CAP / SEIU Shows "Middle Class in Turmoil"

Those billionaires are back, but this time they aren't so keen on Bush. The DOW might be shooting up, but for the first time an influential survey of business chiefs has found that a majority expect the economy to decline next year. There was also more bad news yesterday, when Ben Bernanke gave his official blessing to the tanking housing market. There is a some danger now that President Bush's last years in charge of the American will involve questions more testing than: "things are going well - why don't i get any credit?" But on that very issue, an important and interesting report came out from CAP and the SEIU last week - Middle Class in Turmoil. It adds to Jacob Hacker's work, which uses increased risk as an explanation for the public's economic bad cheer, and lays out various new measures on why middle class families have insufficient savings to cope with bad luck, or bad circumstances. They use a composite indicator, and use it come up with this graph , showing a sharp decline in middle class security.

Much of this comes from issues well known to NDN - inadequate demand begets slow job creation begets less than full employment begets stagnant wages and incomes, all compounded by a sharp increases in many consumer product prices. But CAP add various other stats, in particular that the number of American families with 3 months of income in liquid financial wealth fell by 6.2% from 2001-2004, while the number of families who could sustain themselves through unemployment decreased from 39.2% in 2001 to 28.8% in 2004. The report shows CAP and their allies at their best when turning out well researched yet politically relevant analysis. It is well worth a read.