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Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
Port: Lake Pleasant, AZ
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The Destruction of America's Middle Class -- Part I of III

13 January 2016 | Pago Pago, American Samoa
Kimball Corson
Middle class America used to be pretty much defined as a young to middle aged couple with two children, Bill and Susan, a home with some equity in it, Dad working and later when the kids were in school, mom, too. They had some minor savings for emergencies and made ends meet well enough. Financial bumps came and went, but the scene largely held together -- until Wall Street basically crashed it.

It started out well enough, Easy money and policies encouraging home ownership started to push home prices up. Mom and Dad here saw that from year to year, their home value rose and their equity in it did too. They became wealthier. Feeling better about their financial position, they took out a second mortgage and remodeled the kitchen and bought a new car.

Meanwhile, Wall street worked itself into a frenzy developing and marketing mortgaged backed securities to any and all who would buy them. They got silly about it. The demand for mortgages and derivatively houses to feed this craze was considerable. Mortgage brokers and lenders across the land learned they could grab big up front fees by hawking mortgages to any and all including many not qualified. The mortgage loan would be sold off immediately so if it went south that was someone else's problem. Mostly Wall Street's and its buyers.The bubble burst when housing prices collapsed. The Crash of 2007 followed, the shadow banking business was wiped out and Wall Street's big banks were bailed out.

Mom, Dad and their two children saw the value of their home and their wealth wiped out almost over night. They owed more on their home than it was worth and, as a consequence of all they had bought and Mom losing her job as layoffs and unemployment rose, they had trouble paying their debts. There were layoffs all over the place. Worse, the bank foreclosed on their home and they found themselves having to rent a smaller place with all of their wealth and savings now wiped out.

Bill, now grown, sleeps on the couch in the living room and has student loans to go to the local community college. Susan ran off to get married because she couldn't stand living at home in the small rental unit. There was great emotional and psychological impact on the family as well. Dad started drinking. The family had become poor, both in wealth and income. As one author put it: "Between 2007 and 2010, the median net worth of U.S. households fell by 47 percent, reaching its lowest level in more than 40 years, adjusted for inflation. In other words, middle class wealth virtually evaporated in this country."

The following charts show us what happened to the housing, the income and the wealth of the middle class, their employment, their new status as renters and also show us that the income and the wealth of the rich rose as Mom and Dad's fell. The bailed out big banks did just fine, but middle class America got no help at all and laid dead on Wall Street's killing field. Social justice in America became a roaring joke, but most people didn't know who or what hit them, The middle class became a nation of impoverished low income renters and the rich laughed all the way to the bank.
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Vessel Name: Altaira
Vessel Make/Model: A Fair Weather Mariner 39 is a fast (PHRF 132), heavily ballasted (43%), high-aspect (6:1), stiff, comfortable, offshore performance cruiser by Bob Perry that goes to wind well (30 deg w/ good headway) and is also good up and down the Beaufort scale.
Hailing Port: Lake Pleasant, AZ
Crew: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
About:
Kimball Corson: I am a 75 year old solo sailor, by choice. However, I did take on a personable, but high maintenance female kitten, now a full grown cat, named KiKiPoo when she is sweet, or KatKatPo after she has just killed something like a bird or bat. [...]
Extra:
Although I was a lawyer and practiced law with good success for thirty years, creating significant new law, I never really believed in the law, the politics of law or in the over reaching self-interest of most lawyers I met. Too much exposure to Nietzsche and other good and seriously thoughtful [...]
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Profile

Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
Port: Lake Pleasant, AZ