Not since 1929 ...

That was, of course a long time ago.

(Click to enlarge image, or take link below to WSJ story.)

For many young people today, the Great Depression started when Daddy told them they weren't going to get a Mercedes for graduation from high school.

But the Crash of '29 and the Great Depression that followed remains salient for some of us. That is why, perhaps, this phrase stuck out when Guambat read the WSJ front page story, Trapped in the Middle By Justin LaHart and Kelly Evans:

The well-heeled keep doing better, with the wealthiest 1% of U.S. families garnering the largest share of income since 1929.

It seems that the Great Middle of the American body economic is going, like Guambat, pear-shaped.

Nationally, median household pre-tax income in 2006, though slightly higher than in 2004, fell to $48,223 from an inflation-adjusted $49,477 in 2000, according to the Census Bureau. Weekly wage figures from 2007 suggest the decline persists.

Recessions often depress middle-class incomes and moods. What's unusual about these declines is that they occurred during the economic expansion that began in 2001 -- the first time that's happened during a prolonged expansion in at least 40 years. The main reason: The benefits of prosperity have gone disproportionately to the families at the very top.

Adjusted for inflation, income of the top 1% of earners grew at an annual rate of 11% from 2002 to 2006, according to an analysis of Internal Revenue Service data by economists Thomas Piketty of the Paris School of Economics and Emmanuel Saez of the University of California at Berkeley. Incomes of the bottom 99% grew at less than 1% annually.

This is not to say that things are as stinkingly bad as in the Great Depression, with its Dust Bowl and 25% unemployment.

In some ways, the American middle class is better off than it was eight years ago. It is paying less taxes, thanks to President Bush's tax cuts. The effective federal tax rate for the middle fifth of households declined to 14.2% in 2005 from 16.6% in 2000, according to the Congressional Budget Office. The rate of violent crime in 2006 was lower than in 2000. Death rates for heart disease and stroke have declined by about 25%.

Perhaps John Mauldin is correct is saying Guambat is Stuck in the Muddle With You.

Guambat is prepared to withhold judgment ... but is preparing a draft.