patrick.net

read this from a recent book review, thought i'd share:

"For me," Vollmann concludes, "poverty is not mere deprivation; for people may possess fewer things than I and be richer; poverty is wretchedness. It must then be an experience more than an economic state. It therefore remains somewhat immeasurable ... I can best conceive of poverty as a series of perceptual categories."

source:
http://www.salon.com/books/review/2007/04/16/vollman/index.html

Brand,

My parents have told me stories about the short rations during the "three year natural disaster" that was entirely due to the disasterous implementation of the pigheaded 2nd Five Year Plan. They lived in Shanghai so they were relatively well off, but they said nobody had rosy cheeks during those years. Everyone looks drawn and malnurished. Lots of people, even in the Shanghai, had bloated bellies from the lack of protein.

My father spent a year in Anhui province after university (about 15 years later) teaching peasant to use tractors and met a monk who was the sole survivor of his famine struck village.

Sorry, it's very late in DC, and I do get a bit grouchy my history cred gets questioned.

Space Ace says: No not the 1929-33 one but I did survive the Silicon Valley Depression of 1989-92 and 2000-2002. Many others left for Utah and Washington.

Those were recessions, not depressions.

Unless you're being sarcastic.

sybrib,

If I were you, I wouldn't go around calling random people on the internet princess when I haven't bothered to find out anything about them.

Furthermore, I wouldn't write a condescending reading list recommendation when I hadn't even understood the context of their original argument.

annie,

Sorry if I mischaracterized the current situation in your country. I've never been there (have been to Mexico a few times), but for the most part, my view of Colombia mostly has been shaped by news reports of the "War on Drugs" and the civil war going on there. Also, a VP from a company my wife used to work for was kidnapped there, and that has colored my perspective, I'm sure.

Most Americans probably assume, like me, that life in Colombia is pretty rough and dangerous, after reading news reports like this one:

http://news.bbc.co.uk/1/hi/world/americas/1738963.stm

Colombia has been ravaged by decades of civil war and has become synonymous with drug-trafficking. Since coming to power in 2002, President Alvaro Uribe has stepped up the war on left-wing rebels. Right-wing paramilitaries are engaged in a peace process.
But Colombia remains mired in violence, beset by poverty and at the centre of the world cocaine trade.

Colombia, in common with many Latin American nations, evolved as a highly segregated society, split between the traditionally rich families of Spanish descent and the vast majority of poor Colombians, many of whom are of mixed race

BigBrother Says:

> I live in the city. SFH over $3 million is getting
> very common now

Property Taxes on a $3.5mm Home is ~$40,000/yr
P&I on a $3.5mm Loan at 6% is ~250,000/yr
I guess that must mean that Million dollar salaries are more common than I thought…

> Have you guys EVER wondered perhaps just maybe,
> the herd is wrong, that you are wrong, that property
> will actually be ok?

The “herd” is still buying over priced homes but many are leaving the herd to join us on this Blog (that is sort of a modern day “Galt’s Gulch”).

Things will probably be slow at the open house tomorrow so take a shot at arguing why even one of the points on the main Patrick.net site are wrong:
http://patrick.net/housing/crash.html

Brand,

Ok, now I'm a little confused too. Were you being sarcastic during the entire rant (lampooning rich people who describe themselves as "middle class" but really aren't), or do you really disagree with me that the economy is becoming increasingly bifiurcated --especially for Gen-Xers & later?

In all seriousness, I certainly don't even come close to your "75%" yardstick, nor do most of my friends, but that is hardly a statistically representative sample. I'm not particularly drawn to arrogant, shallow, materialistic people who like to live beyond their means. I know a few people like that, but most are older trustafarians or managers in my company.

Your definition of "old-school" middle class is MY definition:

Several decades ago, the middle class wanted nothing more than to get out of debt. They wanted to own their own house and have a lifestyle that would be sustained into retirement (including medical and SS). The Great Depression did that to people. But now that we’re two generations removed from remembering the Great Depression ourselves, people have bought back into debt=wealth. It’s the new era!

I was wondering about the rant from Brand too, because according to his definition, I've been living the lifestyle of the slave class. Thanks for the clarification:-)

. One thing in the Bay Area is that it has become a place where the upper class and wealthy live, leaving their gated compounds during the day and in come the workers who keep their children, their lawns, their houses, serve them their meals in restaurants and fast food chains, bus the tables, paint , remodel, etc….and return home to

There aren't that many gated compounds here, compared to say... Texas. Certainly none in Fortress Sunnyvale/Mountain View/Palo Alto - not that I'm aware of.

