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How the Middle Class Is Shrinking
Tweet Share on Facebook October 15, 2010 Comment (86)Woodstock. The moon landing. The escalating war in Vietnam. The year 1969 was momentous enough, yet in retrospect it seems to have represented one additional pivot point in U.S. history: the high-water mark for the middle class.
[See 12 ways to stop America's decline.]
As America limps to the end of the first decade of the 21st century, the middle class that once formed its core strength seems to be in tatters. The manufacturing jobs that once helped millions get ahead have been in sharp decline for a decade, and now number one-third less than they did in 2000, despite a growing population. Wages have fallen as jobs have migrated overseas, with the typical family's income, after inflation, down 5 percent since 2000. News headlines warn that the middle class is becoming "extinct" or being "wiped out of existence." Elizabeth Warren, the head of the government's new financial watchdog agency, has been warning of a middle-class meltdown for a decade, and said recently that "the system is broken and it's crushing families all across this country."
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Leadership Lessons From the Chilean Mine Rescue
Tweet Share on Facebook October 13, 2010 CommentGood news is inherently satisfying, but when things go right it's also a stark reminder of the many things that don't.
[See 12 ways to stop America's decline.]
The remarkable rescue of the Chilean miners trapped 2,000 feet underground for 70 days is obviously one of the more uplifting events in modern memory. The story could get a bit seamier as an unblinking media probes every knowable detail and various back stories emerge. But the rescue seems to be an unqualified success that will probably be intently studied for leadership and command-and-control takeaways. Here's a first take on a few of the lessons the Chilean operation could teach American business and political leaders:
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How to Fall Out of the Middle Class
Tweet Share on Facebook October 12, 2010 Comment (7)There's a vast library of formal research and folksy advice on how to get ahead. Now there's an unfortunate new corollary to that field of study: how to fall behind.
Nobody wants to, of course, but a brutal recession and hollow recovery have hammered away at Americans' living standards and pushed many people down the socioeconomic ladder. Real median income has fallen by more than 4 percent since 2007, to just under $50,000 per household. That means the typical family has less money, after inflation, to pay for food, healthcare, housing, cars, education, and everything else they need. Record numbers of Americans receive food stamps and live below the poverty line, a clear sign of downward mobility. Columnist David Brooks has identified a new social stratum: the formerly middle class. Arianna Huffington calls it "Third World America."
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15 Cars Fueling Detroit's Revival
Tweet Share on Facebook October 12, 2010 CommentTwo years after the domestic auto industry collapsed, Detroit is returning from the road to perdition. Government bailouts of General Motors and Chrysler obviously helped, but Detroit is also winning customers with must-have cars emphasizing style, fun, and even fuel economy. Here are 15 cars fueling Detroit's revival:
Ford Fiesta. (Starting price: $13,320.) Detroit neglected small cars for years, but has finally gotten religion. This chipper subcompact started as a hit in Europe, and Ford wisely brought the car to America this year. Crisp performance and a comfortable cabin will leave drivers feeling like they underpaid for a ride that gets average mileage in the mid-30s.
[In pictures: See the 15 cars driving Detroit's comeback.]
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Video: How Ordinary Folks Can Fix America
Tweet Share on Facebook October 12, 2010 CommentI appeared recently on ABC News's Good Money program to discuss how ordinary people can get ahead in a tough economy. Here's the video:
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How Unemployment Will Swing the Elections
Tweet Share on Facebook October 8, 2010 Comment (6)When President Obama took office in January 2009, the economy was spiraling into a black hole and something needed to be done. Obama's economic team predicted that if Congress passed a huge stimulus plan, the unemployment rate, then 7.7 percent, would drift up to about 8 percent, then start to decline. By the time of the midterm elections in November 2010, it would be at a manageable 7 percent or so.
[See 12 ways to stop America's decline.]
Obama got his stimulus plan, of course, but on Election Day in November, the unemployment rate will be 9.6 percent—nearly 3 points higher than what Obama said it would be. By most accounts, it will keep going up for a while and probably peak above 10 percent in 2011. Obama will be extremely lucky if it's back to 7 percent by the time he runs for reelection in 2012.
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The Myth of Disappearing Prosperity
Tweet Share on Facebook October 6, 2010 Comment (46)The American Dream is in rehab. Unemployment is way too high, the poverty rate is going up, and family income has fallen over the past few years. The bottom line for many families is that it feels awfully hard to get ahead.
[See 12 Ways to Stop America's Decline.]
But America has not become some capitalistic wasteland where ambitious strivers lay spent and broken. It remains one of the most vibrant places in the world. Opportunity exists and prosperity is still attainable. It's harder to find, but gloomy headlines and fear-mongering politicians are exaggerating the death of the American Dream—and creating some misimpressions about how we attain the good life. Here are four bogus assumptions contributing to the national malaise:
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Why Detroit's Cars Are Outshining Japan's
Tweet Share on Facebook October 6, 2010 Comment (13)It's cute. Fun. Green, even. Honda's new CR-Z is the first hybrid sports car to hit America, with frisky handling, modish looks, and mileage in the mid-30s. In a market cluttered with me-too imitators, it's a genuine original.
[See 15 cars fueling Detroit's revival.]
But get out your camera if you spot one: They're likely to be scarce on American roads. Even though it's derived from Honda's popular Fit subcompact, the CR-Z is an innovation without much of a market. Since it's a two-seater, the CR-Z will only appeal to singletons or families with at least one other car. It has less power than competing sports cars and gets lower mileage than other hybrids, prompting some critics to wonder, what's the point? "The CR-Z is not a bad car," says website Jalopnik. "But there's something missing here — it lacks a certain Honda joy." For Honda, such faint praise is a damning indictment.
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How TARP Doomed the Democrats
Tweet Share on Facebook October 1, 2010 Comment (9)Save the economy, and get voted out of office. How does that happen?
Here's how: In the midst of a severe financial crisis, orchestrate a rescue plan that's too complex for ordinary people to understand. Explain it poorly. Overpromise results. Ignore the politics of it. Make fairy-tale assumptions about prolonged bipartisanship. Most importantly, forget to toss some swag to the little guy.
