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Deposition Designation Station
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A person does not have to be too old to truly remember the times (mid 1960's and early 1970's) when gas stations gave away trinkets, toys, glasses, tableware and even "Green Stamps" that could be redeemed for valuable "merchandise" when you purchased a few extra gallons of gasoline. How eager the major gasoline companies were to stimulate sales, create demand and obtain their growing share of middle class consumer dollars. In those days, gasoline even premium gasoline, ranged from approx. $0.23 - $0.40 per gallon and the service stations gladly washed your windows, checked the oil and antifreeze, and some even gave candy and lollypops to any children in the vehicle.

The demand for consumer dollars in times of "new color TV" the "new" Princess Telephones and a wide array of new appliances and innovations for the average home was intense. The competition was intense, not because of recessions or significant unemployment, but because a significant amount of "new" and innovative products and avenues for consumer consumption all came along in and around the same time. Basically, the second wave of an easier life for the consumer after the Second World War was in full blast and on the scene. With the middle class subdivision (the "Levittowns") and regional mall shopping center having gained full acceptance and integration into the lives of the middle class, it was now time to enjoy these innovations, and hence an array of lower end consumer's disposables came on the scene.

As you fast forward almost 50 years, those who find themselves in forefront of seeking today's consumers dollars, (the products might have changed from a Royal Typewriter to a Vaio Sony laptop and from a Chevy to a Honda, but the underlying concepts are similar), are once again experiencing a tougher times. Most middle class consumer's are either starting to or are going to start to face the concept of hard choices, something the baby boomers have not faced in almost thirty (30) years, based in good part via a combination of government entitlements, tax breaks, subsidies and deficit financing. As most of the "low hanging or easy fruit" has been picked, those who now enjoy life via consumption, namely the middle class are going to realize neither they nor any government can spend their way out difficult financial decisions.

What has recently brought this dilemma into sharp focus is a solid combination of:

Increase commodity priced, aside from petroleum, such as - coffee, cotton, corn and other major foodstuffs;

Increase prices for petroleum that not only directly increase the costs for oil, gasoline and home heating oil for consumers, but, over the intermediate range indirectly increases the costs for all items (almost everything) that is either based upon a petroleum product, or relies upon some aspect of petroleum for its existence, including delivery of medical supplies via an overnight delivery service;

The decreased value of the dollar as we continue to print this once limited commodity at the average rate of $100 million per hour ($1.0 trillion per year, equates to approximately $100 million per hour); and

The near / intermediate "eventual" increase in interest and borrowing costs, as such will be necessary to rein in increased or projected increased inflationary forces as the above matters gain solid footings, intertwine and often reinforce each other.

Seeking to combine the above outlined items into a succinct economic projection, reveals the middle class will have to continue to support and favor a government that fosters an artificial level of living and consumption, thereby further saddling their children and grandchildren. These projected levels of debt cannot be rationally outlined, supported via interest payments or redeemed via direct payments. In the alternative, the middle class will have to tighten their belts for a period of "economic adjustment." It was easy for most members of society, including and especially the middle class to "adjust" to significant deficit spending, the lowering of taxes and increased entitlements, but whether or not the same (or mostly the same) group of people can readjust in the opposite direction is truly an open question.

Looking forward just a few years, and maybe not that long, "if" increased petroleum and many increased food costs become the accepted norm, then discretionary funds that were once the "reward" for having achieved the status of "middle class" mostly from increased education, sacrifice and hard work, including dual income households, will, rapidly evaporate from the scene. If one adds increased costs for credit cards and other consumer financings, it is very easy to ponder a "middle class" with little funds to expense after all basic necessities have been fulfilled. An extremely cold set of winters or extremely warm set of summers that would easily increase energy, fuel and food costs further, could apply additional pressures. This would not only exacerbate the decline in middle class discretionary funds, but further put pressures on available governments to fund additional "emergency" entitlements, from funds they do not have, as underpinnings for the survival of a middle class.

Seeking to select a path or series of alternatives, even if the undersigned was personally given an option for the nation, does not reveal a pleasant set of scenarios. In eras past, the nation has either inflated itself out of problems, like the repayment of war debts, or mostly for short periods of time invoked deficit financing to "prime the pump" to restart and refocus the nation onto a path of growth and prosperity. With a disproportionate percentage of our corporate "growth" coming from overseas sales, that will eventually be replaced via products produced locally overseas, inflation is not an alternative since higher interest fees would surely cripple or eliminate any recent growth, and deficit spending already in the highest possible gear. Any relief for the pressures presently facing the middle class seem either too small to measure or totally remote.

Quo Vadis?? - The question needs to be asked, where do we go from here, in simple terms that can be understood via a majority of our citizens. The projections denote that slowly, but surely in solid coordination with each other - entitlements must be reduced, price supports, specialized tax breaks and other political patronage eliminated and excessive government waste and duplication must be eliminated. All this, must be started now, not after the next election or the next budget year or budgetary crisis. A nation that awakens to find itself without the group or class that was the backbone of the nation since the industrial revolution (1870's) and became a functioning class after the Second World War (1946) cannot expect to remain competitive or grow in a world where most other nations are nurturing their growing or emerging middle classes.

Political talk is cheap and cannot replace the daily financial facts and forces presently facing our nation and middle class. While "no decision" is a decision, and "no action" is an action, if we expect to arrive at the 22nd century as a viable, solid and financially independent sovereign nation, we cannot expect a totally distressed middle class to carry out the functions it has so prudently undertaken for almost 100 years. Here, not even Green Stamps or now Air Miles can induce national support from the group known for its longer term support measures, if the group is no longer economically viable or does not even exist.

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Dr. Lehrer has been an independent Economist and Financial Consultant since 1980. He holds four degrees from New York University: Bachelor of Science (Finance), Master of Business Administration (Banking), Master of Arts (Economics) and a Doctorate in Urban Economics. After a career on the corporate lending staff of Bankers Trust Company (New York), Dr. Lehrer became a Manager for the Greek Shipper, Costas Lemos [dec'd]. Here, he assisted in a variety of projects in New York, Houston, Denver, Guam and in Europe. Dr. Lehrer relocated to Houston, Texas in 1977.

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