I thought this piece on CBS News was a quite fair reflection of what is going on underneath the 'green shoots'. I think it would do some good for those who live the NYC high finance centric lifestyle to watch such videos to see what is going on out there in the hinterlands. While I am biased being in Michigan [Jun 25, 2008: I have Michigan Economic Bias][May 15, 2009: One City Block in Detroit] , as would someone be who lives in say Nevada.... while those who live in states like North Dakota, Nebraska or in the District of Columbia are asking What recession is everyone talking about? this video is about 4 couples in an upper middle class part of New Jersey - not a place at either extreme. They reflect many of the views we've written about the past 3 years.
While many argue that what is happening to the great middle (the 25 to 75th percentile) is transitory in nature and everything will be fine once we get out of this recession I've made my thoughts known on what I see as some massive structural issues facing the country. Back in 07 and 08 I called it the pooring of America. [Dec 8, 2007: Do the Bottom 80% of Americans Stand a Chance?] Unfortunately for these 4 couples, each seems to work in the private sector ... hence, are fully exposed to what is happening in the economy. They also appear to be paying their mortgages ... hence are part of the 'sucker class' as defined by governmental policy.
Many Americans feel something is amiss but other than worrying that their children might not have the same standard of living they do, can't quite put their finger on it. Unfortunately the only response to these very real threats are masking them via easy money policies that create bubbles of the stock or real estate kind, creating temporary paper wealth via brokerage account or house ATM. [May 19, 2009: Paper Printing Prosperity Defined] (or the current version, the government ATM). [May 25, 2010: 1 in 5.5 Dollars of Income Now Via Government; All Time High] [Jun 5, 2009: 1 in 6 Dollars of Income Now Via Government; Highest Since 1929] Certainly there are solutions to the issues but acting in a pragmatic, long sighted, comprehensive manner is something that seems to be a lost art. Not to mention any such national plans similar to what the Germans employ, would be called 'socialist' in the political climate we have. So I expect us to continue lurching from crisis to crisis only fighting the fire on the couch we are sitting on while the rest of the home smolders.
- No matter where the numbers go next, the recession has redefined goals for millions of Americans, prompting CBS News Correspondent Jeff Glor to revisit four American families living on one suburban street. Jen Singer and her neighbors have waited patiently for life to get back on track. This recession has really rattled us, she said. I always assumed like every American generation that we would do better than our parents did before us, and now I'm not so sure.
- In an affluent New Jersey community, the specter of downward mobility is unnerving. We're not out of the woods by a long shot, either in the economy or our own personal lives, said Bob Schrot, Singer's next-door neighbor.
- But the mention of college, for the Davins and their neighbors, is suddenly a sobering thought. Because of the recession, Grace Davin has redefined her expectations for the future. When we sold that Cape house, that house was our college fund, and we're dipping into it now, and we have to, she said.
- The amount of money just to get a diploma and then there are no jobs, that's pretty frustrating, he said. He and his wife and Eisha Locascio are both working, but with local taxes going up and no raises in sight, they're just hanging on.
- This downward recession is very upsetting, and it's definitely becoming more of a permanent thing, Eisha Locascio said.
- One thing's for certain. No one is spending more than they have to. Jen Singer's home renovation stopped at the deck in 2008 and forget that new car. I've got a minivan that has 130,000 miles on it, and it smells like eight years of sippy cups and shin guards, and I'm hoping that we can hang onto it till it has 200,000 miles or more, she said.
Speaking of greater societal issues - the U.S. also has a higher education bubble... when the average person comes out of college with 5 figure debt, one wonders where it stops. When $80K annual tuition is the norm ? $100K? It is now reaching the point where all the years of paying down college debt will no longer be offset by the higher annual salary.
Again these are not middle class folk... this is the top 10 percentile. These are families who bought a vacation home in Cape Cod. But had to sell. You can imagine the stresses as yuo drop down the ladder to the 60th percentile... or 40th. This is the reality outside the Matrix.
Inside the Matrix ? Green shoots.