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Wednesday, July 18, 2012

Middle Class 'Hit by a Truck'

You don't need a political pundit to tell you that the middle class has been repeatedly hit by a truck since the early 70’s. The message of the market supports this ongoing hit and run accident.

The flow of money between Tiffany’s and Wal Mart illustrates a growing number of Americans from upper to lower classes gradually reducing their standard of livings. The ebb and flo has become more pronounced since the start of the sovereign debt crisis in 2008.

A Tiffany’s to Wal Mart ratio (TIFWMTR) downtrend suggests a standard of living contraction since 2011 (chart). It’s important to not that economic and/or financial crises tend to materialize or intensify during standard of living contractions.

Chart: Tiffanys to Wal Mart Ratio (TIFWMTR)


Headline: James Carville: Middle Class 'Hit by a Truck'
A decades-long decline in the American middle class requires serious, long-lasting measures, former Democratic strategist James Carville told CNBC on Friday. "This is a long-term problem. Middle-class decline has been going on for 30 years. We tend to think that the world stopped and started with the financial crisis," he said on "The Kudlow Report." "To them, as I say in the book, it's like someone with pneumonia getting hit by a truck. And it's a long way back for these people." Carville, a political author who previously served as an advisor to President Clinton, recently co-authored with Stanley Greenberg an op-ed piece in the Wall Street Journal, titled, "The Middle Class Needs a Lifeline." In it, they write, "Today, high school graduates' first jobs pay less than they did in 1973. We are looking back on three decades with fewer and fewer jobs offering health-care or retirement benefits, with people working longer hours and taking on more debt. College costs take a higher proportion of income, even as it becomes harder for the non-college-educated to get their kids to college and social mobility declines. The working-class family is collapsing and only the college-educated are seeing real gains in life expectancy.
Source:  cnbc.com

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