A tiny part of a tiny part of the population of the earth will set
the terms for the future of all humans. A tiny part that is broken,
spent out, and increasingly disillusioned. That sliver of humanity is
the broken, spent out, and increasingly disillusioned American middle
class, burdened with the task of spending all America out of
catastrophe. When they break under the weight of desperate
impossibility, how will the heartlands good citizens react, and what
will they do?
According to the World Bank, there are 6,692,030,277 human beings on
the earth. 308,108,741 of them live in the United States, about 4.6% of
the total. Of these fortunate Americans, about 231,000,000 are of
voting age. In general elections in history's greatest democracy, about
half those eligible to vote actually do...115 million people. History's
greatest democracy has only two options every election, a choice
between two almost similar positions, and the winning option typically
enjoys the support of only half of those who choose, approximately 60
million individuals.
For a scant 90 years, America has been the wealthiest, most powerful
group of humans in all 20,000 years of recorded civilization. Decisions
made by Americans can and do affect the lives of every other human on
the planet, often for both present and future, good and bad. By brute
force of American economics alone, a single, small 0.9% of the 6.6
billion people who call earth home set the agenda for each and every
one of all the rest of us. Not even by force of arms has there ever
been a time in glorious history when so few people dominated so many in
so complete a way.
Centuries from now, historians will want to know whom these few
people were, if only to understand how they lived and thought, and
better know the cause of global events that shaped the world they live
in. As we in our time grapple to understand who the powers were that
made a Roman, a Roman, future thinkers will want to dissect the
condition of the less than one per cent of all humanity who call
themselves American, and who alone make America, America... and the
earth, American as well.
It cost 1 billion dollars and four years to have .9% of the earth
elect the President of the United States in 2008. It took a similar
amount of time and money to be the guy that lost. Hundreds of millions
more are expended to elect the 435 people who make up the United States
Congress. No statistical analysis is required to understand that these
are among the wealthiest and most privileged humans in all of history.
A tiny fraction of a tiny fraction of a tiny fraction of the population
of the planet. This, we are led to believe is democracy, and so this
small sliver is at least nominally responsible to those few who elected
them, and nobody else.
Like all great empires, America has a well-defined class structure.
As a fedora on a table, at one brim is the thin cruel line of poverty
and disenfranchisement, at the other brim another thin line of luxury
and excess, and a middle where the head goes which has historically
been the big, fat, American middle class. The middle class sets the
agenda by dearth of weight, the luxury class promoting the agenda where
and when it suits them. The lower class don't matter at all.
The great American middle class, then, at least nominally controls
the fate of the planet. They do so by electing wealthy folks who pander
to their interests, those wealthy folks whose interpretations of the
middle class becomes policy. Future folks will want to understand how
representative those interpretations were, and will want to see if
changes in the middle class over time were responsible for changes in
American policy towards the world.
If anything defines the great American middle class, it is the
concept of the American Dream. The basic building block of the American
Dream is the family - mom, dad, 2.4 kids and a dog. The "dream" part is
the very American right to economic freedom, freedom to accumulate
stuff. A box on a postage stamp in a sea of urban sprawl called home, a
couple of cars, a good education for the kids, and unrestricted ability
to consume as much surplus crap as possible. Americans define success
completely in economic terms and then attach the flag, religion, and
everything else to it. Without this absolute right to consume hordes of
junk, there is no American Dream, and no middle class. There is left
only a lower class, (whatever that is), and a powerful capitalist class
existing as it always has throughout time, changing flags and
philosophy depending on how the winds blow. Caesar, Czar, King, or CEO
of Goldman Sachs.
The rise of the middle class at the end of the 19th century tracks
the rise of wealth and power for most western, industrialized nations.
Production, trade, and consumption of machine made goods became a near
universal indicator of the rise of modern civilization. However, 40
years of crushing war amongst European powers stalled the growth for
most, but emerging America remained unscathed, benefiting from the
misdemeanours of a now dead age. History will fix the date of the birth
of absolute America to the year 1914, the dawn of the American age to
1945, and no doubt, the golden era to the short period that began to
erode in 1971. Of the time since, we the generation here and now and in
the teeth of it, can only speculate.
