Re: The Decline of the Middle Class

On 3 Jun 2005 01:59:18 -0700, "Jonas Cord" <cordjonas@xxxxxxxxxxx> wrote:

>Hi all,
>
>Why have the living standards of the middle class declined so much in
>the US (and other countries) over the past 30 years or so?
>I am not an economist, but it seems to me that middle class people have
>a lower standard of life nowadays than the one enjoyed by their
>parents, apart from technological innovations such as internet access,
>satellite TV, etc. An example: my working class parents in California
>had no problems buying a house (for about $10,000) in the 1960's. A few
>years ago they sold it for half a million. I am an IT consultant but I
>can't even afford to rent a house like the one my parents bought back
>then, let alone buy it.
>Why has this happened? Recently I watched a documentary by the Mises
>Institute on the Federal Reserve. They claim that the cause lies in the
>collapse of the Bretton-Woods agreement and the gold standard, which
>caused massive inflation.
>Another possibility could be the federal welfare programs introduced by
>the Johnson administration in the 60's. Or perhaps WWII gave us such a
>powerful Keynesian "shot in the arm" that its effects lasted a few
>decades until the early 70's.
>Personally I think the right explanation is a mixture of the first two.
>What do you think?
>
>Jonas

1. Population growth. There is only so much real estate available.
Price of it is bid up by those coming later on who want to live there.

2. Decline in the value of the dollar. Worth about 1/10 of what it was
back in the 1950's. Inflation rate didn't get going until the '70's...
Real jump in prices came about 1975 with higher costs of energy.

Jerome Bigge
Member, Muskegon Astronomical Society
Author of the "Warlady" & "Wartime" series.
Download at "http://members.tripod.com/~jbigge";
.

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