Written by Daniel Greenfield
Uncertainty and struggle are what we most often associate with poverty. Not knowing if you can still afford to pay next month's bills and worrying over how much more you can cut back when you're already barely getting by. This way of life has become more associated with the middle class than with those at the very bottom. The statistic that shows that average black household worth is at $4,955 while average white household worth is at $110,729 is often quoted, but these numbers are not comparing similar things. Comparing the naked numbers is as misleading as comparing the average salaries in Tokyo and Bombay. What matters is not how much money you have, but how you live.
The $110,729 and $4,955 don't reflect different standards of living; but different ways of living. Much of that $110,729 is home equity. But why do you need to shoulder the burden of a mortgage, when the government will just give you housing for free?
It's misleading to think of the $110,729 families as privileged and of the $4,955 families as oppressed.
The $110,729 and $4,955 families both have large flat screen televisions, smartphones and the usual baseline consumer toys. They could both eat equally well, except that the $4,955 family doesn't bother watching its food budget. It just takes whatever it wants off the shelf and worries about prices later.
In terms of personal satisfaction, the $4,955 family is happier than the $110,729 family.
To understand this, think of the "Cloud". You can buy a laptop powerful enough to store all your programs and data. Or you can get by with a mobile device whose apps connect online to a "Cloud" of someone else's servers which store your data. The laptop is heavier to carry than the mobile device, but makes you more independent. Or you can just live in the "Cloud" confident that no matter how you mess up your device; your data will be backed up.
America is being divided between the workers and the dwellers in the government cloud.
The $110,729 families are independent while the $4,955 families are living in the cloud. Their cloud is "Social Capital". Social Capital is their support system within their extended families and the government. Instead of using real capital, they use the collective Social Capital of family resources and government aid.
The $110,729 family pays for everything. The $4,955 family pays for very little. The $110,729 family earns and saves money because that is its medium of exchange which it uses to obtain food, shelter and clothing. The $4,955 family uses money for luxury goods like televisions or sneakers. It doesn't need to save money because cash is just bonus points. Its necessities like food, medicine and shelter are covered by the social capital of the government.
The $4,955 family is single parent, but is built around a large extended family, mostly female, and mostly on various government benefits. That family is capable of providing valuable aid, not just in government money, but also by babysitting and helping out at home.
That extended family is one reason why Clan $4,955 has 5 to 8 kids, while the mother of the two-parent $110,729 household is tearing her hair out trying to figure out how to manage two kids and a full-time job. The $110,729 household doesn't have much of an extended family. Their grandparents live somewhere else and are enjoying their retirement. They pitch in sometimes, but not nearly as much as their own parents did, and they have their own financial problems.
The $110,729 family is isolated while the $4,955 family is part of a social network that extends through a dozen female relatives to the entire government. Is it any wonder that the $4,955 family also has much less worries and is living an existence more associated with 19th century fantasies about an indolent Polynesian paradise than the grim modern day struggles of the $110,729 family living in the house they don't own and worrying what will happen to their standard of living if they lose their jobs tomorrow? The $4,955 family has a lot of kids. Its kids, in traditional Third World style, are disposable. If a few go down, there will be public tears and wailing, but there will be a bunch of others left. Clan $4,955 doesn't do helicopter parenting or hover over Shane Apple Buckbaum-Cleavens and worry about how he's going to get into Harvard when the waiting list for a private kindergarten is so long. The $4,955 family's kids are disposable. They bring in money to the family in the form of benefits, then they drop out of school, hang around causing trouble until they marry, drift to another city or go to jail.
Their parents cry over them, a lot, but they don't invest too much in them because no single child represents their future.
The offspring of the $4,955 family are more likely to be shot, stabbed, locked up or die of a drug overdose, but the $110,729 family is more likely to be left childless. It's almost completely certain that the $4,955 family will extend into the third generation and will be several times larger. Meanwhile the $110,729 family may not even have a third generation or its third generation may see the four grandparents shrink down to two or three grandchildren.
Since the $110,729 family is actually funding the lifestyle of the $4,955 family, that's a problem, but it's a problem that no one talks about. And when social capital gets tight, Medicare for the $110,729 family's grandpa is more likely to be cut than the endless community grants that help keep the $4,955 family and all their many kids comfortable and voting Democrat early and often.
