S., as well.  There are whole categories of goods where there's nothing of any quality available at any price.  

      Cell phone cables and accessories are a glaring example, though small appliances and mass-market home repair parts sold at chain stores aren't far away from that point.

      •  Clothing at Walmart and Target is thinner, (11+ / 0-)

        more cheaply made, and doesn't last past a couple of washings.

        This:

        After all, we can't all be employed producing luxury goods, working at high-end restaurants and hotels
        ties in with the fact that not everyone can be a manager either.  There are only so many slots at the "top" of a company and the rest of us are worker bees.  Us worker bees actually get the work done and deserve to be paid for that work.  I really do believe people are waking up to that fact.  What they will do about it remains to be seen......

        Listening to the NRA on school safety is like listening to the tobacco companies on cigarette safety. (h/t nightsweat)

        by PsychoSavannah on Tue Feb 04, 2014 at 06:48:47 AM PST

        [ Parent ]

      •  Even the nails (11+ / 0-)

        sold at Home Despot suck. We have a local building supply store called Mr. Plywood that sells nails by the pound that actually work.  The last cheap broom, a metal one, I bought from a national hardware chain store was made in China and lasted two weeks when the broom head snapped off. I replaced it with a 25 dollar wood, leather and heavy duty straw broom made locally and it has lasted for 2 years and is still going strong. I'm finding that buying cheap stuff especially tools doesn't save money. Going back to basic simple stuff like old timey rag mops which can be washed and used again is not only cheaper but saves aggravation as they work better. Products requiring replacement parts every few months that are almost as expensive as the initial product is throwing good money after bad.    

        •  Cheapest price isn't necessarily the best value! (1+ / 0-)
          Recommended by:
          shaharazade
          Products requiring replacement parts every few months that are almost as expensive as the initial product is throwing good money after bad.
          Absolutely agree.

          "Push the button, Max!" Jack Lemmon as Professor Fate, The Great Race

          by bartcopfan on Tue Feb 04, 2014 at 11:45:09 AM PST

          [ Parent ]

          •  Even this phenomena, though, (0+ / 0-)

            results in a spiraling upwards (in a bad way.) Who can afford the upfront cost of these better raw materials and tools? People with more money. Many, many people simply don't have the wherewithal to afford the cost of entry . . .

            "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

            by bryduck on Tue Feb 04, 2014 at 12:10:08 PM PST

            [ Parent ]

            •  Sometimes (0+ / 0-)

              the cheaper nails or brooms or whatever cost the same or are less then the shitty stuff that is sold as a bargain. However finding outlets that still carry decent raw materials, tools or basic necessities is a whole other matter that requires transportation and living where there is still access to stores that are not Wal Mart or big boxes that are your only option.

              I'm lucky I live in an urban city that has within walking distance of an independent Mr. Plywood which sells good affordable building material. Some of my best hand tools and gardening tools have come from a thrift store down the street called Village Merchants. We don't have more money but we are not limited to Home Despot or Wal Mart. There is even a tool library in our neighborhood where you can check out power tools no charge. We used them for a chain saw to take out a pussy willow that was eating our yard.

              I think people are going to have to develop smaller communities in order to exist in this 'free market' big box world. Portland OR where I live offers alternatives to car centric living. There are many small businesses here that are affordable and deliver their goods on bikes. I  think people are resilient and creative. They can and do co-operate with each other in times like this. In the Shock Doctrine community is one of the solutions to disaster capitalism. That old maxim buy local and think global is still a viable affordable alternative in my neighborhood and local community.                  

        •  I got my broom at a craft shop (1+ / 0-)
          Recommended by:
          shaharazade

          in Kentucky, handmade by a local artisan. It works great!

