The Middle Class Isn’t Dying

It’s just that standards are rising. James Hanley explains:

[I]f you are content with the standard of living of the 19th century’s middle class, you could probably do that while working half time right now [and] you can live a 1950s middle class lifestyle while working part-time at contemporary American wages…

The problem is that absolutely nobody wants to live like we did in the 1950s. Our standards today are a lot higher. Many of the things the middle class loves the most today — smart phones, color HDTV, movies on demand, the sweet, sweet Internet — just weren’t available at any price back then. But some comparisons are still possible:

[A]s the country becomes wealthier, it doesn’t seem to become easier to live a middle class life. And it seems to me that this is because the material standard of living that defines the middle class today is higher than that which defined the middle class in past generations. For example, in the 1950s, a middle class lifestyle meant a window air conditioner and some fans to move the air around; today it means central air conditioning. Back then a single car family was middle class; today most middle class families are two car families. A single television set was sufficient to be middle class back then; today–even though televisions are much cheaper–most middle class families have multiple televisions, many pay extra for a television that’s much larger than what their (grand)parents had, and most pay extra–sometimes a lot extra–for cable or satellite (i.e., once upon a time three free channels was middle class; now 100 pay channels is middle class). They didn’t pay for microwaves and computers (and internet access) in the 1950s, while we do now. We also eat out a lot more today than they did back then. One of the biggest changes is the size of American homes. In the 1950s, the average home size was just under 1,000 square feet; today it’s over 2,300 square feet. As importantly, a house back then most often had a single bathroom; now homes regularly have 2 1/2 baths or more.

How much is leisure time worth to you? Revealed preference suggests we’re stupidly eager to work our asses off for things that we don’t have much time to enjoy. This could very well be a problem, but it’s a problem distinct from the disappearance of the middle class.

Would a person with a 1,000-square foot home, no cell phone, no microwave, no computer, one television, and one bathroom even be called middle class today? What if he only worked three days a week? Wouldn’t that be fantastic? Books are cheap. So are walks in the park, yoga, and the hobby of home cooking, because the costs of food are sunk in any case. Become a vegetarian and you save even more. One can always mend one’s clothes instead of throwing them out. A person living like this would be living a very different lifestyle from the typical middle-class person today, but he could also be happier. It’s not for me to say.

Most of you, however, would not be happier. I suspect as much based on how I see you living right now. As they say, you pays your money and you takes your choice.

Hanley’s got numbers to back up his claims. I admit I haven’t checked them myself, but I’m sure our readers will be eager to help.

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384 thoughts on “The Middle Class Isn’t Dying

  1. The problem I see is that almost all of the growth James is citing occurred in the first half of the period. Median family income grew by 101% from 1950-1980 and by 15% from 1980-2009. During this earlier period, remember, the top income tax rate hovered from 70-90% and the US’s trade policies were highly protectionist (not to even bring up Nixon’s love of price controls). So, thanks libertarians, for that 15%.

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    • I’m terribly sorry that the rest of the world caught up to us in manufacturing following the golden age of the 1950s. But it’s entirely absurd to blame that on libertarians, and even enacting high trade barriers wouldn’t have produced continued growth of any sort.

      Nor for that matter would taxing the super-rich at a higher rate. I’m not much of a believer in strong correlations between tax rates and growth, but I’m least of all a believer in the correlation you suggest here.

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        • I’m sorry that you have no better arguments to offer than asserting the malign influence of some shadowy evil overlords whom I’ve neither met nor even corresponded with.

          If this isn’t a call for higher taxes, I’m not sure what is:

          [A]lmost all of the growth James is citing occurred in the first half of the period. Median family income grew by 101% from 1950-1980 and by 15% from 1980-2009. During this earlier period, remember, the top income tax rate hovered from 70-90%.

          His later comment removes all doubt:

          America didn’t stop growing in 1980, or stop getting more efficient at manufacturing or stop working as hard. What stopped was that the wealth generated by that growth stopped making anybody but the very richest significantly richer.

