Middle Class Under Attack

The Price of Inequality.

“Freedom is not merely the opportunity to do as one pleases, neither is it the opportunity to choose between set alternatives.  Freedom is, first of all, the chance to formulate the available choices, to argue between over them – and then, the opportunity to choose.”

- C. Wright Mills

Review Lesson number one posted on May 27^th.  You need to invest in stock to get ahead.  http://finance.yahoo.com/blogs/daily-ticker/american-dream-myth-joseph-stiglitz-price-inequality-124338674.html;_ylc=X3oDMTNuNGVvYm0yBF9TAzExODMzMDgwNzMEYWN0A21haWxfY2IEY3QDYQRpbnRsA3VzBGxhbmcDZW4tVVMEcGtnAzBhYTgxYzVmLTFjNmMtM2UyMy05ZDM0LTc0MDFkYTM0Y2M5MgRzZWMDbWl0X3NoYXJlBHNsawNtYWlsBHRlc3QD;_ylv=3

Joseph Stiglitz wrote a new book, “The Price of Inequality”.  http://www.amazon.com/The-Price-Inequality-Endangers-ebook/dp/B007MKCQ30

You could read Dick Chaney’s “In My Time: A Personal and Political Memoir” or just look on the front page of 6/12/12, in The Arizona Republic or the Washington Post the article is “Families lost 39% of Worth in Slide”.  Tricky Dick Chaney doesn’t like the middle class read his book.  You could watch the 60 Minutes from the same date 6/12/12 or you could listen to Jim Cramer’s rant on how the market is rigged, as seen by the Facebook IPO again today.  My recommendation is review what is happening to the middle class.  The GOP is using the economic policies of our 34^th, 35^th and 36^th presidents with the same results.  Just like smoking causing cancer, like global warming the downward slope of the American Middle Class is true.  Like global warming we are unsure on how bad this will end up, but we can avoid the worst problems if we are realistic and plan appropriately.  Just one day’s news and TV viewing; funny thing is I don’t read much news in newspapers or watch much TV except for CNBC and Bloomberg.  So don’t smoke, or move to Florida, and start the only investment game in town the middle class can use to become rich themselves.  I agree with Jim Cramer on this point, the only way for you to move up is with high quality stocks.  (Sorry Jim I don’t know if I quoted you or not.)

2 recommendations. 

First I want you to spend less than you make.  Take the difference and invest it in high quality dividend stocks (at least at first).  Watch your stocks and make sure the company business doesn’t take a turn for the worst.  Here is your goal.  I want you to get one month’s take home pay in dividends every year.  After one month then you need to get one quarters take home pay in dividends.  Even if it is one share at a time on Orange for a $4 commission. 

Second I recommend that you do not vote for the GOP, until either they change their policies or you move up the wealth ladder to the upper 10% of American’s with a net worth in the top brackets.  There would not be a problem with the deficit in the Federal budget today, if we did not have the giveaway program of welfare to the ultra-rich installed by the Bush tax cuts.  Start voting for the party who supports the middle class, after all that is where you are at now.  If enough people start voting different they will change their policies to support the middle class the real backbone of the country.

Closing your eyes to trends doesn’t make them go away just gets you caught in the trap.  Cigarettes were known as coffin nails in 1900.  Scientists bought (bribed) and paid for by the tobacco industry couldn’t change that.  I have friends that smoke and am addicted to second hand smoke.  Scientists bought and paid for by the coal industry don’t change the fact that there is a global warming.  And, economists bought and paid for don’t change the graph of the middle class it turned down during the Bush years and now the middle class has been set back 20 years.  Only half the middle class families stayed on the same economic rung during the Bush years according to the study.  Medium income has fallen 8%.  You need to know the trends to profit by them I know I am addicted to nicotine in cigarette smoke.  Unless something changes the treads continue.  Florida will have more problems as the ice caps melt.  In oil hydraulic fracturing or hydrofracking reversed a tread identified by a Chevron scientist in the 60’s that American would run out of oil and become an importer.  Trends change but until they do, you need to understand how the trend will affect your life. http://www.youtube.com/watch?v=VnVJAkhGyjQ

You have to be an investor in stocks to change your trend!  Become an anti-consumer and a pro-saver.  Be aware that the system is rigged against you.  See the cartoon below.  You can ride on the über-rich’s coattails.  Pick out a basket of good stocks, watch them just to make sure that the underlying company doesn’t become something like a Kodak, and reinvest your dividends.  This is a balance sheet recession / depression, so dividends are above the yield on bonds.