“If any of you lack wisdom, let him ask of God, that giveth to all men liberally, and upbraideth not; and it shall be given him.” James 1:5
It is no coincidence that its demise is coincident with the rise of conservative republicanism.
It’s not like liberals and progressives didn’t try to sound the alarm. It’s just that it fell on deaf ears. The republicans created an economy that enhanced the rich by reducing effective tax rates, enhancing the ability to shelter wealth (again reducing taxes), and offering unprecedented access to government decision-making. The resulting policies shifted the burden of paying for services to the poor and middle class, while at the same time offering financial windfalls to well-connected companies (and by implication their executives, boards, and major stock holders). In other words, the rich got richer because the government “paid them” with money it took from everyone else. Those that had aspirations of being rich certainly were happy to go along. Everyone else was distracted by the family values slight of hand while the government slowly withdrew dollars from our pockets. Anyone who disagreed was demonized with the “liberal” label because we somehow didn’t get it.
Historically, growth in the middle class started with FDR’s new deal and continued through LBJ’s Great Society. There were a lot of things wrong with that approach to raising living standards, but what it did do very well was support access for working people to good jobs and affordable home ownership in good neighborhoods with good schools. All this led to financial stability and the sense that you could make a better life for your children than you had yourself.
Since the 70’s and the rise of conservative republicanism, public education has suffered, wages have stagnated, blue collar workforces have shrunk dramatically, and the gap between the rich and poor has returned to levels comparable to the Guilded Age and robber barons. The middle class kept pace for a while because women left home and entered the work force, but even that extra income is no longer adequate for many families to keep up with increased taxes and costs. College grads from middle class families have had to resort to financing their education with loans which leave some with huge financial burdens that require years to repay. This further delays their ability to start saving for a home. It shouldn’t be surprising that we are soon to have the first generation of children that are LESS well educated than their parents.
The working man has been going without a raise for the whole Bush administration. They felt like they were making money because their homes were increasing in value, but guess what – that bubble is burst. In its place we suddenly discover that the government that was supposed to protect us has sold us down the river to the big financial institutions. That bankruptcy bill wasn’t intended to punish those who were defrauding our defenseless lenders. It was to give unethical lenders cover so that they could offer even riskier credit and mortgages to those who couldn’t afford them. Now the collapse of the ponzi scheme called the sub-prime lending market may be what finally kicks off the recession that the Bush administration has been brewing. In the next year of so, we’re going to find out that even the federal government can’t finance a war on credit forever. I’ll leave you to figure out who is going to pay for it (but it won’t be the rich).