Monday Linkorama

  • The economist reports that half the people in the world are middle-class. That’s a class that didn’t really exist until the wonderful engine of capitalism was set loose:

    An essential characteristic is the possession of a reasonable amount of discretionary income. Middle-class people do not live from hand to mouth, job to job, season to season, as the poor do. Diana Farrell, who is now a member of America’s National Economic Council but until recently worked for McKinsey, a consultancy that has spent a lot of time studying the middle classes, reckons they begin at roughly the point where people have a third of their income left for discretionary spending after providing for basic food and shelter. This allows them not just to buy things like fridges or cars but to improve their health care or plan for their children’s education.

    In the last depression, most of the world was dirt poor. The west was on its own. But it may just be that the rising tides in Indian, China and South America keep us afloat.

    I hope.

  • More reality on the state budget woes. I would quibble that during a recession, states can let the fiscal reins slip a bit. However, such slippage would have been a lot easier if the states hadn’t been wracking up massive spending and debts while we were in an economic boom.
  • The only really bad idea in Obama’s housing plan is the “cramdown” provision. But that one is a doozy.
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