Now Playing at Reason.tv: Living Large with Drew Carey

To hear the Lou Dobbses and Bill O'Reillys of the world--not to mention politicians ranging from Ron Paul to Hillary Clinton--the middle class of America (however you define that term) has never had it so tough. Between credit squeezes, out-of-control immigration, rising costs of education and health care and everything else, it's all darkness out there for those of us who are neither millionaires nor welfare cases, right?

In "Living Large," Drew Carey and reason.tv examine the plight of the American middle class. What do they find? Click here or on the image to find out.

Comments

[Dan Murray]

Right on. It's disappointing that Network television has devolved into a form of tabloid journalism.

I thank you for producing a balanced account.

Twenty-five years ago the IRS would have measured me as one of the poor. Now I'm in an upper middle class category.

The other topic ignored is the mobility of the American Middle Class from lower wage level (when you first enter the job market) to higher way levels (as your skills and knowledge expand).

[Pig Mannix]

Your timing is magnificent, as usual...

[Richard Garner]

Great film. However, I can't help wondering how many of those boats, SUVs, motorcycles, etc, were paid for with loans from banks, etc? How many of those great new houses came from mortgages (maybe subprime!)? How many of all these other great things were bought on credit cards.

With the level of personal debt skyrocketing, savings plummetting, and at the onset of a recession, undoubtably cause by credit expansion, I can't help but suspect that some of these improvements are artificial to say the least, and temporary.

[Rhondu]

Reason sucks

[JB]

There is alot left out in the report. The bigget part, would have been asking those guys how much they owed on those boats. Ask them whether their children go to public colleges, or private - do we subsidize their childrens education so they can have nice toys - are they married, and do they have any Kids (I didn't see any riding the boats) Children cost alot, and their cost is rising - medical care, education, energy.

So yes, in one way regular people can have an exceptional lifestyle, but that is all balanced on the back of Debt, at the expense of families and children, and depends on a social safety, basically social security and medicare - could these guys do this if they have elderly parents to take care of ? one wage earner at the turn of the century usually took care of alot more people.

Technology has made us more productive, so we have more time, but the benefits of the productivity in terms of wealth, control, and power has given us an elite class, like the industrial revolution did, with less upward mobility.

Basically, technology and high productivity is great for providing bread and circuses. I suppose fat ignorant and happy is ok with alot of people. But, given the number of children living below the poverty level, and the number of people retiring, I suspect there will be a limit to how far this can go.

[Theresa]

so where does that leave me?? I guess I'm poor as sh*t since I can't find a job, and my husband only makes 16K a year. Try talkin to someone from NY or Ohio Drew. I usually love your little videos but have to disagree with you on this one. sigh.

[Timon19]

Well, I'm from Ohio, and I'm doing just fine.

My anecdote cancels out yours.

[Daniel Reeves]

Clearly you guys who are saying "omg debt" don't have a clue as to the economic repercussions.

Debt means nothing unless you have income or wealth to compare it to. Donald Trump and Bill Gates each have more debt than me and less reason to worry about it. America has the most debt out of all the nations but it is the most prosperous. These people may have accumulated debt but that's mostly irrelevant. In fact, if they hadn't spent in deficit, they wouldn't have these things.

[Steve Horwitz]

Outstanding job Nick and Drew and crew. We owe it to our children to provide them with the factual basis for having the right to expect their lives will be better than ours. This is a great example of how to do that.

[Slocum]

Richard Garner: Great film. However, I can't help wondering how many of those boats, SUVs, motorcycles, etc, were paid for with loans from banks, etc?

Most of them, probably, but so what? Houses are almost always paid for that way -- are people living houses somehow suspect because they're only mortgaged? Unless you think all those boat and motorcycle owners are ultimately going to go bankrupt and not pay off their loans, they can afford their toys -- they just don't have the cash to pay upfront. Which people rarely do for big ticket items like houses, cars and boats. You'll find that rather a lot of the rich have monthly payments on their homes, cars and boats also.

Theresa: So where does that leave me?? I guess I'm poor as sh*t since I can't find a job, and my husband only makes 16K a year. Try talkin to someone from NY or Ohio Drew. I usually love your little videos but have to disagree with you on this one. sigh.

The point isn't that everyone is doing well. He's not suggesting there are no poor people or that the unemployed are all towing ski boats behind their Escalades. But what are you disagreeing with? Are you disagreeing that these kinds of boats and jet-skis would be an unusual thing for a cop or a auto-mechanic to own? Because my experience here (in Michigan) is that those are just the kinds of toys they'd tend to own.

[Richard Garner]

I'm not saying that debt is necessarily a bad thing but, hey, I bet people could have made similar reports during the "roaring" twenties. Inflationary booms are, well, booming.

[Joe S.]

I noticed there was a kind of fast-and-loose game with statistics around the middle. First, it's pointed out how cell phones have dropped in cost since the 1980s. Then it discussed how much prices have dropped since . . . before 1920.

Hey, everyone agrees that living standards increased until 1971. And they also agree, they've been stagnant ever since.

That's the problem that pro-market people need to address: why living standards have stagnated for almost forty years now, despite the fact that we've had a huge computer revolution at the same time.

In your eagerness to defend the capitalist system, perhaps you've failed to notice that the US is now a welfare/warfare state which eats up capital faster than it's created, and uses government policy to shift wealth from the middle class to special interests.

[Richard Garner]

Unless you think all those boat and motorcycle owners are ultimately going to go bankrupt and not pay off their loans,

Hmmmm, even after Nortern Rock suffered its run here in the UK it was issuing mortgages six times the average rate of earning. I don't things are much different in the US, are they?

[Richard Garner]

Hey Joe, couldn't help noticing:

Hey, everyone agrees that living standards increased until 1971. And they also agree, they've been stagnant ever since.

1971 is when Nixon took the US off the gold standard completely, right?

[dr_dog]

Rhondu | February 4, 2008, 8:21am | #
Reason sucks

Best comment ever.

[Smappy]

I noticed there was a kind of fast-and-loose game with statistics around the middle. First, it's pointed out how cell phones have dropped in cost since the 1980s. Then it discussed how much prices have dropped since . . . before 1920.

Yeah, I agree that those statistics would have been a lot more useful if they all started from the same baseline. I'd also like to know if the hours-to-purchase numbers are based on average or median income.

Still, I think the following is a little much:

Hey, everyone agrees that living standards increased until 1971. And they also agree, they've been stagnant ever since.

Really? Stagnant? Stagnant? More people today have televisions (cable at that), nicer cars, bigger houses, home computers, etc., etc. And you call that stagnant?

[Steve Horwitz]

Standards of living since 1971 most certainly do not suck. Poor Americans today are notably more likely to have any number of consumer goods in their houses than the AVERAGE American did in 1971, which is exactly the point Cox is making in the video. When you count total compensation, incomes continue to rise for the middle class and others. And the "disappearance" of the middle class is mostly because more have moved up than have moved down. Self-promoting citations at:

http://hnn.us/blogs/entries/44568.html (for the data on consumption)

http://myslu.stlawu.edu/~shorwitz/Good/myths.htm

(for a variety of economic myths - that page is a few years old though)

[Matt J]

So where does that leave me?? I guess I'm poor as sh*t since I can't find a job, and my husband only makes 16K a year.

