A Lost Decade?

[Subdude]

Now this is depressing:

It's not shown, but I believe disposable income in real terms is flat or slightly lower than ten years ago. Some of this is just a timing trick - the 1990s ended at the peak of the dot-com bubble and this decade happens to end in recession.

Link

[editor]

I saw this same stat on CBS Sunday Morning. It was accompanied by a note that the Dow ended the decade 1,000 points lower than when it started and the S&P and some other index were both down 20-40%.

It's a decade I would like to forget. It just seemed like one awful event after another.

[BryanS]

Notice how the last three decades, the 80's, 90's, and 00's... are at the bottom of that list.

I don't see how we can juice this thing anymore.

I think we've entered into The Long Emergency.

I might have a negative outlook, but Kunstler really takes the cake.

Read his 2010 predictions.

The only way to get ahead at this point, to power above inflation, are highly-leveraged stock options. Puts and calls. 10 GOOG contracts on Jan 2010 450 calls.

...come on black 17...

God help us.

[Original Timmy Chan's]

Looks like I picked the wrong decade to start my 401k.

On the bright side, I still have the money I put in...but I haven't seen all this "compounding" effect that I was always told about. I must also say that without the 401k mechanism I wouldn't have the discipline to set aside six figures worth of savings on my own, so I do appreciate that.

[TheNiche]

Now this is depressing

Depressing, yes. Unexpected...not if you're a demography nut.

The rate of ten-year population growth in the United States in the 2000's (9.6%) is estimated to have been the slowest since the aberrant 1930's (7.3%). And other than the 1930's, it's the slowest that it has ever been. The mid-19th century was characterized by growth rates of up to 35.9%, every 10 years. That has steadily declined. In the 1900's, the growth rate was 21.0%; in the 1950's it was 14.5%. From the 1970's onward, growth has smoothed out somewhat in the vicinity of 10%.

Meanwhile, the labor force participation rate had tended to increase between 1940 (55.7%) and 1997 (67.1%); the data doesn't go any further back. In that span of time, the only years where it had ever tended to decline were during the baby boom, for obvious reasons...and even then, the decline was slight, protracted, and ultimately served to increase the size of the labor force. Since 1997, the labor force participation rate has declined to 65.0%. It's certainly not a precipitous drop, and even though certain political opportunists like to attribute the decline to economic conditions...historically, there's no significant correlation between recessions and the labor force participation rate. What we're just beginning to see is twofold: 1) we've tapped out the female population which heretofore had had a lower workforce participation rate; and 2) the percentage of the population that is retired is on the rise.

The component of diminishing population and labor force growth that is attributable to a decline in fertility has certainly shown up in the macro indicators as Gen X came of age and entered the workforce. And for all that's been made of the Gen Y echo boomers, their numbers are far too few to reverse the trend. Immigration should've been our saving grace, as it had been in the past, but U.S. policy hasn't exactly been very welcoming in recent decades...even to highly productive foreigners that can immediately begin contributing to our economy. Meanwhile, we have a political machine that is dedicated to playing out the baby boomers' end-of-life "American Dream", which for some reason entails outliving their own human dignity...en masse...in such a way as that the ratio of consumption to investment becomes unsustainably high.

The productive capacity of a nation is determined by its factors of production: land/resources, labor, and capital. Historically, the United States has been blessed with plenty of the former, and its legal framework provided the stability necessary to encourage the rapid development of its capital stock and its labor force. Now, both our labor force are threatened, and in just such a way as it happens to be threatened, so is our capital stock.

No doubt, per capita income will continue to increase. Productivity (output per hour) is not the problem. However, continued growth of gross domestic product, net wealth, and job creation cannot be sustained given current demographic trends. As I see it, there is only one way to prevent the United States from falling into obscurity during the 21st century. We must embrace a sustained high level of immigration, as we did in the 19th century or perhaps higher still. We must also endure the consequences: wage pressures, crime problems, challenges to cultural assimilation, crowded cities, pollution, etc. These are the trade-offs that a superpower must make. We can, of course, decide not to be a superpower anymore. But if the superpower role falls to a country without as stable a political system, then that's a very risky concession.

[crunchtastic]

The only way to get ahead at this point, to power above inflation, are highly-leveraged stock options. Puts and calls. 10 GOOG contracts on Jan 2010 450 calls.

...come on black 17...

