The Financial Elite Have Been on a 30-Year Onslaught Against the Middle Class
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The press is all abuzz with news of the SEC suing Goldman Sachs for fraud. While this is certainly big news in itself, even more important is what it says about what the financial elite has been doing to America for the last 30 years: shorting the middle class.
The SEC's action is a perfect moment for us to look at the bigger picture of how the American people were sold on the promise of never-ending prosperity while Wall Street was overseeing a massive transfer of wealth from the middle class to the richest Americans.
The results have been devastating: a disappearing middle class, a precipitous drop in economic and social mobility, and ultimately, the undermining of the foundation of our democracy.
Thirty years ago, top executives at S&P 500 companies made an average of 30 times what their workers did -- now they make 300 times what their workers make. And between 2000 and 2008, the poverty rate in the suburbs of the largest metro areas in the U.S. grew by 25 percent -- making these suburbs home to the country's largest and fastest-growing segment of the poor.
The human toll of the shorting of the middle class is brought to life on sites like Recessionwire.com, LayoffSupportNetwork.com, and HowIGotLaidOff.com where the casualties of Wall Street's systemic scam share their personal stories.
Looking through these sites, I came upon a story that struck me as emblematic of where America's middle class finds itself these days. It feels like a dark reboot of the American Dream. Think Horatio Alger rewritten by O. Henry.
It's the story of Dean Blackburn of Alameda, California. The first part of his life was a classic American success story. Raised in Minnesota by a single mom, a teacher, he was "middle class by default." Through a combination of smarts and hard work, he made his way to Yale, then took a succession of jobs in the growing Internet world that had him steadily progressing up the economic ladder.
Then came February 2009, when he was laid off on the last day of the month. His boss chose that day because it meant the company wouldn't have to pay for another month of his health coverage. "Looking back on it," he told me, "that hurt more than the layoff itself -- just knowing that the president of the company was exactly that calculating and that unfeeling about my own, and my family's wellbeing." The timing, Blackburn continued, "put those 'family days' and company picnics in a weird new light."
Fourteen months later, he is still looking for a new job. As he, his wife, and their 2-year-old daughter deal with the immediate financial struggles his extended unemployment has brought, Blackburn has become acutely aware of the broader implications of the shorting of the middle class. "Ultimately," he says, "it's not about a dip in corporate profits, but a change in corporate attitude -- a change that means no one's job is safe, and never will be, ever again."
It's one of the reasons he's decided to try to start his own company, NaviDate, a data-driven twist on online dating sites: "It's no longer a trade-off between doing what you love and having stability. Stability is long gone, so you better do something you love!"
Achieving middle class stability and having your children do better than you, the way you had done better than your parents, has always been the American Dream, but, as Blackburn notes, mobility now is increasingly one way: "The plateaus of each step, which can be a great place to stop a bit and catch your breath, are gone. Now, it's climb, climb, climb, or start sliding back down immediately." The result: "the odds are you're going to wind up at the bottom eventually, unless you get lucky."