This Diane Rehm interview deals directly with a historical thesis I’ve been ruminating on for some time (and at least four abortive blog posts!). The jist of my theory is that the American Middle Class has actually never gotten out of the late 70s/early 80s Recession. That they’ve merely employed various coping mechanisms to create the appearance of on-going growth and prosperity (the “each generation does better than its parents” mantra) but that in the reality of working wages and upward mobility the American Middle Class hit their glass ceiling about 1979.
Since this blog post has been delayed and procrastinated for so long what I am going to do is break it into pieces. Here is what I believe are the various successful (and often creative) bandages, delusions, and coping mechanisms American Middle Class households have used–since 1978/1979-ish–to fool themselves that they’ve been still climbing the American post-war wealth ladder. Then, through the rest of the summer, I’m going to devote a blog post to each:
- US Middle Class women solidifying their place in the workforce in large numbers. We associate this move of Middle Class women into the paid workforce with the 1960s and 1970s but the full effect really didn’t take hold until the Reagan years. This made household incomes rise, even as individual living wages stagnated and certain professions saw their pay grades lower as it became associated more with women (bank tellers, for instance).
- Reaganite and Clintonian misguided deregulation of Wall Street and the rise of (1920s style) Middle Americans feeling “rich on paper”.
- Easy credit. In the 1980s and 1990s Middle Class Americans suddenly had access to credit at levels that hadn’t been seen since–you guessed it: the 1920s.
- The post-1995 Real Estate Bubble. People are often shocked that from 1890 to 1990 years the idea that “housing values always go up” would have been considering very Pollyanna-ish. Getting rich on real estate meant owning warehouses and property to rent out: not feeling a sense of wealth based on your own home’s equity.
- The Reagan Revolution and its impact on the psyche of the American Middle Class: both good and bad.
- The passing of the GI Generation (and older) and the loss from living, day-to-day memory of those who could remember when government WAS the solution and the vehicle–not the barrier–to assisting Middle Class expansion.
These books have really influenced my thinking as of late, and Charles Murray’s hypothesis has been one of the most influential ones I’ve read this year. I went into it a bit skeptical, too.