This is what really pisses me off about the the 'bailouts'. The Banks get to continue padding their margins by charging 29% interest, yet pay nothing in interest. It's an absolute affront that 1.25% is a GOOD interest rate for a minimum $5,000 CD. Those on fixed incomes will see their standards of living plummet further as there is now no way to get ahead of inflation other than betting on the market. There is no incentive to for the average person to save, because there is no longer any safety of principal. Money market yields? T-bonds? What a joke. Thank you, Fed. If it wasn't clear the past 30 years that your monetary policy is written for the sole benefit of the banks, it sure is now. It's great that businesses and the already wealthy can borrow at low, low rates. Now how about throwing a bone to the people who work for a paycheck? I just hope my parents can make it another 15-20 years on what they have.

Talk about the lost decade: It took me all of the 00s to make up the $50,000 or so I lost out of retirement savings in the dot com bubble of the late 90s (because people in their 20s and 30s are supposed to invest aggressively, right?). Then I promptly lost it all again the past two years. (Because people in their 40s are still supposed to be invested in the market, or they risk not beating inflation, right?). Another 20 years of this cycle is going leave me with enough money to live on for a few short years-- if I'm lucky--and that's assuming I stay employed the next 20 years, which seems more and more laughable a proposition each day.

I am not as pessimistic as Kunstler or even BryanS, ........ but we did just get a new law-enforcement-grade pump shotgun at the gun show this weekend. It's not as if that $600 was going to earn me any realized income.

[crunchtastic]

As I see it, there is only one way to prevent the United States from falling into obscurity during the 21st century. We must embrace a sustained high level of immigration, as we did in the 19th century or perhaps higher still. We must also endure the consequences: wage pressures, crime problems, challenges to cultural assimilation, crowded cities, pollution, etc. These are the trade-offs that a superpower must make. We can, of course, decide not to be a superpower anymore. But if the superpower role falls to a country without as stable a political system, then that's a very risky concession.

I tend to agree, unfortunately..... my tea leaves say that the this year's mid-terms and probably the next presidential election will see this country embrace a level of anti-immigration and protectionist 'populism' we haven't seen since in a hundred years. There are simply too many people terrified of the prospect (for a host of reasons) that in just a few years, white people will be the minority in Texas and other wealthy, populous states. Isn't 2014 the year the Hispanics will become majority here? That seems to ring a bell.

[TheNiche]

I might have a negative outlook, but Kunstler really takes the cake.

Read his 2010 predictions.

There's something to what he's saying...even if he does exaggerate with some frequency. Taxes and interest rates need to go up, and it's going to be painful. But he loses all his credibility when he claims the following:

One wild card is how angry the American people might get. Unlike the 1930s, we are no longer a nation who call each other "Mister" and "Ma'am," where even the down-and-out wear neckties and speak a discernible variant of regular English, where hoboes say "thank you," and where, in short, there is something like a common culture of shared values. We're a nation of thugs and louts with flames tattooed on our necks, who call each other "motherthousand dollarser" and are skilled only in playing video games based on mass murder. The masses of Roosevelt's time were coming off decades of programmed, regimented work, where people showed up in well-run factories and schools and pretty much behaved themselves. In my view, that's one of the reasons that the US didn't explode in political violence during the Great Depression of the 1930s - the discipline and fortitude of the citizenry. The sheer weight of demoralization now is so titanic that it is very hard to imagine the people of the USA pulling together for anything beyond the most superficial ceremonies - placing teddy bears on a crash site. And forget about discipline and fortitude in a nation of ADD victims and self-esteem seekers.

Civil unrest is spearheaded by young adults who have little worth losing. And (unlike their grandparents) people of my generation are unmitigated multi-generational puppies (EDIT: I can't use the proper plural form of "pussys".)

This guy is a fear-monger playing to old farts who take the televised 'Sexy Action Local News' seriously and think that violent crime is a huge and increasing problem because they hear about it so much more than they used to.

[RedScare]

There's something to what he's saying...even if he does exaggerate with some frequency. Taxes and interest rates need to go up, and it's going to be painful. But he loses all his credibility when he claims the following:

Civil unrest is spearheaded by young adults who have little worth losing. And (unlike their grandparents) people of my generation are unmitigated multi-generational puppies (EDIT: I can't use the proper plural form of "pussys".)