          Now, you can argue that this is a good idea, but so far you haven’t done anything of the sort. Guilt by association long ago stopped impressing me.

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          • There’s that whole mean/median distinction confusing the issue here. Taxes can have no effect on mean income growth (what you were talking about) while having a negative effect on median income growth (what I was talking about). How? By increasing income inequality, of course.

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    • Bo, sad as it is, we must face the fact that the economic conditions in America of the 50’s era were a historic anomaly caused by the fact that most of the industrial world had just finished bombing itself into the stone age. America, as the world’s only major industrial economy unscathed by the wars, was in a unique position to enjoy significant advantages. Those advantages resulted in large profit margins that unions (admirably) leveraged into high wages and benefits for manufacturing jobs which in turn led to the rise of the 50’s era middle class. Many parts of the rest of the world has rebuilt or advanced out of hobbling preindustrial state they once were in and those manufacturing jobs are naturally dispersing once more. No amount of protectionism would prevent this. We can’t go back to the way things were.

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      • The thing is, North, that America didn’t stop growing in 1980, or stop getting more efficient at manufacturing or stop working as hard. What stopped was that the wealth generated by that growth stopped making anybody but the very richest significantly richer. That’s why your story, sad as it sounds, is factually wrong at essentially every point where it bothers to be factual. Corporate profit margins are significantly higher today tha either the 50s or 70s and the rest of the world* did most of its catching up by the early 1990s. What changed was that those high corporate profits have stopped being leveraged into higher wages and benefits. Even today, imports are barely 15% of total GDP, so, if you think 30 year of middle class stagnation can be laid at China’s feet, I think Occam has a razor to sell you.

        PS, The whole libertarian thing was pure snark, and I apologize. I don’t believe libertarians have ever had the sort of influence to effect policy much at all, much less negatively. Oh wait, that’s snark too. Nevermind.

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      • North,

        I think both you and Jason are skirting Bo’s primary point by focusing on what he alleges are the causes. The change in trajectory for the middle class has changed dramatically for the worse since 1980 and not all of it is attributable to the end of the post-war boom.

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  2. You know, I’ve seen this a lot, but only against the middle/working class and the poor. I’ve never seen somebody pointing out that if we taked the Wall St elites at 75%, they’d still be living far better than Wall St elites livedin the 1950’s.

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    • Presumably that’s because the middle class are demographically significant, and because I care a great deal about their interests.

      But no, you’d never think something like that of me.

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      • That “demographically insignificant” ruling class controls an absolutely absurd amount of our culture’s wealth. That makes them significant. Indeed, it’s precisely the imbalance between their material significance and their demographic insignificance that challenges our democracy and our basic social contract.

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          • But isn’t that true of all libertarian discussion? The rich have to be exempted.. just because. Funny how often those who work for the super-rich as “libertarians” tend to duck those delicate issues. It must be part of the career path for the David Brooks wannabes of this world. Nothing like a bit of super-rich welfare money, eh?

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  3. The 1950s were not the Good Old Days. That would be the 1960s, mesdames et messieurs. If there were any Good Days in the 1950s, they came on the strength of being the Last Remaining Superpower. Soon enough they led to a mighty cramp in the bowels of the economy in the late 50s, high unemployment and businesses failing everywhere.

    At any rate, these are interesting comparisons but hardly meaningful. Don’t ever try to map today onto yesterday. It’s bad history.

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    • I disagree that they are not meaningful. The meaning is in our understanding of what kind of lives we lead, and what questions we should ask ourselves if we feel crushed by the weight of our commitments. Do I really need X television sets or N cars? Should I always try to live in the most expensive house I can afford?

      Through my parents, I received values of acquisitiveness and material improvement (along with other values) from my grandparents who grew up in the Great Depression, and so always sought to provide their children with the absolute best available. But why? Because they never knew what would be enough the next time things fell apart.

