Sunday, February 03, 2008

Lies Damn Lies and Statistics

Hat tip Wagga.

We all know Fresno housing is located ground zero in the zone of total destruction so a little whistling past the graveyard is almost inevitable but...

A fact and fiction campaign
Five things candidates say about poor middle class that are myths.
By Stephen Rose
02/01/08 18:14:05

The American middle class is fighting for its life -- or at least that's what Lou Dobbs would have you believe. The CNN anchor's rants about "the war on the middle class" are probably the most prominent examples of such economic doom-saying, but he isn't alone.
Democratic presidential candidates pepper their debates with references to the assault; leading liberal thinkers argue that supply-side conservatives captured the Republican Party during the Reagan administration and implemented policies that continue to privilege the super rich today. They tell a compelling tale of middle-class decline. Pity it isn't true.
...
The middle class is shrinking.

True, fewer people today live in households with incomes between $30,000 and $100,000 (a reasonable definition of "middle class") than in 1979. But the number of people in households that bring in more than $100,000 also rose from 12% to 24%. There was no increase in the percentage of people in households making less than $30,000. So the entire "decline" of the middle class came from people moving up the income ladder. For married couples, median incomes have grown in inflation-adjusted dollars by 25% since 1979.


What a nasty lying bastard. I mean come on does he think all his readers dropped out of grade school? He "mentions" inflation but then makes his point by ignoring it.

An income of $100,000 in 1979 dollars would need $285,710 in 2007 dollars. And then we can see how much the middle class has further fallen by looking at the trend of two income households.

I'll be tearing this jerk a new one a myth at a time over the morning.

31 comments:

Agent #777 said...

I mean come on does he think all his readers dropped out of grade school?

Let me be the first to say that if it is a government school, it hardly matters if one drops out in grade school or the 11th grade.

Martina said...

Our family makes over 100K & we are totalled fuxored at the moment.

We are not house poor.

We probably had too large of a litter ( 3 kids)

Inflation is killing us - gas, energy food expenses up & these things are being factored into other expenses (increased tuition costs, fees)

Karl said...
This comment has been removed by the author.
Peripheral Visionary said...

I am single, I have a graduate degree and make more than the national (and regional) median income, and yet I am priced out of the one-bedroom condo market in my area.

Seriously, what is happening to this country? Asset inflation was fantastic for those who had assets to begin with, but for those of us starting out with nothing, it's been absolutely terrible.

w said...

Is it any wonder that the leading presidential candidates are pretty left leaning? For McCain to be the possible republican candidate shows how many moderate conservatives have seperated from the wall street conservatives. And don't forget the Ron Paul protest voters. Or am I misreading this?

w said...

Rob, Nine Princes in Amber is such an awesome series. I have read and reread it several times. The first time I read it I listened to the Lose Your Illusion albums while doing it, so when I hear those songs now I always get flashbacks to those books. The way the first book unfolds is one of the best plot devices I have ever enjoyed. Another favorite is the Bourne Identity for the same reason.

Rob Dawg said...

W,
Someone's been reading my calculated risk posts. Thanks for the compliment. I've got the books on audio. Time to put them on the iPhone.

As to the candidates. Think about a hawkish, rich, elitist, from a religion with funny beliefs who is strongly anti-abortion. John Fitzgerald Kennedy. That's how far left this country has swung, JFK is too conservative for the Republican 2008 nomination.

chickenlittle said...

Isn't it ironic that there is a candidate being touted as a "JFK" by members of the Kennedy family!

I hope the present "Coultergeist" sweeping conservatives will spread to the Dems- forcing either Hillary or Obama to disown the antiwar libs.

If only people could muster half the positive energy they reserve for hatred.

Property Flopper said...

Someone mentioned Ron Paul not being a valid cantidate. Well, I for one want to dispell this - here is a wonderful endorsement of Ron Paul by someone we all know and love:

"I've been waking up to a lot of things like the 911 truth, the (mostly) fake war on terror, our fiat money system, manipulation by the fed, the Builderburg Group, the plans for North American Union, etc. I even become a bit of an activist to get Ron Paul elected for president. He may be our last hope to get this country back to the constitutional roots."

Oh wait, that's know and LOATH. Yup, Casey Serin is a Ron Paul fan. That little blurb was from his e-mail the other day.

Just for humors sake...

Rebecca said...

"...the Builderburg Group..."
I know it is too much to expect, but at least SPELL it right..."The Bilderberg Group or Bilderberg conference"

Oh, yes, I know, it's CASEY, but LORD.

Casey Serin said...

The main reason I like Ron Paul is because he's in favor of legalizing gay prostitution. ;-D

Win-win for me!

chickenlittle said...

