Monday, September 22, 2008

"Somebody Please Help me!": The imagined Middle Class

It has been hard to watch the ominous financial crisis sweep through the American landscape. It has prevented me from even blogging at times because it is so frustrating to see. Years of unregulated greed have finally come back to haunt Wall Street and the nation. About a year ago I was speaking to my father and I told him that the way the American markets were moving was eerily similar to things I remembered reading about the economic disaster that hit America in 1929. Then I predicted that there would be a depression, not merely a recession that we saw in the early 1990s--if our investing habits and the lack of regulation did not change. I prayed to God that I would be wrong. I still hope I'm wrong.

Before I proceed, let me say from the outset that I am not an economic historian and would love to hear from those who specialize in such fields. My commentary is informed, however, largely by the economic and social history I am familiar with. I write as student of American history and as a concerned citizen.

So now here we are standing at the edge of an economic void of unseen proportions, and the federal government is scurrying along at a frantic pace to inject an economy with some sort of relief. The $700 billion plan to buy up distressed mortgages will affect the next three generations of Americans. Not only this, but what will be the associative effect on the already crumbling value of the dollar? At this point I don't think anyone knows exactly.

As part of my Sunday morning ritual, I typically try to watch CBS Sunday Morning, hosted by Charles Osgood. This Sunday, social commentator Ben Stein said that we "avoided disaster this time," but I do not believe that things will end that quickly. As the saying goes, "things will get worse before they get better." There are deep seeded problems with the American economy that stimulus checks and tax breaks will not solve. This economic crisis is far from over.

There used to be a commercial on television (that was suspiciously taken off the air) that showcased a family living the so called "American Dream," but that dream was better understood as a mirage of insurmountable debt. Such socio-economic delusions of grandeur created an economic monster that fed upon itself. The notion of a middle class in this nation is what scholar, Benedict Anderson called an "imagined community."



Anderson writes in his his classic text, that nationalism creates imagined community, "because regardless of the actual inequality and exploitation that may prevail...the nation is always conceived as a deep horizontal comradeship." That same comradeship can be extended to notions of race and class in this country. In his stand up routine, "Never Scared," Chris Rock argues that there is not a white man in the audience that would trade places with him even though he is relatively well off. Let's be honest, Chris Rock is a millionaire. Rock points out that due to the psychological wage of whiteness, a white man is going to see how far it [whiteness] will take him.

The Lending Tree commercial depicts a white man who seems to be living the good life. His children are in "good schools". He lives in a "good neighborhood." He drives a "good car." However, the lie is that he is drowning in a towering wave of debt to keep up the facade and his membership in this "community." His middle-class ideology is propped up upon the frivolous and indeed dangerous patterns of lending and speculation that have continually marred this nation's economy even during the antebellum era.

The leader of the current regime in America, President Bush says "Investors should know that the United States government is taking action to restore confidence in America's financial markets so they can thrive again." Confidence. That is the name of the game and that confidence has been shaken to the core. It may not look like it now, but just remember Black Monday back in 1987 (October 19). Let us see what the month of October has in store for Wall Street.

I'm not alone in my thinking. Robert Reich, currently a professor at UC-Berkeley, was Labor Secretary under Bill Clinton. He mentioned that "This [financial crisis] could be comparable to the Great Depression in terms of just its effect on financial markets."



$11,315,000,000,000...(the new debt)...why do I hear Diddy in the back of my mind saying, "Take that, take that!"




12 comments:

D. Heard said...

I think your point about the American middleclass operating on the logic of an imagined community is a very insightful observation that leads to other questions. The censorship of the lending tree commercial (dead-on and hilarious, as troubling as it is) reminds me of Anderson’s important point about how the primary apparatus for the creation and maintenance of an imagined community is a national (or group-owned) press which creates in-group messages and sources of identification. What is intriguing in this instance is that the press which provides the middleclass with a point of reference for shared identity comes from outside, from the corporate class whose sole source of existence is the sacred goal of middleclass attainment. Without question you are absolutely right that there is a nationalist logic to the middleclass, yet that logic is surreptitiously manipulated by the outside, not self-determined from within. In this case, however, it seems as though the corporate class’s ruthless (and unsustainable) attempt to multiply middleclass consumption for their own profit has come home to roost. Unfortunately, as you note, looks like we all are going to need saving now. If and when we recover, should we (whomever I mean by that) not question more seriously these so-called middleclass values? Arguably, our lack of questioning can be partially blamed for the mess we’re in, no?

negrointellectual said...

Thanks fort he insightful comment to a awkward posting (at least writing it) because I don't know what to think about this. I think you get directly at a fundamental question though, "If and when we recover, should we (whomever I mean by that) not question more seriously these so-called middle-class values?"

I think you have struck at the core of the larger political campaign issues. The world is changing and a large portion of Americans are hell bent on resisting it. Gone are the days of the Leave it Beaver, My Three Sons, or the Donna Reed-esque suburban enclaves. The lie that began in the post WWII era is falling apart.

I almost feel like this is a Chinua Achebe moment. Is America or those who hold fast to this notion of national identity like Onkonkwo holding on to the past as the future approaches? Is that reaching too much?