You obviously have a PC and time to post comments here, so I'd guess things aren't so bad after all. Unless your logging on from the public library after bathing in their bathroom. If that's the case I stand corrected.

[Tangeng]

It's not really bad for the average American right now. It's just that there isn't really any much consideration for the future. Investment by the average American for the future is rather low. A car can certainly count as investment. You might need it to get to work or move tools around, but the boat, the multiple motorcycles are pure consumption. While it would be nice to have this level of consumption if we had a decent savings rate, we'd be better off saving more and consuming less. The people in the video doing seem very prudent in their spending.

As far as the presentation of deflation, it would seem that most of those gains in food was gained before the 70's. The most recent gains in "productiveness of time" would be in either electronics or manufactured goods that come from China. The former is a good sign. The tech sector has vibrant talent and copious investment. The latter is a bad sign, an example of lack of investment in manufacturing in the US and growing foreign competition.

Finally the last worry is growing debt. It's not that savings has been zero. It's been negative for a long time and that suggests a unsustainable level of consumption. Life is good. But it's no time to act stupid and spend like there is no tomorrow.

[Tangeng]

Ack, misspellings everywhere. It'd be nice to be able to either have a preview or a limited time for editing. Anyways. The moral of the story is that Americans should stop spending like idiots.

[Pig Mannix]

@Steve Horwitz

Standards of living since 1971 most certainly do not suck. Poor Americans today are notably more likely to have any number of consumer goods in their houses than the AVERAGE American did in 1971, which is exactly the point Cox is making in the video.

The average American was probably better off during the depression than the average serf was during the middle-ages.

I don't think that necessarily means the appropriate response to the depression should have been, "Don't worry - be happy!".

[Smappy]

I don't think that necessarily means the appropriate response to the depression should have been, "Don't worry - be happy!".

That probably wouldn't have been my reaction either, but I'm not sure why it shouldn't be.

[Mark VIII]

'Hmmmm, even after Nortern Rock suffered its run here in the UK it was issuing mortgages six times the average rate of earning. I don't things are much different in the US, are they?'

@Richard

Six times? That's a bit of a porky isn't it? I went there and they only offered me 4 times, but then again that might be because I'm an unemployed/able writer. If so, no wonder they went tits up. Isn't Richard 'facial hair' Branson buying them out?

It was a good fun report but it doesn't really talk about inflation and the fact that, you know, sometimes recessions do actually happen.

[Mike Laursen]

A corollary to this video: TV pundits, and people like us who spend their time hanging out at political websites, are always declaring that Americans are stupid or apathetic about politics. Well, they're out jet-skiing while we're fretting over the gubmint. Who's stupid?

[Slocum]

That's the problem that pro-market people need to address: why living standards have stagnated for almost forty years now, despite the fact that we've had a huge computer revolution at the same time.

The answer is simple -- living standards absolutely haven't stagnated for almost forty years now. The number of things that a middle class family can afford now but not in the 1970s (or that are much cheaper now) is staggering:

- Airline trips
- Computers
- Video systems
- Recorded movies
- Recorded music
- Mobile phones
- Video games
- Microwaves

And that doesn't include things that could not be had at any price (the internet, GPS navigation systems, MP3 players, arthroscopic surgery, statin drugs). None of these are luxury items that only the rich can afford -- they are all mass-market products. Nor are these new and vastly improved things trivial trinkets -- they're things that we use and depend on more often than almost anything we own. What do we use more than the Internet, cell-phones, MP3 players, and flat-screen TVs?

And then there are all the products that have improved vastly that they are hardly recognizable as the same. Compare a 1970s Honda Civic to a 2007 Honda Civic and the comparison is a total eye-opener. THIS is a 1977 Honda Civic:

http://a332.g.akamai.net/f/332/936/12h/www.edmunds.com//media/reviews/generations/honda.civic/77.honda.civichatchback.500.jpg

To look at the generations of Honda Civic is to see how greatly things have improved since 1971:

http://www.edmunds.com/insideline/do/Features/articleId=68272#2

Safety, comfort, durability, reliability -- the differences are vast.

I'm sorry -- the idea that living standards of average Americans haven't improved since 1971 is just laughable.

[Rhywun]

America has the most debt out of all the nations but it is the most prosperous.

I suppose that's true when you never have to pay it back.

[Johnjackson]

I live in Ohio, and dont have a job either. But I'm doing fine. The cost of living is so low I can just play on the internets all day and not worry about it.

I have never been one of the "monthly payment types" myself. In other words I've never had a car payment ( cash purchases) or looked at affording things based on the financing. However, that's how most people do it and I see nothing wrong with it. Especially if they have a reasonable expectation to maintain their income levels.

[Chuck]

I would like to know the price of Health Services and Insurance compared to back before the HMO act and even earlier.

The 'squeeze' I hear of most is from people speaking of Medical costs (2500- 5000 for kidney stone [true story]).

[Brandybuck]

I think both sides are off base on this one. This isn't the worst of all possible worlds, and neither is it the best. The problem with "nothing's wrong" arguments is that it suggests no need to lower taxes, cut spending, reduce government intervention, etc.

I'm in the middle. The government is most certainly futzing up the economy, and if it weren't for advances in technology and increased productivity, we would be doomed. In other words, the middle class is stuck in a "three steps forward two step back" mode.

[Bob Smith]

One problem with "omg debt!" is that debt can be a very rational thing to have. Buying a car with a 7% loan and conserving your cash for a ~10% mutual fund is sound economic thinking. Don't forget the effect of leverage: I can buy a house with 80-100% leverage (depending on credit) but I can only buy stock with 50% leverage. That additional leverage means substantial additional wealth accrues to the person who isn't afraid of debt.

One thing that is very different for the middle class in 2008 compared to 1971 is that the middle class now owns trillions of dollars of stocks and mutual funds, something that really was the domain of the upper classes in 1971.

[James Anderson Merritt]

With luck, the controversy and star power behind Carey's latest segment will prompt people to dig into the subject a little further via the web. If they do, they may come up with this wonderful truffle from 1997:

http://dallasfed.org/fed/annual/1999p/ar97.cfm

This is the Dallas Fed's wonderful report, "Time Well Spent," which thoroughly but entertainingly examines the concept of "hours worked" as the yardstick of an increasing standard of living. Most of the points raised in this report are echoed by the Carey video (and, presumably, in his guest's book), but there is a lot more substance for those who think that Carey and friends gave the topic only a superficial treatment. I cannot recommend "Time Well Spent" highly enough. For anyone who has been put to sleep, listening to Cato's podcasts of speeches by FedHeads and other financial poobahs, you'll find this report to be refreshingly accessible -- even exciting if you are interested in economics even a little bit. And the story it tells is quite the antidote to the mainstream media gloom-n-doom that Carey criticizes in his own report.

[Steam McQueen]

I don't know.. I just. Don't. Know. I found the 'time' aspect a bit dubious. Sure, a lot of people are doing well.. or so it appears from a material standpoint, but I didn't see any mention of how much time people were spending at work to make it all possible.

Most people I know are working at least 60 hours a week. The man who was borrowing the boat from the truck driver... well that's pretty telling right there.