@ PV
You have a graduate degree (I do too). It's a terrific asset. Use it!

Peripheral Visionary said...

I do have a graduate degree, but when you're looking at a $300,000 mortgage, 20% down is $60,000. Even if I went with 10% down, that $30,000 is going to take some serious scrimping and saving to accumulate, even with a graduate degree. That's living at a bare minimum level for something like two years, and that's if I have no family events to pay for, and if taxes don't go up.

I think the current set of economists simply do not realize just how completely locked out of the market new buyers are, even with prices (slightly) down. I can't get into this housing market now, and wouldn't even if I could. I'm not holding my breath and waiting for $100,000 housing in the D.C. area, but we need to get prices at least down to the $200,000 range before people like myself can start looking (and people who are on hourly wages can forget about it.)

chickenlittle said...

@PV

So what do you want, the markets to correct even faster? You are displaying impatience.

Several of my friends got burned on their first house in the 80's. I sat that one out, toiling for peanuts well into the 90's for my degree.

Rob Dawg said...

I think the current set of economists simply do not realize just how completely locked out of the market new buyers are, even with prices (slightly) down.

Yes, exactly. We've got a slew of experts and specialists and analysts and whateverists trying to sound deep and profound and all that. They know nothing. Interest rates are not working and interest rates are their only tool.

PV, you need to acknowledge that you are in the class of potential legitimate homeowners. Nothing wrong with that, congratulations. What you also need to know is the part that was never acknowledged; there are a whole bunch of people that will never be homeowners and we are facing a hangover of a lot who are but shouldn't be. We bribed the unqualified into a bad deal for them. We've since learned that it is a bad deal for all but no matter.

There is only one cure; prices. Lower prices are going to "disenfranchise" millions. It doesn't matter, it has to happen. Lower prices are going to re-enfranchise millions like me who will buy properties to rent out at reasonable rates. Again, doesn't matter. Has to happen and all the efforts to prevent it will only cause more harm.

H Simpson said...

ahhh, 1979, I remember it well.

Car makers had finally broken the $1999 entry level benchmark. A honda accord, a vw golf, or a ford pinto was up to $2300 before discounts.

A 3000 sqft 3 br home in the Boston area was $120k.

You didn't have to pay healthcare. You employers picked it and didn't tell you the cost.

You didn't have to sock away money in a 401k, as your employer put money in a pension for you. That saved you at least 10-15 percent.

NJ turnpike was $1.05 from NYC to Delaware.

No cost for cable or cell phone cause there was no such thing.

You did take it in the shorts on albums at 17 bucks.

hamburgers were .35 at McDonalds.

6 pack of Hinies was $2.35. BIG money. Boones Farm Apple wine was $1.99 a bottle, as was md20-20 and thunderbird.

Ski tickets on the weekends was 22=25 bucks. Now it 65-75.

You had to put 10% miniumum down on a home.


Made a big difference.

Rob Dawg said...

H Simpson,
Thank you. You made my day. Be sure to get the next three installments highlighting similar abuses by the writer of this "middle class is alright" garbage.

If it is any consolation I paid $79 for 5 hours of skiing at Mammoth on Saturday.

I had forgotten how expensive music was. Thanks also for that. Weird that Concert DVDs are $5 and CDs of the same are STILL $17. I'm also pretty sure I paid $17 for my copy of Pink Floyd "Dark Side of The Moon" when it first came out on CD.

Then there is beer/wine. Massive benefit from the transport revolution of the period 1975-2005. Cheaper and much better.

w said...

Wow, sounds like life was easy back then. I bet you got a lot less meaningless paper in the mail too. Of course you did have to deal with that whole nuclear armageddon thing.

Rob Dawg said...

W,
You make me laugh. I was able to secure a Sears credit card in the late 70s as a college student. This was exceedingly rare. I used it for exotic stuff like winter gloves and socket wrenches. The "Scientists" clock was a frequent matter of discussion. Looking back it was a "cusp" of opportunity. Thing is those are happening all the time. That said don't discount that whole nuclear armageddon thing. The Soviets were on their own cusp. An attack on European NATO was a very likely alternative to what eventually happened with internal reform.

We in the US are currently paying for winning the third world war that spared Europe.

Lex said...
This comment has been removed by the author.
Lex said...

1979, times were good? That was the beginning of the recession that kicked in full strength in 1980 (the 1990 recession was nothing in comparison). Music started to suck, too.

Conversely, I was single and had the first Members Only jacket on the East Coast.

The times are what you make of them.

Akubi said...

@PV,
I am single, I have a graduate degree and make more than the national (and regional) median income, and yet I am priced out of the one-bedroom condo market in my area.
Seriously, what is happening to this country?