Having an education or SFH is seen as somehow extravagant these days, or as a sick entitlement complex. Anyone else get that drift?

I realize middle class has truly become extravagant of late, especially in the Bay Area (wine cellars, Lexi, private schooling, etc.). I recoil though when we're all painted with the same brush. A condo in Miltpitas and a state school degree are not on par with that. Please know the difference.

How will these Bay Area residents keep employees in the supermarkets that serve them, teachers in their schools, firemen and police and postal workers in their communities if these essential workers can’t afford to live within the communities where they work?

Well a long time ago Californians decided that they didn't need teachers or schools anymore - see Prop 13 and the transition from first to last in Public Education.

Firefighters, on the other hand, have an interesting story:

http://www.mv-voice.com/morgue/2005/2005_06_03.acommt.shtml

Firefighters in Mountain View make an average annual salary of more than $100,000, counting overtime, so their exodus has more to do with their preferences for bigger houses than abject poverty forcing them out of the city. Still, only two of the city's 69 firefighters and two out of 17 support staff live within the city limits, similar to numbers seen in the police department. By comparison, a quarter of the employees in other city departments live in the city.

That's right - Mountain View firefighters make ~$100k.

And where do they choose to live?

Out in Tuolumne County, Norvell now finds himself living in what has become a sort of bedroom community for Bay Area firefighters. His neighbors in the Sierra Foothills, many of whom grew up and attended the local fire academy with him, now work in departments from San Ramon and Hayward in the East Bay to San Jose in the south and Redwood City on the Peninsula.

"I hate driving," he said on the phone from his home in the Sierra Foothills. "But I just think about the benefits of living here, and it's worth it."

Why Mountain View's firefighters, who make just a little less than some Google employees, choose to live out there, is beyond me.

Harm, great topic. It seems like there are several fun points to kick around. Before really diving in, do you assert in your treatise that the poor class is growing or just a growing disparity? Important to clarify please.

I'm not really sure what this is saying; it is obviously bad if more people are getting poorer, it is a good thing if the middle class is shrinking due to more people getting richer.

The other thing I'd like to see brought into this is the appearance of wealth. Do you consider for instance, someone who owns a 2000 Camry outright, and someone driving a brand new Hummer who is indebted a growing disparity?

eburbed,

Firefighters don't have to commute to work 5-6 days a week. I imagine that if Google employees could work firefighter schedules, they would also move further from MV.

I can't think of anyone I know who meets Brand's definition of middle class. Guess everyone I know must be poor, even the multi-millionaires. And anyone with a 4000 sq ft home in San Francisco is definitely wealthy, by any standard.

Oh, I get it, you are being sarcastic.

HAHAHAHA

To expand my last inquiry, it is very possible for people of average means to temporarily project the image of being very wealthy. I get concerned when this turns into a keep up with the Jones's kind of wealth race. These people may be confused with genuine wealth but that would be wrong for this discussion.

There was a strong pull toward buying lots of *crap about 5 years ago when it became very acceptable to tap equity and interests rates kept dropping. Alan Greenspan feared a depression and pulled out all the stops to get people to spend. It worked! Probably only too well. The consequences will be interesting !

Jimbo, that's true, that's why I'm asking for a few clarifications. To me, the poorest people are the ones with the most crap in the garage. Wealth is a real net worth, not a bunch of toys with a hefty monthly bill.

In this country on average we live liike kings in comparison to other parts of the world yet on paper we are actually poorer than the poor. Around the world you are poor if you are worth a big ZERO, yet in this country you can be worth NEGATIVE something and still drive a new Hummer.

bobh Says:
April 21st, 2007 at 6:54 pm
"Why is the “poor” guy in the cartoon skinny? Poor people are usually fat. Just what in hell is a “poor people” defined as nowadays anyway? "

I think nowadays you are poor if you only have basic cable.

Hi Malcolm,

Basically, what I was getting at is that the U.S. is getting more and more polarized economically, which roughly means fewer people achieving "middle class" status (neither rich nor poor --however you choose to define it), with the lion's share moving from "middle" to "poor". Also, a greater share of the country's wealth, passive or otherwise, is now going to the top quintile, with the extreme upper 1-2% getting the lion's share of it.

And no, I would not consider someone with a bunch of HELOC'd status symbol crap they value above their own children "rich" in any sense of the word --economically or spiritually.

I have always thought of Peter P as a Stephen Colbert doppleganger.

My wife agrees.

Cool Harm, this will be a fun one.

yet in this country you can be worth NEGATIVE something and still drive a new Hummer

Yup. At least until someone closes the easy-money tap.