Sure you can have all these things but at what cost? Working yourself to death just to have a garage full of toys seems foolish to me.

I liked the quote: "It's not the high cost of living, it's the cost of living high" Very well said.

Everywhere Americans go, at every opportunity they are being sold to. The unstated message is quite clear: "You need this item to be complete, and if you can't afford it then you are a failure".

I liked it, Drew.. but I think maybe you got a little misled this time. Still a fan, will still keep watching...

[anon]

Steve Horwitz:

of course it is useful to look at "time-wage" prices instead of just "money-wage" prices. But there's a limit to this analysis. By it's very nature it is always comparing the purchasing power of today's time in today's market with a previous era's time in that previous era's market. In other words, it doesn't help us much at looking at one of the key factors of any economy and that is the ability to store up value. So, yes, given the rise in wages, the time-cost of various things in today's labor market is lower than before. But is that terribly helpful to the person who expended his labor in another era's labor market and so doesn't get the opportunity to capitalize on inflation in wages to deal with price inflation. I'm not belittling the analysis. I think it is helpful, but it is hardly the whole picture.

[Steve Horwitz]

Steam: Americans are, on average, working fewer hours than ever before. Thanks to longer life spans and earlier retirement, we also have many more leisure hours in our lives than anyone else in human history. The Cox and Alm book mentioned in the video is well worth reading.

And for anon: Sure it's not the whole picture. We can look at consumption data and all kinds of other things. And there are a few indicators that have gone down. But the overwhelming evidence is that the American middle class are doing better than ever and the American poor are doing better than the American middle class of 40 years ago.

[Daniel Reeves]

America has the most debt out of all the nations but it is the most prosperous.

I suppose that's true when you never have to pay it back.

Other nations invest in us because they're more likely to get higher profits than elsewhere, even if we don't pay back all of the money we owe them. If they weren't guaranteed these returns, then it would be stupid to keep investing. They'd stop. So why don't they? Because they're getting good returns.

There's also economic and political security in investing in America.

Neither public nor private debt is exactly a "good thing." But deficit-spending isn't bad in moderation (it's actually probably a really good thing in moderation), and a big national debt certainly not the time bomb people seem to think it is. At the current level, it's bad. But it's not the end of America. It's not our road to widespread poverty. It's debt, something that'll haunt us for awhile but we'll get over it.

If anything, it can be good for libertarians, so long as they decide to spend less instead of tax more. But that's probably asking for too much.

[Daniel Reeves]

^ ("They" as in the government.)

[jonelin]

i also had the question of how many of these guys had families, how much of their stuff was bought off of an inheritance windfall after mommy and daddy died, how much of it was bought on credit.

someone else said, "so what, we get home loans and no one says you are stupid for that."

the difference being that real estate is an investment. my house generally goes up in value, and as long as i don't live off my equity, if the market sags (like it is right now) i'm still up from where i started.

boats, cars, etc. drop in value.

i am at a point in my career where there are a few jobs for my level, and dozens upon dozens vying for the each job. i can't go down, i'm over qualified. i can't move up until i get that current level experience. so i scrape up freelance work for a few hundred bucks here or there as i can get it.

if my cars weren't paid for (and paid off early, saving me hundreds in interest), and my mortgage wasn't as good as it is, we'd be living with the in-laws. ~shudders~

[TrickyVic]

Credit does matter. It provides the means to purchase things you can't afford. It's an enabler that the middle class probably had little of in the aforementioned "jet setter" age. We have more access to credit now than ever before. Credit can be good. That can be a plus for the economy and the middle class if it doesn't get out of control. The so called collasping of the middle class has more to do with the failure to manage debt. That's not the economy's fault.

I'd like to see how many hours of work people owe on their goods. Plus I'd like to see the cost of goods adjust to the amount paid with the interest included. That's how much we really pay for something.

[James Anderson Merritt]

Whoa. I just divided a close-but-rough estimate of my current household debt against my close-but-rough estimate of my gross hourly wage. The answer I got: 666.

On the good side, that's only about 4 months of toil -- quite a bit less than I have to work to pay for one year's total taxes, in fact. But on the bad side ... SATAN!

😉

[ray]

Cheap money is a major factor. The middle class and below tend to finance their purchases which makes them very interest rate sensitive. I wonder how that visit to the lake would have gone if we had late 80's 20%+ interest rates? In the past people valued paying off their mortgages but today people are encouraged to do the opposite - to borrow against their home equity. I am not saying that things are not better but I think a more detailed analysis is required before any quantitative comparisons are done.

[George N. Wells, CPIM]

While I do not doubt the fact that the toys the video focused on are less expensive in terms of hours worked (a good measure of how much things actually cost), there was a follow-up the Drew never asked: "Do these people have full title to their expensive toys?" My guess is:"Probably not." It is highly likely that the toys are all financed on direct loans or bought from the (diminishing) equity in their houses.

I'd love to beleive that all is wonderful and just not reported by the media. However, my sense is that Americans are living large on credit and need to read Robert Service's poem "Pay the Bill."

[amgriffin]

I was disappointed in the video. I think it would have been a more useful comparison if the expenses used for comparisons were items of necessity rather than items of luxury. The example of cell phones was poor because as the technology develops the devices and services have become less and less expensive. The actual cost of them has lowered, not the buying power of the individual. Likewise the example of purchasing and having central air and heat for one's home in the last 50 years. It is not the buying power of the individual that has increased but the cost of the goods, service and technology has sharply declined. The comparisons did not prove the point that Mr. Carey was attempting to make. It SOUNDED good but under the scrutiy of logic the examples do not stand.

I can only speak from personal experience what it means when I say yes, I do feel squeezed. My income has remained the same for the last 5 years. I pay more now for eggs, milk and bread than I did a year ago. I paid more last year for those things than I paid the year before and I paid more that year than the one prior. The same for the cost of the natural gas to heat my house and the fuel needed to get my car to work and the clothing my child wears and our medical covereage and all the other necessities. All out of an income that remains the same.

From all objective standards I am NOT better off now than I was 5 years ago. Then again, at under $28,000 a year most would not consider me to be middle class.

Yes, I think Mr. Carey is out of touch. And I'm NOT sorry he is. I don't wish anyone to be personally familliar with the stress of having to choose to pay the power bill over paying the rent, or choosing to not pay the power bill in favor of buying groceries. But the reality is lots of people do experience just that. People like me. People who work respectable full time jobs. People who are not living on credit or spending their paychecks on luxuries. People who are only getting by.

I am not alone. I am not a myth. I'm not "living large".

Yes, Mr. Carey. For me and others like me the squeeze is on. Be grateful it's not true or real for you.

[K.]

Sure you can have all these things but at what cost? Working yourself to death just to have a garage full of toys seems foolish to me.

Who are you to say that? Don't you think the family riding around in the sunshine on that boat was having a fantastic time? Don't you realize those kids will grow up with wonderful memories of family time on the water?

Nobody in those clips looked the least bit "worked to death."

People have the right to take pleasure as they wish to--if it's through the use of gadgets so what?

[K.]

I think it would have been a more useful comparison if the expenses used for comparisons were items of necessity rather than items of luxury.

The vid included food & clothing!!!!

