On middle class woes (and personal responsibility)

Hey, why not make it two posts about personal responsibility in one afternoon, right? Let's go for it.

Since it's election season, you're about to be bombarded with misleading statistics from both sides talking about how good and terrible the economic recovery of the last four years has been. The Democrats will tell you (I've seen it ad nauseam already) that Obama has presided over 29 consecutive months of job growth. True, but missing the point.

As for the Republicans, they're likely to counter with something like this:

Although the economy shed thousands of middle-wage jobs during the Great Recession, the bulk of the employment gains since then have been in low-wage arenas such as retail, food-service, and home-care industries, according to a new report released by the National Employment Law Project, a liberal research group.

Low-wage jobs, defined as those that pay no more than $13.83 an hour, accounted for 21 percent of recession job losses but have accounted for 58 percent of the recovery growth.

At the same time, middle-wage occupations (jobs with an average hourly rate between $13.84 and $21.13) accounted for 60 percent of the jobs losses, yet accounted for only 22 percent of the job growth, according to the NELP study which analyzed federal census and labor data.

Indeed, one study showed that among those workers who lost jobs between 2009 and 2011 and subsequently found new jobs (many did not), a full one-third were accepting new jobs with a 20% or greater pay cut. That's a problem, and it shows a significant weakness beneath the declining headline unemployment rate that President Obama hopes to tout this fall. Clearly, not all jobs are created equal, and the recent trade-off has been a terrible one for most Americans, despite what the headline stories would love for you to believe.

This low-quality job growth only continues a steady trend of devastation of our country's middle class, a trend that I largely blame on misguided Fed policies of dollar debasement, all of which benefit the rich at the expense of the poor. But as Mish Shedlock wisely asks, who is really to blame here?

Citing a study from the Pew Research Center, Mish posted the following graphic:

He then wrote,

Note that 62% blame politicians and 54% blame financial institutions, but only 8% blame themselves. 

Five Questions 

1. Did banks force people to take out loans they could not pay back, or did people do so voluntarily? 

2. Who elects Congress? 

3. Do people make enough effort to understand interest rates, debt, the economic policies of politicians, exponential math and its implications, the untenable nature of public union pension plans and promises? 

4. Do a significant number of people (if not the majority) get their economic views (assuming they have any economic views) from The View, Oprah, The Talk, or CNBC? 

5. Why did PEW leave off the Fed and Fractional Reserve Lending from the list of answers? 

Two Bonus Questions 

1. Would the majority of respondents know anything at all about the Fed and Fractional Reserve lending had the PEW listed those options? 

2. Who is really to blame for what is happening?

Preach on, Mish.

If you want to blame the banks or the politicians for all of your problems, fine. Go ahead. It's as good a cop-out as any. But at the end of the day, it is OUR unwillingness to pull our money out of the banks (or to stop borrowing money from them), it is OUR unwillingness to hold politicians accountable for their incompetence, it is OUR continued refusal to stand up for ourselves and take even the slightest modicum of responsibility for our own nation's destiny that is to blame for all of the negative outcomes of the last 10 to 15 years (or more).

The housing bubble and its ugly aftermath could not have existed without the greed and financial illiteracy (call it "innumeracy" if you must) of the majority of the nation's citizenry. Ditto the burgeoning debt crisis that threatens to rob a generation or more of its retirement. As I've mentioned here before, if you make yourself a target, then you're practically guaranteed to be taken advantage of sooner or later. This was all our own doing, but we've seemingly lost our ability as a nation to take responsibility for our own decisions (or refusal to make decisions, whatever).

I'm all about personal responsibility, and I always have been. Therefore, I don't blame Congress, because I haven't done anything significant in my life to change the composition or approach of our Congressmen. Congress does what it does because we haven't required them to do anything differently.

So I do blame myself, because I obviously haven't done enough to change the world in which I live. And in a sense, taking ownership of that is incredibly liberating. Are you willing to do the same?

[National Journal]