          Ed FitzGerald for governor Of Ohio. Women's lives depend on it. http://www.edfitzgeraldforohio.com/

          by anastasia p on Tue Feb 04, 2014 at 03:45:19 PM PST

          [ Parent ]

  •  I live in Southern California and it has been (18+ / 0-)

    disgusting watching the rich (including foreign investors) buy up every inch of property they can get their hands on...then they raze historical landmarks, which are replaced with shopping centers for the wealthy, build condiminiums that are sold at inflated prices to people who are desparate to find housing.

    ...food prices are unsustainable, and fuel prices are highly inflated...

    They used a great formula to create success: wreck the economy by gambling away peoples savings and investments, blackmail the goverment into bailing them out...buy congress and the white house...use almost no-interest loans to create immense wealth...transfer funds for retirement incomes into their coffers, use the justice department to create a criminal cartel that is protected at the highest levels, kill the unions, destroy the environment, gerrymander every district they can buy, split the only party that can stop them, shred the constitution with government paid spys...

    That's how you create wealth the old fasnioned way...

    10 things I won't do in 2014 and 2016:

    1. vote for the lesser of two evils,
    2. support a candidate that begins his/her campaign by giving $200,000 speeches to criminals on wall street,
    3. pretend that third way democrats are anything but republicans,
    4. tolerate politicians who pretend to be liberals while taking money from corporations,
    5. support anyone who doesn't support unions,
    6. support any candidate that doesn't have a strong environmental record...especially any pol who doesn't work to see that the keystone xl pipeline is defeated...and that includes politicians who don't work to kill fracking
    7. vote for any candidate that is not part of a populist movement,
    8. vote or support anyone who backs the TPP
    9. support any politician who doesn't work to overturn citizen's united
    10. vote for any candidate who isn't pro-education

    In other words, I only support candidates that champion traditional democratic values...unfortunately, those values have been discarded by the current administration.

    •  geez i hope you find someone to vote for! (5+ / 0-)

      that is what is sad.  we have no one who fits this description.

    •  Good for you (11+ / 0-)

      As individuals, we have the choice of whether to support a party that doesn't support us, or to turn our backs on that party and support candidates we feel are worthy of our support.  I plan to choose only one or two candidates this year to donate to and support, and ignore all the other pleas from elsewhere.  I'm not a Koch Brother, and my small contribution is better placed with one or two good candidates I have some trust will support the interests of those who need real Democrats in office.

      I also won't vote for another Conservadem for the presidency.  How crazy could that be, if almost half of America refuses to choose between the candidates offered to us?  If Democrats want my vote, they'll have to earn it by offering a choice I want to vote for.  The hour is growing late, both from the climate change and the income inequality standpoints.  More mushy corporatist "centrism" will kill far too many of us.

      We have always been at war with al Qaeda.

      by Dallasdoc on Tue Feb 04, 2014 at 06:41:48 AM PST

      [ Parent ]

      •  I can't stand conservadems! (0+ / 0-)

        The problem is, I consider Hilary a conservadem. She obviously wouldn't be my first choice for president, but should she get the Democratic nomination, it would be counter-productive to act in any way other than fully supporting her and voting for her.  
        Voting for the lesser of two evils is really horrible, but I'll be damned if I'm just going to stand aside and let the greater of two evils win!

        +++ The law is a weapon used to bludgeon us peasants into submission. It is not to be applied to the monied elite.

        by cybersaur on Tue Feb 04, 2014 at 09:31:39 AM PST

        [ Parent ]

        •  Hillary is totally a Conservadem (2+ / 0-)
          Recommended by:
          diffrntdrummr, allenjo

          She'll posture in whatever politically convenient ways she thinks best to get the office, then she'll turn things over to her Wall Street and MIC friends.  Her husband did it, and so did her vanquisher in 2008.  It would be historically ignorant to expect otherwise.

          If she's the nominee I'll sit out the presidential contest and focus on candidates I feel represent me.  I probably won't even vote for her unless my state is too close to call.  My one vote won't make the difference for the presidency, but it'll make a lot of difference to my conscience.