[Ixman]

Rhondu | February 4, 2008, 8:21am | #
Reason sucks

dr_dog | February 4, 2008, 9:24am | #

Rhondu | February 4, 2008, 8:21am | #
Reason sucks

Best comment ever.

Heh. I wonder if Rhondu and Dr. Dog are aware of the unintentional humor in that statement. They just told us much about themselves.

[Art Vandalay]

Rhondu:

Reason sucks?

Yes, I guess it takes a lot of work to think about things, doesn't it?

[Sue]

Food and clothing are cheaper, but housing and education cost much more now than they did 50 years ago. It does no good to say that houses now are bigger and have more amenities, because many of the features on newer houses are mandated by municipal building codes. You cannot get an occupancy permit to sell or rent a dwelling without heat or indoor plumbing, even if you wanted to live that way.

And I agree that much apparent middle-class prosperity is debt-based. The traditional middle-class virtues of thrift and planning are dead.

[Jordan]

I am not alone. I am not a myth. I'm not "living large".

Interestingly, "I" is singular. Meaning one. The plural of anecdote is not data.

I can only speak from personal experience what it means when I say yes, I do feel squeezed. My income has remained the same for the last 5 years.

And whose fault is that? You couldn't find a better job, negotiate with your employer or make yourself more marketable through education?

[Bob Smith]

It is not the buying power of the individual that has increased but the cost of the goods, service and technology has sharply declined.

That's utterly absurd. If the cost of things you buy is decreasing, by definition your buying power has increased. You now have money left over to buy more stuff, buy more expensive stuff, or to invest in future wealth.

[Dave]

Heh...that guy is a "gardener" eh?

Shoulda asked him what kind of plants he tends to.

[amgriffin]

He said "food prices are down". Wouldn't it be great if just uttering the sentence made it true?

http://www.economist.com/opinion/displaystory.cfm?story_id=10252015

[TRH]

Drew also should have pointed out how lucky the middle class is to have bathrooms in their homes rather than in the backyard -- like poor people in the old days. Hmm, it seems like a very rich man is telling the middle class to borrow money for "luxury" items. Shouldn't those boaters be spending time with their kids? Saving money to send them to good schools? Also, I'm glad to see that phones are so small these days. Where have I been? Thanks for the info.

[rickygee]

Seems like a lot of people here are awfully testy towards anyone not singin' the American Dream. Evidently Matt J thinks Theresa is only entitled to her opinion if she is a homeless vagrant eating worms to survive. I sense a little snippy guilt-lash going on.

Drew Carey is a rich, once-funny, ABC/Disney pitchman who has no clue what he is talking about.

I concur that "REASON" -- the website hosting the video in question does, in fact, suck.

[John Fawell]

The premis that people are better off, but always want more is correct. The bottom line is the media is the source of the probem because it is so negative. Plus, the negativity drones on and on 24 X 7. What ever haapened to News -- the reporting of facts that balance both sides of an issue?

[TRH]

Drew, you should have interviewed people taking illegal drugs. I'm sure they would have told you that they can afford it. I mean, the price of drugs has really come down. Just don't interview middle class people taking their prescription drugs--those are rather expensive.

[Dave H]

Spot on again, Drew.

"Evidently Matt J thinks Theresa is only entitled to her opinion if she is a homeless vagrant eating worms to survive. I sense a little snippy guilt-lash going on." --rickygee

I didn't see where Mat J was saying she was not entitled to her opinion. His point is valid. I believe he is offering some, gasp, perspective.

"Just don't interview middle class people taking their prescription drugs--those are rather expensive." TRH

ever care to think about the fact that most of the prescription drugs people are taking today didn't exist until recently? Ever think about what would be happening to many people 100, 50, 20, even 10 (or less) years ago if they didn't have expensive drugs to take. Would you rather be dying (or dead) than paying for an expensive life saving medication? I'm not necesarily arguing that they are cheap or even that they are not overpriced (thats another discussion entirely).

Point is, it is hard to compare standards of living to a previous point in time when there are so many more things today that people consider essential. When many americans consider cable television and a car for every person in the family essential(etc, etc, etc), yes, it may be harder to provide these "essentials" compared to a previous point in time when peoples expectations of the essentials were lower.

[Sharona]

TrickyVic wrote:

>>>Credit does matter. It provides the means to purchase things you can't afford. It's an enabler that the middle class probably had little of in the aforementioned "jet setter" age. We have more access to credit now than ever before. Credit can be good. That can be a plus for the economy and the middle class if it doesn't get out of control. The so called collasping of the middle class has more to do with the failure to manage debt. That's not the economy's fault. I'd like to see how many hours of work people owe on their goods. Plus I'd like to see the cost of goods adjust to the amount paid with the interest included. That's how much we really pay for something.

[Sharona]

TrickyVic wrote:

>>>Credit does matter. It provides the means to purchase things you can't afford. It's an enabler that the middle class probably had little of in the aforementioned "jet setter" age. We have more access to credit now than ever before. Credit can be good. That can be a plus for the economy and the middle class if it doesn't get out of control. The so called collasping of the middle class has more to do with the failure to manage debt. That's not the economy's fault. I'd like to see how many hours of work people owe on their goods. Plus I'd like to see the cost of goods adjust to the amount paid with the interest included. That's how much we really pay for something.

[Sharona]

Honestly, this is THE SUCKIEST blog/comments engine I've ever used. For God's sake, get some bandwidth!

Ahem. Maybe this time the system will accept all of my comments.

TrickyVic wrote:

"Credit does matter. It provides the means to purchase things you can't afford. It's an enabler that the middle class probably had little of in the aforementioned "jet setter" age. We have more access to credit now than ever before. Credit can be good. That can be a plus for the economy and the middle class if it doesn't get out of control. The so called collasping of the middle class has more to do with the failure to manage debt. That's not the economy's fault."

Amen, TV!

"I'd like to see how many hours of work people owe on their goods. Plus I'd like to see the cost of goods adjust to the amount paid with the interest included. That's how much we really pay for something."

I think TV has a valid point. I, too, would like to know how many of those people are in debt up to their eyeballs in order to have boats, Escalades, and so on. It would have been enlightening to have such facts to balance against the shiny new toys.

TV is correct when he/she says that people did not have access to the credit they do these days. I'm old enough to remember when MasterCharge (that's what it was called) was brand new--and there was no Visa. The idea that you could use a single credit card anywhere, one that wasn't bound to a specific store? Revolutionary!

People in the 1950s and 60s did not have access to credit in the form we have now because it simply didn't exist. I'm certain people back then could have afforded a few more toys, if only they'd had the credit availability we have now. And I'm certain any number of doofuses would overspend and get into financial trouble, just like they do today.

(A side note: I was more horrified than reassured [about our economy] that these folks with boats and fancy vehicles worked everyday-Joe jobs. These people may be the same ones not saving for retirement, because they think that the government is going to support them, and that Social Security, Medicare, etc., will always be there...)

Still, this video was thought-provoking, and I enjoyed watching it. My ongoing kudos to Drew and Reason for this series!

Sharona
who's not in debt for one damned thing, and who *will* have enough money when she retires, because she doesn't abuse credit just to have new stuff...

