21.4% is from Shadowstats.

I myself contend that the other 78% have written off the 21%, who have absolutely no money anyway. They are obsolete. More to come!

On inflation, NYT today puts college costs as up about 5%. I've always given that stat great respect as a valid index.

DOW has a clear coast. It's gonna hang on earnings and whether interest-rates hang insanely low. DOW seems largely untied from the dollar.

Non-DOW businesses are another story.

Healthcare?? I expect a bait-and-switch with slow implementation of insurance-reform-- exactly the wrong thing.

Sovereign: 21.4% is from Shadowstats. I myself contend that the other 78% have written off the 21%,

LeRoy: Oh, I don't think so. When unemployment gets this high, almost everyone is concerned about the possibility of losing their job. I still have my job, for instance, but if things continue to worsen, that will have a dramatic impact on state finances---and they might start closing schools down. There may be a small percentage of people out there, who feel so secure in their jobs that they don't give a flying rip about the 21% of folks who are unemployed or underemployed, but I'm betting that percentage is quite a bit smaller than 21%. Ordinary folks (on Main Street) are scared, and you can sense this in all the skepticism that has greeted pronouncements from the grand poobahs that the recession is 'over'.

Sovereign: On inflation, NYT today puts college costs as up about 5%. I've always given that stat great respect as a valid index.

LeRoy: Yup, college costs (and health-care costs) continue to soar. But the soaring cost of college only directly affects families who actually have children in college, or children who are college-bound in the next few years. If you're not in that category, you may not care as much about that, as you likely do about health-care costs, which can affect everybody---even the young who feel that they are so healthy that they can do without health insurance.

Sovereign: DOW has a clear coast. It's gonna hang on earnings and whether interest-rates hang insanely low. DOW seems largely untied from the dollar.

LeRoy: I must disagree with you here. In recent months, there has been a definite noticeable trend, or correlation: when the dollar goes up, the DOW goes down, and vice-versa. Since the dollar has mostly been going down in recent months, the DOW has gone very much up. A cheaper dollar makes US stocks cheaper for overseas buyers. Chinese snapping up a lot of stock in US companies these days. And earnings have been going up for many companies only because they have been engaged in savage cost-cutting. Stocks are going up even while revenues have been going down! There's your real disconnect. And it's silly to say there is any real recovery until both jobs and corporate revenues are going up.

All I said was that college-price-increases are a good inflation-index. Obviously college doesn't directly impact those not going at the moment.

Today, dollar sunk with the DOW. But that's not my point!

And the top 10% have all the money. They are very far removed from the lowest 20%. The money people don't need commerce with the 20% -- not at all. It could even go to 40% whose business has minimal impact on DOW profits. Companies outside DOW are generally more sensitive to the aggregate 80%. But 20% are again "the forgotten man," as known in the '30s.

I glimpsed a PBS story about miners in Butte Montana. It illustrated well the anti-union anti-labor Amurrikan mentality that has almost returned. I fear that USA is going back to its roots. We'll see if armed goons and Federal troops wind up in new repressions. Reagan almost went there.

My understanding is that private colleges went up somewhat less than the average while public colleges went up more since hard-pressed states allocated less money to them. Only a detail, but a detail worth noting. It, of course, means that the price increase was biased against the poor.

Sovereign: All I said was that college-price-increases are a good inflation-index.

LeRoy: No, they're not. College price increases would be a good index of how fast the cost of attending college is going up, and of nothing else. College price increases would tell you literally nothing about what was happening to the price of shoes, of cheeseburgers, of ice cream, of haircuts, of big-screen TVs, of a weekend at the hospital or a weekend at a beach resort, of thumbtacks or thimbles, or, for that matter, of whatchamacallits and thingamajigs. College price increases would tell you nothing about what was happening to the price of gasoline, or of new cars, or of new homes, or of average rents. All that goes to explain why constructing a plausible inflation index is as complicated as it is, at least in the real world. We're not just comparing apples with oranges, we're comparing apples with bongos and xylophones and X-rays.

Sovereign: And the top 10% have all the money.

LeRoy: The top 10% have most of the money, but it's a good thing they don't have all the money, or the rest of us would be starving. [Unless those top 10% were giving food to all the poor starving peasants, out of the innate goodness of their hearts.] About 60% of the American population is ahead of me in the income distribution, but I have several thousand dollars in the bank. Do I wish I had more? Well, you betcha, as Sarah Palin likes to say.

I have no doubt that many of the folks in that top 10% really don't care about the suffering of the bottom 10%, or the suffering of the bottom 80%, for that matter. They tend to live in an insulated world, and they almost all figger they got there on their own merits. And many of them figger they'd be even richer if the government would just close down shop and wither away.

But I believe it is simply incorrect to say that the bottom 20% have been 'forgotten'. Over the past few weeks, The Denver Post has had front-page stories on the alarming rise in childhood poverty, the difficulties of families being foreclosed on, the dire condition of food banks that give food to the destitute, and even on the plight of abandoned pets left behind by families that have lost their homes. There have been front-page articles detailing the tragic stories of people who have lost their jobs, and thus their health insurance, and then have developed serious health problems.

When these problems are appearing on the front page of the remaining major daily newspaper in a major metropolitan area, I think it is safe to say that they have not been 'forgotten'. My local newspaper [The Fort Collins Coloradoan] reported this morning that one of every five jobs in the country has been lost over the past year. It was the headline story, on the front page.

It is safe to say that virtually everyone understands that there is a massive amount of suffering right now in America. Even the top 10% understands this. They just may not care.

I think you meant to say that the price increase was biased against the middle class.

Charlie Daniels said it, in one of his songs:

The rich man goes to college, the poor man goes to work.