This guy is a fear-monger playing to old farts who take the televised 'Sexy Action Local News' seriously and think that violent crime is a huge and increasing problem because they hear about it so much more than they used to.

You are exactly right. Tough talking old people are just that...tough talking OLD PEOPLE. They won't do anything except moan about the good old days. For all the lack of manners and sartorial splendor that young people exhibit these days, crime is actually down from the good old days. Not that prolonged poverty will not cause an increase in crime. Chances are that it will (though there is a lack of hard evidence to prove it). But, it won't cause riots. In fact, the author's disdain for Americans pulling together for anything other than teddy bears at crash sites is exactly why they won't have the fortitude to get together for a riot...though a good riot is just what we need to get the Fed and the Congress to stop blowing Wall Street.

[TheNiche]

This is what really pisses me off about the the 'bailouts'. The Banks get to continue padding their margins by charging 29% interest, yet pay nothing in interest. It's an absolute affront that 1.25% is a GOOD interest rate for a minimum $5,000 CD. Those on fixed incomes will see their standards of living plummet further as there is now no way to get ahead of inflation other than betting on the market. There is no incentive to for the average person to save, because there is no longer any safety of principal. Money market yields? T-bonds? What a joke. Thank you, Fed. If it wasn't clear the past 30 years that your monetary policy is written for the sole benefit of the banks, it sure is now. It's great that businesses and the already wealthy can borrow at low, low rates. Now how about throwing a bone to the people who work for a paycheck? I just hope my parents can make it another 15-20 years on what they have.

Talk about the lost decade: It took me all of the 00s to make up the $50,000 or so I lost out of retirement savings in the dot com bubble of the late 90s (because people in their 20s and 30s are supposed to invest aggressively, right?). Then I promptly lost it all again the past two years. (Because people in their 40s are still supposed to be invested in the market, or they risk not beating inflation, right?). Another 20 years of this cycle is going leave me with enough money to live on for a few short years-- if I'm lucky--and that's assuming I stay employed the next 20 years, which seems more and more laughable a proposition each day.

Over the holidays, I've spent a good bit of time discussing my parents' retirement plans and comparing that with my grandparents' realized strategies.

My paternal grandparents had a modest pension and owned a house but held no investments. They also had social security, but weren't maxing it out by any means. Given the property tax exemptions available to them, they never had to worry about fixed income problems such as may have forced them to sell the house. They always had enough money to take road trips and see the country with a camper trailer in tow. When my grandfather got cancer, the government took care of him and funded everything up to and including hospice care...even though he put up a fight against it for years that doctors had estimated should've been months. Because they had no assets other than their house, they were safe. Estate planning is simple, as well.

My maternal grandparents also followed the veteran/blue collar worker & homemaker route, but made some good investments and did quite well for themselves. Long story short, the fishing business that they founded with my uncle sold the permit to operate the business to the federal government for lots of money. There's a back-story that highlights further wastefulness on the government's part, but the short of it is that these liquid assets cause intermittent drama within the family politics...everybody plays nice, but it lingers. My aunts and uncles don't need the inheritance, per se, but there is a sense that there is a familial safety net. My grandparents decided to invest that money in the stock market, using it for consumption only sparingly. But their health care costs in the last year have increased dramatically so that they're rapidly drawing down from their savings...and government assistance is limited, given the particular circumstances, but would be more forthcoming if this set of grandparents had turned out more like my paternal grandparents.

My dad turned 60 this year. He has no retirement savings, leases an expensive loft in downtown Galveston, and just bought a new car. He's pissed money away all his life...and enjoyed it. He believes that social security will be sufficient to retire on in the interior of Mexico. He has no intention of living a long life or becoming a vegetative burden on me or society, but might anyways. My mom is just worried, and not much else. But as you may have gathered, each of them are going on variations of concepts that their parents went on...so unless the system changes dramatically, my dad probably has the edge.

Myself, I cannot possibly imagine that the system that worked so well for my paternal grandparents will be around when I retire, but it does seem as though there is an incentive to spend money pretty much as soon as it is earned and to save only just enough to buy a house to retire in...perhaps on enough land that a cattle lease qualifies me for an ag exemption and pays the property taxes. This is a fairly recent revelation on my part, but given my experiences (and yours), I just can't justify how speculative investment makes sense given this economic paradigm.

...maybe if interest rates were higher and the tax burden were shifted more completely to a consumption tax.

