Let us be absolutely specific: what is happening is that many of the people who had previously, over 1-3 generations, joined the middle class are falling out of the middle classes, and finding themselves relegated into a new post-Fordist working class (if not non-working class) that is surviving off 'zero-hours' contracts, 'freelance' contracts, help from relatives who still have a contract job, and other precarious arrangements, without union protections of any kind, and with everyone fighting everyone else for whatever scraps of work are left, with the work opportunities being advertised globally on Internet with the effect that the locally unemployed remain unemployed. If one analyses what is happening it is this: the middle class has been hit by what can only be called "the cost of cheap" or "the curse of cheap". The paradox is that cheap is not good: cheap global food (subsidised by US and EU export subsidies) puts small farmers out of business on a global scale, and makes the world dependent on 10-20 food giants, whose overprocessed food causes obesity and diabetes, hence massive health costs. Cheap communication puts back-office workers out of work on a global scale: back-office work is forever being outsourced to ever-cheaper labor (China, Vietnam,...). Free newspapers are putting journalists out of work: serious newspapers (NYT, FT, Washington Post, FAZ, NZZ) are increasingly uneconomic, meanwhile the free newspapers are not delivering journalism, so much as gossip, and a continuation of social-media writing in print. I could go on, but the paradox is this: cheap is not good for society as a whole. Expensive is, of course, even worse than cheap, but the point is this: both expensive (e.g. expensive energy) and cheap (e.g. cheap food, cheap labor, cheap information) are detrimental to society and security. Meanwhile, the post-1995 (WTO) open markets capitalist system, which has contributed to the demise of the middle class in OECD countries, has engendered two Twin Towers to replace those destroyed in 2001. One tower comprises assets held by sovereign wealth funds, pension funds, corporates and oligarchs: stocks at an all-time high, plus real-estate that is unaffordable, plus bonds with yields at an all-time low. The other tower comprises the debt of sovereign States, banks and insurers, municipalities, mortgages, student loans, utilities, corporates, and corporate high-yield bonds. The asset tower is hopefully slightly higher than the debt tower, but unlike the real Twin Towers, these towers of assets and liabilities do not have fixed heights, and market prices only measure a marginal price. And monetary policy is now geared towards stopping the tower of assets from collapsing, and the mechanism to achieve this is "cheap credit": cheap credit is much better than expensive credit, but cheap credit has a cost. The cost of cheap credit is that everything else tends to become cheap: cheap food, cheap communications, cheap labor, free newspapers. Unless we face this "cheap nemesis", this paradox of "the cost of cheap", there will be no exiting the symptoms that Robert Shiller has identified. One should also ask why the people of Syria turned against Assad, and why the people of Iraq turned against Maliki, and why people in Syria and Iraq have joined a nihilist jihadist organisation. It is highly unlikely that economics was not a factor: many Syrians were becoming poorer whilst Assad's clan were becoming wealthier. Likewise, many Iraqis were becoming poorer whilst Maliki's clan and Kurds were becoming wealthier. In the contemporary world class conflict is making itself visible as nationalism (Ukraine, Russia, Hungary), as jihadism (Isis, Boko Haram), as sectarianism (Shia vs. Sunni), as inter-State war (Gaza): the underlying conflicts are class conflicts, and the West denies class conflict at its own peril. One of the failures of the West is to separate economics from politics: but there is only political economy, and economics divorced from politics is ideology. Unfortunately Professor Robert Shiller, you have never developed a political economy of the 21st century.