No! And it gets worse before it gets better.
< McCain Making the Claim that we are better off today.
I was recently challenged to substantiate my claims that the middle class and the average American family, in countering Mr. McCain's statement, is "worse off than they were 8 years ago". To me, as I spend time almost every day researching in these areas, in one way or another, this appeared to me to be a foregone conclusion. However, to anyone that is currently doing "just fine", and has yet to recognize any decline in their daily quality of life, this statement might sound like just "another hollow claim from one of those bleeding heart liberals".
Without going into the negative issues of the current Republican administration, the effects of NAFTA on the jobs issue, the lack of universal healthcare in America and the War, probably, the best way to demonstrate the claim of "No we aren't better off", is to start by giving you the official numbers as determined by the US government:
GAO:
First, the US General Accountability Office (GAO) has stated that the average American family has lost approximately $1000 in annual buying power due solely to the loan interest being paid by all working US citizens on the nation's fiscal loan deficit that began back in the 1980's under the administration of Ronald Reagan. These deficits have not only continued, but have increased to record levels under both Republican Presidents Bush I and Bush II. (And the $1000 loss does NOT include the current, on-going loss of value of the US dollar.)
The 2007 Federal Survey of Consumer Finances: (Survey performed by the US Federal Reserve)
Financial Summary Report:
Net worth: Median net worth of Americans rose only 1.5%, the weakest in more than a decade. The median is the point at which half of all households have a higher net worth and half have a lower net worth. By contrast, between 1998 and 2001, the median net worth increased 10.3 percent. The increase in net worth in the February 2007 survey was due mostly to an increase in home ownership and the previous increases in housing prices. (The numbers for the survey in 2008 / 2009 are expected to be substantially lower due to the increases in mortgage interest, the sub-prime mortgage crisis and the increases in bankruptcy claims.)
Wages: A national decline in US wages also helped account for the slow growth in net worth. While the median income rose 1.6%, after adjusting for inflation, median wages fell 6.2%. Wages make up the largest part of family income. The growth in income was the slowest since the Fed's 1992 survey (the end of another Republican administration), when median income fell.6.7%, between 1989 and 1992.
Debt: Despite lower interest rates in 2006-2007, families spent more of their incomes paying off their debt. Seven percent (7%) of working families said their spending outpaces their income; 16.1% said they spend about what they make; 36.1% said they save income left over at the end of the year; and 40.8% said they save regularly.
The share of families with debt rose 1.3 percentage points to 76.4%. Among families with debt of any kind -- including mortgages, other loans and credit cards -- the median level rose 33.9%, far greater than the 9.5% increase seen between 1998 and 2001. The median level of mortgage debt increased 27.3%.
Savings: The percent of families who said they'd saved in the preceding year fell to less that 50%. This means that for the first time since the Great Depression of the 1930's, less than 50% of working Americans put any money away into any type of savings account.
Assets: The survey breaks down assets into two categories: financial assets such as stocks and bonds, and non-financial assets such as home ownership. The median value of financial assets fell 22.8%, while the median value of non-financial assets rose 22.2%. In other words, savings and investments of cash went down while home values and ownership grew. (When it's finally published, the up-coming 2008 Federal Survey will show that both of these category's values have fallen drastically.)
Stock Investments: The percentage of families investing in stocks, directly or indirectly through mutual funds, fell 3.3 percentage points, to 48.6 percent. It's the first time the Fed has measured a decline in stock ownership, which had been on the rise since 1989, when the Fed began its first consumer finance survey. The median value of stock-related holdings also fell, by 33.8%.
In deciding how to approach the overall subject of; "Are we better off today?", I decided to use the latest visible broadside hit that we are all dealing with today. That being, the overall effects of the escalating gas prices on the American family:
Reasons for the Gasoline Price Increases:
Over the past 12 months, the dollar has plummeted more than 10% against global currencies, and oil has climbed about 80%. As the dollar continues to depreciate in value, investors have bought oil futures as a hedge against inflation. Also, oil is priced in dollars worldwide, so a falling dollar provides less incentive for oil-exporting countries to increase output or for foreign consumers to cut back on oil use.
As oil prices hit a record $122 a barrel last Tuesday, there were no immediate signs of gasoline or diesel prices retreating. "The No. 1 problem with gasoline prices is high crude prices," said Deutsche Bank oil analyst Ryan Todd. Many energy industry analysts blame oil speculators for cashing in on the fuel cost crisis and, in the process, boosting the price of oil. "There are many practices by hedge funds that fall below the radar screens of federal regulators," Tyson Slocum, director of the energy program at public interest group Public Citizen, testified at a public hearing on the problem. After a Goldman Sachs analyst predicted oil could rise to $200 a barrel in 2008, Slocum said the increase prediction itself sends speculators into the market, because "the high bar has been set for traders."
Also contributing to rising gasoline and diesel prices is that global demand has outpaced that of the previous 12 months. Industrial expansion in China and a rising number of cleaner-burning diesel cars in Europe have boosted diesel fuel demand. Additionally, the new ultra-low sulfur formula for diesel that was introduced in 2006 costs more to produce and this has affected production levels.
