The Great Depression of the Middle Classes

I have visited the United States regularly since the early 1970s. I finished high school and attended university in up-state New York. It was the Nixon era (1969-1974). I watched the impeachment hearings religiously and felt the hope of youth and the uncertainty and unease of older Americans. I worked in the Ithaca gun factory over summer and saved up enough to buy a rare beauty, a Fender telecaster which has now been passed on to my youngest son. I came to understand several of the many subcultures of the United States, and started to understand how hard it is to comprehend the complexity of the United States. It was the end of the conventional manufacturing industry ,  as it was in Australia. That summer I saw American manufacturing it in all its glory. I saw how proud men came to work in their pick-up trucks and disappeared back to their little blocks or houses with their generous but hard-earned wage. That period of my youth was so important because it made me understand that there is no way to really understand or portray the United States as one culture. But there were moods that you felt and saw: optimism in people and wedded lifestyles and attachments. The incredible American land continued to give. Corn in the fields along the finger lakes, once the Iroquois staples, now harvested by tractors and combines. The relentless of white men with backhoes.

I stayed away for most of the Ford and Carter era. This was a period when the American economy slowly lost its vitalism and national events and the Iranian hostage crisis contributed to the beginning of modern American uncertainty and self doubt.

 I visited again regularly in the early 1980s and lived in Manhattan and visited 60 cities in 1991-2

‘It was morning again’ in America with Ronald Reagan (1981-89) in the early 1980s. With Labor in power in Australia it was incredible to see Reagan nominated and elected. Reagan wanted to assure those that had shed their jobs in the manufacturing plants that their day would come again. Meanwhile his recipe for stimulating the economy meant that the public infrastructure and taxation base of the United States disappeared. It was a temporary fix to an ever burgeoning set of problems.

Then followed George Bush snr (1989-1993) and the rising fear and uncertainty of the first Gulf War. Why were Americans fighting overseas when things were so bad at home? -  the country seemed to ask.  I remember watching a military march in Chicago that was unusually subdued. George W. Bush’s era was synonomous with homelessness in cities like Washington and New York as people without hope travelled there to take advantage of their relatively generous welfare benefits.

Bill Clinton (1993-2001) with his “Hope” bus seemed an uncertain bet.  But  in the year before he won office I wrote an article in the Australian Financial Review predicting his victory. I was on a Hakness Fellowship studying American health insurance and it brought me into contact with the real problems that ordinary Americans were concerned about. Clinton brought about a wave of positive economic change, the homeless didnt disappear off the streets.  But prosperity began to return to the middle classes of America. At the same time the structural changes continued. The North American Free Trade Agreement decimated cities like Chicago, Detroit, Pittsburgh to name a few of many.

Under George Bush Jnr (2001-2009) the middle and upper classes won more tax breaks and a kind of false dawn prevailed as people struggled to hold on to jobs and conditions and health care insurance. The middle class was becoming a wedge those at the thin end enjoyed working conditions and wage rates that were once available to the many. Good wages were now only readily available to the precarious few.

Barak Obama (2009- was elected with a mandate to bring some kind of economic justice back to the middle classes. But the global financial crisis  did something that had never occurred on mass before in American history. It eroded one hundred years of value in built infrastructure and middle class assets across the country. In cities like Chicago and Detroit deindustrialisation eliminated millions of jobs and created burnt out ghettos. But these were in concentrated areas. In 2010 trillions of dollars of value was wiped from the asset base of ordinary middle class Americans. This was unlike any of the past causes of uncertainty and worry within the American psyche. It was not just jobs that were lost. It was not just uncertainty about the future. It was not just massive changes to technology and skills. What happened was a complete loss of wealth accumulated over a lifetime and sometimes  over generations.