(Changed my tag to be more explicit; there's another ajh now posting on CR.)

just maybe, the herd is wrong

So now the bulls are saying 'the herd' is bearish. I disagree.

It is a well known sociological effect that a group that has had overwhelming reinforcement of their views for a period of time sees even a mild move towards neutrality as propoganda for the opposition.

It's a little bit like the people who think US interest rates are going to be lowered because they are "high", when in fact they are only just into the neutral range (and in fact some of the alternative-CPI types feel that in real terms they are still negative). They have become so used to the freakishly low rates of the last few years that they consider these to be 'normal'.

What is considered middle class? Earning $80,000 a year combined. or $250,000 a year. Having a S500 Mercedes or a Suburban. Supporting your kids in Private school or having them attend public schools. I know several people who are in the top echelon in terms of assets. I consider them as the higher class.($10 Mil - 150 Mil) The definition of middle class is very subjective. Do I think there is a disparity of middle class and the wealthy in bay area. I would say no. Do I consider myself as middle class. I would say so. Will another person think I am a tick above middle class, sure. I can be in the category of middle class as a renter. I can also categaorize a homeowner with a $800,000 mortage a notch below what I feel as middle class.

Middle class is as much a mental state as an economic category. There's quite a few surveys where everyone from people from households earning as little as $30K to as much as $1M thought of themselves as middle class. Two recent and pretty well discussed wrinkles follows.

1. The high earners start to see themselves as upper class rather than middle class, segregate themselves via private school and gated communities.

2. The low earners see trappings of high earner "middle class" life and believe that lifestyle is obtainable. Aim for lifestyle via big splashy expenditures.

@LSR, tanks man ;)

@DP,

See "Quintiles" section on HH Income
http://en.wikipedia.org/wiki/Household_income_in_the_United_States#Quintiles

lower class $0-18,499
lower middle class $18,500-$34,737
middle class $34,738-$55,330
upper middle class $55,331-$88,029
upper class $88,030+
Top 5% (subset of upper class) $157,176+

Of course, these are arbitrary statistical divisions and raw "income" by itself means little. It's the standard of living (not to be confused with "quality of life" --thanks, cm ;-) ) it's capable of purchasing that matters.

For example, my family would be considered "upper middle class" by HH income quintile, but in CA, we cannot (yet) afford even a 2Bdm condo within a reasonable commute to our jobs with anything other than a toxic NINJA loan. We manage to save by living below our means (yes, we're *that* weird) and occasionally take nice vacations that we pay for up front. The wife's car is 11 years old, mine is 9 --and no plans to replace them anytime soon. We are still probably "rich" by any developing world standard, but still cannot achieve anywhere close to the standard of living the previous (Boomer & Silent) generations took for granted at our age.

eburbed,

next time, take a drive on Pierce Road in Saratoga, go from the so-called "golden triangle" to the back the mountain and you know where the gated communities are. Do the same on Kennedy Road in Los Gatos.

I picked Pierce Road because it is a very interesting transition. While all the "golden triangle" residents tap each other on the back for making it into this million-and-half-dollar neighborhood, busy showing off their graniteel, remodel, schools, they have yet to travel just a few miles to see where the true wealth is.

It is always very interesting driving from the rolling hills down to 9 in Saratoga and Monte Sereno, or from Portola Valley down to Palo Alto, it puts things in perspective. Once I saw a couple of pony-riding kids in full equestrian apparel came by from behind the gate on my drive, it felt so surreal. It is the same pattern - those with such a sprawling estate so deep in the woods that you cannot even see the mansion from outside the gate, looking down from atop the hills at all those million-plus-dollar bland ranch houses huddling together in the so-called prime spots, who thought they owned a piece of the valley, but they really don't. They are just slaves, not only slaves to those on top of the hills, slaves to their debt, but also slaves to other people's dreams.

For most self-proclaimed middle class worker bees in BA, they are just spending their entire lifetime trying to replicate a cheap, made-in-China version of those on the western end of Pierce Road. When I see someone putting a heavily decorated iron-cast gate on a 7000-sft lot where a 4000-sft McMansion with plaster pillars and vinyl windows sits, I can't help chuckling, who the hell do you think you are trying to fool?

HARM,

as long as you take cautionary steps to protect your hard earned and hard-saved money, you will be able to experience the upper middle class lifestyle in the next 5-10 years.

However, the issue is, do you want to? I think anonymity and modesty is the best protection in such a polarized world, especially after a major financial blowup. You certainly don't want to stick out like a sore thumb flaunting your money as the soup line gets longer.

I recommend "Wealth and Democracy" by Kevin Phillips, for those who have not read it. It's an older book but it's eye-opening.