          We have always been at war with al Qaeda.

          by Dallasdoc on Tue Feb 04, 2014 at 11:32:54 AM PST

          [ Parent ]

    •  I admire your convictions (1+ / 0-)
      Recommended by:
      Aquarius40

      but with that kind of attitude - we will have more and more KOCH Brothers bought and paid for MOC -  not voting is more destructive than voting for the lesser of two evils.. 2010 is the example.

      Why do Republicans Hate Americans?

      by Caniac41 on Tue Feb 04, 2014 at 07:29:53 AM PST

      [ Parent ]

      •  The opposite argument can be made, ie, by (2+ / 0-)
        Recommended by:
        ssgbryan, Dallasdoc

        rewarding people who screw you, you will always get screwed -- not to mention consolidating their power.

        Votes are about a whole lot more than identity of the person who's ass plops down into a particular seat.

        LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

        by dinotrac on Tue Feb 04, 2014 at 08:01:02 AM PST

        [ Parent ]

      •  Slow death is still death. n/t (1+ / 0-)
        Recommended by:
        Dallasdoc

        "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

        by bryduck on Tue Feb 04, 2014 at 12:11:18 PM PST

        [ Parent ]

  •  A striking example of what's happening in the U.S. (18+ / 0-)

    ...may be found in these two stories (over at Zero Hedge, today):

    Ford, GM Car Sales Tumble: Weather Blamed As Usual

    Mercedes Didn't Get The "Blame The Weather" Memo

    ...yes, let's blame this on anything but our country's greater realities.

    "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

    by bobswern on Mon Feb 03, 2014 at 12:36:04 PM PST

  •  think you are doing well? (11+ / 0-)

    think you are doing well, think again.  as the middle class flounders so will you.  we are all on the same ship. you won't be spared. your place in line is just an illusion.

  •  I have no idea (24+ / 0-)

    how the rich and Republicans could even think that forcing the middle class downward into low income territory would not be detrimental to business.  Are the Republicans dumb enough to believe that as incomes are forced down, people can keep on spending money as they did in the past?

  •  Well, look on the BRIGHT side... (4+ / 0-)

    All the fad stuff that the rich won't buy goes to poor people's stores for pennies on the dollar.

    Sure, it's effectively corporate dumpster diving...

    but think of the SAVINGS!

    /snark

    I don't blame Christians. I blame Stupid. Which sadly is a much more popular religion these days.

    by detroitmechworks on Tue Feb 04, 2014 at 06:36:57 AM PST

  •  Republicans are not evil. What policies should we (2+ / 0-)
    Recommended by:
    PsychoSavannah, kvnvk

    adopt/advocate that would change this.

    Obviously, two simple ones would be to get rid of capital gains protected status. Maybe put some income levels on it.

    Second, go back to the Bush tax rates for everyone.

    What else. This is not a problem brought about by 3rd Way Democrats or conservative republicans. It was a change started in the 70's.

    How do we increase union size and power? That would help.

    We know the facts. We know the facts are destroying people and the economy.

    What do we do?

  •  It is one thing that the greedy (14+ / 0-)

    have never understood.

    Employees are far more than just expenses on a budget sheet...and far more than even assets....

    They are consumers.

    "Growth for the sake of growth is the ideology of the cancer cell." ~ Edward Abbey

    by SaraBeth on Tue Feb 04, 2014 at 06:39:12 AM PST

  •  Unfortunately, Henry Ford was not a genius. (14+ / 0-)

    What he said about paying his employees enough to buy his company's products is self-evident.  That is how a real market works, but we no longer have such a vehicle.  Capitalism, like Communism before it, is becoming so corrupted that it will eventually collapse of its own top-heavy construction.  "Pure" systems when taken to extremes always do so. In reality the nature of human greed is such that they are doomed to fail.  "Exciting" corporate ideas to make ever more profit are at the expense of stability.