      My parents continued these values, but I think more out of inertia than out of need. Also, some keep-up-with-the-Joneses.* It’s been my generation** that has more frequently stopped and asked “Is this now enough?” Sometimes the answer is “No,” and all kinds of considerations go into that. But I don’t want to work harder just out of some kind of inertia. Hanley’s reminders are a good lens for inspecting our goals and needs.

      *This phrase always carried a different meaning for me than for most. My mother was very competitive (in a friendly and supportive way) with her next-older sister. That sister married a man named Jones. So, when I wondered who my mother was comparing herself to, keeping up with the Joneses was always a good bet.

      **Later generations than my Gen X are also asking these questions, and sometimes have some good guidance for me and my cohort through their public expression in books, film, etc.

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      • The old Grimm’s Märche of the Fisherman and his Wife comes to mind.

        If America lives in houses they cannot afford, who threw their credit pulls in the trash and loaned them the money anyway? The Flounder in the Sea. Who made the mortgage interest deductible? The Flounder in the Sea. If America buys flat screen displays made in China, technology invented here in the USA, who has made them so cheap? The Flounder in the Sea. If strawberries are so cheap, brought to ripeness by illegal aliens who sleep in shacks made of the same plastic which shelters the strawberries, are they not delicious? Thank the Flounder in the Sea, for they are lovely things to put on ice cream.

        Now listen here: I remember the 1950s and they were horrid times. Rural poverty was appalling and you didn’t have to go very far off the roads to find it. People shit in outhouses and drew water from an uncovered well. Here it is, Anno Domini 2011 and I scratch my grey beard, watching the minivans full of homeless people pulling up into the Walmart parking lot after a foraging expedition in the Arby’s dumpster. I never saw that in the 1950s. Time has given me a terribly long perspective: the longer I live the sadder I have become. That sadness is the price of wisdom.

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        • “Here it is, Anno Domini 2011 and I scratch my grey beard, watching the minivans full of homeless people pulling up into the Walmart parking lot after a foraging expedition in the Arby’s dumpster. I never saw that in the 1950s.”

          That’s because, in the 1950s, those people would be dead. Society was not so rich that the food Arby’s threw in the dumpster could sustain a minivan full of homeless people.

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          • They died all right, but not of starvation. Their kids didn’t grow very tall since they didn’t get enough calcium in their diets to grow long bones. Those people went back to the hills and hollers whereof the worthy Boegiboe speaks, to communities where folks didn’t let each other starve.

            Such communities no longer exist, and more’s the pity. Boegiboe knows whereof he speaks. You might do well to consider the world of the 1950s, before the War on Poverty in the 1960s.

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            • Are the solutions being proposed by many closer to doubling down on the War on Poverty than not?

              It seems to me that they are.

              There is a lot of heavy lifting done by societal norms.

              It seems to me that stuff like the War on Poverty does as good a job at chipping away at these norms as it does at lifting people up out of poverty (or, perhaps, an even better job).

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              • When Liberals proposed a War on Poverty and Civil Rights for those Pesky Negroes, it cost them millions of voters.

                The Societal Norms argument has been revived by today’s Conservatives. You’re probably right, such efforts do tend to chip away at the Societal Norms, but the weeds keep regrowing, sometimes stronger than ever.

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                  • (rudely) you may not so idly dismiss who proposed these things. I see in today’s Conservatives the same gap-toothed xenophobia as I saw in Richard Nixon’s Southern Strategy.

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                    • Well, given that my question was “Did it accomplish what those who pushed for it said that it would accomplish?”, I find myself wondering whether we have any overlap, at all, for what we think “those who pushed for it said it would accomplish”.

                      I honestly was not aware of any theory that the intention was to get people to complain about Mexican Immigrants rather than African-American Citizens.

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                    • Did what work? Did the War on Poverty eliminate poverty? Poverty was reduced by six percentage points. You might argue other factors were at work, but you’d be making the arguments the bigots made back then.

                      As for the Civil Rights Act of 1964, which did change the Societal Norms, Nixon did use the backlash against it to his advantage.

                      The GOP continues to believe government assistance to the poor is counterproductive, a constant since their opposition to FDR. Your task, not that you can or will take it up, is to make the case this is no longer true.

