Peter Schiff on America's Middle Class

[bjl584]

http://www.marketwatch.com/story/peter-schiff-on-americas-middle-class-crisis-we-used-to-be-the-envy-of-the-world-2017-04-24

Peter Schiff on America’s middle-class crisis: ‘We used to be the envy of the world’


Published: Apr 25, 2017 7:58 a.m. ET

This high-profile market pundit says U.S. living standards have been eroded

U.S. economist Peter Schiff says there’s been a reversal of fortune for middle-income families in the U.S.

By

Quentin
Fottrell

Personal Finance Editor

The Pew Research Center, a nonprofit think-tank in Washington, D.C., released a major report Monday on America’s shrinking middle class. Peter Schiff, the chief executive of Euro Pacific Capital, and a market pundit who often espouses what critics describe as a bearish outlook for the equity market, says the middle class has been gutted by over-regulation, an escalating cost of living and stagnant wages. This interview has been condensed for space:

MarketWatch: You’re not exactly optimistic. Is that a fair assessment?

Peter Schiff: The American middle class used to be envy of the world. It was a byproduct of economic freedom. We had a very dynamic free market economy and limited government. People were out there pursuing their own self-interest and creating employment opportunities. We had a very upwardly mobile economy and that peaked around the 1950s when the typical middle class American family consisted of a father with a job and stay-at-home mom who took care of the kids.

Generally, middle-class American families had help at home. They didn’t necessarily have two cars. But they owned the one they did have. They didn’t have credit-card debt. They had ample savings. This was true even if the husband didn’t graduate from high school. Even if he had a blue-collar job, he could support his wife and family. And they paid off their mortgage.


MarketWatch: It’s hard for even dual-income families to make ends meet in many U.S. cities. Even people making six figures in New York have a hard time making ends meet. That would be an absolute luxury anywhere else, right?

Schiff: By the time people retired 50 years ago, they were out of debt. Not today. A school teacher would go to America and be a big shot because he had a lot of money. The cost of living wasn’t as high. Today, it’s changed dramatically. The bar has been lowered dramatically. The middle class today would be poor by the standards of the 1950s. Today, with two people working they would still live paycheck to paycheck.

By the time they pay for day care, it wouldn’t make any sense for both parents to work. Half of the money goes on taxes. Most women want to be with their kids, especially when they’re young. Today, you don’t even come home from school because you go to after-school as both your parents are working.


MarketWatch: What do you believe is driving the pressure on today’s middle-income families?

Schiff: Today, people have lots of consumer debt, auto loans and student loans. Not only do people not have savings, they’re loaded up with debt. They have no real chance of retirement. People have more TV sets and cell phones. They don’t travel as much as they did. They don’t have as much leisure time. A husband would usually come home to a cooked meal. Now he has to help make the meal.

Families are smaller. They can’t afford to raise their kids or send them to college without taking out a lot of student debt. It’s too expensive. People are getting married later in life and many don’t get married at all. We’ve lost the free-market principles that gave us the free market in the first place. We have lots of regulation, higher taxes, much bigger government and a much smaller middle class.

Remember “The Brady Bunch” TV show? That 1970s family had a full-time live-in housekeeper called Alice. Mrs Brady worked at the PTA and did community work. She didn’t clean her own house. That was middle class. Now you have to be very rich to employ a housekeeper. Everything it meant to be middle class has changed dramatically.”

[Guppy Tender]

Nothing really said there

After reading this article I really can not say I learned much.

The article just says that today people are worse off than they were 50 years ago, but no explanation about why.

Yes, perhaps we have a few more gadgets. Today's jobs might require people to take schooling of some sort, more than was required years ago. People are choosing to go into debt(or are things really just that much more expensive).

I do think the job economy is less stable than it use to be. So lower wages, compared to the cost of living?

Even when asked straight out what he thought was causing the problem, the person being interviewed just restates the problem, and not what is causing it.

[disneysteve]

This is a pretty worthless article. Saying that things are different in 2017 than they were in the 1950s is just stating the blatantly obvious. And I don't get the Brady Bunch reference either. I grew up in the 70s. I don't know anyone who had a housekeeper and I'd say we were all middle class. A cleaning woman maybe, but not a live-in, full-time housekeeper. That was for the rich back then, too.

Lifestyles are dramatically different than in the 50s. I have no doubt that a family could live just fine on one income if they would scale back to the simpler lifestyle that was prevalent back then but good luck finding people who want to turn that clock back.

[bigdaddybus]

What I always find interesting about articles comparing today vs yesteryear is.....

Today the upper class is bigger than before
Today the middle class is smaller
Today the lower class is larger

Its like people only look at this ^^^

But the fact that upper class growth has exceeded lower class growth, basically more people moved from the middle to upper than moved from the middle to lower. But this is never discussed as a positive

[disneysteve]

But the fact that upper class growth has exceeded lower class growth, basically more people moved from the middle to upper than moved from the middle to lower. But this is never discussed as a positive

Great point. If the middle class is shrinking because the upper class is growing, that's not really a bad thing.

I've never considered myself to be upper class but I can certainly say that my family enjoys a far greater lifestyle than I had growing up so there has definitely been upward mobility for us.

[97guns]

The article speaks of debt and the debt based economy/society that we presently live in, it wasn't there in the 50's.

there wasn't child care like we see today, it's a become a thriving business based on need and the need for 2 incomes

[disneysteve]

there wasn't child care like we see today, it's a become a thriving business based on need and the need for 2 incomes

But is that "need" self-imposed?

I once had a good friend tell us, "I have to work. Otherwise, we couldn't afford daycare." She saw nothing wrong with that statement. It just never occurred to her that if she stayed home, she wouldn't need daycare.

[PeggyHefferon]

After reading this article I really can not say I learned much.

The article just says that today people are worse off than they were 50 years ago, but no explanation about why.

Yes, perhaps we have a few more gadgets.

American's just forgot there are 24 hours in a day. I can use one of those gadgets and easily make an extra $25k a year on top of my full time job.

[msomnipotent]

http://www.marketwatch.com/story/pet...rld-2017-04-24


Remember “The Brady Bunch” TV show? That 1970s family had a full-time live-in housekeeper called Alice. Mrs Brady worked at the PTA and did community work. She didn’t clean her own house. That was middle class. Now you have to be very rich to employ a housekeeper. Everything it meant to be middle class has changed dramatically.”

I actually choked on my coffee reading this. Who on Earth would honestly think that having a live-in housekeeper and a housewife that didn't work would be considered middle class in any day and age???