07 Nov Bonus Episode: Whatever Happened to the Middle Class American Dream, Redux
On September 1st, I published the episode, “Whatever Happened to the Middle Class American Dream?” Apparently now, even the MSM is asking that question. Better late than never, I guess.
✔️ “The American middle class is experiencing the biggest wealth drop since the Great Recession.” -Fortune.com Well, at least we’re allowed to bring up 2008. I think back to all the people on their soapboxes, “Oh we would just neevvverrrr have another 2008…” Really?!?
✔️ We’re still getting the narrative, however, that people are going into this downturn flush with cash. Plenty of money in savings, low personal debt, all that stimmy cash from 2020. 😒
✔️ At this point, if someone still has their head buried in the sand, I think it’s probably too late. By the time we’re told a recession hath hit, we may be in an economic depression.
Links I discuss in this episode:
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Transcription by Otter.ai. Please forgive any typos!
Welcome to the Causey Consulting Podcast. You can find us online anytime at CauseyConsultingLLC.com. And now, here’s your host, Sara Causey. Hello, Hello, and thanks for tuning in. Today I wanted to record a Redux to the episode I published on September 1, titled whatever happened to the middle class American dream, it seems now that even the mainstream media is asking itself that same question. Better late than never, I guess. I also find it funny because I lost several followers when I published that episode, specifically, I still don’t really understand what their complaint was. But it seemed that they took some kind of real umbrage to the fact that I was even asking that question. So like, How dare I? I don’t know if it’s like that John Steinbeck, quote, where these people thought that they were like, temporarily embarrassed millionaires. And so how dare I pull this out into the light and say, Yeah, so the hot air the hopium. The promises that we were given in the 1980s Midwest have really not borne out to be true. I don’t know. But I do find it interesting that at least now mainstream media is starting to say, hey, whatever happened to the middle class, y’all, y’all remember those guys? On November 2 fortune.com, published the article, the American middle class is at the end of an era. The byline reads the American middle class is experiencing the biggest wealth drop since the great recession. But you know, remember all the realtors and brokers that told me we would never have another 2008 mile my, if you go on YouTube right now and you look at any content about the real estate market, the housing market, however you want to phrase it in your search parameters. You will see no small number of people talking about housing bubble is popping housing market crash is coming. The Fed is ruining the housing market. Yeah, tunes are being changed. In this article we read, what do the Simpsons and about 50% of American households have in common? Not just a love for donuts, or a kid who loves to say eat my shorts. They both belong to the middle class. I’m not really sure why we needed that comparison to the Simpsons, but okay. With government assistance and less spending during lockdown, America’s middle class was able to save unprecedented amounts of money. During the pandemic, US households had socked away about $2.5 trillion in extra savings from March 2020 to January 2022. Hmm. I’m not really sure that I believe that I don’t really know of people, personally, or anecdotally that had unprecedented amounts of money in their savings account over the past couple of years. To me, this sounds like that old turtle Mitch McConnell getting on TV saying that people are flush with cash, and they’re still living in grandma’s basement off their stimulus money from 2020. That’s one hell of a magic trick. If you can make a couple $1,000 In STEMI money last for two years during a period of inflation. I would love to know how that works, I surely couldn’t have done it. Now new data made available by Bloomberg and produced by University of California Berkeley, economists revealed that wealth for middle class families reached a record level of $393,300 during March 2022. That’s $120,000 more than the average middle class adult in America was when Donald Trump took office in January 2017. Bloomberg points out it was a golden era for the middle class, which began shrinking pre pandemic. But that wealth boom has been fading. In mid October, the average wealth of the middle 40% had dropped by 7%. Since March, according to Berkeley’s economists, that percentage represents an estimated decline in wealth by around $27,000. It’s a big fall, I would say. That kind of decrease hasn’t been seen since the 2008 global financial crisis. Well, okay, at least we’re allowed to talk about the 2008 global financial crisis and at least we’re allowed now to make very cogent comparisons, that what we’re going through now smells an awful lot like the garbage heap that we went through back then. It’s the result of a perfect storm of economic uncertainty brewing. Oh, here we go. Here we go. Think about all the times I’ve told you the various ways that they will spend this. Oops a daisy, we just didn’t see this coming. Who could have predicted it? Oh, could have foreseen it? Hmm, I don’t know. Maybe anybody with more than two brain cells to rub together? Maybe someone who was already an adult during this last global financial crisis that remembers quite well, you know, call me crazy, but maybe anybody like that? Yeah, interest rates are rising. The market is tanking recession, rumors are everywhere. And decades. high inflation means that cash in the bank isn’t worth as much as it used to be. As the cost of living increases, more households have dipped into their pandemic era savings. Oh, well, Glory being hallelujah, at least all of these people, supposedly these phantoms, I don’t know who the hell they are. But, you know, supposedly, these people were flush with cash and had these robust savings accounts built up over the past couple of years. And oh, thank God for that. So at least now they can dip into that money to try to weather this terrible storm, this strange, bizarre, perfect storm of economic poopoo that just my goodness me, no one could have seen coming. And fewer Americans are earning as much as they were spending. According to data from