Thanks to a regular reader in the Netherlands who sent me this link tonight. It is worth watching. Now Senator Elizabeth Warren–then a commercial/bankruptcy professor at Harvard Law School–gave this lecture in 2007 on the trends behind rising bankruptcy and financial stress in the middle-class (“UC Berkeley Graduate Council Lectures”). As households continue to struggle under record debt levels in 2014, the socioeconomic trends outlined by Ms. Warren remain relevant in North America and beyond.
In order to rebuild the middle class, we need to first understand what ails it. Despite spending less today on food, clothing and appliances, Warren identifies 5 fixed costs that have surged since 1970: housing, healthcare, auto costs, child care and household taxes. She also explains why two income families today have less disposable income than one income families in 1970. They also face greater financial risk with much less buffer to absorb life’s shocks. This weakening of the middle class masses is a weakening of our entire economy. Here is a direct video link.
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