What Comes Next?

There is a very interesting article (here) from George Friedman at Stratfor regarding the economic stress placed on the perceived American way of life and specifically the middle class by our current economic trend. The trend itself is a deterioration of the median household income of Americans. In short, the median income now is approximately $4,000.00 less than in the year 2000. It is more concerning in view of the 1950s and 1960s when the typical median household allowed the American family to survive and prosper with only one wage earner. He notes it could be possible today but would require a lot of skill, especially for the family living in a metropolitan area.

Friedman notes that the trend is due to a number of factors. He sites corporate restructuring, which has caused a disadvantage to individual workers and the breakdown of the conventional family. He also notes that American society was never egalitarian and that wages and wealth would be different but that there was an expectation that wealth could be obtained. Friedman’s basic statement is that our core assumption, that all would benefit from growing productivity and efficiency, is at risk.  All of this now leads to the basic argument between a free market fix, where not all will achieve wealth and the more liberal argument for wealth redistribution to ensure a healthy middle class.  He finally suggests (and I’m sure most of you wonder when I would get to this point) that America will have to be lucky to come out of this and our luck, as indicated by our history, comes after we have been frightened.

Well then, we should be frightened. All we have to do is look toward Europe. Our last election tells us that the majority of Americans believe we should be following their example, but the EU, which if taken as a single geographic entity should be the largest economy in the world, continues to try and stabilize itself instead of breaking apart. The problems are precisely the same as we have, excessive debt and a desire by the weaker countries to be helped by the economically stronger ones. (here) These issues are solidifying radical anti-state movements by the chronically unemployed who believe they have nothing to lose by destabilizing the state.

If the United States continues on this path without any serious attempt to regain our productivity for everyone, we will eventually find ourselves with an increasing population segment that no longer believes the overall stability of the United States is their primary concern.