In the summer of 1914, America was an outlier in a world of
teetering monarchies, festering colonial empires, and rancid landed
aristocracies. While the rest of the world fed its gold and its young
to the insatiable maw of industrial war, Americans were building a
dream from limitless resources and the economic opportunities of a
conflict that left America unspoiled and prosperous. By the close of
hostilities in 1945, with the capital of the planet spent and
exhausted, America burst from the ruins to begin the greatest run of
prosperity and innovation of all time. The American middle class
exploded, living the dream so thoughtfully given to them over a
generation of global war.
Powerhouse America imposed its vision of a liberal, free market
democracy on the "free world" through the Bretton Woods agreement of
1944. The United States became the world's greatest manufacturer of
goods, trader of goods, and consumer of goods. Rebuilding the planet
became a God given mission, the profits manna from heaven. The American
dollar became the world's dollar. Freedom and cash registers rang.
But with the US greenback backed by gold, American economic
expansion was limited to the bullion it horded. Wars in Korea and Viet
Nam, and the massive expansion of "entitlements" with Social Security
and Medicare among others, began to strain the American Dream. By the
early 1970's the US had ceased to be an exporter of stuff, and the
middle class began to buy increasingly cheaper stuff from abroad - at
the expense of their own manufacturing and jobs. Given that the dream
of freewheeling consumption was the bedrock of the burgeoning, voting
middle class, politics insisted on a populist solution to the
increasingly broke US economy. In 1971, Richard Nixon elected to
abandon Bretton Woods, leave the gold standard, and America was free to
print its way out of deficit and keep the dream alive.
At the same time as the US set the world awash in USD's, untold
wealth and prosperity inflated its way through the massive baby boomer
cohort. Women were entering the workforce in exponential numbers,
soaking up inflated dollars with double incomes - and less expensive
kids. American politics became a contest of pandering to the hedonistic
desires of the American household, boom times embraced and fuelled by
lax regulation and credit, busts fought off with the simple printing of
even more money. Good times.
The American household saved 11% of its income in 1970, and had only
1.4% of its cash going to newfangled credit cards and auto loans.
Everything else exchanged for clothes, appliances, food, houses, and
shiny happy stuff, increasingly from overseas. Unknown to all, it was
to be the high water mark for the middle class of America.
In 1971, American imports exceeded exports for the first time in
modern history, by 2.6 billion dollars. At a time when a billion was a
lot, America began paying to simply exist. Gross Public Debt had grown
from 43 billion in 1940, to 381 billion by 1970. Within a single
generation - the age of narcissism, the computer age, the age of
globalization - the baby boomers of the American middle class had
tilted the entire planets resources towards an unsustainable consumer
culture. No longer living the dream, those alive just moments before
Lehman Brothers listed over, rolled under, and disappeared below the
waves of history, were fighting simply to keep the stuff they had.
The future had evaporated right before their shuttered eyes, and for over forty years.
The current version of the American middle class bears no
resemblance at all to that of the end of the golden era in 1970. Forty
years ago, Americans saved 11% of their earnings - which had evaporated
by 2005, reaching the oxymoron of negative savings. Credit card debt
shot from 1.4% to 15%. In the space of a generation, a single income
family flush with cash, savings, and dreams had become a double income
nightmare staggered with debt.
In 2008, there were more household bankruptcies than divorces.
The cost of crap fell and Wal Mart rose. Debt enslaved suburbanites
now spend 32% less on clothing than they did a generation ago. 18% less
on food, 52% less on appliances, and 24% less on cars. The middle class
is consuming as voraciously as it ever has, however they have replaced
sturdy $400.00 American Lawn Boy lawn mowers with $99.00 tin cans from
China, and buy them now on credit. Some call that progress, others,
value. In reality, it's inflation. The simple fact of the matter is
Americans no longer have the disposable income to consume their way out
of trouble, and that trouble lies in why it is the American middle
class is broke, struggling, and increasingly angry.
At the same time that consumables were falling in price, the fixed
portions of the American Dream began an exponential increase. Two
incomes meant two cars - or three, or four - and despite the fact that
cars were cheaper, the cost of cars to the two-income family rose by
52%. Houses got bigger, and mortgages increased 76% - with 10 million
of them in various states of distress and foreclosure. Health insurance
rose 76%, taxes 25%. Childcare was an expense nobody had a generation
ago, but one that became essential with two adults working. The cost of
education had increased - as did the length of time necessary to obtain
that education. A ticket to the middle class that cost 12 years of
school - grade one through high school - now includes daycare,
preschool, grade school, high school, and then college. Americans must
now pay for the additional time.