I am not as pessimistic as Kunstler or even BryanS, ........ but we did just get a new law-enforcement-grade pump shotgun at the gun show this weekend. It's not as if that $600 was going to earn me any realized income.

I bought mine about a year ago. Only paid a little over $200 for it, though, as it was a Chinese-made clone of the Remington 870.

Hmmm...a trip out to the gun range could make for an interesting pre-happy-hour activity.

[TheNiche]

...though a good riot is just what we need to get the Fed and the Congress to stop blowing Wall Street.

Authentic rioting (not pussie* rioting, like with the Tea Parties) just pisses off the great mass of squares that comprise the political center and further entrenches the establishment. Look at what the hippies did in the late 60's; I'd argue that they were responsible for Nixon's successful presidential campaign and that Nixon set the socially conservative tone that persists to this very day.

The last riot that accomplished anything was the Bonus Army during the Great Depression, and the circumstances were fairly unique to that era. Frankly, the benefits given to vets since WW2 have been so generous and the old tradition of the wartime bonus has faded so far from cultural relevance that I can't imagine that kind of thing ever happening again.

[barracuda]

Authentic rioting (not pussie* rioting, like with the Tea Parties) just pisses off the great mass of squares that comprise the political center and further entrenches the establishment. Look at what the hippies did in the late 60's; I'd argue that they were responsible for Nixon's successful presidential campaign and that Nixon set the socially conservative tone that persists to this very day.

I would argue that Reagan did more to set the socially conservative tone in this country. He successfully brought conservative and fundamentalist Christians into the Republican fold and empowered them as a political force. Nixon was more of an old-school conservative and would be considered moderate to liberal based on today's standards. Consider that he started the EPA, signed the Clean Air Act Extension of 1970, called for national health insurance, and supported affirmative action, to name a few.

I bought mine about a year ago. Only paid a little over $200 for it, though, as it was a Chinese-made clone of the Remington 870.

While much of the blame for the "lost decade" is rightfully pointed at our corrupt financial system, I have to suspect that globalization has also played a significant role. I think the incredible shift of money and production from wealthy countries to the developing world has especially affected the middle class in this country and plays a part in the zero job growth of the last ten years.

[TheNiche]

I would argue that Reagan did more to set the socially conservative tone in this country. He successfully brought conservative and fundamentalist Christians into the Republican fold and empowered them as a political force. Nixon was more of an old-school conservative and would be considered moderate to liberal based on today's standards. Consider that he started the EPA, signed the Clean Air Act Extension of 1970, called for national health insurance, and supported affirmative action, to name a few.

In the midst of a growing counterculture, Nixon was the vote for law and order. His position was amplified by comments made by Spiro Agnew, his VP.

While much of the blame for the "lost decade" is rightfully pointed at our corrupt financial system, I have to suspect that globalization has also played a significant role. I think the incredible shift of money and production from wealthy countries to the developing world has especially affected the middle class in this country and plays a part in the zero job growth of the last ten years.

Production, yes. Money...not so much. It just gets lent back to us at artificially low interest rates such as induce consumption in lieu of investment. And this is a wrinkle in the story that has yet to unfold. And as for its impact on the middle class, its something of a wash; you have to weigh job losses in certain sectors against lower consumer prices and cheaper credit. I could bring Ricardian theory into the discussion, but that kind of thing rarely goes over well on this forum, so let's not bother.

[N Judah]

If people ever get worked up enough for armed insurrection, the powers-that-be will just legalize marijuana.

[BryanS]

In the midst of a growing counterculture, Nixon was the vote for law and order. His position was amplified by comments made by Spiro Agnew, his VP.

Production, yes. Money...not so much. It just gets lent back to us at artificially low interest rates such as induce consumption in lieu of investment. And this is a wrinkle in the story that has yet to unfold. And as for its impact on the middle class, its something of a wash; you have to weigh job losses in certain sectors against lower consumer prices and cheaper credit. I could bring Ricardian theory into the discussion, but that kind of thing rarely goes over well on this forum, so let's not bother.

And how much longer do you think that is going to last?

And how do you "induce consumption in lieu of investment" when the prime rate hits 18+%?

We've already repeated history with an unemployment rate exceeding 10%.

Next, will be high interest rates. Insanely high.

Hopefully, ridiculously higher rates will break the back of our consumption-based economy and force us to live right, for once.

