The second chapter of (Not) Keeping Up With Our Parents seems very politically slanted.
Last week I began a series on the book (Not) Keeping Up With Our Parents by Nan Mooney. To read my thoughts on the preface and chapter 1, visit last week’s post. We’ll look at chapter 2 today.
I didn’t think it was possible for me to disagree with Nan Mooney more than I did last week. I was wrong. Chapter 2 of (Not) Keeping Up With Our Parents is entitled From the New Deal to the New Economy. It’s basically a history of the middle class.
How could I disagree with a history lesson, you ask? It was the way it was presented. To summarize:
- FDR rescued the people of the U.S. from the Great Depression with all his social programs.
- President Reagan is pretty much responsible for the shrinking of the middle class, because he gave tax breaks to corporations.
- President George W. Bush made things even worse for the middle class.
Now I don’t think any of the above Presidents are (were) without fault, but I don’t think any one of them is single handedly responsible for saving or destroying our society.
Times are Changing
In the last 100 years, our society has moved from agriculture to manufacturing to the information age. People went from owning farms to working for employers, and now it seems the pendulum is swinging back towards self employment.
We can blame government, but the truth is that even if government were to stay the same, technology and knowledge change, making old ways of doing things obsolete.
It used to be nobody could afford a computer. Now almost everyone has them. It’s easier to contract work out to people working at home. It’s easier to work with people overseas.
Even if all the policies from FDR’s New Deal had remained in place until today, I think we’d still be facing the same problems with rising costs and stagnant salaries. Times change.
Values Changed
There was a part of the book that I completely agreed with. Mooney also talked about the change in values, and how that has played into the decline of the middle class.
In post-depression days, people were afraid of debt. They were afraid of not having enough, so they practiced thrift and frugality
As the middle class emerged, affording luxuries like cars and televisions became the norm. Mooney says,
Trends like buying on credit and keeping up with the suburban Joneses found their legs during the ’50s. Debt became less frightening than it had been for those weaned on the Depression as Americans experienced a surging confidence in the stability of their economic future.
Consumerism came into it’s own during this period, feeding off a thriving new middle class that suddenly had the means to want and purchase and want even more. pp. 23-24
We became a society that defined ourselves by what we have, rather than who we are. The goal became to earn money for the sake of having a lot of money. Little thought was given to a greater life purpose.
My Opinion
Times change, and we have to constantly be prepared for those changes. Throughout history we have come up on shifts that hurt our overall economy.
I feel we’re headed for some tough financial times. Prices are rising, our health insurance situation is a mess, and job security isn’t what it used to be.
Rather than thinking of it in terms of good or bad, though, I prefer to think of it in terms of a shift in society. Consumerism has become excessive, but in response, there is a growing movement toward environmentalism and simplicity.
Working for big corporations doesn’t give a person the job security or benefits that it used to. In response, there’s a shift toward not being dependent on an employer for your financial well being. I have a feeling that a change in insurance policy will soon (hopefully soon) follow, to cover those who are self-employed.
Rather than blaming government, I think it’s more important and more productive for individuals to do what they can to weather the change in society as best they can. For me, this means getting rid of debt, simplifying life, and building multiple streams of income, so if we get caught in the middle class crunch, we have something to fall back on.
Next week I may tackle more than one chapter. Though I think (Not) Keeping Up With Our Parents is a thought provoking book, so far it’s been pretty negative. And I’d rather not draw this series out over too many weeks, if it’s going to be negative every week.
What do you think about the series? What do you think about the rise and fall of the middle class? Can we attribute it’s growth and decline to government alone? Do you think changes in society have anything to do with it? Where do you see our nation going from here?
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I do agree with you; history isn’t as easy as pointing to one event or person and that being the only cause of something.
It’ll be very interesting to see where the middle class ends up in a few years, though it’s looking like things will get worse before they get better. For all the people downgrading and living simply, there are still quite a few who are firmly set in the consumerist mind frame.
I agree with you in that we cannot blame governments etc for the economic changes. We need to make sure that our finances are in good order so that we are prepared for any economic climate.
