The collapse of America's middle class - Spengler

http://www.atimes.com/atimes/Global_Economy/MH02Dj05.html

This article will get a lot of play across the major blogosphere. The highlights:

People irrationally dig in even further once their position or cause becomes obviously untenable. I'm not sure why this is. The author brings up the American Confederacy after Vicksburg and Gettysburg, the Nazis after Stalingrad, and the Japanese after Okinawa. All of these tipping points indicated, or at least they should have, that the bottom had fallen out and that the end was but a slippery slope away.

Perhaps it is because whole systems of influence and power become erected soley to deliver the goal that is now completely out of reach, like a chute to a hopper that has moved somewhere else. All other the channels and options have been shut down, whatever goes down the chute cannot back itself back up the chute. The only thing that reverses this process is to destroy the system. This is where the Tea Party comes in, kind of. While they want to destroy the system, whether it be for revenge or to enact a wholly new economic system, they are mistaken in their goals. As middle class members of the Republican party, for the most part, their goals do not align with the system they want to deliver. The majority of their wealth is not in savings or investments, but in real estate. The system that existed before, the housing bubble, abetted them in ways they are blind to now and while they seek to instill a more free market, it is one that will destory the housing market and in effect, the middle class.

Only by savings and exports can America get back on track, Spengler argues. The American strength in exports is in agriculture, an endeavor that unfortunately employs very few. This means manufacturing exports must grow, but at a wage level that can compete with global sources. In other words, very cheap labor must become abundant.

In other words, is the middle class digging in by insisting that things will be as they have been since the post-war period, with housing as a source of savings and employment for those without a college degree as long as they are willing to work? The Tea Party represents that middle class, but whether they understand where they are taking themselves is under question.