Stagnating middle class? Really? How does that jive with all of these facts?

[Metaphor]

Keeping up with the Joneses is something they want, not something the manufacturers can make them do.

Horseshit.

Do you think that companies spend $560 billion a year on advertising because they enjoy wasting money, or because they are microcephalic morons who can't see half a trillion bucks of pure wasted expenditure?

Keeping up with the Joneses is very much something manufacturers make people want to do; and they are spending big bucks to ensure that they keep wanting to do it.

Manufacturers want people to keep up with the Joneses, but they can't make them. And that statement is true even though advertising is effective (which, obviously, it is).

If advertising stopped tomorrow, I guarantee you people would still prefer nicer things to less nice ones.

 

[Toni]

Horseshit.

Do you think that companies spend $560 billion a year on advertising because they enjoy wasting money, or because they are microcephalic morons who can't see half a trillion bucks of pure wasted expenditure?

Keeping up with the Joneses is very much something manufacturers make people want to do; and they are spending big bucks to ensure that they keep wanting to do it.

Manufacturers want people to keep up with the Joneses, but they can't make them. And that statement is true even though advertising is effective (which, obviously, it is).

If advertising stopped tomorrow, I guarantee you people would still prefer nicer things to less nice ones.

But but but: how would we know which things were nice without all of those ads?????

 

[TV and credit cards]

Are houses bigger because people are beating on the doors of builders screaming for larger houses? Are vehicles larger for the same reason? Or are consumers led by the nose in a "keeping up with the Jonses" absurdity.
People do not know what they want. They are told what they want.

Keeping up with the Joneses is something they want, not something the manufacturers can make them do.

What creates this want? Is it innate?
I lived in the Phillipines for three years. I traveled to some very remote areas of the islands, parading around in my Levis and Nikes. If there was want of my possessions, the people were very subtle about it. They did not see such things as a means of happiness. Happiness for them was music, tubâ, lichon, and friends.
This source of happiness for capitalists was created by advertising and perpetuated by easy credit. Very easy credit. Exceedingly easy credit. Credit a baby or dog could get.

 

[bilby]

Manufacturers want people to keep up with the Joneses, but they can't make them. And that statement is true even though advertising is effective (which, obviously, it is).

If advertising stopped tomorrow, I guarantee you people would still prefer nicer things to less nice ones.

But but but: how would we know which things were nice without all of those ads?????

^ This.

 

[DBT]

Horseshit.

Do you think that companies spend $560 billion a year on advertising because they enjoy wasting money, or because they are microcephalic morons who can't see half a trillion bucks of pure wasted expenditure?

Keeping up with the Joneses is very much something manufacturers make people want to do; and they are spending big bucks to ensure that they keep wanting to do it.

Manufacturers want people to keep up with the Joneses, but they can't make them. And that statement is true even though advertising is effective (which, obviously, it is).

If advertising stopped tomorrow, I guarantee you people would still prefer nicer things to less nice ones.

Keep pounding the message hard enough and long enough and the ideas that are being pushed take root in the minds of consumers...product conditioning being the general purpose of saturation advertising.

 

[Axulus]

Horseshit.

Do you think that companies spend $560 billion a year on advertising because they enjoy wasting money, or because they are microcephalic morons who can't see half a trillion bucks of pure wasted expenditure?

Keeping up with the Joneses is very much something manufacturers make people want to do; and they are spending big bucks to ensure that they keep wanting to do it.

Manufacturers want people to keep up with the Joneses, but they can't make them. And that statement is true even though advertising is effective (which, obviously, it is).

If advertising stopped tomorrow, I guarantee you people would still prefer nicer things to less nice ones.

And how much of advertising is just about getting people to buy our product vs. the other guy's product?

Just because it is effective in getting people to buy our product doesn't mean people would suddenly buy much less products if advertising were to be substantially reduced. They may buy just as much but the particular companies they buy from might be different.

Also, if their competitor advertises and they don't, they have to advertise just to keep things even. Advertising effectiveness does not imply that no purchase of any kind would've been made without the advertisement.

- - - Updated - - -

Manufacturers want people to keep up with the Joneses, but they can't make them. And that statement is true even though advertising is effective (which, obviously, it is).