Once again, thank you for the insight. I think you’re correct in your observations about this book. I’ve actually been grumbling about the lack of personal responsibility I’m finding in some of these personal finance books. It is interesting to me that people who approach personal finance from a Socialogical perspective seem to have vastly different opinions than people approaching it from the “been there, done that” perspective.
Good post and that comes from a person who would love to blame G.W. Bush for everything:) No, seriously, couldn’t agree with you more on your view of history and how it affects (or doesn’t) affect our finances but rather how we are what affect our finances. I do believe there are people who are caught in the social ills but overall most of our problems stem from personal responsibility – I know that all that has been bad and good about my finances has stemmed from my personal response to how I manage money. I think it is okay to have a negative review, I learned from this post even though you didn’t agree with much of the book…
I agree with you that we can’t blame just one person or event in history that has caused the issues that the middle class is facing. I do think that the government has played a role, but society has also made decisions financially (and otherwise) that have affected our economy. Rather than try to blame someone, people need to take responsibility for their own actions.
Good post. I think what we hear from the media has changed our thinking about personal finances (instant gratification), and I think out government has tried to influences us in our personal finances by the law they have made. Bottom line we have changed from what our parents knew and did.
This is very interesting–especially in contrast to the book I am reading: Liberal Fascism which discusses a lot of those same points in a different light. I think a lot of it comes down to attitude about debt and credit and lack of personal responsibility.
Great post – would love to keep reading your reviews of this book. I think a more interesting question is why did we loose personal responsibility? There are times that we have no control over our economics – crashes on Wall Street, the downfall of big corporations (i.e. Enron), record setting gas prices, etc. These are events that no ordinary individual can effect and are often caused by big business/the government. The lack of control can be overwhelming, whether you’ve been laid off or your 401k was demolished by the latest stock market crash. It’s easy to see how people start and keep a blame game going, but that’s a vicious cycle to enter into.
I’m one of the lucky few. I was raised in poverty or at least lower middle class and now live in what amounts to upper middle class, at least here in Iowa.
Lynnae, Your review and perspective on this book is terrific – and thought provoking.
Many people think building net worth is all about accumulating assets. They often forget that it’s also about reducing (and eliminating)liabilities. Too many “gurus” out there teach their minions to about use leverage (i.e. debt or “other people’s money)to buy assets and therefore build their net worth, faster. (I’m embarassed to say that I was one of those minions!) So, much of the problem has been the propagation of these faulty ideas.
The other point you make well is that job security as our parents knew it no longer exists. I’d like to see people start thinking in terms of “income security” vs. job security. The only type of income security is income that comes from more than one place – i.e. multiple streams as you wisely point out.
I look forward to your next post!
Kevin
Well, I like your views on the book, though I think it’s too liberal for my taste. I prefer conservative. I think the book is harsh towards the presidents–I believe that George Bush has done a lot to protect and help our nation. The war and increased security have been necessary, so that we can enjoy our freedom.
Also, while there are some hard things financially in the country going on, as a believer, I think as long as we trust God and do what He says with our money, we will be taken care of…I actually believe that much more abundance is coming in the near future for us, because of what’s going on in the world. As long as we are good stewards and obey when we’re to give, then we’ll reap the harvest, so to speak.
There is a verse in the Bible that talks about the wealth of the wicked being stored up for the righteous. I believe it.
I’m not reading the book; however, I can say with confidence (and for the record I am an agnostic, moderate democrat/liberal republican) that it’s pretty well documented – way beyond this book – Reagan and both Bushes’ negative impact on the middle class. I am living it. The best years of my life were when Clinton was president. Just thought I’d represent the other side since there seem to be a lot of commenters agreeing with what seem to be pretty conservative views.
Wow. Lee, you need to wake up. I cannot believe there is anyone left who still thinks GW did anything good for our country. Katrina? The horrible deficit? This pointless war that has nothing to do with terrorism or our safety? What rock have you been under? Even McCain can’t stand the guy.
Our society has gone from a saving society to a spending society and it has hurt many families. I was born in 1950 and my mom and dad lived paycheck to payckeck but we were out of debt and happy. They did not have insurance and we went to the doctor only when we were really sick. Mom paid for the visit when we went. Luckly none of us needed any hospitalization during the period when they didn’t have insurance. Back then people had savings accounts and put money back for a “rainy day.”