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                    • Did what work?

                      This is odd. I asked my question twice and you keep answering questions that I did not ask.

                      Here, I will ask it again:

                      Did it accomplish what those who pushed for it said that it would accomplish?

                      Perhaps we need to hammer down what those who pushed for it said that it would accomplish before we point out that my arguments are identical to the arguments made by the bigots.

                      I mean, if they said that it would reduce poverty by 12 percentage points (a number I use for the sake of argument only), could we say that it did not accomplish what those who pushed for it said that it would accomplish?

                      Or would only someone who does not care, truly care, about minorities, women, and the LGBTQQII community pose such a question in the first place?

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                    • You were answered, in full. Government cannot solve all problems any more than a police chief can completely eliminate crime in his town. The War on Poverty did a great deal of good. So did the Civil Rights Act and Voting Rights Act.

                      We must return here to Societal Norms. If those folks of the hills and hollers protected their own, they saw the wisdom of FDR’s extension of that principle to the country at large.

                      But once it became apparent those Pesky Negroes were gonna get some help, too, they violently rejected it. That’s what I saw. My people are from the piney woods of Tennessee and South Carolina and we have soldiered for this country for six generations. They were FDR Democrats who switched to the GOP when Strom Thurmond did. When my parents were married, black people attended their wedding and my Dad’s people didn’t speak to my parents until I was born. When my parents went to Africa as missionaries, they were practically disowned.

                      So this Societal Values schtick of yours is very much a mixed bag. Don’t try this argument on me again, you ain’t the only cracker in the barrel who remembers things as they used to be.

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                    • Given that it was phrased as a “yes or no” kinda question, please understand that I don’t feel like the question was answered.

                      We’re not even discussing what was promised by those who said that it would accomplish X. We haven’t hammered out what X is.

                      It’s also my position that X is knowable *AND* measurable.

                      Those who pushed for the legislation said that it would accomplish X.

                      Did it accomplish X?

                      I don’t believe that pointing out that my belief that societal values does a lot of heavy lifting is a schtick is an answer to the question.

                      How’s this?

                      I posit that I am an evil person. On par with Hitler and Stalin combined. When I walk into the room there is a palpable menace and ladyfolk all cast their eyes to the floor in order to avoid meeting my serpent-like gaze. I am wicked and destined to eternal hellfire for my wickedness.

                      Granted.

                      Can we answer the freakin’ question without further dwelling on how awful I am? I admit it. It’s out there for all to see. Great. Swell. Wonderful. That has been established.

                      Can we answer my question now?

                      Did the program accomplish what those who pushed it said it would accomplish?

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                    • Let’s return to the gist of your argument:

                      You argue the solutions being proposed by many closer to doubling down on the War on Poverty. Societal norms are also doing some heavy lifting, too, you say, tendentiously pointing out the War on Poverty chipped away at those Norms.

                      To which I respond: those Societal Norms were mostly self-serving bullshit, protecting only Me ‘n Mine. When FDR proposed his own War on Poverty, the poor of the country backed him to the hilt, over the vigorous protests of the GOP elites and the SCOTUS of his day.

                      LBJ was a different story. Though all were equal in the days of FDR, champion of the poor, those folks loved him. But some, it seems, are more equal than others, when it came to the Pesky Negroes, who were being lynched by the dozens in those halcyon days of the 1950s.

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                    • The answer is simple: FDR’s war on poverty appealed to common decency for the poor. It very largely worked, though it did have certain socialist aspects. But the same could be said of Bismarck’s placating his own disgruntled workers in a previous era, using a dose of socialism to stave off Communism. LBJ’s War on Poverty went a long way to lift the rural poor out of poverty. If the War on Poverty can be said to have failed, we might make that case in the inner cities, where the poor were warehoused, far from any meaningful work opportunities. LBJ wanted to legislate away the worst aspects of poverty and he largely succeeded, since most poverty, then and now, is rural in nature.

