The Double A Lounge

With the economy the way it is currently, we’ve had to contend with soaring prices for basic items. Employment has become much more contentious. Many people are finding out that the golden nest egg they had for retirement is inadequate. We struggle with increasing costs for health care. So you end up asking yourself – how bad is it really?
People from my generation have grown up to think we are entitled to basic things. Here is a list of what we feel we are entitled to:

• Stable employment
• Decent income
• No or low cost health care coverage with decent coverage of basic items
• Reasonable prices for basic goods and services
• Protection from all forms of crime and fraud

I could all to this list ad nauseum but I think this covers the basics. We expect these things without question. Now that we are at a point where these basic entitlements are being challenged, we find ourselves not feeling so great about it. I think a quote from this article from Newsweek sums it up pretty well:

We middle-class Americans are in a funk. “The overarching economic
narrative of the 2008 campaign is the idea that life for the middle
class has gotten more difficult,” writes Paul Taylor of the Pew Research Center,
which has just published a massive report on middle-class anxieties. By
its survey, more than half of Americans believe they either have not
moved ahead in the past five years (25 percent) or have fallen behind
(31 percent).

I see this as a larger movement for something I call the Middle Class Big Correction. This is more of the social version of what happens in the financial markets where prices for things fall back in line with reality once we’ve played out this fantasy of something that seemed better than it really was.

Now reality hits home. Things cannot stay the same all the time if they are to continue evolving into something more akin to what we expect. We’d all like to think it would be like the days of yore where you got a great job right out of high school or college and that was your career till your sunset from the working world. We’d like to think that we would never have to pay for things like health care or contribute to our retirement. It’s all costing us more to maintain our middle class lifestyles. I’d like to think that being middle class today is nothing like it used to be. I get the impression that today’s version of middle class would be more akin to at least a lower upper class from the past. Our standard of living in this country is still very high. Feel free to visit any country where they don’t enjoy the things we do and you will see what I’m talking about. We have things like electricity, good running water, telephones, heating fuels, gasoline, etc. We used to expect these things for such a small slice of our expenses. Now that those costs are ratcheting upward, it infringes on our sense of security.
We find out this stuff really costs serious money to provide and consume. We also find out how much we are really consuming. There is such a concept in economics as scarcity. With scarcity comes trade-offs. We have infinite needs, but only finite resources. In my view, we are facing that dilemma right now more than ever. We are having to change our choices on what we use and how we use it. The middle class will need to choose wisely to navigate these troubled waters.