Look at the RNC...it was by and large attended by white men. Is that really a slice of what America looks like?

This country is going to face itself in the mirror and like the Joker in the Dark Knight, the rest of the world (at least in the markets) are sarcastically saying, "Why so serious?"

That being said I still don't have an answer to this mess.

Diontre said...

Agreed, the "middle class" has always been a myth. The difference between those who are "living just to get by" and those who are assumed to be middle class is the use of debt. It's the American way!

As sick as this situation is, it isn't one sided. American consumers are just as guilty as Wall Street Execs. Instead of using a common sense approach to fiscal management both Wall Street and Main Street outsmarted themselves. (Excessive leverage + stagnant wages)*non-existent savings = the here and now. While I'm not an advocate of the current regime I do think they are on somewhat of the right track. $700B is a hell of a lot of cash, but the losses from a collapsed financial system could trump that number 5 fold. Check out www.molifeney.com if you want the real deal on how this debacle will affect you and yours.

negrointellectual said...

D-tre,

You are right good brother. This situation is two sided which is why I used the Lending Tree commercial. We must start to see things that way. I will definitely check out www.molifeney.com too.

Thanks for posting the comment...as I said, I am far from having the answers to this situation.

Anonymous said...

Bro. Mitchell,
Very astute post, as I always find your posts.

I am not as familiar with this idea of “imagined community” as I should be, but the notion is quite intriguing. Is it akin to the notions of “middle class aspirations”, which get people to acquiesce to things like vast socio-economic inequality in the hopes that they will be able to one day be part of that “American Dream”, even though the reality is that most of them will be doing well to just get by, and live from check to check.

What to make of this? I think that at some point, middle class America has to begin to question the status quo. I, in particular, think that questioning begins with critical thinking, which has to be learned. My first hope is that schools (especially in history, civics and economics classes) would make it a point to teach young people the tools to research and ask questions, and also really lay out the ideas of radical democracy (government for the people, by the people, of the people). We have lost that notion. Only half of the people will vote in this year’s historic election. Many people claim to be jaded by electoral politics, but the very ones who affected the most by it are the ones who are the least informed and least active. Our halls of education need more progressive thought and policies to begin to infuse the seeds of radical democracy in the populace. Then again, that corporate class infrastructure also affects educational policy and electoral politics. So, I also fancy another center for critical though, our faith based institutions.

The Church, Mosque, Synagogue, etc. should be a prime place for critical thought, motivation, and strategizing. Yet, they have become more of a social club than a place of deep thought and inspiration. Too often they do more to perpetuate the status quo than to encourage change. Most of that “Imagined Community” is not only “created” in the media, but it is taught and hegemonized in our churches. When all the church provides is cheap, simplistic morality tales, but no critical analysis, we wonder why so much is placed on the backs of the middle class. There is so much critical thought infused throughout the scriptures and such, yet, there is so little critical thought be exhibited by our faith communities. There is a valuable opportunity being wasted there. Oh, to dream….

Thanks for posting this; you have really enlightened me this morning.
Bro. Spears

n2deepthings said...

Insightful post...my feeling is that the middle class real or imagined has been a necessary segment for those in the shadows who are actually in control. It is from the lower middle class where a bulk of your military pawns, and the upper middle class which produces military leadership...but more importantly the middle class is the target for mass media disinformation, mass marketing, and brainwashing. The middle class is the portal through which the illusion of the American dream and the belief of democratic principles are communicated to the lower class. The people at the top of the economic ladder understand this system institutionally is designed for their benefit, those at the bottom realize those institutions are inherently predisposed to lower the glass ceiling.

As a result of extensive brainwashing, crumbs from the master's table, and self induced slavery stemming from massive personal debt, America’s middle class harbors the illusion of the American dream. In addition, the middle class spends trillions of dollars in the sports and entertainment industry which allows them to be distracted, as their world crumbles.

The primary function of the middle class is to pretend the emperor has no clothes, therefore mitigating the anger of the lower class. The secondary function is to serve as a role model for the lower class basically class version of “keeping up with the Joneses”.

As long as there is a happy, well fed, entertained, and debt riddled middle class, the potential for revolution is low. As long as the lower classes follow the lead of their middle class brethren the potential of their visceral anger to erupt in any thing beyond burning and looting their own community is low.

America needs a cleansing, a purging from a broken system, but a complacent and nascent middle class stands in the way of a new 1776.

Fall97 said...

A true understanding of how money is created needs to be posted here for all to understand. I've done some personal study with the issue and I believe I can shed a little light. Since I'd like all readers to get the correct context, I'll begin with an explaination of the Fed and go from there.....

Our system of banking is called fractional reserve banking. That means the banks are required to have a certain amount of real money in proportion to the money they lend out. If banks get below that reserve limit, they can borrow from other banks (i.e., the lender bank purchases bonds from the borrower bank). The Fed can intervene in the process of setting a bank's interest rate by purchasing bonds from the bank. The fed does this by printing more money. There is no value or 'work' behind that fascade.

