Monday, May 12, 2008

The Coming Collapse of the Middle Class

Harvard Law Scholar Elizabeth Warren gave a lecture on what has gone wrong with the American Economic Dream. It's up on youtube here. Watch it. The sad but entirely predictable thing is that I heard all these statements 20 years ago in publications on the "radical liberal fringe". I did what I could to protect my family then, staying away from credit cards and debt. I figured, rightly it turned out, by the time the mainstream media picked up on the story it would be too late. Still, it's nice to see the government's figures backing everything up.

Keep in mind that what Elizabeth Warren talks about isn't news. It's history. She isn't talking about what is happening right now, but what has already happened while America has slept.


Nichols D. Rosen said...

The trouble is that Elizabeth Warren, so far as I can tell, is like most of the people who are upset about increasing concentration of wealth, and the difficulty of affording a home in a decent neighborhood: she doesn't understand what the cause is. Try reading this, and LVTFan's other pieces:

The big problem isn't globalization, or failing to tax the rich enough on what they earn, or not enough labor unions. The problem is land. They aren't making any more of it.

Lioness said...

It's true they don't make any more land. It's also true that a) this country in the middle of a vastly overinflatedhousing bubble that has to burst someday and b) the rural area where I live has not been so sparsely populated for over 1000 years. So no, I don't think rising land prices are the sole cause of poverty.

I do agree that it was disappointing Dr. Warren did not talk about causes, only about effecs.

Nicholas D Rosen said...

As to (a), I agree, although I'd pint out that the housing bubble is largely a bubble in the price of land, not bricks or plumbing fixtures. As to (b), your neck of the woods may not be thickly populated, but there may -- or may not -- be high land prices. Can someone where you live easily find a land available to live and work on, or would he have to pay a substantial amount to a timber company, an urban land speculator in the nearest small town, or someone?

I don't think that land prices are the sole cause of poverty, but I do thingk that they are one important factor.

Lioness said...

Does between $10,000 - $20,000 for a older house qualify as affordable? Undeveloped land is still around $100/acre, but that's expected to drop soon.

Sure, you can pay $250,000 for a MacMansion in the big town in a neighborhood with "plenty of nice restrictions" (Honest to God, a real estate agent thought that was a selling point with us. Yuck!) But that's just if you want to. You can buy a 100-year old mansion for less than that in the older parts of neighboring towns, and you won't end up driving any further to work.

It's a source of constant amusement to us that a "home theatre system" costs over $100,000 and our town's only cinema (fullsize, mind you) is up for sale for $25,000.