How Long Will It Last?

One of the great myths about America is that we are a middle class society.  That is, most of us fit between the extremes of wealth and poverty.

This myth may have originated with the fact that, unlike Europe – and the rest of the world, for that matter – we started out with no aristocracy or serfs. That lack of inherited privilege or servitude has linked to several other ideas about ourselves we also hold dear, that we are a land of opportunity and equality.

Elizabeth Warren, Chair of the Congressional Oversight Panel and Harvard law professor, has recently speculated about “America Without a Middle Class.” (See Huffington Post)  Incisively describing the economic decline of middle class families, she makes the following points:

One in five Americans is unemployed, underemployed or just plain out of work.

One in nine families can’t make the minimum payment on their credit cards.

One in eight mortgages is in default or foreclosure.

More than 120,000 families are filing for bankruptcy every month.

The economic crisis has wiped more than $5 trillion from pensions and savings.

These facts are forcing us to rethink our myths, particularly as they are paralleled by the enormous growth of wealth at the other end of the scale.  As the middle class erodes, we are becoming a divided country of rich and poor.

But class is not just about wealth.  It’s also about identity and status.  We are familiar with some upper class families who have become destitute but salvaged their pride and self-respect.  Conversely, many have risen to great wealth but held on to their middle class life-styles.  Warren Buffet is perhaps our best example of that.

So we are facing a wrenching disconnect between economic and psychological reality.  The media focus, of course, is on the facts of the economy, but this increasing identity gap is likely to provoke a host of emotional consequences for those who have been displaced: embarrassment and shame at being exposed as not who you thought you were, humiliation for the loss of status, depression for the failure for feel yourself to be, and anger at those who caused it to happen.

But we are also in danger of losing a key element of national identity.  Unequal, without opportunity, with rigid new class boundaries, there will be nothing special about us, nothing that sets us apart except our financial power and military force.

Arguably, our myths have been illusions all along, but they have been a key element in our national identity.  And they have kept us from bitterly fighting among ourselves.

There is a lot of inertia in national identity.  It takes a long time for it to change.  But without a foundation in reality, it can’t last forever.