[BryanS]

While much of the blame for the "lost decade" is rightfully pointed at our corrupt financial system, I have to suspect that globalization has also played a significant role. I think the incredible shift of money and production from wealthy countries to the developing world has especially affected the middle class in this country and plays a part in the zero job growth of the last ten years.

Bingo.

And as globalization continues... pretty soon all American jobs can be outsourced, not just the blue collar labor jobs to build cheap junk. Who needs American financial/business professionals - when Indian replacements will do? IT help desk? India. But move it back to the US, because of the language barrier. No, no, no... screw it. Move it back to India, it costs less. Let the customers eat cake if they can't understand broken English. No need for high-dollar American engineers. Just out source the engineering to a Pakistan firm. Who needs American doctors? The South Koreans can build tele-robotic systems (located in American hospitals) that can be operated remotely by lower-paid Mexican doctors, in Mexico. Who needs American-made Levis? Make those in Mexico too.

The standard of living in all these poorer countries will rise dramatically. From grass huts, to nicer grass huts. And if we ever want to stay competitive, in this country... and compete in that kind of global market... we'll all have to get used to living in nice grass huts vs. our palatial 3-2-2 1800 sq ft homes with indoor plumbing. Because that will be all we can afford in the new world economy, working for a fraction of our former salaries. Everything reverts to the lowest common denominator. And that's going to suck, for us.

[TheNiche]

The standard of living in all these poorer countries will rise dramatically. From grass huts, to nicer grass huts. And if we ever want to stay competitive, in this country... and compete in that kind of global market... we'll all have to get used to living in nice grass huts vs. our palatial 3-2-2 1800 sq ft homes with indoor plumbing.

You don't travel internationally much, do you?

[RedScare]

Actually, this will break the back of the consumption based economy...

http://www.denverpost.com/ci_14112108

About 6 million Americans receiving food stamps report they have no other income, according to an analysis of state data collected by The New York Times.

In declarations that states verify and the federal government audits, they described themselves as unemployed and receiving no cash aid — no welfare, no unemployment insurance, and no pensions, child support or disability pay.

Their numbers were rising before the recession as tougher welfare laws made it harder for poor people to get cash aid, but they have soared by about 50 percent over the past two years. About one in 50 Americans now lives in a household with a reported income that consists of nothing but a food-stamp card

Read more: http://www.denverpost.com/ci_14112108#ixzz0bcPhFLSh

[N Judah]

How so? I see it the exact opposite way.

[RedScare]

6 million people with absolutely no money whatsoever will stimulate the consumption backed economy? Perhaps you could explain how a person without a dime in his pocket can stimulate an economy.

[TheNiche]

6 million people with absolutely no money whatsoever will stimulate the consumption backed economy? Perhaps you could explain how a person without a dime in his pocket can stimulate an economy.

His criticism of your earlier statement is valid, but I think it's because you're each looking at the issue from different rhetorical perspectives.

When government takes resources from households with earnings and savings by way of taxes or crowds out the market for debt that would've otherwise been allocated to private users (whether for consumption or investment) and transfers those resources to households without money in their pockets, the recipients consume 100% of those resources (and consume disproportionately high levels of imported goods)--whereas the donors would've consumed <100% of those resources and saved (i.e. invested) the remainder. To the extent that the ratio of consumption to investment is a problem independent of the aggregate consumption level in and of itself, poverty and government programs that are associated with alleviating it only exacerbate that problem.

[RedScare]

Whatever dude.

The average family receiving food stamps gets about $227 per month. Only you, and perhaps N Judah, could turn $227 worth of food stamps into a symptom of the consumption driven society.

[BryanS]

You don't travel internationally much, do you?

Enough to know that I don't want my standard living to decline to those levels, in those other countries. The working class in those countries, not the elites. But that's where we're headed.

Maybe we were wrong to destroy the unions in this country. All they ever wanted was a decent shot at the American Dream. Trying to maintain a middle class way of life.

But that was just too much to ask.

Look for the union label

When you are buying a coat, dress or blouse.

Remember somewhere our union's sewing

our wages going to feed the kids and run the house,

We work hard but who's complaining.

Thanks to the I.L.G. we're paying our way.

So, always look for the union label,

it says we're able

to make it in the U.S.A.

..and now, today... we can't even buy a "coat, dress or blouse" that is even made in the USA. Outsourced to Vietnam. They have huts there.

Better move quick on this one, because it won't last! Hurry!