If advertising stopped tomorrow, I guarantee you people would still prefer nicer things to less nice ones.

Keep pounding the message hard enough and long enough and the ideas that are being pushed take root in the minds of consumers...product conditioning being the general purpose of saturation advertising.

Someone may desire a cola. Coke's advertising message means that Coke will be the one that comes to mind and they'll seek out someone selling a Coke.

Without the Coke advertisement or any cola advertisement for a cola, the desire for a cola doesn't necessarily go away and in fact is unlikely to go away once they've discovered that they enjoy drinking cola. They'll most likely just buy Pepsi or some generic cola instead, or may just buy a Coke anyway.

 

[Axulus]

Are houses bigger because people are beating on the doors of builders screaming for larger houses? Are vehicles larger for the same reason? Or are consumers led by the nose in a "keeping up with the Jonses" absurdity.
People do not know what they want. They are told what they want.

What creates this want? Is it innate?
I lived in the Phillipines for three years. I traveled to some very remote areas of the islands, parading around in my Levis and Nikes. If there was want of my possessions, the people were very subtle about it. They did not see such things as a means of happiness. Happiness for them was music, tubâ, lichon, and friends.
This source of happiness for capitalists was created by advertising and perpetuated by easy credit. Very easy credit. Exceedingly easy credit. Credit a baby or dog could get.

Was created? Or the desire was always there and once the ability to purchase the items easily perhaps the desire was manifested? How can you tell?

- - - Updated - - -

Axulus, after reading through much of this thread, I think I understand where the confusion is.

When an economist talks about the stagnating middle class, they are not talking about their standards of living. It might be true that the middle class today has bigger houses, more gadgets, better cars, better education, etc. I concede that. But that is not what we are talking about when we talk about the stagnating middle class.

Wealth=assets-debts. That's the key equation. It is the wealth of the middle class that is stagnating. You are equating wealth with assets. Although that might tell us about how the middle class is living, that doesn't tell us how the middle class affects the economy, which is what the economist worries about.

Traditionally, when the middle class has more wealth, they stimulate the economy. They buy more, trade more, and invest more. Every transaction stimulates more transaction.

The middle class is still buying lots of stuff, so it looks like the economy should be stimulated. But this new purchasing is done on credit, i.e. debt. As debt accumulates, the risk of bankruptcy, foreclosure and default heightens. This ultimately has a negative feedback on the market. This is what economists worry about.

As far as the market is concerned, your house, your car, and your livelihood are weighed against your debts. You might enjoy your assets. But the market ultimately doesn't care if you enjoy them. They are just numbers on a sheet of paper. No more or less abstract than your debts.

Standard of living is not wealth.

Just want to add the middle class is smaller now than it was in 1980, is further from the upper class in income as a percentage of buying power, and its numbers keep dropping faster than do retirements. Other than that you are spot on.

Numbers please. How big was the middle class in 1980, and how big is it today?

 

[Nice Squirrel]

Manufacturers want people to keep up with the Joneses, but they can't make them. And that statement is true even though advertising is effective (which, obviously, it is).

If advertising stopped tomorrow, I guarantee you people would still prefer nicer things to less nice ones.

And how much of advertising is just about getting people to buy our product vs. the other guy's product?

Very little. Most ads are targeted to a desired lifestyle self image. They are more effective when they play on your desires. There are few advertisements slated to competition.

Just because it is effective in getting people to buy our product doesn't mean people would suddenly buy much less products if advertising were to be substantially reduced. They may buy just as much but the particular companies they buy from might be different.

Considering how effective it is at getting people to by, I wouldn't be surprised to find less consumption if advertising went away.

Manufacturers want people to keep up with the Joneses, but they can't make them. And that statement is true even though advertising is effective (which, obviously, it is).

If advertising stopped tomorrow, I guarantee you people would still prefer nicer things to less nice ones.

Keep pounding the message hard enough and long enough and the ideas that are being pushed take root in the minds of consumers...product conditioning being the general purpose of saturation advertising.

Someone may desire a cola. Coke's advertising message means that Coke will be the one that comes to mind and they'll seek out someone selling a Coke.

Without the Coke advertisement or any cola advertisement for a cola, the desire for a cola doesn't necessarily go away and in fact is unlikely to go away once they've discovered that they enjoy drinking cola. They'll most likely just buy Pepsi or some generic cola instead, or may just buy a Coke anyway.