[NatureDevil]

This video is right on. Everyone has tough times, and I am going through some of the hardest right now, but everytime I look back to the year before, I am always out on top, whether I have more free time, less debt, more equity, greater investments, and of course more personal accomplishments.

It is easier for people to complain about their problems and then blame the rest of the world for them. Be thankful for what you have...

[TRH]

"ever care to think about the fact that most of the prescription drugs people are taking today didn't exist until recently?" --DaveH

Yes I have. I think the advancements in medicine are amazing. What does that have to do with the costs that are "squeezing" the middle class? Isn't that the topic?

[TRH]

NatureDevil, "be grateful for what you have" but elect leaders and decision makers who craft laws that help American to be stronger, healthier, more educated, safer and ultimately happier. I know our law makers make some corporations healthier & happier (supposedly that trickles down, right?). Pointing out what we, as a country, are doing wrong is not complaining, it's examining our actions. It sounds like you're getting through tough times by working hard and making smart decisions. I'm sure you looked at yourself and saw some things you could do differently in order to improve your life. We should expect the same from our government. We're "free" but our government shapes our world.

[Dave H]

"Yes I have. I think the advancements in medicine are amazing. What does that have to do with the costs that are "squeezing" the middle class? Isn't that the topic?" - TRH

I thought I clarified that in the paragraph after that one. I will rehash it again. Yes, people may feel more squeezed to support their desired lifestyle than in the past. but that is because our expected lifestyle has gone way up (look at all the things people have nowadays that were luxuries or just didn't exist previously). ie: yes, many americans may feel squeezed to pay the cell phone bill, internet, two car payments, way bigger house than they really need, 50" plasma tv.

i made the comment about the drugs because it was brought up. yes, it may indeed be hard to pay for expensive medicines. but it is unfair to say (not directed at you specfically) "it was easier to make ends meet in the past", when the ends you were making meet in the past were simpler, or had lower standards.

clear?

[TRH]

Dave H, I agree that it's unfair to say "it was easier to make ends meet in the past". I'm saying we need to look honestly at all aspects of today's economic situation with the middle class. I think Drew's comparison of the past and presnt are completely irrelevant. Who cares if cell phones are cheap? Who cares if they weren't invented 75 years ago.

Using a bunch of boaters as proof that the middle class is doing fine is as ridiculous as using a bunch of drug users. Let's look at the real people--people trying to pay for prescriptions (and who cares if those prescriptions didn't exsist 20 years ago--that's irrelevant).

Also, when a friend is struggling financially and asks for a loan, the first thing I ask is "Have you cancelled your cable?"

[James]

What exactly does being "middle class" mean? It's funny how the media, pundits, and politicians want to put everyone in a single class. But, truly my definition of middle class is probably different than the next person.

[TRH]

Upper Middle Class: highly educated, salaried professionals and managers. Lower middle class: mostly semi-professionals, skilled craftsmen and lower level management...$25,000 and $100,000 a year

[Kracken]

I know, all those people trying to pay for a prescription for a disease that would have killed or crippled them fifty or sixty years ago. Poor things.

You want to live as if everything should be free somehow, first take a look at how much it costs to R&D the medicine in that prescription. Or you could sit in your own garage and figure out a cure for everything all by your lonesome.

Middle class squeeze is bull, its far too many people thinking their life sucks because they don't have an HD television.

[David L.]

Wonderful video, but... It seems when you actually check the Census Bureau data it doesn't quite support Carey's conclusion! Just the opposite in fact. The last decade actually shows income stagnation for the first three quintiles when calculated in constant dollars. Add to that increasing health care costs, debt burden, property taxes etc., it appears that Lou Dobbs is a lot closer to understanding the problem than Drew Carey is.

[Daniel Reeves]

Dave H, I agree that it's unfair to say "it was easier to make ends meet in the past". I'm saying we need to look honestly at all aspects of today's economic situation with the middle class. I think Drew's comparison of the past and presnt are completely irrelevant. Who cares if cell phones are cheap? Who cares if they weren't invented 75 years ago.

Using a bunch of boaters as proof that the middle class is doing fine is as ridiculous as using a bunch of drug users. Let's look at the real people--people trying to pay for prescriptions (and who cares if those prescriptions didn't exsist 20 years ago--that's irrelevant).

Are you kidding?!?! It's completely relevant. It is one of the most relevant things in comparison. Hell, it's a part of the scientific method.

The price of something means absolutely nothing if you have nothing with which to compare it. Prescription medicines that did not exist 20 years ago had an undefined price. Someone who cannot afford them today is benefiting as much as someone who could have afforded them when they did not exist.

The changes in goods matters, as well.

Comparing the differences of statistical categories over time produces different results from the differences of singled out things-- from human beings to nations. What is being compared differs in each case. Discrepancies as a result of comparison instead of individual success produce relative results, not real results. The most lucid example of this is the adjustment of prices for inflation. Why would you compare prices from the 70's with those of today without adjusting for inflation? Simple: you don't. Nobody with a brain does. Unfortunately, this principle is seldom consistently adhered to outside monetary value.

There is an inflationary bias from the consumer price index because goods change over time. When you're buying a car of today, some of the additional price may be because of air conditioning, GPS, better gas mileage, etc.

Likewise, a car from the 70's with low vintage and in "perfect condition" will sell for much less than a car of today. The same applies for any products in the 70's. Basically, the same product costs plenty less today than 30 years ago. Just as our dollar is worth less today than thirty years ago, so we adjust for inflation for a fair comparison.

A rise in production has led to a rise in prosperity for all classes, however, the higher quintiles have received a faster boost. Median income has been increasing. It is completely understandable that rich people are growing at a faster rate than the rest of us. It fails to show that we are lagging behind, and it can never show that we-- the middle class-- are being "squeezed." The fallacy that the rich are eating the poor is outrageous-- the industrial revolution proved that wealth can be created. Wealth is neither a pie nor can it fairly be measured as one because of that fact. It is unfortunate that people think only in comparison of the more productive, instead of those who were as productive as them years before them. It is unfortunate people use inconsistent logic, comparing things with literally nothing, as some things did not exist 50 years ago. There is nothing to compare.

If you ever want a reading list, I always have a few good suggestions. Just drop me a line.

[TRH]

Daniel, yes comparisons are appropriate when used correctly and logically. Cheap cell phones? That's kind of lame proof that the middle class is thriving. Film shots of the middle class recreating on a lake in the 1950's would have been full of families on boats rather than a few single dudes off work. Is that today's successful middle class--a truck driver with a boat?

[dick]

TRH,

In case you didn't notice the boaters WERE recreating with their families. It is just that the recreation available now was not available then so that the families could have been in the boat, on the shore getting the food ready, in a friend's boat. The boats that were shown were of 2 types - for small groups and fun and for larger groups and family fun.

As to the comment about cheap cell phones being lame proof? You couldn't have had that at all just a short time ago. Now you have cell phones for almost everybody should they want them - their choice. They are relatively cheap and many have gotten rid of their land line phones. And many of them are with the lower class, not even middle class. That strikes me as a big proof, not a lame proof.

[Daniel Reeves]

Cell phones are a huge part of people's lives. It's the indoor plumbing of the twenty-first century. When a billionaire and a man with a $50,000 annual income are using the same cell phones because nothing better exists and when that technology is an integral part of our lives because of its usefulness, then yes, I do believe the middle class is doing pretty damn good. The widespread availability of the best technology available for practical usage has blurred the line of living standards between the upper and middle class.