    Despite moves to reach Galt's Gulch by building havens for the rich, there is no safe haven, even for the vastly wealthy.  We either cooperate or die.  Mother nature is a mean mother.

  •  Clearly we need to suck up to rich people (4+ / 0-)

    Our politicians are simply showing us the way.

  •  DEMAND CREATES JOBS (13+ / 0-)

    all this crap about job creators needs to be pushed back with that one fact.

    that's why we give people unemployment benefits.

    that's why we give people workman's compensation

    that's why we give people SNAP and other similar benefits

    large numbers of people who can not pump money into the economy are a drag on the economy in more than one way

    we must take back the House and pass a stimulus package with heft so that money can flow through the system and spark a real recovery

    giving money to the wealthy does NOT create jobs!  

    "job creators" only add jobs when they HAVE to in order to meet increased DEMAND

    Politics is like driving. To go backward put it in R. To go forward put it in D.
    DEMAND CREATES JOBS!!!
    Drop by The Grieving Room on Monday nights to talk about grief.

    by TrueBlueMajority on Tue Feb 04, 2014 at 06:48:21 AM PST

  •  The supply-siders have it all (9+ / 0-)

    wrong. It is not the rich who are the wealth and job generators, it is average people. If more money were put into the pockets of poor and working class people, the enterprenuers would make plenty of money. Instead, we have taxation and economic politices that are ass backwards.

    Guns are never the principal in the commission of a crime, but they are usually an accomplice

    by MadGeorgiaDem on Tue Feb 04, 2014 at 06:53:27 AM PST

    •  Oh, the supply siders are actually very right (2+ / 0-)
      Recommended by:
      Eric K, kvnvk

      You err in assuming they want to improve the economy for everyone with their voodoo economics. That simply isn't the case. The goal is to enrich the wealthy and powerful, so, in that endeavor, they have been very successful and their rich benefactors continue to reward them handsomely for those efforts.

      +++ The law is a weapon used to bludgeon us peasants into submission. It is not to be applied to the monied elite.

      by cybersaur on Tue Feb 04, 2014 at 09:40:51 AM PST

      [ Parent ]

  •  A Rising Tide Lifts All Yachts (1+ / 0-)
    Recommended by:
    shaharazade

    It's not like we didn't already know this was coming.  Citigroup published a series of memos detailing this phenomenon back in 2005.  Here is an old Daily Kos diary with some good links.  http://www.dailykos.com/...

    Those struggling retailers should do like our elected officials and focus on the rich.

    "The working class mind is strange and unpredictable" -- Ty Lookwell

    by Illinibeatle on Tue Feb 04, 2014 at 06:59:14 AM PST

  •  It's time for every one of those retailers to quit (8+ / 0-)

    the U.S. Chamber of Commerce.
    Businesses that cater tot he middle class need to support policy that helps the middle class.
    They should speak up too.

    Just like every poor conservative votes like she's a millionaire, small businesses follow the lead of big businesses whose needs and interests are contrary to the small business person.

    I ain't often right, but I've never been wrong. Seldom turns out the way it does in this song.

    by mungley on Tue Feb 04, 2014 at 06:59:27 AM PST

  •  Even though entitlements help grow economy (2+ / 0-)
    Recommended by:
    Brooke In Seattle, kvnvk

    I am absolutely sure that government entitlements like unemployment benefits and food stamps help put money into the economy.  That would be difficult for the right in our country to argue.  They argue that it is not up to the government to grow the economy.  They feel it is only the private sector's responsibility to do that.

    I have to disagree with that belief.  Ask the businesses and the employees of the businesses all around the hundreds of military bases across our country if government doesn't put money into the economy and doesn't help keep it vibrant and helps grow it.  Ask the small intrepaneur (sp?) what impact it would have on them if people on unemployment had that taken away from them or if people had to stop buying food with their SNAP program cards.  It would be devastating to our economy.

    What the republicans are intent on is foolishness.  