Soft drinks are a bad example because the soft drink companies are essentially a trust that control the market having bought out the grocery distributors and entering into exclusivity contracts with major institutions.

 

[laughing dog]

Numbers please. How big was the middle class in 1980, and how big is it today?

Coming from someone who has refused to define what he means by the "middle class", that request is hilarious.

 

[Axulus]

Numbers please. How big was the middle class in 1980, and how big is it today?

Coming from someone who has refused to define what he means by the "middle class", that request is hilarious.

We've already been over this. It is not possible to define middle class in such a way, that has any rational connection to the concept of "middle class", where by this group did not have improvements of similar magnitude for all the metrics I posted.

 

[jonatha]

Numbers please. How big was the middle class in 1980, and how big is it today?

Coming from someone who has refused to define what he means by the "middle class", that request is hilarious.

The Census Bureau or Department of Labor or IRS or whoever it is that tends to put out reports measuring such things typically break income levels into 5 quintiles, i.e., line everybody up by income and take the first 20% (lowest income), the next 20% (second quintile), the next 20% (third quintile), the next 20% (fourth quintile), and everybody else (top quintile). "Middle class" is then usually defined as the middle three quintiles, or perhaps second and third.

By definition, therefore, the middle class is always (say) 60% of the population, and since the population is growing, the number of people in the middle class is too.

What *is* changing is the income boundaries between the quintiles, which means the purchasing power of the middle class may have stagnated or declined over the years. I suspect the necessary data are available on some government website somewhere (see, e.g., here).

Table F-1 from the Census Bureau's historical statistics seems particularly on point. In 1980, the lower and upper limits on a "middle class" income (middle three quintiles) were $27,992 and $93,667 (in 2013 dollars). In 2013, they were $28,894 and $121,059. The growth in the lower limit amounts to an annual increase of one tenth of one percent (yes, .0001) per year. The growth in the upper limit represents an annual increase of 0.78% (less than 1 percent) per year.

I would characterize those rates of growth as stagnant. If Axulus and dismal care to disagree, I will be happy to take any money they may wish to lend to me at either rate.

The lower income limit on the top 5% went from $148,037 to $217,032 - a growth rate of 1.16% per year. Not a lot better, but unfortunately the tables don't list the income limits for top 1% (or top .1%).

 

[Loren Pechtel]

Horseshit.

Do you think that companies spend $560 billion a year on advertising because they enjoy wasting money, or because they are microcephalic morons who can't see half a trillion bucks of pure wasted expenditure?

Keeping up with the Joneses is very much something manufacturers make people want to do; and they are spending big bucks to ensure that they keep wanting to do it.

Manufacturers want people to keep up with the Joneses, but they can't make them. And that statement is true even though advertising is effective (which, obviously, it is).

If advertising stopped tomorrow, I guarantee you people would still prefer nicer things to less nice ones.

And an awful lot of advertising is about buying Brand A rather than Brand B--which produces no overall change in spending.

 

[untermensche]

Coming from someone who has refused to define what he means by the "middle class", that request is hilarious.

We've already been over this. It is not possible to define middle class in such a way, that has any rational connection to the concept of "middle class", where by this group did not have improvements of similar magnitude for all the metrics I posted.

Yes they all enjoyed the elephant as tens of thousands of species have gone extinct due to man-made causes.

 

[fromderinside]

Yes they all enjoyed the elephant as tens of thousands of species have gone extinct due to man-made causes.

I see we're all still chewing the fat. I wonder is ocean fat more nutritious than land fat? Will we kill every one in both environments to find out?

 

[laughing dog]

Coming from someone who has refused to define what he means by the "middle class", that request is hilarious.

We've already been over this. It is not possible to define middle class in such a way, that has any rational connection to the concept of "middle class", where by this group did not have improvements of similar magnitude for all the metrics I posted.

Bullshit squared. People have been defining "middle class" for ages. And people can define "stagnation" as well. For example, jonatha in this thread has done so. You demand specificity from others while you refusing to do so. Your argument and position is either intellectually stunted or dishonest.

 

[bilby]

Manufacturers want people to keep up with the Joneses, but they can't make them. And that statement is true even though advertising is effective (which, obviously, it is).