[N Judah]

The average family receiving food stamps gets about $227 per month. Only you, and perhaps N Judah, could turn $227 worth of food stamps into a symptom of the consumption driven society.

I don't think it's a symptom of a consumption driven society. I just happen to disagree that it will "break the back" of a consumption driven society. People on food stamps without other sources of income will just buy things on credit. The worse their credit is, the higher the interest rate, making them go further into debt.

[TheNiche]

Enough to know that I don't want my standard living to decline to those levels, in those other countries. The working class in those countries, not the elites. But that's where we're headed.

You made me do it. Theory of Comparative Advantage

[RedScare]

While the lesson in comparative advantage is nice, I am wondering why we have to tear down perfectly usable 1800 sf homes and replace them with grass huts. Wouldn't the more intelligent victim of an imploded economy simply live in the house until it crumbled to the ground 40, 60 or even 100 years later?

[RedScare]

I don't think it's a symptom of a consumption driven society. I just happen to disagree that it will "break the back" of a consumption driven society. People on food stamps without other sources of income will just buy things on credit. The worse their credit is, the higher the interest rate, making them go further into debt.

How long do you think that will last? Unless I am reading wrong, the credit card companies have been canceling cards and lowering credit limits, especially when they notice unusual spending patterns. Getting approved for new cards with no income, while not hard a few years ago, is nearly impossible now. With no income, even spending at the poverty level $12,000 would wipe out a credit card in no time. And, with no income, the card would be canceled within a month after no payment is made.

Perhaps you do not understand what Bryan and I were talking about when we referred to the "consumption driven society". We were discussing the level of consumption in the mid-2000s, where $50,000 median annual incomes were augmented by credit card spending and home equity loans. A person who has lost their home, credit cards and job, and subsists on $3,000 to $5,000 in food benefits cannot even approach that level of spending. If the percentage of people living in poverty grows large enough, the ability of the consumer economy is severely restricted. Clearly, a person with only food benefits is not buying flat screen TVs and luxury suits.

[N Judah]

My understanding is that the government has been printing lots money to replace the leverage that was lost. Once the economy picks up steam, this money will create leverage of its own. Then dollars will become at least as easy to find as they once were, making credit once again readily available. Food stamps are just the stimulus check to tide people over until then.

With regards to food stamps, I personally doubt that a family can be sustained on $277 a month. So an incomeless family must be getting money somehow. If not from credit, then I don't know where...

Edit: In response to your question about how long it will last, I think that (in the absence of another stimulus plan that actually addresses infrastructure needs) it seems to all be up to the banks right now.

[RedScare]

Judah,

From the article, it appears that most of these people are forced to mooch off of family and friends. I imagine some are homeless. But, clearly they are not consumption driven. As for the banks and their use of TARP money, don't hold your breath. They are only using that money as free loans to invest. Little of it is getting lent. It is the major reason that TARP did not work as intended back in 2008. It made sense. But, the banks and investors had other ideas.

[crunchtastic]

My understanding is that the government has been printing lots money to replace the leverage that was lost. Once the economy picks up steam, this money will create leverage of its own. Then dollars will become at least as easy to find as they once were, making credit once again readily available. Food stamps are just the stimulus check to tide people over until then.

With regards to food stamps, I personally doubt that a family can be sustained on $277 a month. So an incomeless family must be getting money somehow. If not from credit, then I don't know where...

Edit: In response to your question about how long it will last, I think that (in the absence of another stimulus plan that actually addresses infrastructure needs) it seems to all be up to the banks right now.

But it's not an issue of credit being readily avaialable, rather jobs and job creation.

I would call the outlook bleak:

http://www.bls.gov/oco/oco2003.htm#occupation_d

Look at the table for occupations with the largest numerical growth, and how the majority of those jobs are low-skilled, low wage.

For those able to get a higher skill/wage job, the increased cost of higher education creates a signifiant debt burden--which is also a significant impediment to re-training that I rarely hear people discuss. For a former union manufacturing worker to get a new skilled job at a middle class wage, he or she has to go back to school at significant cost, not only the cost of school but possilble opportunity cost of lost wages (albeit low) that could be had. A country full of home health care aides and cafeteria workers cannot sustain the consumer driven economy of the past 20 years, regardless of whether banks make easy credit available again to the higher income brackets. The middle class is not just getting squeezed, it's getting squeeezed out of existence.