  •  How can they be surprised? (5+ / 0-)

    They've benched an extraordinarily large number of people at the end of their working lives, eroded the savings of everyone else who had any, and kept the rest of the population from getting gainful employment at decent wages.

    I'm not an economist, but what the hell else did anyone expect to happen?

    The middle class has been hollowed out. The money is gone -- at least from the bottom tiers of our society.

    Unless and until we get decent paying jobs back in this country for everyone who wants one, not just some special secret elite group, we will continue to slide downhill until the middle class is a distant memory.

    "The difference between the right word and the almost-right word is like the difference between lightning and the lightning bug." -- Mark Twain

    by Brooke In Seattle on Tue Feb 04, 2014 at 07:09:01 AM PST

  •  It's antebellum plantation mentality (7+ / 0-)

    The primary ethos in the Republican Party for some time now, and it has pretty much enveloped Wall Street at this point as well, is that of the pre-Civil War southern planter.  It's a mentality that knows the price of everything and the value of nothing; it's the mentality that pole-axed the South's economic and infrastructural development to the point where it didn't have a chance in the Civil War even with the Union generals' bungling of the first year, and sadly, it's the mentality that has now gone national through the vehicles of the Republican Party and prioritizing shareholders over all other stakeholders in a corporation.  Looking at an 1860s railroad map of the United States is rather like looking at night-time satellite imagery of street lighting today of the Korean peninsula; it's a developed country sitting next to a camp with little more purpose than getting agricultural exports to the nearest port.

    It's a matter of national, and maybe planetary, survival that this mentality be excised.  Yes, to start with, it means accepting that excising the mentality has to be done incrementally, with any tool we have, whether it be lesser-of-evils voting in a general election, primary challenges, community organizing, and third party candidates.  We can't be fundamentalist about the method, folks.  But it has to be done.

  •  I know what a struggle independent retail (1+ / 0-)
    Recommended by:
    Eric Hopp

    is these days. One of my three sons has a vintage store in Toronto. Big store, high rent, long hours, not much income. He would love to hire someone so he did not have to work seven days a week, but can only do so for the 6 weeks leading up to Xmas or he wouldn't make anything. The store is busy. His customers are young and come and look and love things but can only rarely afford to buy.

    My daughter in law (another son) owns a restaurant. Same story. Big volume, long hours, high rent, fabulous food. barely makes what she did when she ran the kitchen. Cannot pay employees more, cannot raise prices more than nickels and dimes because there are too many almost-as-good restaurants within a few blocks.

    Another son manages a greenhouse/landscaping operation that does OK, but they are losing business to big box and supermarkets who sell a limited selection of plants using employees who know next to nothing about them for less than his business can get them wholesale (if they are not producing them themselves in the greenhouse). It is simply volume and clout in the marketplace and loss leaders.

    Retail can be a tough go. Hard work. The good news is they are all surviving. They enjoy the challenge and the chance to do things well even if they could make more dollars managing a big store or food operation for some quasi-satanic corporation.

    We have only just begun and none too soon.

    by global citizen on Tue Feb 04, 2014 at 07:11:06 AM PST

  •  Barack and Michelle only visit S.F. when they come (7+ / 0-)

    to Northern California... They never go south. For a reason:

    Down here in Silicon Valley -  the birthplace of "opportunity" and "creativity", the home of Page Mill Road venture capitalists who make or break ideas, the only place on the planet where in a mall parking lot a Lotus can be seen parked next to a rusted-out '71 Dodge Coronet... we have exactly the kind of thing going on suggested in this diary. Yes, it's true: in spite of what you might have read, a "depression class" still exists here and is not getting smaller.

    Last weekend we visited a local mall and were initially shocked to find that both the LensCrafters and the huge T.J. Max outlet had been shuttered. After a bit of thought I'd arrived at the same conclusion that this diary suggests.