If advertising stopped tomorrow, I guarantee you people would still prefer nicer things to less nice ones.

And an awful lot of advertising is about buying Brand A rather than Brand B--which produces no overall change in spending.

More horseshit.

'Generic' products are typically cheaper (often far cheaper) to the end user than brand name products. So the change in spending can be very large.

In many cases, the only difference is the branding. I have worked on production lines where the labels were the only thing changed when switching from making brand name goods to making 'no name' or store brand goods. The retail price difference can easily be a factor of three, four or five.

The consumer only pays three times as much for stuff with a particular label because he has been told, repeatedly, that it is far superior; that by buying it he will become sexy and happy, and be 'one of the cool kids'; and that buying the cheaper option will make him a sad loser, and an outsider with no friends. That is why companies pay for advertising.

Advertising hijacks our evolved tribalism, and uses it to pressure us into making poor decisions. That is not a bug; it is the entire purpose of the excercise.

 

[Nice Squirrel]

Advertising hijacks our evolved tribalism, and uses it to pressure us into making poor decisions. That is not a bug; it is the entire purpose of the excercise.

Without such hijacking there would not be a Whole Foods.

 

[Toni]

And an awful lot of advertising is about buying Brand A rather than Brand B--which produces no overall change in spending.

More horseshit.

'Generic' products are typically cheaper (often far cheaper) to the end user than brand name products. So the change in spending can be very large.

In many cases, the only difference is the branding. I have worked on production lines where the labels were the only thing changed when switching from making brand name goods to making 'no name' or store brand goods. The retail price difference can easily be a factor of three, four or five.

The consumer only pays three times as much for stuff with a particular label because he has been told, repeatedly, that it is far superior; that by buying it he will become sexy and happy, and be 'one of the cool kids'; and that buying the cheaper option will make him a sad loser, and an outsider with no friends. That is why companies pay for advertising.

Advertising hijacks our evolved tribalism, and uses it to pressure us into making poor decisions. That is not a bug; it is the entire purpose of the excercise.

This is noticeable in the retail market. Unfortunately, for those of us who do not live in or near major metropolitan areas, what is available is largely what is most popular and/or left over from major markets. Unless you buy on line. And even then, it isn't great. Example that none of the men will related to: For a few years, the rage was tops with ruffles. Ruffles. For grown women. On virtually all types of tops. To the extent that it was really, really hard to find a new shirt or blouse that did not have ruffles. Ruffles are not an attractive feature on clothing for those of us who are vertically challenged, yet they appeared on nearly every single petite sized shirt or blouse I could find.

Aside from the ruffle trend (which, thankfully, seems to have passed) I've noticed a sharp decline in quality from trusted merchandisers in the last few years. Meaning that I am spending more for clothing of lesser quality.

Meanwhile, my husband is able to buy shirts which are essentially replicas of the same shirt he's worn since I've met him. Oh, sure, some more 'modern' color choices and sure, fewer patterns and mostly stripes or plaids or solid color but far fewer ugly patterns, for sure.

 

[TV and credit cards]

Manufacturers want people to keep up with the Joneses, but they can't make them. And that statement is true even though advertising is effective (which, obviously, it is).

If advertising stopped tomorrow, I guarantee you people would still prefer nicer things to less nice ones.

Sure. We're ruined now. But if we were never exposed in the first place and we relied on word of mouth regarding products, I think we would more tend toward quality rather than what impresses others.

 

[Jayjay]

Manufacturers want people to keep up with the Joneses, but they can't make them. And that statement is true even though advertising is effective (which, obviously, it is).

If advertising stopped tomorrow, I guarantee you people would still prefer nicer things to less nice ones.

Sure. We're ruined now. But if we were never exposed in the first place and we relied on word of mouth regarding products, I think we would more tend toward quality rather than what impresses others.

Or the opposite. If your only source of information is other people, wouldn't you be more influenced by what you think impresses them?

I think the bigger problem is that it is hard to draw the line between advertising and "word of mouth". If I think brand X is the greatest, and want to share it with the world, can I put up a billboard on my own yard? What if, the manufacturer of said product gives me a little bit of money to help cover the cost of that billboard? ... and so on.