Middle class squeeze: The deep roots of an economic and social transformation

The current recession has stoked deep-seated fears about a declining middle class. A great collective anxiety about such a decline has been floating around for years now, and for good reason. As abundant data make clear, middle class families are being squeezed by stagnant incomes and rising expenses, and have been since the 1970s.

This week, Elizabeth Warren, chair of the Congressional Oversight Panel that is monitoring the TARP bailout funds given to banks, jumped into the debate on the topic. In an interview with The Washington Post, she said: "I believe that the middle class is under terrific assault."

An astute political player, she added: "And I don't want to play this as a capitalism issue." Actually, capitalism has quite a bit to do with the squeezing of the middle class -- but so do other factors, including government policy and deep structural changes in the global economy.