    I really don't give a damn whether our so-called "leadership" graduated from Stanford, Harvard, Yale, Boston University or any of those places; the evidence is conclusive. Supply side economics is a formula for the destruction of the  Middle Class contrived by avaricious intellectuals with no comprehension of human nature and sense of community - either on a local or national scale. Take away demand and nobody buys anything but the wealthy elite. And, as a consolation prize they receive for their efficient rape of the masses, they get a whole bunch of angry, hungry, cold, desperate people who will begin to do anything to survive.

    Welcome to 21st century America. Now hurry up and declare bankruptcy so the bank can take your home  and resell it to a Chinese investor.

  •  a collective (2+ / 0-)
    Recommended by:
    Aquarius40, NoMoreLies

    DUH??!!  or a Told Ya So...

    My purchasing power has gone down and I rarely shop anymore other than the grocery. I buy clothes when I need something specific - and I usually buy ONLY ON SALE. I am glad I have a job where I can bluejeans and t-shirts - generally cheap clothing..

    I bought a new dishwasher - made in the USA - only after having dish pan hands for 3 months.

    OTOH - my wealthy sister and her husband just bought a 'vacation home' and she is furnishing it with both flea market and second hand store finds as well as new things..

    Why do Republicans Hate Americans?

    by Caniac41 on Tue Feb 04, 2014 at 07:24:11 AM PST

  •  Well, as far as I'm (3+ / 0-)
    Recommended by:
    bakenjuddy, koosah, ssgbryan

    concerned-many of these retailers are getting Exactly what they paid their lobbyists to get Forthem.

    Austerity-Austerity-Austerity.
    How do the like "it" Now?

  •  Keynes said that in a depression the government (3+ / 0-)
    Recommended by:
    ssgbryan, NoMoreLies, kvnvk

    needs to act as a state capitalist to meet the country's
    needs. We have plenty of needs, infrastructure, green energy, wifi, energy efficiency, etc. That will end up creating middle class jobs and hopefully putting money into the pockets of retailers.
    This is what FDR tried to do.

  •  Welcome to America, a third world country. (1+ / 0-)
    Recommended by:
    raboof

    With nukes.  It's obvious that this would occur.  Thank the Fed for accelerating the processes resulting in disappearance of the middle class.  Too many people for the good paying jobs that need doing.  But, have no fear, the upper 5% can pay for never ending unemployment insurance.

  •  It's a great time (0+ / 0-)

    to open yet another "dollar" store.   :-/

  •  hard rain's gonna fall (2+ / 0-)
    Recommended by:
    Aquarius40, ssgbryan

    I'm not usually the revolutionary type but I don't see how anything is going to change from the top down. it's only when enough of the (ex-)middle class and poor folks get together and get radicalized that anything will change.

    1. Books are for use.

    by looty on Tue Feb 04, 2014 at 07:34:27 AM PST

  •  Commercials (2+ / 0-)
    Recommended by:
    Caniac41, NoMoreLies

    Watching TV these days you see a number of commercials for Wall Street investments, luxury cars, expensive clothing and jewelry, etc.  Who are these commercials for?  Not me!

    Who's left that can remotely afford these things, other than those in the top 1%, which is probably less than 1000 people in the whole country.  Wouldn't it be more cost effective to send out ads just to those people and leave the rest of us who can't afford this sh_t alone.

    STOP REMINDING ME OF WHAT I CAN'T HAVE!

    "Some men see things as they are and ask, 'Why?' I dream of things that never were and ask, 'Why not?"

    by Doctor Who on Tue Feb 04, 2014 at 07:41:10 AM PST

  •  The rich would argue that as long as they spend (4+ / 0-)

    the same as everyone else its sustainable, and in the short run that has been partly the case.  The problem is ultimately not the amount of money spent but the number of people spending it.  Two problems emerge from this.  First, as the income gap gets wider, the politics supporting the system become less sustainable.  Second, many stores rely on mere foot traffic.  The smaller number of rich may have larger sums to spend, but they have a limited number of places to spend it.

