Secret “Shame” of the American Middle Class?

There’s a good article appearing on today concerning the “secret shame” of the middle class.  Written by Neal Gabler for The Atlantic, it begins by revealing a surprising statistical find by the Federal Reserve Board: that 47% of American consumers would either have to borrow or hawk a possession in order to cover the cost of a $400.00 unexpected emergency.  Surprisingly, the tone of the article was not one of shock or disbelief, but empathy and resignation.  Gabler openly confessed that he, despite his career success as a writer of some five books, hundreds of published articles, and even television appearances, is one of these 47%.

To his credit, Gabler made no excuses.  Instead, his point seemed to be that times are tough, even for the hard-working and well-disciplined.  A real estate market collapse here and staggering college tuition there is enough to bring anyone to the point of financial fragility, he reasons.  While I applaud Gabler for coming out of the financially fragile closet, I disagree with this bleak suggestion that no matter how hard one tries, we are all destined to live in a paycheck to paycheck lifestyle.

The reality, you see, is that the majority of Americans are walking a financial tightrope without a safety net because of one bad choice after another.  In reality, the “secret shame” of which the article speaks is just not there at all.  It used to be, mind you, but over the last 20 or so years, there simply is no shame in being financially impotent.  Instead, people with little to no net worth think nothing at all of eating meals out daily, of buying new clothes every season of the year, or of purchasing large SUVs for the single person commute to work each day. No one is encouraged to delay gratification, to work hard and save aggressively as a young adult. Why bother, the reasoning goes.  Life is too short, and if we get in over our heads there is always bankruptcy and government safety nets.

There really is a better, and more responsible, way.  Despite having reached a level of financial independence from 24 years of frugal living habits, it is still a rare occasion when I, for example, visit a restaurant where the dinner tab for two will exceed $35.00.  I never, ever join the tens of thousands of fellow local residents who happily drop two, three, or four hundred dollars to attend a football or basketball game for 2-3 hours.  I still do not pay people $40.00 to mow my grass or thirty to change my car’s oil.

And yet on those rare occasions when I do visit a restaurant as high priced as an Outback or Longhorn, I am constantly surprised by the length of the wait list.  Once inside, I see families of 4 – 6 just living it up, stuffing their already obese waistlines with $25.00 entrees, drinks, and deserts.  How many of these people, I wonder, could handle a $400.00 emergency?  Probably all of them if they simply ate at home and drove a Nissan Sentra rather than the Chevy Tahoe that sits outside.

The other part of Gabler’s article that bothered me was a gratuitous injection of politics.  He writes that the financial stress of Americans causes us to lash out at innocent targets, such as President Obama.  Really?  I don’t care what side of the political aisle you sit on, there is no disputing that real wages in America have fallen under this administration.  Also beyond dispute is that the concept of fiscal responsibility has been all but destroyed by a federal government that has ratcheted up the national debt to a truly unbelievable 19 TRILLION dollars, all while raising taxes and handing out more and more and more free entitlements, from Obama phones to Obamacare.  The hope of climbing out of debt and building a financial safety cushion takes a mighty beating when we have a federal government that spends like a drunken sailor on shore leave, only to raise taxes on the one-half of Americans who pay them in order to give entitlements to the other half who do not.

The main point, you see, is that responsible choices and discipline are still the keys to financial stability, both at the governmental and personal household levels.



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7 Responses to Secret “Shame” of the American Middle Class?

  1. Pingback: half of americans have no savings. | alifesgayventure

  2. Rosanne says:

    Neal’s article was thought provoking and honest. Your takeaway was some political message to rant over? Yawn- people like you bore me.

  3. vster says:

    So Neal’s article was “thought provoking” — as long as thoughts don’t turn to personal responsibility and disciplined behavior. Thank you, Rosanne, for helping to make my point.

  4. Mark says:

    Your blog would be a lot more enjoyable if you avoided interjecting your political biases.

    • vster says:

      I’m sorry the occasional political discussion troubles you, but I’m trying to stimulate a movement here – one towards responsible, self-reliant living. Sometimes that necessitates calling out those who take a head in the sand approach to what gets them in over their heads.

  5. tails83 says:

    Did you look at the comments of that inaccurate and outdated CNSNews article? Is that the company you keep? There are legitimate revisions to BLS data, but you lose credibility with Shadowstats nonsense. It also doesn’t help that you don’t understand basic macroeconomics. What exactly is so unbelievable about trillions of dollars of debt? We also have trillions of dollars of economic activity. Is that unbelievable too? These are just numbers that work today. Maybe they won’t work tomorrow. Trust me, you don’t need to believe in these numbers for them to be true. There was a great article recently by Catherine Rampell about “beliefs” getting in the way of reality, leading to actual catastrophe:

    The author does not regret foregoing his economic well-being for the success of his children. He is broke and he wouldn’t change a thing. His problem isn’t money, it’s his conventional approach of lavishing his kids with the best money can buy in an effort to outclass the other parents doing the same thing, thereby driving prices through the roof. That is how society actually works for almost all people and is basic human nature. They try to climb the social ladder at any cost, because it’s not the money that matters, it’s the social status. Those people will always be broke on purpose. There is no need to try to change them. They will think we are crazy to hoard what they consider pieces of paper. This thinking allows us to reach FI faster. The beauty of ERE is that I am one of the poor ones from whom little can be taken, financially or socially.

    It’s important to note that financial independence, versus self-sufficient economic independence or communal social independence, relies on these people making poor choices. It seems that investment options are limited to skimming the financially illiterate with pervasive marketing of irresistible products, and timely entries and exits of bubbles. As a frugal person pursuing FI, I am revolted by what I am investing in: crap food (Coca-Cola), predatory lending (JPMorgan), unnecessary insurance (Travelers), bubble blowers (Goldman Sachs), tax dodgers (Apple), fossil fuels (Exxon, Chevron), fast food (McD), passive entertainment (Disney), and drugs (Pfizer, Merck) and health care (UnitedHealth) to fix what everything else broke. Looking at it now, some of the companies are OK. We all need toilet paper (P&G), soap (J&J), electricity (GE) plastics (DuPont), and small appliances (MS). And none are fully evil. I hope I can find alternative investments in sustainable small businesses.

  6. Just Us says:

    … I understand exactly to what you are referring and remember living in quite a different situation a mere decade ago.
    I have taught my children to also live within their means, so it is not an age issue with the other commenting people.

    I liked your post. (Oh, and I do have the Emergency Fund envelope hidden in the house for those emergencies.)

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