                      You are not making any sense to me. Did it “work” ? I asked you for a definition of “work”, for some yardstick against which we could say the War on Poverty might be said to have failed or succeeded.

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                    • “Yes and no” is an answer. THANK YOU.

                      As for what the definitions of “worked” was, I’d ask whether it accomplished what it promised to accomplish.

                      Let’s posit something like this:

                      6th graders and their reading levels. Let’s say, after testing, we establish that 5% of 6th graders read at a high school reading level, 60% read at a 6th grade reading level, and 35% read at a lower reading level. That’s pretty crappy. Worse than one out of three are behind.

                      Now posit a program called “You Too Can Read!” that said that it would take the 35% of 6th graders who had poor reading levels and turn them into only 10% of 6th graders who have poor reading levels… and we applied it and, after a generation, we had 1% of students reading at college levels, 2% reading at high school levels, 30% reading at 6th grade levels, and 67% reading at below 6th grade levels…

                      Can we safely say that “You Too Can Read!” failed?

                      It seems to me that we can.

                      Why? Because we were promised that the 35% of kids reading below level would turn into 10% of kids reading below level.

                      That is what I mean by “work”.

                      Did it accomplish what the people pushing it said it would accomplish?

                      Was the point of the war on poverty to put toilets inside of 97% of American homes?

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                    • We don’t have to erect a hypothetical. We have Head Start, an artifact of the War on Poverty. Head Start really does give children a leg up on their non-Head Start peers.

                      What we’ve learned from Head Start is this: it doesn’t matter how much of a head start you give them if you put them into a crap school system. The effects. while noticeable for the first few years, will fade away.

                      Maybe, as you imply, heh heh, we ought to double down on programs like the War on Poverty and back the public school system in a far bigger way. As a wise man once observed “Rarely is the question asked: Is our children learning?”

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                    • I did have to erect a hypothetical in order to explain what I meant by a program that did not “work”. A program that did what its pushers said it would accomplish, that is to say, a reading program that would result in 10% of students reading below level would be a program that “worked” in this case and the people pointing and saying “but 10% of the students are still under 6th grade reading level!” would be, at best, disingenuous.

                      As would the folks in the previous example pointing to the 40% of kids reading at grade level or above and questioning the motives of those asking about the kids who are being ill-served by the new program.

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                  • I’ve been looking around for some promises made by the advocates of the War on Poverty. I can’t seem to find any. Your hypothetical is, to put it mildly, a red herring. Are you claiming more people were reduced to poverty by the War on Poverty? In the case of the gigantic warehouses like Pruitt-Igoe and Cabrini-Green, there’s a very good case to be made for exactly that: these public housing projects crammed the poor into ghettos in the sky. There were no jobs for them anywhere near where they were built. Their schools were shit because there was no property tax revenue to support them. For the same reasons, there were no police officers to patrol them. There were no grocery stores near them. There were no nice families to associate with because the only people allowed to live in those ghettos in the sky had to pass poverty tests: should someone actually get a job, they could be run out of the Poverty Trap before they were ready to leave. And because they didn’t own their apartments, that which costs us nothing is of no value and those apartments were quickly trashed.

                    See, here’s what just makes me shake my head in wonderment, and with this, I hope never to respond to another one of your posts, ever: in the course of promulgating these Societal Values wherein the poor were once valued members of a community, helped and being helped as they needed and could, you’re here to say the War on Poverty, wherein our society tried to lift the poor from poverty, in toto, was a failure because it attacked those Societal Values.

                    Now I’m done with you. You don’t have a point to make, just a whole lot of jumping up and down and flinging shit from the top of the tree like some enraged gibbon. I think I’m only contributing to the problem by responding to you.

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                    • I can’t seem to find any.

                      That’s troublesome. Surely there must have been at least one.

                      Are you claiming more people were reduced to poverty by the War on Poverty?

                      I don’t believe I’ve made any claims stronger than, here, let me use cut and paste:

                      There is a lot of heavy lifting done by societal norms. It seems to me that stuff like the War on Poverty does as good a job at chipping away at these norms as it does at lifting people up out of poverty (or, perhaps, an even better job).