    The only thing we have to fear is fear itself - FDR. Obama Nation. -6.13 -6.15

    by ecostar on Tue Feb 04, 2014 at 07:41:45 AM PST

  •  A dark thought for retailers, as if they need one. (6+ / 0-)

    I don't think that retailers should feel confident that if the middle class recovers their spending habits will be the same as before the crash of 2008.  What occurred in 2008 to consumers was like a toddler touching a hot iron ... it's a memory not too soon forgotten. The consumers who found themselves wrapped in the chains of credit card debt may have had enough negative stimuli that they will hold back on purchases when their incomes return. It took decades to condition American Consumers to not worry about tomorrow when it came to conspicuous consumption. Even Wilma Flintstone and Betty Rubble had "CHARGE IT!" as their battle cry back in the 1960s.  I have my doubts that Americans trust the US Economy as they once did, and that could lead to perpetual bad times for retailers.

  •  How is this so difficult to understand (14+ / 0-)

    I'm almost 64, lost my job in 2009 and will likely never work again.  I get by on early Social Security and a reduced pension because I "retired" early and I also had a 401k that was decimated in the recession and which is steadily and prematurely being depleted.  There are millions of me.

    Every Sunday we have pages and pages of ads but we don't buy any of it, every magazine has pages and pages of really nice stuff but we don't buy any of it.  Beautiful new cars advertised constantly on TV but we don't buy any of them.

    Once we bought them but it's unlikely that we'll ever buy anything but the bare essentials again.  We see our local merchants going under and recall a time when we were their customers but no more.  I guess the only thing we have going for us is we don't have student loans, we really didn't need them then, it was a different world and we came out of the gates ready to buy and support businesses but those days are gone too.

    How fucking stupid do people have to be to think that withholding money from the middle class is the single worst idea ever conceived??  

    •  Well Said (2+ / 0-)
      Recommended by:
      bartcopfan, Mike RinRI

      I think that there are many people out there in your situation.  If the population as a whole is aging, and that aging population has no pension or 401k, then a large percentage of the overall consumer base has virtually nothing to spend on anything other than necessities.

      I tell my kids, 'Think of something you can do for a job that the very rich want.  Then you will always have a job."

    •  The crash of 2008 taught us all the stuff we own (4+ / 0-)

      is now enough.  We can't afford to rid ourselves of last years cloths unless they are too worn.  Our cars run fine and we don't need a new one.  Appliances are working no need to change or cheaper to have it fixed than replaced.  Our spending did change for all the reasons you stated.

      Now to watch our own children struggle to get ahead even with both of them working.  Raises are either not given often or so little they are not seen because the price of goods rising more than income.  

      How far does the middleclass have to fall before it does effect the politicians in DC?

      Do not adjust your mind, there is a flaw in reality.

      by Shrew in Shrewsbury on Tue Feb 04, 2014 at 09:28:10 AM PST

      [ Parent ]

      •  All the way, apparently. (0+ / 0-)
        How far does the middleclass have to fall before it does effect the politicians in DC?

        "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

        by bryduck on Tue Feb 04, 2014 at 12:18:22 PM PST

        [ Parent ]

  •  US Purchasing Outsourced to China & india (4+ / 0-)

    Henry Ford said he wanted to make a product his employees could buy. Is it possible .he could deliver on that promise by buying his raw materials cheaper than most ? (steel , rubber etc).

    When Corporations moved labor abroad (from US), not only did they lose a potential customer , but they lost 2 people (the US worker and the outsourced worker who will never afford the product made).

    The efficiency now is Labor and if you can get cheap raw material ..double whammy.

    LABOR (WAGES) is also part of CAPITALISM.

