Saturday, July 14, 2012

So much talk of "Midddle Class". So little agreement on a definition.


Blogger Charles H Smith @ Of Two Minds has dealt with this definitional thing thoughtfully and often.  It is, at the heart of it, a matter of defining one's terms.  Lots of folks who believe themselves to be middle class are, in fact, in an aspirational (dare we say hallucinated) state.  They strive aggressively for middle class appearance, claim that as their status, yet lack so much of the underpinning that realistically defines it.


Five "threshold" characteristics of membership in the middle class:

1. Meaningful healthcare insurance
2. Significant equity (25%-50%) in a home or other real estate
3. Income/expenses that enable the household to save at least 6% of its income
4. Significant retirement funds: 401Ks, IRAs, income property, etc.
5. The ability to service all debt and expenses over the medium-term if one of the primary household wage-earners lose their job
I would now add a sixth:
6. Reliable vehicles for each wage-earner
Author Chris Sullins suggested adding these additional thresholds:
7. If a household requires government assistance to maintain the family lifestyle, their Middle Class status is in doubt.
8. A percentage of non-paper, non-real estate hard assets such as family heirlooms, precious metals, tools, etc. that can be transferred to the next generation, i.e. generational wealth.
9. Ability to invest in offspring (education, extracurricular clubs/training, etc.).
10. Leisure time devoted to the maintenance of physical/spiritual/mental fitness.
Lagniappe attributes:
11. Community altruism (volunteer time and/or money).
12. Pursuit of continuing education (not net surfing, but some exploration and growth in the real world).
The key point of these thresholds is that propping up a precarious illusion of wealth and security does not qualify as middle class. To qualify as middle class (that is, what was considered middle class a generation or two ago), the household must actually own/control wealth that won't vanish if the investment bubble du jour pops, and won't be wiped out by a medical emergency.
In Chris's phrase, "They should be focusing resources on the next generation and passing on Generational Wealth" as opposed to "keeping up appearances" via aspirational consumption financed with debt.

Only after finishing this did it occur to me that this is Bastille Day.  A day on which class conflict rose to new heights (or. was it a descent to new depths?) Out of the French Revolution came a far-reaching sense that revolt against the hereditary nobility and the stinking monarchy, abetted by the fawning clerical estate would bring about an independent class of citizens, defined in the Declaration of the Rights of Man and of the Citizen. 

And, ultimately, a middle class.  

Tuesday, July 03, 2012

Let me recommend the best medicine in the world: a long journey, at a mild Season, thro' a pleasant Country, in easy stages. -- James Madison, 1794

Exactly what we've been thinking...about our coming travel through India.  That it came from the pen of Madison recalls his real-life journey as a founding father of the United States.

Madison, one of the 3 or 4 key actors in the drafting of the US Constitution. 

In 1787, at the Constitutional Convention, he kept the minutes of that long hot summer of debate.  He crafted the myriad nuanced drafts on which the founders would continue the discussion (an euphemism; it was often enough an eye-gouging brawl) in search of elusive consensus. As is the custom--if not the prerogative--of the one chosen to keep the minutes, the description of what they said was shaded a bit in the direction of what Jemmy would have liked that they said.

Without compromise there would never have been a Constitution, no United States of America.  So, the odious Three-fifths Compromise was agreed to.  And it set us on a course through a long journey, in seasons of rancor, through a divided country, toward the bloody stages of Civil War.

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Of the biblical allotment of three score and ten I have lived only three of them more than a bicycle ride from one of the Great Lakes. I grew up ten blocks from Lake Erie in the (once Irish/Italian ghetto, now newly-hip) "Near West Side" of Cleveland. I can still cycle to the Milwaukee lakefront in an hour and a half; but, a round-trip has always been more than I would (noror ever did) attempt. -0- I'm a "...somewhat combative pacifist and fairly cooperative anarchist," after the example of Grace Paley (1922-2007). -0- I'm always cheerful when I pay my taxes (having refused--when necessary--to pay that portion of them dedicated to war). -0- And I always, always vote.