The Coming Collapse of the Middle Class – A Lecture by Elizabeth Warren
Want to know why the middle class is disappearing despite families now having two people in the work force instead of one? Here is Elizabeth Warren discussing in an hour-long lecture at Berkeley. She is the author of The Two Income Trap.
The only thing I really take issue with is the fact the savings rate is horribly misleading for the reasons I explained in this blog over at About.com. For example, all of the money Warren Buffett has in shares of Berkshire Hathaway, which is nearly $60,000,000,000 never counted as “savings” on his part because it came from capital gains. Likewise, certain retirement contributions, which are now standard, aren’t included. In fact, if Buffett were to spend $10 billion, it would cause the savings rate to be negative if he were the only citizen in an economy because the $60 billion was never counted in the “plus” column. That isn’t economic reality, it is government accounting.
Warren makes great, valid points, which is why I think she she chair the consumer protection agency. To a finance geek like me, lectures like this are the equivalent of a night at the Playboy mansion.
Update: This post was restored on 05/14/2019 as part of a project that involved releasing selected posts from the private archives. It is difficult for me to overstate how disappointed I am that Elizabeth Warren, who has subsequently become a United States Senator, has gone from a fair-minded, even-handed academic discussing deep policy matters to someone I see, at times, as little better than a demagogue who proposes policies that are not only blatantly unconstitutional but that would result in massive incentive distortion and even greater problems down the road. The fact that she has had to move so far to the left in order to gather support within the Democratic party is, in my opinion, a further example of how the two party system in this country is fundamentally broken. The person in this video is someone I would have supported. Where did she go? Politics changes people. Most people, anyway. Not always. Exceptions exist. They are rare. I suppose the nicest thing I can say is that even her recent legislative initiatives are far less insane than the economic illiteracy that was the Bernie Sanders 2016 Presidential run, the policy proposals for which I analyzed here.