Understand that for the last few years the interest rates were VERY low. It was low because: the printing press was rolling too long. It was rolling too long because the legislators wanted more of the population in homes. The easy money from banks led to very loose lending practices.

Back to the banks. Interestingly enough, banks dont actually lend out all the money they have. When the bank lends, it creates an IOU and holds it as an asset (in this sense an asset is a piece of property that produces income). They trade these IOU's between each other and on occasion mark them up (this is why the gubment don't know the price of what they buy in those handouts - ahem -bailouts).

Combine this with those get rich quick real-estate schemes on your late night TV, flip this house gurus, and people who have tenuous income situations and you have a catastrophe waiting to happen.

The government created this situation, now they want to get 'us' out, but the real issue is their issuance of fiat currency.

To my people: dont be upset. There are many opportunities to twist the bank's arms for some of this property that they cant give away. Tread cautiously though...


I see the posts here and everyone creating these posts talk about the middle class in a collective sense, like a group of people were selected to be in that group. People have their own goals and ambitions and acting as a group is the last thing on their minds. Only in retrospect can you view society like some "imagined community"; you can learn a great deal about society from learning about individuals, but this process cannot be reversed. Try learning astronomy without learning about individual stars - it cant be done.

Here are some references for your own personal studies. Onward & Upward!!

Fed: http://www.youtube.com/watch?v=LbiHpDnpoRc

Fractional Reserve Banking: http://www.youtube.com/watch?v=cy-fD78zyvI&feature=related

Housing bubble:
http://www.cnn.com/2008/POLITICS/09/23/paul.bailout/index.html

Books:
The Creature from Jekyll Island
http://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986212

The Revolution
http://www.amazon.com/Revolution-Manifesto-Ron-Paul/dp/0446537519/ref=pd_sim_b_1

Economics in One Lesson
http://www.amazon.com/Economics-One-Lesson-Shortest-Understand/dp/0517548232/ref=pd_bbs_sr_5?ie=UTF8&s=books&qid=1222187505&sr=8-5


BTW - that commercial is about 2 or 3 years old - it was not banned.

Fall97 said...

Oh yeah,
Since I am not a leftist, Marxist or other associated collectivist who wishes to incite anger in order so that you will be my pawns, I'd like to provide additional resources to empower all who choose to listen.

Prosper.com - Peer to peer lending resource

Digital Gold Currency - gold backed money exchanges like pecunix or egold that allow you to do transactions in gold.

negrointellectual said...

"Fall97"

thanks for the info...as far as the commercial is concerned, I knew it was made actually I think in 2007 maybe 2006, but it was playing quite a bit earlier this year. Regardless, that was just a side bar, but the commercial is still a great illustration of what folk see as the "American Dream." Again thanks for the postings, I plan on checking them out.

Leslie said...

I think you are dead-on, V... But I would also add that the current economic crisis is the direct result of two factors: 1) free market capitalism's survival is predicated on the need for low and middle class class to remain perpetually in debt, and 2) in order to sustain the capitalist system, America has championed the idea of rabid consumerism. When reading your blog, I am reminded of a Discover Card commercial I saw recently. It opens by saying something along the lines of: "Americans love to buy lots of things...and there's nothing wrong with that..." Until we "wake up" and realize that there IS something fundamentally wrong with that, we are doomed to repeat the same mistakes... At some point, we do have to ask ourselves some hard questions, and consider how important it is for us to have "things," while we are slowly drowning in debt...

the uppity negro said...

If a depression happens, it won't be because of the same mistakes that happened starting in 1929. I'm convinced that there are enough safeguards in place to prevent that. Now, the issue is whether or not these safeguards are being used. Greed is a powerful muh----- and who know's what's REALLY going on on Wall Street.

As I've said on some other posts, aside from economically depressed cities such as Detroit, Gary, Ind., Camden, NJ, or Chester, Penn. to name a few, by in large, black folk have been in this recession since 1877 as far as I'm concerned. The only reason folks are hollering now is because white folk have had to adjust their ideal of the American dream. Black folk, by in large haven't been affected by this. Driving through SWATS out here in Atlanta, I still see homes being built, and I don't see hella "For Sale" signs. Aside from us having no gas and the gas that is left was effing $4.29 a g-damn gallon, I'm really trying to see what the problem is.

Claire Huxtable said it best when she was brought onto the Sunday morning cable access show "Retrospective" to talk bout the black and woman issues. They asked her in the remaining 30 secs of the show to say what was the state of blacks during the Great Depression and she simply answered "We learned that misery does not love company."

It took me some years to understand what she really meant because it's quite the opposite of the typical saying "Misery loves company" and I later understood it to be that blacks were already at the bottom of the barrel and whites during the Depression still exercised their white privilege--and I'm quite sure that'll be the case in the future.

Stuff educated black people talk about said...

"...but a complacent and nascent middle class stands in the way of a new 1776"

As long as people have just enough to be comfortable, they will never fight for change.

Give them bread and circus in the form of cheap, fast food, and American Idol/Sex in the City/sports).

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Negrointellectual by Vernon C. Mitchell, Jr. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
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