The financial raid against the middle class – 9 of the 10 largest occupations in the U.S. have median wages between $8 per hour and $14per hour. The middle class is inheriting a new serfdom drowning in mountains of debt. The new two income trap.
The war against the middle class is silent and has grown since the recession started. We don’t hear much about this because in large part, those falling out of the middle class don’t have the funds to purchase airtime with the media who is wedded to Wall Street. 40 million Americans now receive food assistance. How often do we hear about this? Each month we add tens of thousands to this number yet we are somehow in a recovery? A recovery for which group of people is the question we should be asking. Clearly the middle class isn’t feeling this recovery. Nearly 17 percent of our population is underemployed. But then we add 20 percent of those who are employed who are part of the working poor. If we look at the top 10 occupational sectors in the U.S. we start to realize that many in the middle class are giving up higher paying jobs to service the needs of a tiny elite class.
Blame the real estate bubble on California and New York. Why the housing bubble centered around 4 states and spread across the nation. The Southwest and Florida sunshine real estate infatuation. 45 percent of foreclosure filings come from 4 states.
When we hear about the foreclosure crisis we tend to paint with a very broad real estate brush. Without a doubt the housing bubble bursting is rippling throughout the country. Yet to assume all states are being impacted equally is absolutely incorrect yet mainstream media analysis usually talks about the “foreclosure crisis†as if it were hitting each state on an equal footing. For example, 45 percent of all foreclosure filings in April, the last data we have available, all occurred in 4 states; California, Florida, Nevada, and Arizona. This is something that most understand but why did these Southwestern states and Florida lead the charge forward in the housing bubble to begin with? It really is a question that hasn’t been examined. If we look closely, we will find structural but also psychological reasons for why this occurred.
Bankruptcy filings reflect a weak economy – 9 percent jump in bankruptcy filing in last month of data. Bankruptcy map shows Nevada and South have highest filing rates per capita. $79,000 income and $11 million in debt?
Bankruptcies are still plaguing this country and show deeper strain in the fabric of the economy. Average Americans are still very much dealing with the challenges of a deep and profound recession. Filing for bankruptcy is usually the end of the financial line for many Americans. Yet in the last month of data for March of 2010 we saw the highest number of bankruptcy filings in the entire fiscal year. Instead of the rate dropping it has actually increased. Keep in mind that these filings are coming at a time when bankruptcy laws have become tougher and stricter on most Americans. Yet there is only so much you can squeeze out of someone who has entered the last stage of their financial options. This is why even programs that focus on mortgage adjustments don’t help because they don’t drill deep enough into the core of what is happening in our economy. Without a job or adequate income, most will simply default whether it is in bankruptcy or through foreclosure.
FDIC massive problems ahead with smaller bank failures. 105 banks hold 77 percent of all banking assets. $10 trillion held in too big to fail while 775 banks appear on the FDIC problem list.
The FDIC went ahead and closed another handful of banks this Friday. It really is a rare day to see 400,000+ jobs added and the market retreat so significantly. A large part of the gains came from temporary Census hiring which peaked last month. If the economy were really recovering banks wouldn’t be failing on a continual basis. Part of the issue the FDIC has is the concentration of troubled assets in too big to fail banks. 105 banks hold 77 percent of all banking assets. The impression we have is the Federal Reserve and U.S. Treasury will do anything including destroying the U.S. dollar to keep these banks propped up. On the other hand, you have banks that are dealing with massive amounts of bad loans including commercial real estate loans and the FDIC deposit insurance fund is running in the negative.