Death of the Middle Class....And Drew Carey

[painkiller]

Here's an interesting video about the middle class in America, hosted by Drew Carey. Is he the next John Stossel?

[chucklesR]

Careful PK, you'll get a reputation posting stuff like this.

[NOLAsailing]

That's horrible. The middle class have to content themselves with jet skis and ski boats.

...Now I know what the poor people do...

[Valiente]

"Affording to buy something" is not owning it. It's qualifying for a loan to spread the cost over years.

If the loans are called, or the credit is declined, the house of cards collapses.

I have two sailboats, no cars, a downtown house and cash savings. I carry very little debt (credit cards paid off completely every month), have old furniture, a cathode tube TV and a lot of books. We haven't gone on vacation (apart from essentially sail-training opportunities) for 13 years.

We do these things because we are attempting to bugger off for five years, the cost of which will be covered by renting out the house and spending a carefully hoarded sailing kitty. The cruising boat will very likely be sold when we return...unless we sell the house and keep sailing.

The miracle is no miracle: We have consciously declined to go into debt or to buy "stuff". This frees up amazing savings potential, even on "modest" incomes.

Now, if you'll excuse me, I have to walk the 3/4 of a mile down to my boat club to plug in the boat as it is really cold today. The walk will do me good. Tomorrow I'm going to the boat show here in Toronto, which is mostly about gathering information and catalogues and making snarky observations about production boats...

[painkiller]

Heh. I'm not real sure what your main point relating to the video was, Valiente, but you're right. They did not discuss how much debt these guys carried to have their toys.

Still, the video does make the point that while we sometimes think we're not so well off, we actually are. Our opinion of what is necessary has changed.

[sailboy21]

He made no mention of the "C" word (credit).

[sailaway21]

I think some are missing the point.

But, let's deal with credit first. I have a mortgage at six percent interest and may refinance it lower yet depending on the terms. When I was young, conventional wisdom held that we'd never see six percent mortgage rates again. The first mortgage I held was at something like 12%, I forget exactly the number now. Now, if you're not familiar with these numbers and have a mortgage, just talk to your banker about how much you'd save by lowering your mortgage interest rate by one percentage point. Now imagine lowering by six percentage points. In the 1970's the difference between the two was money out the window, money you'd earned but would never see again.

I bought some stereo gear the other day, an amplifier. Paid essentially the same dollars as I did the last time I bought one in the 1980's. That means that they've decreased in cost in real terms.

I live in a house much the size of the ones I grew up in with my three sisters. That's why I have some money in the bank. Most people in my situation live in a house 3-4 times the size of mine. Somehow I get by. Oh. My house doesn't have air conditioning either. The trees I planted grew up and I then never really needed it thereafter. I'm highly unusual in that though. Most all houses now have a/c and they pay to run it. In 1970 barely one percent of houses had a/c; we had these things called windows and we put fans in them.

These same people you here squawking about being squeezed have homes sitting vacant all day with the a/c keeping it at a nice 68 degrees. Squeezed?

Cars. Surely cars are more expensive? Maybe, maybe not. They seem pricier but I know for sure they're cheaper to own. We used to tune up the '71 Beetle every 3000 miles with the oil change. Adjust the points, re-gap the plugs and then, the next time we'd have to replace them. Today you get 50,000 miles out of a spark plug, no problem, and you may sell the car before you have to change them. And the car gets far better gas mileage as well. You don't have to sit in the driveway after carefully applying just the right amount of choke, pumping the throttle twice, hoping it'll fire the first time on a cold morning, and then sit there until it warms up a bit. Today you just turn the key and go.

You can get TV for free, yet over 70% of us have the wherewithal to buy cable or satellite services with 150 channels of essentially the same mind-numbing stuff we could get for free! TV's used to be furniture. Remember those console TV's? Today they're accessories. Those big houses are full of TV's. Kitchens have TV's in them now.

Speaking of kitchens. You'll notice that about half of them now have some form of super-de-duper Jennair type stove, the quasi commercial type you need if you grew up watching Chef Paul or whomever on TV. Two ovens in a kitchen is no longer uncommon. I just don't know how grandma got it done without these things. Refrigerators are the size of what Buick's used to be. I'm not sure why we need such big refrigerators since now the grocery stores, huge grocery stores complete with clothes and hardware, are open twenty four hours a day. Why put a fresh green bean inn your fridge when you can toodle down to the Meijer at two am and buy a brand new one? Something is causing them to be able to be open all night.

We know all of this intuitively as well. The standard isn't, or shouldn't be, where we were last year or the year before. Where were we twenty years ago or where were our parents? Early retirement? Common today.

We are without doubt the most pampered and spoiled generation (Boomers) in the history of the world...and our kids are worse! We don't have the slightest of ideas of what real sacrifice involves. A statistically meaningless number of us has ever known what real hunger is on a regular basis. I know I'm better off than my parents were by intuition alone. (it occurs to me that my old man was sixty years old before he could afford or justify a snowblower...the folks across the street who are "really strapped" have a brand new one!) My paents would be embarrassed if I whined about my condition.

Good thread, Pain.

Reason is the magazine, in print and on-line, of the Randian wing of the Libertarians. We truly live in a perplexing age as I believe that Drew Carey is Canadian. Obviously we're better off than imagined when Canadians flock here for the American dream and become libertarians.

[NOLAsailing]

One of my favorite commercials. Not as good as Outpost.com, but very funny:

[sailaway21]

"Each generation goes further than the generation preceding it because it stands on the shoulders of that generation. You will have opportunities beyond anything we've ever known." Ronald Reagan

[sailboy21]

Sailaway, your talk sounds "rich" to me and according to the government my family should be well into the middle class and has been for at least 4 years. I don't have any of that stuff you speak of, and my truck has points & a carb. The other vehicle has fuel injection but is 17 years old! I only get 1 channel on my rabbit ears. My cell phone is 5 years old and on the 50 minute a month plan.
Maybe if I mortgaged my soul I could get all that neat stuff you speak of. Oh well, at least I have "the boat" which, incidentally, cost a fraction of any one of those ski boats in Carey's video and only costs me about $600/year for moorage. Less than a month's payment for a hummer. I often find myself wondering why, even after aggressively limiting discretionary spending and cutting back everywhere we can we still could not have all that "stuff." My grandfather bought a 500 acre farm and a lakefront cottage all while be the sole income earner for a family of 6 on the salary of a traveling salesman and later as a mid-level executive manager. Lets see you do that today.