“Vanishing Middle Class” Is Bad News For Society But Good News For The State

It looks like the middle class is “vanishing before our eyes.”

In a real market economy, good news for one person is not bad news for other people. Yes, on an individual level, you can wish that you had someone else’s fortune, but little prosperity could exist in a society where anyone who wanted to grab someone else’s fortune could do so just because they wanted it. Everyone would be poorer. So, rationally speaking, merely wanting someone else’s life and finances isn’t really “bad news.” In a market economy, people are restrained from taking what belongs to others. They can only acquire through production and trade. If you want someone else’s money, you have to give them something they value enough in exchange so that they hand it over to you freely. That is good news for both parties.

In such economies, the rising fortune of one party means the rising fortunes of others (even though this video is about something different, it does show how free markets work). For example, when America’s “first tycoon,” Cornelius Vanderbilt made his immense fortune, he did so by drastically cutting the cost of migration and transport of goods in North America for everyone. Millions of Americans became richer because of Vanderbilt. He didn’t make his fortune at their expense.

But this sort of relationship means that everyone gets better off and, by the law of averages, a middle class grows and expands. What do we see now? It seems we see stores like Wal-Mart and Target losing customers while both high end and low end stores (i.e. “dollar stores”) are doing better. Why? Because instead of a market economy we are under a corrupt fiat currency banking system.

In this system, many of those who are among the richest get the new money that the Federal Reserve is creating first. They then use that cheap money to make a profit that is unavailable to the middle and lower classes. Bubbles produced by easy credit destroy middle class jobs when they go bust. With few exceptions, the middle class gets driven lower. It gets even worse because the upper classes can get the government to plunder everyone else to bail them out; all the while claiming they are “saving Main Street.” It is all a scam that robs most Americans for the sake of the few and the richest.

I get tired of the way Republicans seem to forget how Bush tanked the economy (though if Jeb tries to run, he will find more people remember than he expects). But I am equally weary of how Obama gets away with taking a bad situation and making it much worse. For five years now, Obama has gone along with Bush’s Federal Reserve appointment Ben Bernanke, in pretending that the answer to a debt crisis brought on by over-spending is to go into more debt and spend more. It is an insane plan, but it affects the middle class most of all (at least at first).

Who gains from a vanishing Middle Class? In my opinion, no one really benefits if we think of real human needs. Even though the wealthy still feel wealthy, they actually lose some of their standard of living. I remember seeing the homes of wealthy in a Mexican city. They live in bunker houses for fear of kidnapping and other crime. Being wealthy in a thriving economy with a middle class allows far greater prosperity for everyone compared to being wealthy in a sea of poverty.

But there are political advantages to a shrinking middle class. A thriving middle class also means you have to deal with informed voters and popular resistance to the ways in which you want to control people. Poorer people who are worried about food and shelter are more distracted and less likely to oppose you.

Our ruling class has basically decided they prefer power to real wealth.