Now days people spend every penny and have very little money saved. Many of them are in debt up to their eyeballs and will never see the light of day. They buy houses they can’t afford and go on vacations they can’t afford and buy all the new gaggets that come on the market.
Lucky for my family we have spent wisely, saved money and are out of debt except for the house. Our cars are paid off and I don’t charge anything that I can’t pay off at the end of the month. At one time we had $ 12,000. in credit card debt but I got that paid off and have made a promise that I won’t let that happen again.
Living frugally can be easy if you just take the time to learn. I never pay full price for meat, I buy it out of the “day old bin” and it is good. I freeze it and use it the day it is thawed. There are soooooo many ways to cut expenses and live withing your means……
We can’t blame anyone but ourselves for the messes we make…. Enjoyed reading this post.
Although I am no economist, I have seen figures that say that the transfer of wealth to the middle class started by FDR’s economic policies was undone by the fiscal policies of the Reagan era and beyond. Part of the prosperity of the post-war years was aided by the government in terms of the G.I. Bill, enabling g.i.s to get college educations; Vet mortgages for houses; and even Social Security, which enabled their parents to live independently. True, it was a time of general prosperity for the U.S. Our real level of buying power has been in decline for the last 25 years, masked by two-incomes due to women in the workplace – and more recently by cheap Chinese imports. Perhaps pointing an historical finger won’t do much good in one’s day-to-day financial conduct – but it will explain why we are living much different lives than our parents did. Yes, I do mourn the days of the old suburban house…and we didn’t have to go into perpetual student debt for our colleges, because my father could afford to pay for it – now almost unheard of. The fiscal policies of the last 25 years have not emphasized the wellbeing of the middleclass as we understand it, and it cannot be contested that the assets of the nation are held in fewer and fewer hands. The benefits we have taken for granted as part of our American inheritance – such as a good free public education (and even free libraries and museums) are being eroded everywhere we look. And I won’t even go into the health care crisis. As a former sometime student of sociology I find it instructive and even consoling when I realize that a significant portion of what might be considered a personal financial dilemma is a systemic one. As a pragmatist, I will keep my head to the ground and pinch my pennies, as I have become very good at, and generally get the most for my money. But I see increasing financial frivolity, which is bound to end badly, as the economy falters. And if the problems were systemic – where is the overall societal/governmental attempt to remedy them? I have seen the corporate sector line its pockets and engage in short-term and irresponsible practices (note the sub-prime debacle) which are damaging to the overall commonweal – altho some people on the pyramid made money if only in their generous salaries. Democracy in America depends on a strong middle class. Without it we have oligarchy and we will drift into a condition more like Mexico, with a small moneyed elite and a large downtrodden class, and a tiny middle, which doesn’t bode well for social stability. Wake up, you guys! We turned around the excesses of the Gay 90’s and their robber barons with the Progressive Movement of the early 20th Century and we can do it again. In the meantime, keep pinching those pennies.
Great thoughts, I got a copy of the book and plan to review it myself…if only I could find the time to read it!
Politics aside, I do feel that something has gone wrong with the middle class…they want to be rich, even if it means being in debt up to their eyeballs they seem to want more more more.
I can’t wait to hear more about the book and read it myself!
Take Care
LJ
This is a great analysis of our middle class today, and indeed of our entire society. I agree wholeheartedly that the government can’t be held responsible for our individual lives – we have to take care of ourselves the best we can and the government should be there to help us when we need it. If we all stand with our hands open to the gov’t, calling for “more! more!” while doing nothing ourselves but moping about how we’re getting nowhere, that will be to our ruin.
Thanks for this thought-provoking review! I don’t mind if you drag the review out over many weeks – as long as the book keeps you writing like this! Thanks :)
First of all, I don’t thin k we are having a “middle class crunch” I think we are having a DEBT crunch. The government shares part of the blame (not necessarily the president, but the govt as a whole) with irresponsible spending and borrowing with little regard to where the money will come from when the bills come due. These are our “leaders”?