In expensive areas like DC, SF, Manhattan and Marin being single pretty much prices you out of the market unless you make an extraordinary amount of money or enjoy carrying a lot of debt.
When I bought my 1 bedroom condo before the bubble I had hoped to upgrade to a "real" house by now and scrimped and saved yet anything that isn’t dilapidated still seems out of reach unless I take the multi-unit route, but there aren’t many of them here.
A double income seems to be a requirement for certain areas. I wonder how many people get married just so they can buy a house...

w said...

I look forward to a time when only polygamists can afford to buy a house.

Lou Minatti said...

"I've been waking up to a lot of things like the 911 truth, the (mostly) fake war on terror, our fiat money system, manipulation by the fed, the Builderburg Group, the plans for North American Union, etc. I even become a bit of an activist to get Ron Paul elected for president. He may be our last hope to get this country back to the constitutional roots."

Casey sounds exactly like a Bubble Blog regular. The comments there get nuttier and nuttier as the day progresses. Relative sanity in the morning, then the conspiracy wack jobs on the west coast wake up and start ranting about the "Plunge Protection Team!!" and Joshua trees and popcorn.

Lou Minatti said...

I was able to secure a Sears credit card in the late 70s as a college student. This was exceedingly rare.

It's funny you should mention Sears. When I graduated from high school, my mom told me how important it was to obtain a Sears card and be diligent with paying it off. Not because there was anything at Sears that I wanted, but because a clean active account at Sears was considered to be a primo thing to have on your credit report. This was in the early 80s. A Sears card was supposedly tough to get.

H Simpson said...

W.

Things sucked.

Layoffs were the norm. the unions were getting creamed. Everyone had buddies out of work.

Cars sucked. engine performance was terrible with all the epa gear that killed performance ( there were no electronics back then).
Car quality sucked as the unions were pissed and the owners did not car. Roger Smith was just starting to run GM into the ground building cars for price instead of transportation. You had Ford Fairmonts, Mustang IIs made on Pinto platforms etc. Chrysler was on the ropes.

Oil was still very expensive and it was affecting the price of plastic. I remember a set of Lange hockey skates doubling in price because of material costs.

People were looking down on the military from the VietNam fiasco.

Carter made the US look weak. His inability to get the hostages out of Iran made us look like wussies. The Russians were making inroads Afghanistan.

Interest rates were sky high. I think I was paying 12 percent on a car loan. I was amazed my in laws had a 5% mortgage from the 60s. Banks were trying to buy them out.

So it was not all sunshine and kisses.

We were in a recession and that brings on a funk. Luckily by 1980 we had the Miracle on ice which showed we could beat the commies, and then Regan which helped pull us out in 81.

The storm is coming. Time to reduce sail, dog the portholes, and get ready for some tough sailing.

h.

Bill said...

The original owner of my wife's 1979 Toyota Cressida simply yanked the catalytic converter and removed the fuel nozzle restrictor.

However, that car passed emissions tests for many years - finally someone doing the test noticed the lack of both of the above components.

Unfortunately, rust sent it to an early grve (as with many import cars of that era)

Once in my car we were passed by the same model and I thought someone had stolen her car, until I realized that Cressida was rusting in the exact same spots.

>Cars sucked. engine performance was >terrible with all the epa gear that >killed performance

H Simpson said...

Bill

In 1980 I bought a new Toyota pickup. When the catalyic converter clogged, I bought a "test tube" that bolted up and then took the heat sheild off the old one, drilled some holes and bolted it around the test pipe before installing.

In Mass, you had to get an inspection every 6 months and part of it was an emmissions test. Never failed one, and the extra power I got was great, never mind the $300 I saved.

h.

bcubbins said...

You must be joking...right??

The numbers have obviously all been adjusted to today's dollars. They just wouldn't make sense otherwise.

A household making $30,000 in 1979 (in '79 $) was in the TOP quintile of the income distribution.

http://www.census.gov/hhes/www/income/histinc/h01ar.html

Rob Dawg said...

bcubbins,
It is the author trying to pull a fast one. He switches from inflation adjusted to household to individual income at will.

pjm said...

How is the author trying to pull a fast one? I guess he didn't make it clear that the data was inflation adjusted, but it seemed obvious to me at 1st reading.

Did you really think that 12% of US household made over $100K in 1979?

As for calling him a "nasty lying bastard", don't you think that was a little harsh? I double checked his data and it appears to be accurate from the census data. Did you check the data? What is he lying about?

"I mean come on does he think all his readers dropped out of grade school?" --No, I finished grade school and that is why it was obvious to me that the numbers were inflation adjusted.