No Rest for the Debt-Addled Middle Class

 

Oh my…oh my…

A Nobel Prize winning economist has come out with yet another analysis, showing that capitalism isn’t working. It is failing the middle class, says Michael Spence.

The rich are getting richer. The poor are as poor as ever. And the middle classes are losing ground. That’s what he says.

And he’s a moron. Here’s the Reuters blog…

Capitalism is failing the middle class

Global capitalism isn’t working for the American middle class. That isn’t a headline from the left-leaning Huffington Post, or a comment on Glenn Beck’s right-wing populist blackboard. It is, instead, the conclusion of a rigorous analysis bearing the imprimatur of the US establishment: the paper’s lead author is Michael Spence, recipient of the Nobel Prize in economic sciences, and it was published by the Council on Foreign Relations. – Reuters Blog, Chrystia Freeland

Actually, the poor are making huge gains – in India, China, and Southeast Asia particularly.

The rich are making huge gains too – all over the world.

And the middle classes? The poor middles classes in the developed world can’t seem to catch a break. They’ve been treading water for the last quarter century. But rather than accept the status quo, they managed to improve their living standards by working more hours and going further into debt.

Alas, with the labor markets full of millions of unemployed workers…they can no longer add to their incomes by working longer. And with household debt near record levels, they can’t get more stuff that way either.

What are the poor devils to do? They need to cut back…downsize…learn to live better on less income.

Does that mean capitalism has failed? Not at all. Capitalism is just doing its job…

…separating fools from their money…

…and giving people, not what they expect or what they hope for, but what they deserve.

Of course, there’s more to the story. The feds are the real culprits. Their central planning is largely responsible for the strange pattern of income distribution.

But that’s a long story…for another day.

Regards,

Bill Bonner
for The Daily Reckoning

No Rest for the Debt-Addled Middle Class originally appeared in the Daily Reckoning. The Daily Reckoning recently featured articles on stagflation, best libertarian books, and QE2 .

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