America’s middle class is shrinking. So who is to blame?
Published: 21:24 BST, 27 August 2012 | Updated: 15:56 BST, 29 August 2012
The Pew Research Center released a report last week titled “The Lost Decade of the Middle Class.” The report found that the American middle class has “endured a lost decade for economic well-being.” Using 2000 as a benchmark, the middle class has shrunk “in size, fallen backward in income and wealth, and shed some – but by no means all – of its characteristic faith in the future.”
Who is to blame?
Some partisans will try to blame President George W. Bush. Some others will try to blame President Barack Obama. The answer is much more complicated than putting the blame on the shoulders of one party, or one president.
The study indicates that using 2011 dollars the median net worth of middle income people in 2001 was $129,582 and increased to $152,950 in 2007. During that same time period, lower income Americans experienced a decline and upper income experienced an expansion of wealth. The Pew study indicates that the Bush years before the meltdown were good for the middle class.
America’s economic woes cannot be blamed solely on former president George W Bush (left ) or President Barack Obama (right)
By 2008, the economic meltdown had hit and destroyed the wealth of Americans in all income levels. By 2010, the economy had started a slow rebound. In 2010, all income levels regressed and the net worth of the middle class regressed to $93,150. That is a staggering drop in wealth that has left many Americans angry and in need of answers.
During the past four years after the economic meltdown, the economy has not rebounded. Unemployment numbers have been over 8 per cent for a long period of time, and the number of underemployed Americans has increased. Recent graduates can’t find jobs. Furthermore, the number of Americans completely dropping out of the work force has risen to unacceptable levels. The President is having a hard time convincing the American public that he is not responsible for a slow economic recovery. Especially after his bold promises that his stimulus plan would help turn around the economy with government projects, some targeted tax reductions and a massive bailout of state government funding shortfalls.
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Clearly, Republican Mitt Romney and President Barack Obama will try to shift blame from their respective parties for the economic collapse experienced by the middle class. President Obama is trying to use class warfare as a means to tap into middle class rage, in the hope of securing a second term.
Politico quoted President Obama stating earlier this month to voters in the swing state of Ohio that, “I want to say, by the way, that when I talk about middle class, I’m also talking about poor folks that are doing the right thing and trying to get to the middle class. The middle class is also an attitude. It’s not just about income, it’s about knowing what’s important, and not measuring your success just based on your bank account. It’s about your values and being responsible and looking after each other and giving back.” This has been a consistent theme of Obama’s re-election effort.
President Obama is trying to use middle class anger as a wedge to pander to the fear of many Americans. Obama and his allies talk about “income inequality” and use other code words to tap into middle class anger with wealthy Americans. The Pew study indicates that the wealthy were also hit by the 2008 economic meltdown, but that does not matter to the President.
The President has pledged to block tax cuts for all Americans until he has delivered tax hikes on the rich. No matter that this is the same President that agreed to tax cuts for all in 2010, because he recognized the harm tax hikes would impose on small business. Now, President Obama is locked in to make this election a referendum on class warfare. Obama’s policies take from the rich to give to his government so the government can allocate those new resources to new green energy projects and a bigger welfare state.
Republican Presidential candidate Mitt Romney has his own argument to make. Romney is using a similar campaign theme to that deployed by Ronald Reagan in 1980, when Reagan asked, “are you better off now than you were four years ago?” The answer then was no, and the answer today is no.
Republican nominee Mitt Romney hopes to convince America that he can offer a brighter future
The Romney campaign website quotes a Romney spokesman as saying “President Obama just can’t seem to get things right or improve the economy for middle-class Americans. After three and a half years, his disappointing record is clear: energy prices are up, young Americans are struggling, our trade policies aren’t working, deficits have soared, and small business owners are being over-taxed, over-regulated, and personally denigrated. The American people deserve better – they deserve a president who won’t let them down.” Many Americans bought Obama’s “Hope and Change” from 2008, and they feel burned. There are a good percentage who feel betrayed by the broken promises of a better life from 2008 – and they say they will not be fooled again.
The Pew Study indicates that party membership colors people’s perspective on who is to blame. The study concluded that “partisan differences also affect the way members of the middle class apportion blame for the economic difficulties the middle class has endured over the past decade. Sizable gaps exist on whether a lot of blame belongs with large corporations (Democrats 59% vs. Republicans 27%) and banks and other financial institutions (Democrats 62% vs. Republicans 40%). However, similar majorities of both groups blame Congress (63% for Democrats and 58% for Republicans).” The battle between Romney and Obama will come down to the issue of who can convince independent voters not affiliated with either party who is to blame – and who has the proper solutions to the problems.
Conservatives are confident that the now-infamous statement by President Obama that “You Didn’t Build That” evidences a strong hostility by the President toward the private sector and free market capitalism. Many believe that Obama’s statement was a glimpse into the big government mind of the President and evidence of Obama’s government-centered direction for the economy.
The question of “who is to blame” for a shrinking and hurting middle class will ultimately be decided by the American people. Expect both Romney and Obama to try to use the Republican and Democratic conventions as a platform for blame and solutions. We shall know in November who won that important debate.