Without personal technology I probably would have pursued a career in economics because I like economics and I could more likely score a good paying job. Because income means less these days, I'm happily pursuing a career in commercial art because I like art more and I can easily live a good life on a lower income; economics is now just a side thing. I'm using the technology as a safety net!

[Leo Strauss]

The assertion that debt is more beneficial than harmful is nothing but a fallacy that is put forth to rationalize the ugly reality of all of the negatives that such a large debt problem brings.

[Ilkka Kokkarinen]

This was a great video. Like I wrote in my blog post, you guys should next do a video that simply compares the homes of an average American and an average European, and other aspects of their material standard of living such as how often they eat out etc.

Left-liberalism has support among the American middle class because the average middle-class left-liberal simply doesn't understand that if he ever actually got his wish of America becoming like Europe, there is no way in hell that he would have the 3000 sq. ft. home, a car for each member of the family who is old enough, dining out several times a week and vacations that he gets to enjoy in the American system. Really, please please pretty please make a video that would make him understand this, and on the other hand, make the Europeans ask why they don't get to have the same.

[Jimbeaud]

This video omits the fact that most households are two-income households - hence we are working TWICE as many hours for those 'things"
Comparing plane flight to 1930 is idiotic. Compare to 20 years ago, not to the 'dawn of the technology' Same with cars, cell phones. (by the way, we now pay TWICE for our phone - one for home and a cell phone) How about cable? That's gone UP considerably, hasn't it? And compare food to 5 years ago, not 1900!!!

[Jimbeaud]

"...if he ever actually got his wish of America becoming like Europe, there is no way in hell that he would have the 3000 sq. ft. home, a car for each member of the family who is old enough, dining out several times a week and vacations that he gets to enjoy in the American system."

Who NEEDS a 3000 square foot house?
And the reason everybody has a car here is because they killed public transportation. Not to mention the US is essentially 'designed for cars'.
Eating out is just as cheap there as here, for the most part.
And their vacations are often one to three MONTHS! Me? I canned my vacation this year - too many medical bills!

[Diane]

The questions I never heard asked was, "How much debt do you have?" Sure, people buy boats and expensive cars but can they really afford them? I doubt it.

This middle class family of 4 has no expensive toys because we can't afford them. We have a physically disabled child and I had breast cancer surgery last year and we're swimming in medical debt because our insurance sucks.

Some middle class families are having a hard time making ends meet. You just didn't decide to talk to any of those people.

[A More Inconvenient Truth]

Unfortunately, all the negative opinions out there stem from the misconception that the world is a zero-sum game. The rich are not stealing from the poor, they are *creating* wealth. The wealth of the world as a while has grown extremely fast over the last century. Our time is the most important good in life--think of how much time is saved by modern transportation, by the internet, by businesses that build and move goods quickly every single day around the world. Read more on my blog http://moretruth.wordpress.com/2008/02/06/news-flash-negative-news-for-profit/

[Doug]

The comparisons with 1930, or 1970, or even 1990 are all fair. The standard of living has increased, and continues to do so. The quality of the goods continue to improve, and the pace of technological innovation provides the new toys we all love, and which didn't exist just 5 or 10 years ago. As for those who are moaning about their cell phone bills, and cable rates, these are the very definition of discretionary spending. If you think they cost too much....pull the plug. Yes, there are the anecdotal sob stories, but in the end, ask yourself...would you rather be poor in the US, or rich in Zimbabwe....hacks like Dobbs pander to those who want the government to take care of us....

[Daniel Reeves]

The assertion that debt is more beneficial than harmful is nothing but a fallacy that is put forth to rationalize the ugly reality of all of the negatives that such a large debt problem brings.

Speaking of fallacies, nobody asserts that. It's a straw man. It's deficit-spending-- buying things you can't pay for up front-- that people say is beneficial, and even that to moderation. If you (or your parents) didn't do that, you (or your parents) would probably not have a house or a car.

People buy things they can't afford and then repay in excess because the additional cost exceeds the opportunity cost of having the product later and paying up front. Unless you were born into a rich family, you're going to do it.

[Stephen Burgoyne Coulson]

There are two major problems with the piece. The first problem is also the same problem that "the media" have when they are talking about the middle class getting squeezed and that is that there is no good definition of what the middle class actually is. It's a very amorphous term.

The second problem is that of asking a self selecting audience about how they're doing. If you go to a place where a certain activity takes place you will find that a large number of those people there enjoy and can afford that activity. If half the people who could afford it last year couldn't afford it this year then the missing people would not show up in the interviews. If, for example, a deadly plague was to be "squeezing" the living, asking people if they are still alive would tell you only that those people were still alive but it would not tell you that no-one had died.

So, if the middle class is getting squeezed such that some people end up falling out of the middle class, the people still in the middle class are still experiencing middle class lifestyles.

Another problem is the simple definitional fact that "middle class" is a relative term. It is relative to the upper and lower classes. It's also a group or collective term. The middle class is all of the people in the middle. To answer whether the middle class is getting squeezed we need to know if it is getting smaller or not (does it contain less people now than at some time in the past). How many people have moved from the middle class to the upper class in the past few decades or vice versa, and likewise how many people have moved between middle and lower class.

As to the time value of products, whose time is being talked about. An average is used, but what average? Probably the mean average but a more meaningful average would be the median. If you placed a person with a million dollar annual income in a room of ten other people who earn $20,000 a year then the mean average would be almost $110,000 a year. Should the other people earning $20,000 a year be delighted that their average earnings are so high? Should they be overly worried that the rich guy might leave the room thus crashing their average income back down to $20,000? Of course not. The median average would tell you that the median annual income in the room is $20,000 and that would give a much better picture of what peoples earning (and thus spending) power is.

[Khalid Shah]

I am happy for the guys enjoying their boats but to look at that and say we are much better today is a consumption oriented analysis that is flawed in its basic assumption that consuming more means we are better off. Consider a person so obese that they cannot move from their bed is consuming more and more each successive day (perhaps at a lower food cost) but one would question the wisdom of thinking they are better off today than yesterday.

Perhaps adding a macro (try looking at the whole forest) view would bring a little balance to this analysis. Technology has made many amenities a lot cheaper but I would question if that has led to a better quality of life. Look at personal issues like obesity that have skyrocketed. On a society basis, compared to 30 years ago, we have more people in prison (and more than any country in the world), drug use is way higher and a million plus abortions per year (not a pro choice/life issue but rather pointing to a lot of really bad decisions that lead to a abortion number 10X per capita of comprable european economies). To say that things have gotten better while macro metrics (of individual and collective behavior) are going in the wrong direction is like everyone climbing higher on a ship that is slowly sinking.

We are all part of a vicious consumption production cycle driven by strong captalistic forces. More production leads to more consumption, more consumption leads to more production, like a dog going faster and faster trying to catch its tail. On a society basis there is something really wrong when we are spending almost twice as much of our GDP on health compared to most other countries and on any of the national health metrics we don't make it into the top 25. If we trully have extracted benefit from technology, the easy problems like basic health care should be a slam dunk to solve. But all new technology, including new health care technology, is primarily geared towards one goal: increase profits....which means increase consumption. Which is why preventive care is almost never supported by health insurance.