financial health pulse 2022. US Trends report, the number of Americans qualifying as financially healthy dipped. For the first time in the five years the survey was run from 34% to 31%. In 2022, it’s still higher than pre pandemic levels when households were less able to save. As talks of a recession swirls. This income brackets difficulty to keep up with the cost of living isn’t a great sign for the state of economic security. The middle class is often heralded as a symbol of the American dream, often associated with a steady income and homeownership something that has become more difficult to maintain as inflation crunches and makes expenses well, more expensive. Yes, this is what we were told, all through my childhood, you have talked before about Billy Joel song Allentown, that you were given a shot at getting, at least as far as your parents did. But really, the goal was that you would surpass your parents in your wealth and your upward mobility, and then your children would surpass you and your grandchildren would surpass them. And so within your lifetime, you would get to see all of this growth and prosperity and development. And you could I guess, sit back on the porch in your rocking chair, in your twilight years with your little Afghan over your lap and think it was all worth it. My sacrifices paid off because now look at how good my grandchildren have it. Do we see that now? They’re, I mean, honestly, there’s no sum of money that you could pay me to go back and be a kid again, no offense to anybody, but I didn’t like being a kid when I was a kid. I felt like I was born at about the age of 30. And I’ve just continued to age ever since. So for me being a kid having to mind adults. It was not Yeah, no, no thanks. But you really couldn’t pay me any sum of money to go back and have to start over in these economic conditions. No, thanks. I mean, I can’t imagine that there are a lot of grandparents sitting on the porch in the rocking chair with their Afghan and their cup of hot tea going yeah, things are looking really good right now. What a great time. I’ll continue to read time to bootstrap narratives success for these households is sometimes seen as a bellwether for the nation’s success, or at least used as rhetoric in many US elections. Well, so many things get used as rhetoric in US elections. As this income bracket shrinks, and inequality rises, the dream that many are fed also starts to fade. Yeah. Yeah, because you get your dose of reality. Now for me, the dose of reality came in the 1990s it’s kind of like okay, all through the 80s We told you that you could be anything you want it to be. But then in the 90s whenever you grew up, you had to start making some real decisions about your life and your career. Well, no, no No, no, no, you’re not going to be the president. You’re not going to be a CEO you’re not going to be the scientist that cures cancer. How? No no, no, you need to find a job. A J. OB you need to plug in you need to become indispensable for your boss. You need to make sure that old boss man likes you because by At that point in time, more than likely it was going to be a man. That’s what you need to do give up on all the dreams and the hot air that we fed you just a decade ago. And you know, go ahead and sit down and shut up and be a good little peon. How can those dreams not fade? How can the bubble not get burst whenever you’re told later? Well, you know, we told you that when you were a kid, but it was kind of like Santa Claus and the Easter Bunny and the tooth fairy, we wanted to keep you happy. We wanted to let you have some innocence and some fun while you were still a kid. But now that you’re an adult, you need to go ahead and wake up to reality. You know, how could the dream not fade, the number of people actually in the middle class has dwindled. 61% of US adults were considered middle class in 1971, dropping to just 50% in 2021. According to an analysis from Pew Research Center, fewer Americans consider themselves to be middle class than they did before the Great Recession. While wages have increased for upper class individuals to match inflation, the same wage increases weren’t always found for the middle class. A majority of middle class households 75% feel that inflation is growing at a rate faster than their incomes according to a survey from financial services company primerica we Yeah, in that initial episode I recorded I said, I feel like we’re in a K shaped economy, not a K shaped recovery, a K shaped economy, where the people in the upper tiers continue to get rich and their wealth builds, the people who are in the bottom tier continue to feel poorer and less well off. Meanwhile, the people who are left in whatever remains of the middle class continue to get squeezed, more and more. As I said, Better late than never, I mean, I’m glad that someone in the mainstream media on an outlet as big as fortune.com is finally reporting on this. But you know, they’re late to the party. In my opinion, this evidence has been clear for quite some time now. And instead of it being just some small, independent voices, like myself talking about it, this really needs to be blasted on a larger scale so that people will understand. In the final paragraph we read, while Bloomberg data shows the middle class as wealth is still fairly high anxiety plagues these household households as the economy eats away at their newly accumulated wealth, it’s all enough to make someone say so. Yeah, again, I don’t really understand the comparison there to The Simpsons, or the need to try to end on a joke. I mean, it’s, it’s not a laughing matter. deep, heavy existential sigh. I mean, this is another reason why I tell you that, by the time messages hit mainstream news, by the time that the talking heads and the pundits come out and say, oh, oh, I think we’re in trouble. In my opinion, you’ve waited too late. And as I’ve said many times before, I feel like it is an auspicious time. Although at this point, I really think we’re beyond it being an auspicious time, to really determine where you get your news from, to be judicious about who you’re listening to. I feel like if you haven’t already done that by now, quite frankly, in my opinion, you’re behind the eight ball. The time to have done that would have been as soon as possible as early as possible this year. I’ve also not been shy and telling you like I started to feel my