The Federal Reserve also shares the blame for the current economic situation. Artificially low interest rates spurred on irresponsible borrowing, and now the FOMC’s solution is to lower the interest rates even more … and all the while our dollar is worth less on the global market and inflation is taking a noticeable bite out of the average person who actually does buy food and gasoline.
This book you are reading sounds very negative. I would have thrown it across the room at least a few times by now. Elizabeth Warren’s books also sound quite depressing and negative. The problem is, for a lot of people these books are their reality, because they haven’t been taught a better way. Marketing and ignorance are taking their toll on our current society with a vengence!
I don’t have the answers for the country or society, but I know I (edit) sure have the answers for myself and my family: no more consumer debt and build up a big emergency fund regardless of how bad Panic Boy Ben (Bernake) screws us on the interest rate.
Of course, if it gets too much worse, I may stimulate the economy by buying guns, ammo, and canned food … then set up a good Army-style perimeter around my property.
LOL, I just have to respond to Debt Free Revolution-
I agree and I look forward to seeing pictures of your militia-esque perimeter :)
Hello everyone,
I’ve enjoyed reading the first two chapter reviews and everyone’s comments, and I’d like to add a thought or two of my own.
Most of the definitions of the middle class in the discussion so far have focused on property and finances: What do the middle classes own and what can they afford?
I would like to suggest, that membership in the middle class is not based on income and assets, but on a set of values specific to this class: Liberal Arts education (as opposed to a business track degree), life-long learning (reading, visiting museums, historical sites, evening and weekend classes), participation in civic affairs, contribution of time and talents to community projects, an interest in other countries and cultures, ample free time spent with one’s children, active involvement in the children’s education (reading aloud to children, introducing them to the library, helping them with their homework, participating in PTA activities), a healthy amount of self-respect (which expresses itself in a healthy lifestyle), loyalty to family and friends, and common courtesy in interacting with neighbours and strangers.
The discription of her life made by a contributor to the discussion of the first chapter of this book, a woman named Liz, illustrates my ideas quite well.
Social class is a matter of attitude more than money.
***
It would be interesting to do a study comparing the level of civic participation in communities, and the self-evaluation of the middle class in those communities. I’d be willing to wager that communities with a high level of civic participation also have a confident and secure middle class.
Kind regards,
Joshua
Joshua,
That’s a really interesting perspective, and I think there’s some merit to your ideas. I know that I can say even when we were probably technically in the lower class, we always felt middle class. But my husband and I have always been very involved in all sorts of different things with our community and with our family.
I would love to see a study like the one you mentioned!
Cutting taxes on the richest of Americans while failing to cut, or increasing spending inevitably ends up squeezing the middle class and their kids (and grandkids…).
Once again, I agree that people have to take responsibility for their own situations. But there is no reason that EVERYONE in the richest country on Earth should not be able to afford health care, a quality education, and maybe a big screen TV.
I’m not suggesting we should all have yachts, but too many personal finance websites focus on denial of wants to bring financial harmony. But just like dieting, it doesn’t end when the debt is gone, it’s a lifelong process of denial of things that middle class people should be able to afford…
It’s too easy to draw incorrect conclusions from limited data. And it’s easy to look at only a few things in history and say it caused a certain situation.
But oversimplifying just gets us in trouble.
For instance, saying FDR rescued us from The Great Depression is tenuous at best. Some historians say his New Deal actually lengthened the depression.
Anyway, I feel like the middle class has experienced financial difficulties for reasons too many to list: pride/ego, widespread use of debt to fund consumption, inflation caused by “Easy Al” Greenspan, etc.
Ultimately, I believe the nation’s current difficulties are divine judgment for ignoring God’s law. We were sold to Babylon in 1913/1914 with the passage of the Federal Reserve Act.
On Saturday, April 26, there is a national day of prayer and repentance. President Bush will be participating. Please consider participating, too.
http://www.reigndownusa.com/
I couldn’t disagree more with this post. “Times Change” is far too simplistic a phrase to describe the current economic climate. And we can blame the government for taxing us to death. Each and every person I know going through tough economic times is doing so because of a job loss,like myself, or health issues. Yes, there may be 1% of the population who overspends. However, to blame folks who lose their health or jobs is to perpetuate the gap between the most wealthy and the impoverished. Shame on everyone who agrees with this misguided view.