The growing phenomenon of “Privatize Profits, Socialize Risks”, where politically well connected big businesses and de-facto cartels attempt to insulate themselves from competition, and seek to transfer the consequences of their own bad financial decisions to taxpayers, via federal laws, subsidies and bailouts.

To the above I say let's repeal the 17th amendment so that the senate is not so directly controlled by the lobbyists-

http://tinyurl.com/bg8nu

Paul,

Huh? The 17th Amendment was a blow against federalism, but I don't see how it makes the senate particularly vulnerable to lobbyists.

Hellokitty,

I've heard of a dogsitter who charges $30 per visit to open the door so the dog can do its business, wait ten minutes for the dog to come back in, and then lock up the house and leave. By this calculation and unless there's some alternate quid pro quo, your friend is potentially depriving you of thousands of $.

Or maybe your friend could just put the dog up somewhere for the duration of the trip.

Brand Says:
Are we really seeing “increasingly unscrupulous behavior” from people in power? Or is the information age and a surplus of journalists simply bringing status-quo abuses of power to the attention of the populace?

It's possible... starting from, i dunno, watergate or so... plus 'indulgent' education like sociology degrees being available to all and sundry... the link in the the last thread outlining marx's 5 types of alienation and a critique of consumer culture came from -- west valley college, saratoga -- and perhaps germane to this thread on consumerism also:
The Marxist critique of consumer culture

There was certainly an increasing mistrust of authority figures starting in the late 60s and the counterculture, the content of liberal arts studies, around things like vietnam, etc -- this is the beginning of a true re-democratisation process? But we don't know what we don't know regarding skullduggery in earlier times -- the Internet and mass media certainly get information around a lot quicker to a lot more people than it used to...

The thread's going well -- my silence indicates approval of the discourse... ;)

My sister thread 'Should land be free?' earned only ridicule and scorn... :(

I believe Nicholson is an Australian cartoonist for...The Australian, appropriately enough... where do you get them from so quickly Harm, I can never find good graphics...

The only thing different about the Roman empire was the pattern of enslavement and taxation of 'barbarian' societies which lead to them march back on Rome (from Germany mainly) once they mastered Roman forms of military organisation -- I don't see an equivalent threat to the US geographically (despite the invasion of 'illegals'), militarily, or other serious threats... Or...?

I'm interested to know what y'all mean by class...

In England. for instance, its all about who your parents/grandparents were, where you went to school, where you live, what kind of job you have. Its like a sixth sense - no matter how classless people say they are nowadays in Blighty, most can tell in seconds exactly where you fall on the class ladder, as soon as you open your mouth to speak.

Its not about money..too many aristocrats that have sold the family estate to live in the gatehouse, too many so-called working class people with bags of money.
Class is much more of a social heirarchy, and despite the changes in UK society over the last 50 years, most people are still acutely, if subconcsiously, aware of it.
If anything, I'd say that the middle class in the Uk has grown over the years, as working class people have moved up, and upper class people have moved down - so that more people are glommed in together in the middle.

Over here, it seems to be all about the money - the more you have, and the bigger your toys, the higher class you are. Maybe its something to do with the fact that your socielty hasn't evolved from feudalism over the last 1000 years...

Anyway, I'm interested in exactly how class is defined over here - is it money? Is it some indefineable 'other' quality? What makes one person working class and another upper class?

There's a lower, middle and upper middle class, I guess... The LMC can easily morph back into the 'working' class (hmm, they're the only ones who work, apparently), and in fact one treatment I read pointed out most of the middle class is really an extension of the working class who have become more affluent, with the illusion of being middle class and having some sort of control over their lives -- but they are still reliant on salaries and wages from a potentially capricious employer... (in a similar vein, Marx's model only recognised the 'owners of the means of production' (the bourgeoisie) and small employers (the petit bourgeoisie) -- everyone else is basically proletariat. However, the rise of the professional and managing classes probably puts paid to this simple Marxian model, but the caveat above still applies.)

class was traditionally defined purely economically. another measure of 'class' membership is the amount of cultural capital you possess, apart from your pure economic status. so you could be a PhD not accustomed to manual labor but still in a LMC wage bracket, earning less than a tradesman, but highly edumicated and aware and mixing as a social equal with other more successful graduates...

Brand's description of luxury would have to be UMC, or bourgeois, tho... there are plenty of middle class people who have bought tiny overpriced houses in Sydney who can barely afford furniture, also...

speedingpullet, i just wrote that last post as a complete coincidence which follows yours -- it partially addresses your remarks, but i think you brought out 'social class membership' much better...

DS - I seem to be sympatico with a lot of people's thought processes these days...