                      I think that I am willing to stand by those claims.

                      In the case of the gigantic warehouses like Pruitt-Igoe and Cabrini-Green, there’s a very good case to be made for exactly that

                      Interesting. Something that didn’t “work”. Something that ought to be avoided.

                      See, here’s what just makes me shake my head in wonderment, and with this, I hope never to respond to another one of your posts, ever: in the course of promulgating these Societal Values wherein the poor were once valued members of a community, helped and being helped as they needed and could, you’re here to say the War on Poverty, wherein our society tried to lift the poor from poverty, in toto, was a failure because it attacked those Societal Values.

                      This is where I can’t help but notice that you’re putting a great many words in my mouth and attacking my character despite my agreement that I am worse than Hitler and Stalin combined. I don’t mind you attacking my character, I am evil after all, and perverse. The things you think are insults sound in my ears as gentle lullabies and high praise in my twisted and evil circle.

                      I am irritated that you ascribe an argument to me that I have not made, however.

                      It strikes me as lazy. Surely someone capable of writing prose as purple as yours can do better than resting so easily upon your laurels.

                      Now I’m done with you. You don’t have a point to make, just a whole lot of jumping up and down and flinging shit from the top of the tree like some enraged gibbon. I think I’m only contributing to the problem by responding to you.

                      As interesting as name-calling is, I think that there are interesting things to find in the ideas being explored…

                      For example:

                      Have there been programs as part of the War on Poverty that actively did harm?

                      Are there programs as part of the War on Poverty perpetuating that harm?

                      Is it possible to reverse that harm?

                      Assuming that culture does a lot of heavy lifting, how can we re-enforce that culture in a healthy manner?

                      Or should we say that culture is an untouchable concept and one is as good as any other so any attempt to push one at the expense of another is a violation of some very important Rights?

                      These strike me as a lot more interesting than, say, name-calling. Well, boring name-calling, anyway.

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                    • You can’t seem to find any? President Johnson spelled it all out in a quite famous state of the union speech in 1964. It’s known as the War on Poverty Speech. You can look it up.

                      Here’s what he promised:

                      “Our aim is not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.”

                      Now that I found that for you it should be easier to answer the question.

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                    • Well, Sam, he knocked six percentage points off poverty and changed millions of lives for the better. Maybe, if you’d read the thread, you’d see for yourself how the War on Poverty failed and how it succeeded.

                      Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory nor defeat.

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                    • I don’t know that this is entirely useful.

                      I mean, I’m a measurement guy. I’m all on board with Jaybird’s method of establishing whether or not legislation actually works. Declare ahead of time, “If we do X, then Y.” If you don’t get Y, it underperformed. If you get Y, but you get Z and Z is worse than X, well suck.

                      Might still be a good idea, might not. It depends on how far off of Y you were.

                      However, “the proponents” of any particular set of legislation don’t usually have these sorts of measurable quantities. Sam’s response illustrates how useless a measure politicians use. They use what sells the public on the legislation. “I will get rid of poverty” is going to get more votes than “This bill will reduce crime recidivism by 12% among the 21-27 year old urban male population.”

                      So while I agree, we ought to be very clear about what we mean by “it works”, or “it’s working”, or “this is how it works”, I don’t know that a politician’s promise ought to be the standard of measure.

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        • My mother lived in that rural poverty as a young girl, on a farm in the foothills of Appalachia. She’s told me about it, how hard the work was on everyone, and how she often felt either guilty for being the baby of the family or desperate to get away from the house, into the woods or the pastures. Her parents were hard bargainers, but they also never let someone starve. That was how community worked, when starvation and illness were such close companions. I didn’t experience it, and my mother and grandparents hoped I never would, so they told me about it.

