Buffalo Rising Online

I would agree since I am in the process of looking for one of those steals myself!

This is a sloppy interpretation of what the Business Week article actually says:

The article points out that people are backing away from home ownership (national trend) and are moving more toward the rental side of things.

A direct quote would have been better. Here's the closest it comes to saying something like that:

Only about 31% of Americans rent, but that share could rise if sinking home prices and rising foreclosures make homeownership a more risky proposition.

"could", not "are", and no mention of a trend just speculation about "if" possibilities.

Here's a link:

http://www.businessweek.com/lifestyle/content/jan2008/bw20080117_100623.htm

NewBuffalo - I agree with much of your comment but not the first sentence. There's no evidence the middle class is "being eliminated" whatever that means. The middle class is far from disappearing by any objective measurement.

Regarding U.S. home ownership percent, it's increased very strongly since 1960 as shown in this chart:

http://en.wikipedia.org/wiki/Image:Homeownership_rate_since_1960.jpg

A few years of decline started in the late 70s, leveled off in the 80s, then has been growing strong since then - setting historical highs many years in a row during the 1990s and 2000s.

Anything that keeps going up and up like that is bound to slip backward once in a while and that might well happen at this point. But no actual evidence of that happening has been reported. Data for 2006 and 2007 haven't even been published yet, or at least I haven't seen any. Most recent I can find is 2005 which was 68.9%, essentially unchanged from its 2004 all-time high (69%). Even it if does slip down some from those levels it can still stay strong by recent standards, very strong by historical standards, and it wouldn't indicate anything is being eliminated.

Cross country in a Buick costs about as much, if not more, as a plane ticket.

Plus, good luck holding a job or getting a degree without internet access and home computer.

Cross country in a Buick costs about as much, if not more, as a plane ticket.

LivingForge - Sounds nice, but not true if you consider average round trip plane ticket in summer 2007 cost $340.

Ref: http://www.usatoday.com/travel/columnist/mcgee/2007-06-26-mcgee-fares_N.htm

Last week, USA TODAY published an article entitled " Summer fares fall for flights in USA," which provided some rare good news for vacation travelers. Using an analysis of more than 1 million tickets bought through Sabre, the industry's largest computer reservations system, the paper determined that domestic airfares have dropped during the summer season for the first time since 2004. The report concluded: "The average round-trip domestic airline ticket this summer costs $340, 2% less than last year. ..."

For a family of five, 5x340= $1700. Comparing to car trip, suppose 1500 mile distance, about half way across country. 3000 miles round trip. Suppose 20 mi./gallon highway, it's 150 gal. Times $3.07 (U.S. avg gas price this wk), it's $460.50.

So for family of 5, avg airplane tix cost of $1700 is over 3x cost of car trip half way across U.S. and back. And air travel usually means car rental at destination so add $300 for a week (might be more in a tourist city) and it's $2000, over 4x cost of taking car. Even for a single person traveling alone the avg plane ticket plus car rental probably exceeds $460 gasoline cost, and for a family the car seems clearly much less expensive for most cases.

RonR is right - the list can go on and on. Middle class desired sizes and features of houses these days are much greater too than years ago. Number of cars per middle class family has grown. LivingForge makes a fair point about internet access, but DSL can be had for $19/month and instead of that a $89.95/month cable+broadband cost is considered a necessity. Cable alone is $59.95/mo. I'll believe there's serious trouble in the middle class the day people start dropping that in big numbers. I bet it never happens.

Upward expectations result from human nature and tremendous growth of the American economy. The U.S. middle class has more than ever and is not disappearing as some politicians and media like to claim. A lot of of struggles are self-inflicted by wanting more and more. I'm not saying that's good or bad but it causes much of people's anxieties.

The U.S. economy has had a great run since the mid-80s and is the strongest in the world. Overall growth pauses from time to time, and some sectors have declines. That's always happened everywhere and is impossible to totally avoid.