The $110,729 family is responsible. It understands that money is finite and that the government can only do so much. The $4,955 family doesn't understand that and won't accept it and has a lot more free time and energy to do something about it. The $110,729 family looks at a variety of factors before voting. The $4,955 family is practical, it looks only at its own bottom line.
No money, no vote.
On paper, the $4,955 family is poor. But so were the Polynesian beach combers. Poverty is relative. From the perspective of a white male capitalist, the $4,955 family is ridiculously poor, but its life is actually comfortable and worry-free compared to the $110,729 family.
On paper, the $4,955 family is poor. But in a society where hundreds of billions of dollars go into funding social capital, the old dollar-and-cent household values no longer apply.
A 1913 family that had less than 5% of the net worth of the average household would have been living a grim existence complete with patched clothing, hungry children and a ramshackle hut that they were paying an outrageous weekly rent for. But a 2013 family with 5% of the net worth has just dropped out and is letting the average household carry it.
There are still plenty of working poor in America, but the broken families that pad out the bottom of that $4,955 statistic rarely work for a living. They work for extras. Social capital has freed them of the need to work for anything except luxuries. And when they work, they don't pay taxes, usually they get someone else's taxes back as Earned Income Credits.
On paper, the $110,729 family has an impressive household worth, but much of that worth comes from a mortgaged home that it is struggling to keep up the payments on. The $4,955 family lives in a housing project that they can’t lose no matter how many payments they miss on their high interest credit cards. If the payments get too hard, they'll drop $199 on a hole-in-the-wall lawyer to declare bankruptcy.
The middle class has become the new poor. The old economic uncertainties of the households at the bottom of the ladder have fallen squarely on it-- with none of the sympathy, which is still reserved for their welfare wards.
The middle class is trapped by its own aspirations. Those aspirations are weighed down by a political system that exists for the benefit of the upper and lower classes. Though the middle class still has the majority of the vote, it has the least political influence because it has the least disposable time and wealth, and lacks a dedicated political class to represent its interests
The United States is no longer a middle class country. It is a country whose political establishment answers to the operatives of the very rich and the very poor, the donor class and the welfare class. Politicians have a vested interest in catering to very rich donors or welfare voters because they have the time, money and organizations to get their way. And what they want is wealth redistribution upward and downward from the middle class.
The middle class is being looted by crony capitalists and welfare clans. The liberal Robin Hoods who direct billions in stolen money to Green Energy companies and ghetto voters do their best to convince the middle class that it should vote for them because it's actually poor.
The middle class is poor, but it has all the disadvantages of poverty and none of the advantages.
Its workaholic efforts leave it at a disadvantage when it comes to competing with the idle rich and poor who launch Green Energy companies that are meant to fail and stand in line waiting to cash their latest government check every other week. The middle class just doesn't have the time or energy to do anything about the trap that's in. Unlike the rich and poor, it can't even get politically organized.
The Obama vision is a "Cloud" America where all the money is in the government cloud and each family is given support according to its needs and is taken for whatever its abilities earn. That vision is already true on the $4,955 scale and is coming true on the $110,729 level as well.
The government money "Cloud" works about as well as Healthcare.gov. Its brand of central planning has failed everywhere it's been tried. But the experiment won't completely crash until the middle class does. Margaret Thatcher famously said that Socialism works until it runs out of other people's money. The "other people" are the middle class who have the most money and the least ability to protect it from the cloud dwellers. There are two Americas; the America of the working class and the Obamerica of the government class. Measuring poverty in net worth is relevant in only one of these Americas. To measure poverty across both nations, we must speak of the poverty of freedom, the poverty of family and marriage, the poverty of economic security and the poverty of leisure time.
These are the true measures of modern poverty in an America where some people are living in a postmodern government cloud that uses social capital instead of personal income and others are scratching out an uncertain living to support the "Cloud Dwellers" who manage the government bureaucracy, work at non-profits and squat in the $4,955 space.
Our postmodern economy punishes personal aspiration and rewards the surrender of economic independence to the government. More Americans are vanishing into the government cloud, going on disability, dropping out of the system and entering the cloud until the cloud is too heavy to keep on floating in the sky and sinks down to earth or until the New Poor get tired of living fearful lives to subsidize the utopian fantasies of the 1% and the Polynesian lifestyles of the $4,955.
An American workers' revolution will not be a Socialist revolution, it will be an Anti-Socialist revolution of the new poor of the middle class.