In the current issue of The Economist J.A. Frascino from New Jersey wrote an interesting letter. He sees the cultural revolution in the 1960s as a contributing factor to income inequality and financial crisis.
A commitment to one’s job, living within one’s means and saving for future needs were all deemed passé in the bosom of post-war affluence, and those values eventually morphed into irrational expectations, self-indulgence and immediate gratification.
He further continues that the new lifestyle of living beyond your means and maximizing consumption was sustained by the government by enabling an indebted middle class.
Without that change in values American households might have tackled the onset of middle-class wage stagnation with a return towards austerity. Instead, now programmed to expect an affluent lifestyle as manifest destiny, households fuelled their insatiable consumptive urges with two incomes, working wives and mounting credit.
The government, bless its heart, unable politically to deal with income inequality, used debt as a means of sustaining middle-class prosperity. It all worked for quite a while.
Yes, it worked for quite a while, but it was not sustainable and now the very same middle class and especially lower class has to suffer the consequences, whereas the top 10% are barely affected.