The availability of crude oil is actually not that bad today, but the availability of refining capacity is where there is a real shortage or bottle-neck. It's the "Perfect Storm" combination of: the oil speculators; a refinery shortage; a deflating US dollar; a strong OPEC oil cartel and too few oil companies in control plus strong oil demand increases in the US, China, India and other parts of the world.
This combination is what has brought on the current escalations in US gasoline and diesel pump prices.
Effects of the Gasoline Price Increases
In a protest by independent truckers outside Newark, New Jersey, a Turnpike Authority spokesman said there was a line of rigs "as far as the eye could see" as truckers heading south on the New Jersey Turnpike slowed down to 20 miles per hour. Three truckers outside Chicago also received tickets for driving slowly, three-abreast, on Interstate 55. And more than 50 big rig drivers near Port Tampa in Florida decided to park it rather than drive. They were demanding that contractors pay them more to cover their fuel costs. One driver says while it costs most truckers about a dollar a mile to operate a tractor-trailer, some companies are only paying as little as 87 cents a mile. One trucker in Columbus, Ohio, said he figures the oil companies control everything, and adds, "there's nothing we can do about it".
More independent truckers are now losing their trucks, just for being unable to pay both their truck payment and fill their fuel tanks at the same time. These truckers then start losing their savings and their homes because they can't afford to continue driving at a loss while not bringing home a paycheck.
There are now many stories circulating on the internet about senior citizens that have to make decisions about whether they spend money to eat or to buy gas to get to their Doctor's. appointment. One story was about a woman that could not afford her medications and her food and to also pay for the gas to get to the hospital for her cancer treatments. (She finally gave up the treatments.)
Many people that rent apartments are moving, just to be closer to their jobs for a shorter commute. More people are also now car-pooling or using mass transit or they are trading in their current cars, trucks and SUV's for the new high gas mileage hybrid vehicles.
The Effect on Food Prices
(Mostly Due To Shortages and Freight and Transportation Cost Increases.)
Rocketing food prices — some of which have more than doubled in two years — have recently sparked riots in numerous countries. Millions are reeling from sticker shock and governments are scrambling to staunch a fast-moving crisis before it spins out of control. From Mexico to Pakistan, protests have turned violent. Rioters tore through three cities in the West African nation of Burkina Faso last month, burning government buildings and looting stores. Days later in Cameroon, a taxi drivers' strike over fuel prices mutated into a massive protest about food prices, leaving around 20 people dead. Similar protests exploded in Senegal and Mauritania late last year. And Indian protesters burned hundreds of food-ration stores in West Bengal last October, accusing the owners of selling government-subsidized food on the lucrative black market.
Riots haven't yet started in the US, but here are examples of the food price increases in the US since 2006 from the Bureau of Labor Statistics:
Bureau of Labor Statistics (BLS):
>>>White Bread (1#) '06=$1.05 '08=$1.28
>>>Eggs (doz) '06=$1.45 '08=$2.18
>>>Apples (1#) '06=$0.96 '08=$1.16
>>>Flour (1#) '06=$0.33 '08=$0.42
>>>Ground Beef (1#) '06=$2.28 '08=$2.33
>>>Whole Chicken (#) '06=$1.06 '08=$1.16
>>>Milk (1 Gal) '06=$3.20 '08=$3.87
>>>Butter (1#) '06=$3.13 '08=$4.93
Commodity Prices:
>>>Corn: (bhs) '06=$2.28 '08=$5.46
>>>Soybeans (bhs) '06=$5.72 '08=$9.07
>>>Wheat (bhs) '06=$3.48 '08=$11.21
Other Areas Immediately Affected by the increases in Prices at the Pump:
Trucking Industry: The American Trucking Association is predicting that US truckers will spend $140 Billion dollars for diesel fuel in 2008 versus the $112 Billion dollars they spent in 2007.
Shipping / Freight / Package Delivery Industries: All shipping and freight fees are increasing due to the price increases.
Purchasing Power: As oil prices have escalated, the value of the dollar has fallen over 10% in the last 12 months. Oil speculator activity in the coming months is predicted to increase the oil price to ~$200 per barrel from the current $122 per barrel.
Travel Prices: Airlines are adding surcharges to the air fares as jet fuel prices continue to increase. Fewer auto vacations are being planned and the use of mass transit is increasing. Many travel plans are being altered which in turn affects motels, hotels, restaurants and major amusement parks. Needless to say, this includes fewer job opportunities in these areas as well.
Vacation Travel: Any vacation vehicle that uses gasoline or diesel will be used less. This includes boats, jet-ski's, motorcycles, private airplanes, ATV's, SUV's, motor homes and trucks w/ campers or trailers. (Both the use and the sales of these vehicles will be down this Summer.)
Farmers / Ranchers: Most independent farmers, ranchers and corporate farmers are raising their prices to support the increases in fuel cost for their farm equipment and for the increased costs of their animal food and grain.
Auto & Truck Sales: Many people are getting rid of their SUV's and pick-ups with the poor MPG's. The auto dealers are being stuck with large inventories of gas-guzzling cars, trucks and SUV's while they are selling out of their lower-cost compacts and scarce hybrids.
Energy: Most energy suppliers that need to burn fossil fuel to produce energy are increasing their monthly energy fees.
Conclusion:
Are we better off? Based on just the information above, I'm sticking with my claim of, "No, most Americans aren't!", and am therefore resting my case.
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