          They wouldn’t even have had the farm, perhaps, had the Flounder in the Sea not formed the CCC and given my half-starved grandfather a job working on the Blue Ridge Parkway. But he never thought it was the Flounder in the Sea. He knew it was borrowed from the future. Whether he worked hard because he had the fear of God, or because his wife drove him for the family, or due to some debt he felt he needed to pay back, I won’t ever know. Maybe a combination of those. Maybe he just wanted never to starve again.

          Each member of the rural community kept one another alive through their hard times because they might be the next with a bad harvest, or to lose a husband.

          So, let me see if I understand the Fisherman and His Wife: You can do better than you currently are doing, but if you don’t bring it about yourself, then it costs something to someone else, and that makes God angry. And, after all, the covetous person will never be pleased with what they have, so when they inevitably covet too much, they will be brought down and find themselves in squalor again. O, how the mighty have fallen!

          But they don’t fall, usually. There are enough of them, and over the whole of the world, that they can almost always pick each other back up again. And they all help the one who falls on hard times, such as being forced to resign as dictator, because–who knows?–they might be next. The egregiously awful among are sometimes allowed to be eaten by the slavering masses, but only rarely, and only enough to let those masses think their plight is just. “See, the hard times have taken Ken Lay! We are with you, er, Brothers!”

          So, what do we do? We, living in the shacks by the sea. Do we keep fishing for the magical flounder that we can use for a Good wish, and raise everyone up at once? Or do we keep fishing in the hopes that maybe we’ll feed two families this year instead of one. The less the government is able to come in and break up our local ways of saving and protecting one another, by overtaxing for ostensible reasons of providing the safety nets we already know how to provide, the better off we are.

          And if–and this is real value for me in Hanley’s and Jason’s points–if we maybe don’t eat so many of those fish ourselves, might we have a little extra to help a little bit more? It’s hindsight for this crisis, but we as a society don’t have to forget when times are good again, if we just understand the stories of our parents, and grandparents, and even the Grimms.

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          • FDR did what he could, inoculating the USA with a dose of socialism in an attempt to prevent an even worse condition, Fascism, then making great headway in other parts of the world. Mussolini had pulled Italy out of the Depression: it was the first county to emerge from the Depression. But Mussolini had done with more guns than butter. FDR was intent upon making it mostly butter, though in creating the CCC, WPA and other acronymic entities (most of which were struck down by SCOTUS as soon as they arose) he also fed and organized the men and boys he would soon march off to war in Europe and Asia.

            The covetous are never satisfied, this is true. But you have missed the point of the story entirely: the fisherman, unlike his demanding wife, knew there was no good ending to the story. He who receives the Gifts of the Flounder will eventually have them taken away.

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            • I’m afraid I can’t let it drop there. You are too pessimistic, and it has made you misread the story. The fisherman always thought that the here and now WAS a good end to the story. He said “It is good that you are pope!” and he meant it, or at least meant it to assuage his wife’s greed. He who receives the Gifts of the Flounder and does not appreciate them as gifts will have them taken away. We’re not in this mess because we had good times in the oughty-oughts, but because we expected ever more. And that ole’ Flounder never said otherwise.

              It’s not that there is no good end to a good-luck story, but that there is no guarantee of one, and expecting one is foolishness.

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              • Misty waaaater-colored maaaaamamaries of the Way We Were. I maintain the 1950s were just awful, a fearful time when kids used to hide under their school desks, doing their Duck and Cover drills. The Korean War told us we were no longer invincible, that the nuclear bomb had changed everything. We entered the Arms Race in a huge way, applying billions of dollars to the American economy like so much cheap rum to a drunken sailor in an attempt to prevent a hangover. It all came to a very bad end around 1957 or 58, when the economy shat itself and almost closed down.

                For anyone, least of all in these days, as a New Gilded Age dawns in America, to make any comparison to the 1950s is nauseating.

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                • But all those sitcoms from the 50’s were just so wonderful!!!!! But slightly more serioiusly it was a good time in many ways to be a worker. Many people were just glad to have survived WW2 and were able to build a life far better then they imagined before the war. I agree the 50’s as a golden age are way overblown and often based more on Leave it to Beaver colored memories, but there were tangible parts that were good for many people.

