Alas, the poor American middle class, I knew him Horatio.
Just what is the proverbial middle class? Statisticians like to assign dollar amounts to define just who fits into this august category. Individuals almost always classify themselves as some measure of “middle class,” regardless of household income. That is why we have the phrases “upper middle class” and “lower middle class.” But do you want to know the real definition? One which isn’t as arbitrary as all that?
Here it is: the 2rd, 3rd, and 4th quintiles in terms of household income. The top quintile we will call upper class, and the lower one, well, lower class. By definition, this group can’t shrink on a relative basis; it is the middle 60% in terms of household income. Period. There is your middle class. We can quit with the mental gymnastics now.
I suppose the real question isn’t about the “middle class,” it is about the need to increase household purchasing power. How can we put more money in the hands of private sector consumers to drive the economy?
In the past, some readers have accused me of having a lot of opinions, and not a lot of solutions. Well, I have a solution here, and it isn’t all that difficult. Three words: compressed natural gas.
The Census Bureau has reported the US imported approximately $312.8 billion in crude oil in 2012. It exported, you read that right, $2.269 billion of the stuff. Obviously, that is a deficit of around $310 billion. Before any subsequent revisions, it appears as though our overall trade deficit was roughly $525.479 billion. So, our deficit in crude oil, alone, makes up around 59% of our total trade deficit. Brother…Read On…
The opinions expressed within this report are those of John Norris as of the initial publication of this blog. They are subject to change without notice, and do not necessarily reflect the views of Oakworth Capital Bank, its directors, shareholders, and employees.