A Credit to BusinessWeek for a piece that describes the combined effect of the housing crisis and the oil boom on the American middle and lower-middle classes.
The article eschews platitudes in favor of reality, and sums up that reality nicely—if we can use the word for circumstances that are anything but nice.
Reporter Peter Coy tells us that:
Given enough time, history shows, Americans can adjust to almost anything, from the demise of the family farm to the decline in factory jobs. In the long run, they can adapt to high oil prices by buying fuel-efficient vehicles or finding jobs closer to home. Likewise, with enough time, if they can’t afford their homes, they can eventually cut a deal with their lenders or quietly move to a cheaper house or rental.
Trouble is, this ain’t the long run. The one-two punch of rising energy prices and falling home prices has landed so quickly that many American families and businesses are breaking rather than bending.
The story avoids the rather prevalent and increasingly outdated myth that America consists of one vast middle class—and the extension of that myth, that we all suffer equally.
The oil and housing woes are felt most heavily by the middle and lower-middle classes. The very poor are less affected because they don’t own cars or houses, while the well-off have a cushion of savings and spare income to help them ride out the storm. Those in between have no such buffer.
This isn’t a complete revelation, but unlike many pieces we read on the state of the economy, it makes sense.
Elinore Longobardi is a Fellow and staff writer of The Audit, the business-press section of Columbia Journalism Review.