Friday, February 4

LOW SIX-FIGURE INCOME WORKING FAMILIES WORRIED

When denigrating the Bush economy and plans to "reform" the IRS and Social Security, we progressives usually count on average American income earners to be our greatest partners in the move to counter Bush economic policies.

But I can't tell you how many conversations I've had in the past week with upper-level corporate managers (not quite of the executive class) making, oh, somewhere between $100,000 and $160,000 per annum, who are worried sick about the Bush economy. Roughly three-quarters are Republicans, the rest Democrats. These are mostly forty-somethings who have at least two children, combined house payments and property taxes in the $2,500-$3,500 per month range, and whose retirement savings are almost totally invested in their 401(k) plans. In almost every case, they have been counting on their 401(k) savings to someday augment their expected Social Security benefits when they retire. Most of their net wealth is tied up in their homes. None of them have substantial investment portfolios; they have been paying or saving for their kids' college expenses, making house payments, subsidizing orthodontists and music teachers and trusting in a future where they will make more money. A job loss is a catastrophe; they have little financial cushion to tide them over until they secure a new job unless they tap into that sacrosanct 401(k) or sell their precious homes, and more and more they're frightened that the next job will come with less income.

They comprise a demographic that should be a target of anti-Bush economic messaging, especially on the Social Security "reform" proposals. They trust less in the magic of Wall Street than do young workers who have yet to personally experience its periodic downside; they've seen their personal investment funds diminish radically in the past, and are loathe to put all their eggs in that basket. They're less than 20 years away from their anticipated retirement age, and have factored in their expected Social Security benefits, but they're now being told by Bush that they're not in the "safe" category of those born before 1949, and don't know how this will impact them. They don't want, after a lifetime of hard work, to be dependent upon their own children for their upkeep, when they've spent their lives working towards financial independence.

I myself am in that same group and share their fears. The difference between us is, some of them (Republicans only) actually want to trust the Chimp to "do right" by them (while fearing he won't), whereas I have no such illusions. I do what I can to educate them on the particulars and hope for the best, but I'm only a small cog with a limited audience.

We need to craft a message specifically aimed at this financial class nationwide and get the truth to them, fast and effectively. They may be our best allies in defeating Bush's attempts to destroy Social Security.

3 Comments:

Blogger HL said...

What I want to know is, why would anyone make a choice to put that much money into a real estate investment? How about half of that (still too much in my opinion) and the rest in alternative investments, a-a I think they call it diversification or is it stupidity?

7:59 AM  
Blogger Motherlode said...

There are probably as many reasons as there are people who do it. At different times real estate has offered the safest, most reliable returns on investment. Other people do it because their home is their refuge or their status symbol.

I heard Krugman say recently that if you haven't sold your stocks and bought property in Italy, you should get started.

9:32 AM  
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