By Gary North, The Tea Party Economist, 10/2/2015
News from Pew Research.
The share of adults who live in middle-income households has eroded over time, from 61% in 1970 to 51% in 2013. Although the share is unchanged in recent years – it was the same in 2010 – the erosion over the last four decades has been sure and steady, through economic ups and downs. If past trends continue to hold, there is little reason to believe the recovery from the Great Recession will eventually lead to a rebound in the share of adults in middle-income households.
The shrinking in the middle of the income distribution is not all bad news, however. Yes, the share of adults living in lower-income households has increased, up from 25% in 1970 to 29% in 2013. But more adults now live in upper-income households, up from 14% in 1970 to 20% in 2013.
The narrowing in the middle happened for all major racial and ethnic groups. From 1990 to 2013, the share of adult whites and Asians living in middle-income households decreased the most, from 58% to 53% and from 56% to 50%, respectively. The decline was less pronounced among Hispanics (from 48% to 47%) and blacks (47% to 45%).
Note: 45% of black Americans are in the middle class. In 1990, 47% were. Did you get this impression from the media? No? I wonder why not.
Something has gone wrong since 1970. One big thing that went wrong took place on August 15, 1971: Nixon unilaterally took the country off the gold-exchange standard. He “closed the gold window.” The worst period of peacetime inflation began immediately. It takes $5,845 today to buy what $1,000 bought in 1971.
Did you get this impression from the media? No? I wonder why not.
As Nixon said on January 3, 1971: “I am now a Keynesian.” He proved it eight months later.