With poor people literally lining up at paycheck loan kiosks, it can seem distinctly whiny to fret about middle-class suffering, as law professor Elizabeth Warren did in this testimony to the Senate Finance Committee from May. But I found it pretty persuasive, at least for its insight into what Americans are consuming. Routine critiques of consumerism -- my own included -- tend to focus on frivolous overconsumption of branded products or status goods, but Warren points out that spending is trending downward for clothing, food, appliances and cars. Spending on electronics is up, but understandably so, considering recent technological changes. Instead, spending is going increasingly to what Warren labels as fixed costs -- housing, taxes, health care, child care, education and transportation expenses. These costs are exacerbated by the fact that both parents in a child-rearing household have to work, in part to keep up with these very expenses, creating a self-perpetuating cycle. (It also left me wondering why anyone chooses to raise children -- from a rational-economics standpoint, the incentives are all wrong; I suppose the desire for the music of children's laughter is an exogenous variable.)
Warren then offers some middle-class friendly policy prescriptions: subsidies for education, better health insurance, universal preschool, and more-stringent regulations on credit markets, which she details further in this piece for the journal Deomcracy. These seem like wise political ideas, since they are likely to appeal to voters in contested districts and battleground states. And they would probably help alleviate what Jacob Hacker has dubbed the Great Risk Shift, the recent tendency of government rescinding the safety net it once promised. Above all, such prescriptions would assure that the middle class lifestyle would appear as an entitlement to those already possessing it, but they may not do much to give hope to those on the outside that they ever might enjoy such privilege. Directing entitlements at the middle class may only help the middle class guard its turf, to build the wallls higher, or help them maintain a safe distance from the lower classes they are trying to differentiate themselves from.