Third World America - Arianna Huffington [17]
MIDDLE CLASS: I KNOW IT WHEN I SEE IT
The crippling of America’s middle class didn’t happen overnight—and it wasn’t the result of the bad bets made by the game-fixing gamblers on Wall Street (although they sure did their part). It’s actually been decades in the making. But before we look at who set the roadside explosives along the middle class’s road to the American Dream, it might help to define exactly what the term means.
What makes someone middle class? Is there a base income level (fall below it and you are officially poor), or a top-line figure above which you instantly ascend to the upper class (with a quick rest stop at upper middle class)? Does it depend on the size of your house (do you even need a house—can renters be middle class?), the kind of car you drive, the amount of rainy-day savings you have squirreled away in the bank?
In truth, pinning down a hard-and-fast definition of “middle class” is tricky business. It’s a lot like Supreme Court justice Potter Stewart’s famous assessment of what constitutes pornography: “I know it when I see it.” (Indeed, with both porn and the modern middle class, someone is usually getting screwed.)
There is no tidy formula.4 Paul Taylor, executive vice president of the Pew Research Center, asked during his testimony to the Senate Finance Committee: “Is a $30,000-a-year doctor doing his residency in brain surgery lower class? Is a $100,000-a-year plumber upper middle class?” Or are they both part of the great middle class?
According to the Pew Research Center, more than half of American adults (53 percent) define themselves as middle class.5, 6 But behind this assertion, Pew discovered a host of caveats: “Four-in-ten (41%) adults with $100,000 or more in annual household income say they are middle class”—as do 46 percent of those with incomes below $40,000.7 At the same time, a third of those with incomes between $40,000 and $100,000 don’t believe they are middle class.8
For purposes of its research, Pew defined the middle class as those adults “who live in a household where the annual income falls within 75% and 150% of the median” gross income for a family of three in 2006 (the latest year data was available).9 In dollars and cents, that meant an income of between $45,000 and $90,000 made you middle class.10
But, in the end, in a very American way, it all comes down to self-definition: If you consider yourself middle class, you are middle class.
THE MIDDLE CLASS’S LONG MARCH TO THE EDGE OF THE CLIFF
From 1945 to the 1970s, a period characterized by widespread economic prosperity, the wealthiest Americans grew richer at a rate almost identical to that of America’s lower and middle classes.11 From factory employees to chief executives, Americans experienced a doubling of income.12 By the end of the 1980s, however, things had changed drastically, with the income of the wealthy skyrocketing while the rest of the country lagged far behind.13
What happened? Did middle-class Americans lose their mojo? Or had rich Americans unexpectedly come upon the economic equivalent of the Fountain of Youth—a Fountain of Wealth? They had, but rather than Ponce de León, it was Ronald Reagan who led the income-boosting expedition, marching into Washington under the banner of lowering the taxes of America’s moneyed elite.14
But, the Reagan Revolution of the 1980s was about more than shifting the tax burden—it was about shifting the way America looked at itself. In short order, government was no longer seen as a solution—it was fingered as the problem. Tocqueville’s “welfare of the greatest possible number” was replaced by the notion that the invisible hand of the free market could best determine society’s winners and losers—until, that is, the winners got into trouble in 2008 and the government rushed to the rescue in the name of preventing Armageddon.
In books such as The Virtue of Selfishness and Atlas Shrugged, Ayn Rand, the high priestess of free-marketeers such as Alan Greenspan, championed the notion that by doing what is best for yourself,