The same script is now repeating on a global scale. What we are seeing in India and China and elsewhere is that they are getting into this consumption/production cycle. And obesity is going up in middle classes all over the world and more and more continue to go hungry.

In short, there is something very wrong with this picture. We need to stop looking at only personal consumption as a metric of well being but try to look at personal and collective macro issues that should improve if indeed our well being is improving. I would accept that some such metrics have improved over time but enough are going in the wrong direction that we should be concerned.

[T Nick]

Great video, but I have a couple of observations:
1. The video did not address how much debt is carried by those "on the lake". They were only interested in the toys they owned and not the amount of debt/income ratio. It's the self inflicted trap of "Buy now, pay later".

2. The introduction says, "To hear the Lou Dobbses and Bill O'Reillys of the world...", but I only saw CNN clips and NONE of O'Reilly. Why hammer him? If you use him to sell the story, then insert a clip.

Minor points, but I did appreciate the message that, "Its not the high cost of living, but the cost of living high." So true.

[Jack]

One thing missing from the report and the statistics: There are more families now with two incomes. In the 1970s, one parent or spouse was more likely to stay at home.
How does that affect the " work time" spent to purchase something?

[James Nightshade]

Diane wrote: "This middle class family of 4 has no expensive toys because we can't afford them. We have a physically disabled child and I had breast cancer surgery last year and we're swimming in medical debt because our insurance sucks."

If this were the 1970s, you might already be dead. Back then, the 5-year survival rate for breast cancer was only 10%. (!!!) Nowadays it's better than 80%.

See http://news.bbc.co.uk/2/hi/health/272078.stm

Obviously we need to work much harder at improving the odds. Modern medicine is unfortunately still not very good at treating cancer... but at least it is much, much better than it used to be.

And although medical treatment in the US is very expensive, it is by clear margin the best place in the world for cancer treatment.

[Carl Lumma]

There's a lot of truth in this piece, but a few things are misleading. First, all three people interviewed at the Lake regarding their source income are involved in service industries, and probably self-employed. That doesn't make them middle-class. Often quite the opposite.

Second, though price comparisons in terms of wage hours would be most welcome, most comparisons here spanned over 100 years, skipping the rise of the middle class and the post-WWII boom that people now complain are fading. An appropriate starting date for the comparison would be 1971, when Nixon was forced to head off foreign calls on the dollar and subsequently the addition of mothers to the work force with no appreciable improvement in the standard of living. And every comparison was made back to the first market appearance of the technology in question (cell phones, flight, automobiles).

The constant improvement of technology does make it hard to do such comparisons. But things like square feet of living space, acres of land, a loaf of bread... would be better. Ultimately, just measuring how much people work is a good indicator. And the hours worked by women mean this comparison is not coming out in our favor since WWII. (Not to say that the empowerment of women was a bad thing, and it certainly came at a convenient time -- without it our standard of living probably would have collapsed.)

[John Moyle]

I agree on most counts, especially when it come to putting things in perspective in the media. However it's not all roses either. In 2005 America had 16% broadband penetration. Though I am sure that number has increased it is still likely that 2/3rds of America are not able to easily watch this video to learn it's alternative perspective.

Additionally, while some costs have dropped others have increased. Fuel costs, which effect most Americans have skyrocketed as we all know. Family health care costs have increased dramatically as well. Also, costs like homeowners insurance, real estate taxes, etc have all increased.

My homeowners insurance and real estate taxes have each doubled in costs in the last 8 years. My medical insurance costs have gone up by nearly 50%. My utility costs have increased, my car insurance has increased, my internet access costs have increased. Meanwhile, my wages have remained nearly the same in that time period.

Getting perspective based on America 50 years ago vs. today is a great exercise, but in my America, it's the increased cost of living in the last 10 years that is having an increasingly devastating impact on my family.

[jeff]

i generally like reason videos but this is a total stinker - and a political hack job at that

the "reasoning" is faulty - even a simple first year logic student could pick it out. you forgot to offset the gains in material items by the needs of material items.

sure, at one time only the "wealthy" had a phone, but at that time it wasn't required in normal daily life. same with cars, cell phones, a washer and dryer even.

certain technologies may always be a luxury, but certain other technologies when commonplace will always become a necessity.

so you compare a wealthy person buying a new "toy" at one point in time with a different "middle class" person at a different point in time when the "toy" is now a necessity - ridiculous.

bad, bad reasoning.

[Brandon]

I don't understand the hit on Ron Paul in the video description. Seems completely out of place and its not even mentioned in the video itself.

[vincent]

One of the main factors that makes people feeling worse than before is skyrocketing house prices (just before the recent backlash) in some parts af the country, that offsets the gains of falling prices of everyday consumptions.

But by the way, this is clearly a socialist factor: prices have been skyrocketting only in places where land use is over regulated for the profit of some special interests. Not in places where "property rights" still mean something.

So Mrs Clinton and Mr. Dobbs, who have always been advocating such planning policies, are the first among the warmongers against middle class.

[Fyodor Dostoevsky]

Is this a JOKE? Drew Carey finds (clearly WEALTHY) people who have what are considered blue-collar jobs, and this disproves the fact that most Americans are the working poor? My middle-class parents sure as hell don't have BOATS. Or paid vacation, for that matter. And what benefits? Shitty health insurance that you pay through the nose for?

My grandparents' houses, by the way, are big, 2-story, and GORGEOUS, with enormous kitchens. I accepted long ago that I will never come CLOSE to affording a house like that. Or even a shit-hole apartment.

And their jobs, by the way? Only one of my grandfathers was a 'professional' (eye-dr; the other was a carpenter), one grandmother didn't work and the other did part-time stuff like working at a beauty parlor.

Approx. 28% of Americans make less than $25 thousand/yr and another 26% (i'm rounding down on both of these) make 25 to 50,000. A fifty dollar cell phone is 3 hours of work? In what job? My mom works for the public schools and considers her benefits and salary very fair -- she makes $11/hr.

This sucks. I used to LIKE Drew Carey! I never thought he was capable of such crap. This is total propaganda. There was not a single middle class person in that entire video, by the way. The households they showed (like the people setting their gorgeous dining room table) are NOT middle-class.

And all those 'extras' in the house? I grew up in a very nice suburb in a big house but we never had central air, a DISHWASHER, or a FIREPLACE (are you KIDDING?) Not a single one of my friends (also in the nice suburbs) had FIREPLACES either. Jesus. This is total crap.

[Elroy]

Great article but don't let the government hear you. My taxes are high enough and if they hear how well we are doing look out. Also, the mainstream media are always praising celebrities for doing supposedly "courageous" things. Well this is something that definitely takes courage to say.

[JoeTX]

Give any family a pocket full of credit cards, and they will appear to be living large for a while. BUT, lets visit that same family 20 years later when the parents are ready to retire AND CAN'T because instead of saving and investing, all their available cash when to credit card interest payments, and lets see if the sons and daughters went to college or didn't because they or their parents couldn't afford to save up enough money to send them to college.