On the contrary AtwaterLouse, Take a look at the cost of living indexes to really see how things have changed or not changed. If you take a look at Local Telephone, Long Distance, Internet, Cable, Heat, Electric, Water and gasoline as a share of the average household expenses in say 1950 and 1960 as per today what you would reallize is that its not household expenses for utilities that are killing the middle class.

Today the costs for utilities if indexed for inflation havent really changed that much...

I will however agree that since the 1950s and 1960s today people demand almost double the square footage for their home and almost double the lot size that they did. Still this isnt the reason for the disappearing middle class.

The reasons for the disappearing middle class is simple: 1) Its our tax policy which overwhelmingly taxes production instead of consumption. The US has not been a production based economy in 50 years or more.....the majority of our GDP is consumption based which means we need taxes based on consumption.

2) Its our foreign policy which is to heavily weighted to foreign aid and bribing other nations with jobs and money that should rightfully go to US citizens and US corporations.

3) Its our failed public school system that cannot turn our world class students

4) Its our a nation that ignores copyrights and patent enforcement for our exports, its a nation that signs free trade treaties but does not enforce violations like currency manipulation by Asian exporting nations and its open borders for illegal aliens that undercut our poor from geting jobs and undercut our white collar workforce which would rather hire less expensive foreigners on work VISAs.

5) Its a nation that refuses to invest in infrastructure....from bridges to light rail to high speed rail to sewars to water lines to energy production...every dollar this nation gets in taxes is either pissed away on unions, on patronage, on buracracy, on foreign aid, on foreign wars or on paying for illegal immigrants instead of investing it in infrastructure and productivity for rising living standards.

Honey, the last person holding back this nation is the expectations of the lower middle class!

Some very good points being made here, by most everyone. What hasn't been discussed is the two- income houshold. The average middle class household during the 50's and 60's was typically comprised of one breadwinner. Today, two incomes are required to break the middle to upper middle class threshold. Many don't reach that point even with two incomes. You can blame some of it on materialism, but it's all relative. Every generation spends more than the previous one did when it comes to modern convieniences, even John Boy and the Waltons eventually had two vehicles.

The central problem in this particular discussion is the term "middle class." It is very often mistaken for "middle income." We use them interchangeably because Americans need to be considered part of this American ideal. It is a major misconception to believe that if one can rise above blue collar status, he or she has "overcome" humble beginnings. As some food for thought, here are some indicators of Middle Class characteristics. They are educated (most likely NOT at public institutions of higher learning), inherited assests, are vested with property and savings, and are generally immune from downswings in the economy. They have conservative family values and are Protestant. The single most defining quality is their constant striving to improve themselves through education, investing, and improvement of self. It is not a class in which one "arrives" merely by making money.

pegger - Context here is economic. Started with house rental rates and evolved from someone saying the MC is being eliminated. Religion and other stuff may be a strict part of some people's use of the term MC, but seems irrelevant to what anybody said here.

Chris69 - I agree gas/utilis are smaller % of income. So your paragraph addressed to me looks disconnected from what I wrote - except I don't think the MC is getting killed or disappearing, so maybe that's what you meant by "To the contrary". As I said, rising expectations for discretionary items - cable, more cars, larger houses, stuff RonR mentioned, etc. aren't inherently bad (and aren't holding back nation), but they add costs which tighten household budgets and can helps explain some middle class feelings of stress.

crackhouse - Yes it's all relative. Prevalence of 2-income households is good point but hard to unravel impacts. it also affects expectations and perceived thresholds of what's "required" to be upper or middle. Hard to compare to 50s/60s when there just weren't today's workplace opportunities for women. If that wasn't the case there would've been many more 2-incomes. With more money flowing into households, material expectations would've risen even though so much else was different (technology, globalization). No way to guess side effects. Also, 2-income households expand the workforce. That's good for nation's economic growth, but has some downward side effects on wages. Many complexities.

you guys need to go on CNBC; or run for office and help the politicians govern this city; they obviously know nothing

Pegger I think you're talking about the Upper Class.

Another article that was in last weeks USAToday:

http://www.usatoday.com/money/economy/housing/closetohome/2008-01-14-buffalo_N.htm