spidey senses shifting in January. I can’t explain it to you logically, all I can tell you is that like January 1 of this year, it felt like a door got slammed shut, and all the momentum of the great resignation started to come to a halt. Now that’s not to say that it happened overnight. I’m just telling you, I sensed it on January 1. All of a sudden, it was like projects that were hot and heavy clients that wanted to not only hire but over hire, I mean, just just that kind of FOMO and Yolo that we saw in the real estate market that also happened in the job market started to subside. To me the shift was palpable as of January 1. So I bring all that up to say, Here we are in November. If you’re still listening to disreputable sites, you’re listening to people whose predictions don’t come true. They’re giving you hot air hopium nonsense BS. I really don’t know what to tell you. It would have been an auspicious time to tune in to better prognosticators earlier this year. Again, better late than never The life you save could be your own. But I think that if, if you’re still listening to people that are steering you in the wrong direction and giving you bad advice, I’m kind of not sure what to tell you at this point. The other day on social media, I saw where the account fu I quit, had published a really good series of slides and I want to read those for you now. The Fed is going to raise interest rates again today, they believe wages are too high and are jacking interest rates to increase unemployment. They claim it’s to combat inflation. But really they just hate seeing workers gaining an ounce of power, which also means that wage stagnation has been an intentional policy for decades to make sure the pours stay in their place. The only thing trickling down is bad policy just the way the billionaire’s like it. Someone should tell the Fed that it’s not a wage price spiral when corporations are posting their highest profits ever. It’s corporate greed, that’s jacking up prices, not wages. I’ve been telling you that for quite some time. Now. The Fed has not been shy in saying what their agenda is. That leaked memo from Bank of America about workers having too much power and the balance of power needing to go right back to corporate America. That was pretty damn clear, too. But there was a person who wrote in to the account and said, How does jacking up interest rates increase unemployment and honest question. I’ve never seen this correlation before. And I had like a mixed reaction to that, to be honest with you, because part of it broke my heart and part of it gave me a headache. Because it’s like you’re writing into a meme account, asking about economic policy. And it just reminded me of the man that I saw earlier this year on LinkedIn who was like, Well, I never heard of a company resending a job offer. Meanwhile, for a solid month before that happened to him, it had been all over the news, not just on small independent sources, not just on small, independent podcasts. But it had been all over mainstream media and mainstream news to be careful, because more and more companies were not only slamming the brakes on hiring, but resending job offers, and then this person is sitting there saying, Well, I’ve never heard of her send a job offer before I had no idea that a company could do this. Wake up. naivete comes at too high of a price. Now, I’m not ragging on meme accounts. There’s plenty of them out there that are run by very intelligent people. They put things out with humor, they put things out with comedy, but they know what they’re talking about. Me personally, I wouldn’t want my first exposure to this information about the Fed and unemployment and what’s about to happen. I wouldn’t want to rely on a Twitter account, an Instagram account, somebody making comedic pieces to tell me how the economy works. You don’t have to get left behind in this thing. You don’t you can be prepared not scared. There are things that you can do not Chicken Little The sky is falling, not telling you that we’re about to be Mad Max in the Thunderdome. People are going to resort to cannibalism out in the streets. I’m not saying that. We could have one hell of an economic downturn, though. In my opinion, we’re already in a recession. All of this BS about oh, there are rumors of recession Oh, it might happen. Oh, it will happen next year. It’s happened already. It’s happened already. In my opinion. By the time they tell us we’re in a recession and the crap storm is here. It may very well be an economic depression. Be ready for that. Be ready. If it turns out that it’s not that bad. And you were prepared with some extra food in the larder and some extra money in the bank. Thank God, be glad of it. Be glad of it. I can’t tell you what to do. I can’t give you advice. All I can do is tell you that in my opinion. I don’t think having some extra provisions would be a bad idea if you can afford it. If you’re like the person that said well, I’ve never heard of a rescinded job offer before but I’ve never heard about interest rates jacking up unemployment before I had no idea this was going on. Please wake up. If you’re a frequent tuner enter of this podcast. If there is someone in your life, a friend, a family member or someone you genuinely care about that you feel like has their head in the clouds. And they’re just not aware. Would you want them to rely on a meme account? Would you want them to rely on somebody that posts comedic content on social media? share this episode with them. Help them to understand what’s going on. I know some people will say gloom and doom Debbie Downer and that’s fine. But I really do believe as we go further into this mess, The life you save could be your own. The finances you save could be your own the decisions that you Make in this downturn could very well have a huge ripple effect on you. There are people who never really recovered from 2008 Do you want to be the person that never really recovers from 2020 to 2023? I don’t want that for you. Be strategic, get intentional, get educated. If there’s someone in your life who is not awake yet, do what you can to rouse them from their slumber if you genuinely care about them. Stay safe. stay sane. I will see you in the next episode. Thanks for tuning in. If you enjoyed this episode, please take a quick second to subscribe to this podcast and share it with your friends. We’ll see you next time.