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The problem with "middle class" and "upper class" labels, is that until a person is obviously, excessively rich, they are loathe to admit that they are "upper class."  Meanwhile, many of us who are supposed to be "middle class" don't feel like we are.  I think these are useless labels.

I do see there being two levels of economic stratification and they come with their own test.  Instead of a middle class, I call it the spending class, since they spend more than they save each year. It includes everyone living hand-to-mouth, the partial savers, as well as the wealthy who are living beyond their means. The spending class is the fuel to our GDP engine.

Then there is the saving class, defined by people who save more than they spend each year.

It's a good rule of thumb to say that the saving class is the upper-upper echelon of taxpayers, and they make the majority of their money passively, by leveraging their money and making capital gains and dividend income, directly and indirectly creating the holy job.  When you buy a CD or a T-Bill you are financing private and government spending, ergo job creation.  When people think of "job creators" they imagine the entrepreneur developer restaurant franchise mogul, but the unseen job creators are all of the small depositors at the bank that the mogul got his loan from.

There are some working class people who live frugally as members of the saving class, and good for them, because they are on the road to one day having a passive income.

There is no tax plan that isn't redistributive, the only way to avoid "redistribution" is to eliminate all taxes. Sales taxes target people who spend more. Gas taxes target people who drive more. Payroll taxes put the biggest pinch on people who earn the least. Have you noticed that the only time a tax is supposedly "redistributive" is when it's not a highly regressive tax?

When Democrats and Republicans get together to discuss economic theory, it boils down to whether you think the economy grows best by favoring the saving class, or by putting more money in the hands of the spending class. The GOP hides their failed trickle down theory behind a smokescreen that the argument boils down to which came first, the chicken or the egg? Only very rarely (h/t Steve Jobs) does an entrepreneur create a new demand for something that didn't exist before. The restaurant mogul didn't invent food, after all. No entrepreneur builds an empire from producing a product that the public doesn't yet want, they all are responding to the demands of the current marketplace.

There is no doubt about the answer to the question of where job creation comes from.  All job creation is a response to the activity of the spending class.

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Comment Preferences

  •  Tip Jar (2+ / 0-)
    Recommended by:
    Habitat Vic, NormAl1792

    The Virtue of Selfishness is not a driving manual

    by bondibox on Wed Oct 17, 2012 at 07:32:10 AM PDT

  •  I think it's distracting and not particularly (0+ / 0-)

    helpful to attempt to redefine terms that everyone understands pretty well, especially when the upperclass is redefined to "saving" class, when saving is a term with positive connotations.

    It's like calling a law "Right to Work" when it really means the opposite.  

    Not helpful.

    •  What you say is true (0+ / 0-)

      Perhaps I put too much emphasis on the idea of the saving class without examining the negative connotations I might be building.

      My point is if you want to address a sub-group of Americans and have nearly everyone feel like they belong to that group, make the cutoff at people who are not able to save as much as they spend. Who can't relate to that?

      Mitt Romney, even if he paid cash for the new car elevator on his lavish beach side home renovation, still will squirrel away more money than he spends this year. When he addresses an audience, he's speaking to his own.

      The Virtue of Selfishness is not a driving manual

      by bondibox on Wed Oct 17, 2012 at 08:18:21 PM PDT

      [ Parent ]

  •  Earning and leaching class? (1+ / 0-)
    Recommended by:

    One class makes its money primarily from labor, the other makes its money by leaching off the labor of others.

    Serf and ruling class?

    One class has rules applied to them, the other applies the rules.

    How about the owning class and the poor? As Adam Smith said in Wealth of Nations, "Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all. "

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