Elizabeth Warren: The Coming Collapse of the Middle Class:
By Barry Ritholtz - December 7th, 2009, 8:00PM
Distinguished law scholar Elizabeth Warren teaches contract law, bankruptcy, and commercial law at Harvard Law School. She is an outspoken critic of America’s credit economy, which she has linked to the continuing rise in bankruptcy among the middle-class.
2007:
via uctv.tv
The Coming Collapse of the Middle Class: Higher Risks, Lower Rewards, and a Shrinking Safety Net – UCTV – University of California Television.
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December 7th, 2009 at 10:19 pm
Great speech!
I wonder what is causing these problems. I looked for other videos of her and this one gave me an idea:
http://www.youtube.com/watch?v=xyew29DsxRc#t=5m5s
Perhaps those post-WW2 policies built up the middle class to an unsustainable level, and we are now returning to normalcy.
December 7th, 2009 at 11:50 pm
Sure, it will pay to be (or appear) poor (or otherwise in a politically protected class) OR very wealthy. Otherwise, unless you can get well-compensated in the underground cash economy, you are screwed.
December 8th, 2009 at 7:39 am
It was possible to have a strong real middle class, but the rich opted to make more by shipping the jobs overseas instead of keeping the interests of their country in mind. Everyone but the US has practiced protectionism for the last decade. It may be too late to fix.
December 8th, 2009 at 10:16 am
@Mike
Do you have any references to back the “everyone practiced protectionism” claim? Doesn’t the WTO regulate this? Honest question, I don’t know much about this.
December 8th, 2009 at 3:25 pm
[...] The Coming Collapse of the Middle Class [...]
December 8th, 2009 at 5:28 pm
Hey Mike…your conclusion appears backwards.
All the jobs that “got shipped overseas” were in the areas where this fictional family were able to improve their budget. It was the areas where they were better off… Clothes, Food, Appliances, Per car expenditures…have all dropped dramatically. In almost every area, the conclusion that I drew, based on the facts that she gave was that the gov’t is screwing families.
The areas where the consumer is getting screwed based on her work…
-Taxes: Taxes have gone up for the fictional family. I’m guessing that this is largely due to the increase in FICA taxes that occurred after the first Soc Sec reform. (The govt has pi**ed that money away.)
-Health insurance: Maybe this is subjective, but the gov’t is largely responsible for the structure of this entire industry and the cost of insurance. Gov’t could help here by covering catastrophic medical conditions/events.
-Housing: Poor public education system has created demand (and a premium) for homes in areas with good school systems. The rest of the increase was due to the choice of consumers to buy a larger home.
- Childcare: Would actually like to see the gov’t get more involved here. A lot of research suggests that pre-school and early childhood education has a high return on investment. A recent Fed study suggested it was a much more profitable gov’t investment than a sports stadium…
- Cars: People want/need a second car.
She did show her bias early on – showing the kind of conclusions that she was looking for early on – in her repeated questioning of the drop in clothing costs when they didn’t fit the story that she wanted to tell.
She is missing a huge part of the analysis though, likely to make the situation look even more dire. It would be useful to see how the wealth or net worth of the fictional family has changed over the period as well.
Good information in here overall though…
December 8th, 2009 at 5:44 pm
Anybody know somewhere to get a copy of this presentation or where to find the charts? They were really useful illustrations…
December 9th, 2009 at 1:30 am
[...] The Coming Collapse of the Middle Class [...]
December 9th, 2009 at 11:27 am
She is absolutely right. This is way things are moving in this country.
Good luck to you all.