[puddinpop]

LIVING LARGE WITH DREW CAREY deleted scene

(transcript below)

DREW CAREY: "Another telling example of the continued prosperity among the middle class is all the fabulous prizes won by 'Price Is Right' contestants! In one recent taping, three people on the show walked away with a a bumper pool table, a trampoline, a Broyhill sofa, and a year's supply of Tide washing detergent! And let's not forget the Showcase Showdown-I know there's more than one middle class drudge who's enjoying a fantastic vacation in the U.S. Virgin Islands! Plus, if working Americans are so concerned about prices going up, how come so many of them can't accurately price a can of Chef Boy-Ar-Dee ravioli during the Shell Game? Also, if working Americans are feeling the squeeze, how would they be able to fly out to a 'Price Is Right' taping in the first place? Not only that, everyone in the 'Price Is Right' audience are grinning ear-to-ear and screaming like maniacs. I ask, is that the behavior of careworn people living paycheck to paycheck? Hardly! So take it from me, Drew Carey-there's no problem with the middle class! Everything's fine! And watch 'The Price Is Right' weekdays on CBS!"

[shteve]

Bookmark this video and rewatch it in a few years time - it'll be like a trip to fantasy land.

Drew completely ignores both the incredible indebtedness of Americans and the unfolding crisis in the credit markets.

Hasn't anyone here heard of the housing bubble? Read about credit card defaults? The collapse in car and boat lending?

[Michael Ejercito]

I can conclude two things from this video.

Either boats and motorcycles are cheap.

Or rich people are very generous.

[Michael Ejercito]

One of the main factors that makes people feeling worse than before is skyrocketing house prices (just before the recent backlash) in some parts af the country, that offsets the gains of falling prices of everyday consumptions.

I wonder why falling housing prices are now being spun as a bad thing.

Housing prices going up: bad

Housing prices going down: bad

So when are times good?

[Michael Ejercito]

And the reason everybody has a car here is because they killed public transportation. Not to mention the US is essentially 'designed for cars'.

Tell that to someone living in New York City or Chicago.

[TallDave]

The assertion that debt is more beneficial than harmful is nothing but a fallacy that is put forth to rationalize the ugly reality of all of the negatives that such a large debt problem brings.

Debt creates wealth by freeing liquidity from otherwise dead capital. In fact, there is an EXTREMELY strong correlation between the ability to collateralize property (i.e., car loans, mortgages) and GDP per capita.

[TallDave]

And it's easy to see why: if you couldn't purchase a car or house unless you had the cash up front, there would be a much smaller market for cars and houses.

[TallDave]

So when are times good?

When Pravda tells you times are good.

It's important to realize that news is always going to skew negative. This is not because the media want to bum everyone out, but because humans have (not surprisingly) evolved a strong information-seeking preference for bad news, so they give us what they want (or we watch their competitors). The survival value of such a preference for early humans in a very hostile prehistoric world is probably self-evident enough not to need explanation.

[Jeff]

Sadly while I still find Drew very funny...I think they are way off with this one. Too bad. I'll still watch his show though!

[bearlee]

What Drew neglected to ask these folks is how much equity they pulled out of their homes to buy these toys and how many are now upside down in their mortgage?!!?

All together now...Jingle mail, jingle mail, jingle all the way, oh what fun it is spend and walk awayyyy, HAY!

[Jay]

I only have one question about this report.
If there is no "Crunch" or "squeeze" on the middle class, than why cant I afford to own a home, a decent car, Medical insurance for myself and my family, and have plenty of food on the table at the same time?
I am your average everyday middleclass american.
I invite you to come walk a day or two in my shoes, before you tell me that Im not facing financial struggles, on middle class wages.
Thank You

[Dan]

Wow, what a scumbag. I used to Like Drew Carey.

Nothing is quite as irritating as a rich guy talking about how great the middle class have it, and making brilliant points like "A century ago only rich people owned cars!"

. . . yeah, and fifty years ago only businesses, the military, and universities had computers. Duh.

Notice when Drew is talking to all the people with the boats he never asks "Do you actually on this craft, or like most of America have you charged it to your credit?"

Have another doughnut Drew, you greasy, dishonest, self-absorbed prick.

[hobo]

What a bunch of crap. Lets see........50 to a 100 years ago there was only one bread winner in the middle class family. Now there are 2. Maybe we should legalize polygyny. Just think of all the tax breaks and things we could have if 10 of us worked.

[Phil]

I think the criticism about the boats being purchased on credit is fair. Drew uses the boats to suggest current wealth... but it's likely just debt based on speculation about future wealth. There is a difference there.

Also there seems to be over-reliance on Lou Dobbs and some random guys on a lake. The preview text promised me Ron Paul and Bill O... where were they?

[All Loan]

thank you for the post!

[Stalephreak]

Gosh, I don't own a boat, a motorcycle, or a car worth more tha $2000...What's that make me? I built my computers, I do all my own mechanic work..., and I live paycheck to paycheck... Let's see, I don't have cable, I don't have healthcare, or any benefits package from work, I have hobbies that are cheap, (bmx and guitar performance...But the guitar pays me, not the other way around)... OH, BTW I'm in buisiness management, and AM currently employed. No offense Drew, but you kinda missed the boat on that ride.

[hcat]

About ten years ago, Warren and Tyagi in The Two Income Trap solved this mystery - wages and salaries, in hours worked terms, in relation to most consumer goods that we buy at the mall, and to these boats, jet skis, and motorcycles, have not gone down. Wages and salaries have gone down measured against four specific things; housing (both rented and owned homes), health care, tuition (which for public schools is included in housing costs) and income ta bracket creep. These, Warren and Tyagi say, are the reasons people "cannot" live on one income, and they are also, if you've noticed, the focus of our political attention right now.

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[bored]

funny video they could afford drew carry they dont have enough money to research relevent facts, lets talk about cell phones prices dropping and house prices dropping. great call were in a recession and cell phones just became a mass market device. makes we wonder, how cheap is it to get drew carry these days

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[Jamie Block]

In the video there is an obvious dishonesty of numbers. This is hypocritical of reason.
The Gains in buying power were compared to different base years. Why? my guess is to give the most dramatic impact. So on one hand the video accuses news shows of showing bad news to get ratings and then it manipulates the numbers to make a point.

I would like to see the numbers to a standard base year (hopefully a year after the great depression).
I would pick 25, 10, and 5 years ago as good base to compare to. 25: Generation (Avg age of woman having first child) Ten and 5 just because.

For historical purposes maybe 1970 but I don't think 1917 would be a good base for the discussion of the middle class.

[Jamie Block]

So the basic reason of this video is correct. Comparing middle class should involve buying power / standard of living not just wages. It can also include the disparity between the top 1% and the middle 50%.

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[Bill Sweeney]

Of course, this video is dated. Still, it is interesting to see how facts were cherry picked to support your position. The thesis of the msm comments about a declining middle class focuses on how middle income people are earning less than in previous generations. Cherrypicking? How about interviewing people at a playground, filled with people who have placed importance on their toys? How about comparing prices of those very hi-tech items (like cell phones) while not comparing costs of things like higher education? How about comparing how many hours one has to work today to buy a car compared to 15-20 years ago -- as opposed to a century ago, when cars were a new product and not mass produced? You weaken your argument when you spin the facts...

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