I'm more optimistic. We reached peak oil in the 19th century, but then we figured out we could also get oil out of the ground. I agree with your point, I just want to point out that the unforseen is...
But as far as the middle class having a lower standard of living, could you expand upon that? Are you talking about real estate or what? I ask because I am a relatively poor person, but I think my standard of living is higher than my parents (at my age) simply because of technological innovation. If you want a McManshion and fancy cars, my standard of living doesn't look so hot; if you measure my standard of living based on what I care about, I'm doing great.