Political campaign for President and lack of "civility." UPDATE Feb. 18

Many in the media have said that the 2012 Presidential election campaign was shaping up to be a clash between the 99% and the 1% or Class warfare. While that surely seems to resonate with many of us who write Blogs, I would offer a more sinister look into the 2012 campaign. It looks to me like it is a reenactment of the Civil War. I would suggest to you that the plain hatred for this President and the insistence that he be a "one term President" is racially motivated and the reason why Newt Gingrich won South Carolina and why Mitt Romney won New Hampshire. To me if you peel back this onion, the presidential race seems to be about reliving the "Civil War" in the political arena. Look at the arguments on both sides of the issues. If you frame them through the prism of "Civil Rights", you can easily make the leap to that argument. That is why the "Birther" conspiracy took hold for so long. Being "civil" means being courteous or polite. And the sad truth is that there is nothing "Civil" about this election campaign season.

It is going to get much worse I fear, before this election campaign is over. Notice the language of Newt when he talks about President Obama being the "Food Stamp" president. Yes, there are many on Food Stamps today, but not just minorities are getting them. Mostly white Americans receive them today. But the racial undertones are there and the dog whistle call to the far Right gets the applause lines from the far Right. For one brief moment yesterday the Congress was able to put this war behind them and join in a tribute to Rep. Gabby Giffords of Arizona in her struggle to survive a gunshot wound to the head last year. She has given up her Congressional seat so she can focus on her rehabilitation. That's smart. A small glimpse of sanity in an otherwise anger filled political season.

UPDATE Feb. 18th
Last night on the show Real Time with Bill Maher, Bill closed his New Rules segment commenting on the disrespect of President Obama, in an affront to the first Black President that seems to be based on racism. I totally agree with his views and want to say here I really valued his persistent reference to how this President has been disrespected from the very beginning of his Presidency, unlike the treatment of any other President in history. Thanks Bill!

What's happening to the Middle Class lately? They're being squeezed!

I thought today instead of discussing the stock market or politics, I would put up a piece on the current plight and squeeze of the Middle Class. I start with a look at their Personal Savings Rate over the past years, to where we are today, as a result of the stresses of the deepest Recession in history. Then I will look at what has happened to them the past 6 months as they are squeezed to save less and spend more on Commodities and the increase in the cost of Oil and therefore gasoline. The first chart below shows the Personal savings rate from 2000 to 2011. The data comes from the U.S. Dept. of Commerce.

Before the Recession, from about 2001 to 2005, the Personal Savings rate was about 3.5%. In 2005 and 2006 it dropped down to about 1.5%, and then moved to 2.0% and stayed there until the Sub Prime scare in 2008 and the beginning of the recession. But from 2008 to mid 2009, it reached a peak of 8.0%. Then it started to drop and settle in at between 5.0 and 6.0%. In the last 6 months, you will notice that in mid 2010 where it had reached back to 6.2%, it has steadily dropped back down to 5.0%. That's an absolute 1.2% drop. What has caused this sudden drop in their savings rate? We have been told that the economy has improved and that there is no inflation by the Fed, the government, and the media. But the data suggests otherwise. In the chart below, Crude Oil Prices have risen these past 6 months, gasoline prices have been accordingly rising and now are taking a bigger bite of our income. See the red arrow of the prices the past 6 months.

The next chart is on the Commodity Price Index from 1989 to 2011. You will notice the high peak in 2008 and that we are now back above that level now and have had a sharp increase mid 2010 to now. This coincides with the jump in Oil and the Gold price surge in the latter part of 2010.

There is no doubt that the Middle Class is being squeezed again and that it is affecting their savings rate. Many would like to pay down debt but as long as they are being squeezed, it is going to be more and more difficult.

By the way, President Obama and his Administration define Middle Class as anyone making up to $250,000/year. However they also were considering the legislation for the tax cuts up to $1 Million/year and that might be the upper limits today of where the Middle Class ends and the wealthy begin. I don't know if one can arbitrarily draw a line where one class ends and another begins, but it helps to define at least what group of people are being affected the most. If you feel empathy for the difficulties the Middle Class is facing, consider how the poor must be doing. You see it is often the Middle Class who does the heavy lifting to assist the poor by small donations to those less fortunate.

We are experiencing a Class Warfare right now unprecedented in our history. I have no idea if and when it will end, but I don't think we are going to like how it is finally resolved. These things end in other countries with revolutions and a rising up of the poorer classes. I have heard that buying a gun is easy these days and gun sales have risen very rapidly in the past decade. But they say try buying ammunition. You can't as it is all sold out! Why do you suppose so many are buying guns and ammunition is unavailable? Kind of scary, isn't it.