Much like the crash in 1929 that lead to the great depression, much of it was caused by income disparity in the nation. The chasm between rich and middle class was too wide.
The narrative starts with income disparity in the 1950’s through the first decade of the 21st century. As more and more wealth is concentrated in fewer and fewer people, consuming has to drop. Middle American worker wage stagnation in comparison with the wealthiest Americans and the rate of inflation created a situation where families invest more and more time and energy just to maintain the same standard of living as in the past.
1950’s: A white middle class family could live comfortably, purchase a home and basic necessities on a single income.
1960’s Much the same as the 50’s for whites, but African Americans wanted in on the picture and were fighting for the right to earn the same as their white counterparts.
1970’s Women started going to work in greater numbers, raising family income, although wages remained relatively static to inflation. So now a family was earning more by spending more hours at work.
1980’s High rates of inflation started eating into still stagnating wages. The wealthiest 1% profited, but middle class families struggled to keep up and more women had to go to work, not by choice but of necessity.
1990’s As wages continued to stagnate falling behind the rates of inflation, the middle class increasingly turned to consumer credit to maintain a comfortable living. The cycle of debt was bolstered by rising home values where families could take out more loans with their homes as collateral.
2000’s The cycle of consumer debt continued to increase, families considered it normal to have both spouses working, sometime multiple jobs just to stay afloat. Skyrocketing home values continued to provide greater and greater loan opportunities. Houses were literally becoming ATM machines seen as an inexhaustible supply of cash to pay for daily living expenses and more and more consumables.
Towards the end, families had run out money to service their debt, maxed out their time to work more hours, and therefore could no longer afford to continue consuming, purchasing higher and higher priced homes, leading the whole house of cards to come crashing down.photo by Richard Morgenstein
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