     

  •  Shrinking middle class (4+ / 0-)
    Recommended by:
    Anakai, Hayate Yagami, bryduck, kvnvk

    Looks like Grover Norquist is succeeding in his mission, albeit with a victim economists on the left told him he get if government shrank to the size he preferred. Always was the case, even from Ronaldus Magnus's trickle down days. Drown the government, you really are drowning the middle class, since they are the majority of taxpayers, government workers, and consumers of goods enabled to exist in some way by legislative over-sight and/or subsidy. Elitist's and narcissists at the top convinced themselves they exist in a vacuum, inured from the effects of their preferred policies. Welcome kids to the world we in the middle class all knew was coming if you got your way. No middle class, no functioning economy.

    •  The goverment is an asset owned (2+ / 0-)
      Recommended by:
      Hayate Yagami, Caniac41

      by the middle class. It's great to live in a large house and not pay to maintain it, but before too long, the roof starts to leak and the windows need replacing. Now, we have to rent out rooms to people who aren't paying rent and we're moving into the basement because they're using our kitchen and bathroom.

      I'm living in America, and in America you're on your own. America's not a country. It's just a business.

      by CFAmick on Tue Feb 04, 2014 at 08:51:14 AM PST

      [ Parent ]

    •  Middle class was always a temporay thing (3+ / 0-)
      Recommended by:
      Hayate Yagami, Caniac41, NoMoreLies

      In America it was the product of unique historical factors that will never be repeated:

      - After World War 2 we had an intact economy, while the rest of the world was in ruins
      - Massive pent-up demand due to the diversion of all resources to wartime production
      - Women forcibly being removed from their temporary fill-in positions in industry
      - Government programs providing free subsidized college education and housing
      - Minorities not being involved in the economy at all
      - Something which wasn't obvious at the time: plentiful natural resources, in particular energy (in WW2 we were the world's leading oil producer by far)

      There will always be a 'median/mean' income, but the middle class defined as workers who earn enough income to secure significant assets such as homes, is not long for a capitalist system. The natural equilibrium is a large pool of cheap workers, with the benefits flowing to the owners of the means of production. Which not surprisingly is what we have today.

      I think the ongoing demise of the middle class has been disguised by the fact that older members of the middle class can still rely on assets they accumulated on their own or inherited from their parents when times were good. For today's millenial generation and beyond, the vast majority of them will never be able to reach middle class status. The current constraints of the global economy simply do not permit it.

      This will prompt radical change in our politics in the near future, for good or evil I cannot say.

  •  Can't buy anything but necessities. (4+ / 0-)

    Since my income dropped 30% due to layoff in 2010 (I found a new job in 2011 but at much less pay), our three-person household doesn't consume anything but necessities, the budget is bare-bones, and I'm STILL looking for places to cut. Most of our income goes to house payment, gas and car, and debt service left over from better times. We never eat out; I cook mostly at home and from scratch to save money. We rarely buy clothes, but when we do it's sale or clearance. Our teenage girl saves money from grandparents to buy clothes, and when she does buy, she shops bargains. We are just barely scraping by on a household income that's smack in the middle, and I'm sure we're far from alone. Republican economic policies have all of us hunkered down just trying to survive. As my kid would say, that's a massive fail.

  •  A prosperous society has a strong middle class (3+ / 0-)
    Recommended by:
    ssgbryan, bartcopfan, kvnvk

    In grad school I studied the archaeology of the Near East. One thing that I learned was that there are pretty much always rich artifacts in any society (we're not talking about poor little individual villages here), because there are always at least some elites who can afford gold, precious metals, gems, ivory, etc.  A truly prosperous society, however, had artificial elite goods. One example from the Near East is ivory--the elites would have ivory panels decorating their furniture. The middle class couldn't afford real ivory, so they would have bone or other material stained and painted to look like those ivory panels on their furniture. We have the same thing: may not be able to afford Chanel bags, so we have knockoffs--or lower-end lines.  

    A society whose consumer growth is fueled nearly solely by the top end isn't healthy.

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