Not the 'country'. Sorry.

Well, some would consider you poor, and you have gone to college. In California, many who are poor by most definitions are attending community colleges, so I tend to disagree with you. If you count anyone who is stress by the cost of going to college - that is, those who are forced to borrow money to go to college - as poor, then there are many poor in college. When I was going to college, there weren't any student loans so, probably, there were fewer truly poor people attending college then.

Incidentally, Charlie Daniels seems to ignore the existence of a middle class in his song, or more likely he considered anyone who had to go to work as poor.

An index of inflation merely points to it. It doesn't measure it. It isn't a component or substitute. In college costs we get what learned people work up as a long-term composite of many factors. I note that in practice, college costs seem to reflect inflation reasonably -- like kosher hot dogs at the deli. When there are contentions about prices falling, I look at college costs as a sign that they are not falling in many areas but are rising in key items like strudel that just rose 40% (100% over 8 years).


NYT also has "entertainment" articles on the underclass's woes about once every two months. The major networks even less. Kim's ass gets more spreads.

FORGOTTEN! (not the ass).

It never was a reflexion of common interest in the first place.

The index has taken strength from job loss....wall street job losses decrease overhead and thereby increase stock value. So....starving workers equals higher dividends...nice eh?

Phil: Well, some would consider you poor, and you have gone to college.

LeRoy: Some might consider me poor now, but that is probably not accurate. I am probably at about the 40% level of the income distribution, with ~60% of Americans having a higher income. I am on the boundary between the lower middle class and THE middle class, if you define those terms by income quintiles. And since I am a high saver, I am starting to build up some significant wealth. My net worth is approaching $100,000. When people learn that, they probably would not classify me as poor anymore. [But then they see the car I drive around in, and I am back to being 'poor'. Ha.]

My father was very well-off, probably on the boundary between upper middle class and rich. At least by the time he prematurely died at the age of 52. He was a Vice President of Advertising, Sales Training, and Public Relations for three different (but related) companies at once. Don't know about you, but I count that as nine jobs. He was a workaholic.

My story shows how screwed up our 'system' is. I was a National Merit Scholar. Those things are determined purely on merit. But how much you receive for your scholarship depends on your family income. Well, they were looking at my father's income, which was quite high right before his death. But that's the thing. He died between my junior and senior years in high school. That made no difference to the people who determine such things. Hence my 'scholarship' did not even cover the cost of my textbooks.

By the time I graduated from college, I was living on bread....and water. That's it. I was buying loaves of bread, and just eating the bread, plain. Was all I could afford. I couldn't even afford butter to put on the bread.

I am aware that there are many people who would probably be called poor attending community colleges. Many are going part-time, trying to improve their position in life. But there are many more poor people who never set foot on a college campus, of any kind.

I had a more balanced diet at school, at least in the winter: I would buy bread and pepperoni and tomatoes and keep the latter two in the snow on my windowsill.

Leroy: I am probably at about the 40% level of the income distribution, with ~60% of Americans having a higher income.

I don't think you're doing yourself justice. I read that the median individual income was about $32K and the median family income about 150% of that, i.e., about $48K a year. You make over $40K, don't you, Leroy? You're probably about at the 55% percentile, I would guess.You are edu-socially upper middle class at least and economically middle. Hell, you're a homeowner!

As for moi, I made $11K working full-time, so I'm probably < the 5% percentile among Americans. But locally, I'm easily at the 90% percentile and nationally probably in the upper quartile. That gives one a good feeling, indeed, to have so many of one's brethren beneath one...

As for shares of wealth and income, the rap against Latin American countries like Brazil has always been that 10% of the country owned 90% of the wealth. Well in today's United States, the top 10% makes 50% of the income and has nearly 80% of the wealth. We're fast becoming Brazilianized...with hardly a hint of protest (so far) from the downsized masses. Maybe the latest banksters' outrages will rile up the folks out of their stupor?

At a global level, you are probably solidly in the top 10% in wealth with about three times the mean, but in the US you are, as you say, only lower middle, as mean wealth is probably $200K by now (the 2000 figure was $144K). Actually, it will be interesting to see how much mean wealth grew since 2000--if it grew at all. Taking the stock market index, there has been little growth, and taking the Case Shiller index for housing, there has been a rise of about 50% in nominal home vales since 2000. But as people have taken equity out of their homes, their net real estate worth probably hasn't grown that much since 2000. I wouldn't be surprised if mean net wealth of Americans in 2009 was only around $160K. The median is much less, of course, perhaps only $60K or so. For people in your age cohort (50s), median wealth would be higher, possibly around $100K or more?

We could use some fresh statistics.

With my annual 'bonus'.

Well that's 25% above the median--which incidentally dates from a year or two ago, but incomes haven't gone up much since then.

You also have to consider your locality and prevailing incomes in your town. I'd imagine incomes in Fort Collins were slightly above the national average. So you may in fact be quite middle class in your town. But I would add another consideration. Anyone who has the wherewithal to purchase a home is automatically among the "haves", and doubly so if he can do this on his own steam. Of course this goes for gals, too. That's impressive. I couldn't do what you have done, and this is despite voluntarily leaving a stable job which paid more in San Francisco (in 2001) than you are making today. I would probably be among the hard core unemployables were I to return to the States. But I have no debt and a house--albeit which is not in my name, but a roof over my head nonetheless. I have no debt and a quarter of a million in an IRA, plus $50K or so in cash and stocks. That's better prepared than most Americans are, and the kicker is that I probably live on less than $10K a year. So my net worth divided by my annual burn rate nearly equals my life expectancy. That's adequate wealth in my book. We should occasionally stop to count our blessings.