In 2005, that .09% of the earth that set the agenda for the planet
was spending over 66% of its income on the fixed costs of the American
dream alone, where it once spent less than a third. Or, to frame it in
a way that defines the great problem, the American system that depends
on rabid consumerism has left its heartland with exponentially
decreasing amounts of disposable income, falling from 66% to 33% in a
single lifetime. When George W Bush implored the middle class to spend
its way out of the 9/11 chaos, in stunned and terrified whispers the
American middle class muttered, "With what?"
"The conscious and intelligent manipulation of the organized habits
and opinions of the masses is an important element in democratic
society. Those who manipulate this unseen mechanism of society
constitute an invisible government which is the true ruling power of
our country"- Edward Bernays, 1928
"Our enormously productive economy...demands that we make
consumption our way of life, that we convert the buying and use of
goods into rituals, that we seek our spiritual satisfaction, our ego
satisfaction, in consumption.... We need things consumed, burned up,
replaced and discarded at an ever-accelerating rate"- Victor Lebeau,
1947
"Too much consumption and too little investment, too many imports
and too few exports. We have not been on a sustainable economic track
and that has to be changed. But those changes don't come overnight,
they don't come in a quarter, they don't come in a year. You can begin
them but that is a process that takes time. If we don't make that
adjustment and if we again pump up consumption, we will just walk into
another crisis."- Paul Volker, 2009
“If you look around, you see how many people is out of work, number
one, and you see how many people is in foreclosure or lost their homes
or in default because they've lost their jobs, that tells you right
there what the economy is doing.” - Middle Class American, 2009
A tiny part of a tiny part of the population of the earth had
constructed a global economic architecture that sustained it in wealth
and excess, security and predictability. In a scant forty years that
wealth, excess, security, and predictability have proved to be entirely
unsustainable. The approaching political climate of the American middle
class will reflect the shock and desperation that may now be starting
to manifest itself. How Americans react to their fast changing
circumstance and what they will do about it will deeply affect the 95%
of the earth's humans who are really only along for the ride.
In 2008, America gambled on hope, as hope is all it had. A new
administration faced the growing catastrophe in the only way it could
understand, frantically pumping in dollars to resuscitate a prostrate
consumerism. An insane amount of debt piled up, the annual deficit
soaring through $1,000,000,000.00. One trillion dollars. Absolutely
none of it was used to purchase plasma TV's, hot tubs, or bling. The
richest of Americans - as they always have - prospered along Wall
Street and summered in the Hamptons while the drought stricken middle
class waited for a rain that will never fall.
The American middle class will not spend its way out of disaster, if
only because it can't. There are no savings. The house is worthless.
The credit cards are gone. Jobs are disappearing. Today is bad and
tomorrow looks worse. People are nervous, frightened, worried. They are
behind in the mortgage, and struggle to make health insurance payments.
All the while, they watch the stock market explode, the bonuses
arrogantly roll on, and their government lie to their faces that the
"recovery" is underway. China is booming, so is India and Brazil.
Beneath the hope, patriotism, and the flag, the American middle class
can feel it all slipping away.
In a nation consumed by politics, where pandering and lobbying are
two sides of the same platitude, what will the increasingly angry
gentle folks of Ohio, Iowa, and Florida demand of their philandering
representatives in Washington? What form of instant remedy will some
baseless political hack come to offer them as the snake oil for what
ails them? How will those decisions come to dominate the lives of those
in Canada, Ecuador, and Ghana?
In the distant future, historians will consider the rise, fall, and
collapse of the great American Dream and conclude that was the cause of
all that followed. None will be surprised at the all too human response
of anger, frustration, and action in the teeth of injustice and
inequality. After all, history is full of angry people who just weren't
going to take it anymore. They will wonder only how it was we could not
see it coming - how we could be so stupid to have blown it.
The coming fury of angry America is as palpable as it is silent.
What will that tiny part of a tiny part of the earth's population do
when the utter hopelessness of the situation washes over them and the
tides of history curl around and bear them, inexorably, into the past?
What will they do?
Aetius Romulous- Historian, Economist, Accountant, Writer, and blood sucking CEO.
Born at the wrong end of the Baby Boom Generation - too late to
enjoy the ride, too early to have missed it, and stuck in the middle
with the mess.
Aetius writes and blogs from his frozen perch atop the earth in
Canada, spending the useful capital of a life not finished making
sandwiches and fomenting revolution.
It's a living.
The People's Voice