Middle Class, R.I.P
Begala, Paul, Newsweek
Byline: Paul Begala
The latest casualty of the Bush depression.
I have a wealthy friend who lives in a wealthy neighborhood. One day he was in his front yard, chatting with his next-door neighbor, a Republican, who asked him why he's a Democrat. My friend said he'd grown up poor but had gotten a good public education, worked his tail off, and made it. Then he pointed to a gardener working across the street. "Don't you want that gardener's son to live the same American Dream we have?" my friend asked. His neighbor shot him down, sniffing, "That gardener's son will be my son's gardener."
And so dies the American Dream. Have we reached a point where rich people no longer want to extend the winner's circle? Has it gotten so bad that poor people cannot plausibly aspire to success? Are we moving toward Third World economics, where a few have it all and most have nothing? Are we witnessing the death of the great American middle class?
We define "middle class" as much by values as we do by economics. It means working hard, playing by the rules, and getting ahead. It means saving up to buy a home, making payments on a new car, seeing your kid graduate from high school--and even college. It means retiring with some dignity and security.
In terms of income, six in 10 Americans earn between $25,000 and $100,000 a year. They're the heart of the middle class. And yet as many as a third of those making more than $150,000 and 40 percent of those making less than $20,000 also describe themselves in the same way. So in all, three fourths of Americans think of themselves as middle class--which means that three fourths of Americans (more, actually) are getting screwed.
A recent report from the Federal Reserve documents the collapse of the middle class. Between 2007 and 2010 median wealth dropped a staggering 40 percent. As ever, the rich did fine, actually seeing their wealth increase as everyone else's disappeared. That's because those on top have less of their wealth tied up in real estate and more in investments like stocks and bonds, which have done better in the Bush Depression than home prices.
The birth of the American middle class was the product of policy decisions--and the same is true of its death. After the Second World War, America had a debt crisis. …