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                  • If times were better for workers in the USA, the USA had survived WW2 with its factories intact. That’s pretty much the only reason, imho.

                    I subscribe to a theory wherein every Middle Class is a temporary phenomenon. They appear under highly specialized circumstances, where demand is high enough to support a class of workers in short enough supply to warrant paying them a little more.

                    My own industry, software, is characterized by this phenomenon. The demand’s still reasonably high, but the supply of workers has risen and wages have fallen. For this reason, I’m a consultant: I’m the guy you call after the cheap talent has wasted a million and hasn’t delivered, and I don’t come cheap.

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                    • The supply of workers in software hasn’t risen.

                      The supply of bodies who will punch code into a terminal has gone way up, but people that can actually build software systems are still pretty damn rare.

                      The problem, of course, is that there’s such a pressing need for software of all sorts and you can get by with a large chunk of buggy crap and still get work done… that we still hire people who can’t build software systems to write code. And it generally works.

                      You get insecure, buggy software that does all sorts of dumb crap at weird times, but you get something.

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                    • I suppose there’s some merit to that assertion, but software is a craft. I could wax prolix on the artistic aspects of software or the fact that some programmers are amazingly effective where most aren’t. But I won’t because most of that sort of thing is bosh.

                      Ultimately, bad software emerges from a flawed understanding of the problem to be solved. Like every craft, software is learned as a process of emulation.

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                • I’ll leave the discussion there. I’m tempted to make a parting shot, but I’d rather think for a while and maybe re-engage on comparing and contrasting the 1950’s to the 2000’s on some future thread.

                  But, I do want to thank you now for your personal experiences, the link to the Grimm fairy tale, and the discussion. That discussion has helped me clarify some of my thoughts about this progressivism v libertarian stuff that has been bubbling here lately.

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  4. JK has a point if you are immune to disease, will not need retirement, and have no children who might want to attend college.
    The erosion of the middle class isn’t just a matter of slowing wage gains… it also involves increased prices for medicine/college and declining real value of pensions/Social Security.
    But if you live in Europe, a lot of those costs will be borne by the state… which is perhaps a defense of the liberaltarian utopia of low wages and generous government benefits.

    Bottom line… cheap food doesn’t make up for the fact that it’s harder for the children of the working class to attend college than a generation ago.

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    • JK has a point if you are immune to disease, will not need retirement, and have no children who might want to attend college.

      I’d still have a point even if you sometimes got sick and did have children to send to college. Hanley explains.

      But even setting those things aside, we could still all work a bit less, consume a bit less, and remain vastly ahead of the 1950s in terms of living standards.

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      • Hanley doesn’t mention health care or retirement (or did I miss it?).

        He says you can go to community college… although one could argue that part of the self-definition of the American middle class is the ability to send your children to a four year college.
        That’s a debateable point… although switching Yale for CC is a decline in consumer good quality that probably outweighs the cheap costs of TVs.

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        • You’re correct that he doesn’t mention health care or retirement. They are meaningful omissions, although even here, we might want to look closely at the numbers. Much of our health care spending is almost certainly unnecessary and unhelpful. Avoiding that unnecessary spending may be a good deal harder.

          In any case, I still think the point stands pretty well.

          The two branches of progressivism really need to sit down and talk with one another. By this I mean the “consume less” branch and the “shovel more goodies to the middle class” branch.

          It’s not for me to do the negotiating here. All I can do is point out the contradictions. At the moment, the “shovel goodies” branch seems to be winning. It probably annoys them how I’m pointing out that the crunchy lifestyle of the consume-less faction would leave them all happier, healthier, saving more, relaxing more, and — of course — consuming less. When what they really want is to get more handouts, because life was supposedly so much better in the 1950s.

          Seriously guys, sit down and talk. I’ll be eager to listen in.

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          • Retirement and health care seem important. If you genuinely believe the middle class is thriving, then you should have some thinking about those issues.

            About health care…

            I’m on board with the notion that much of our hc spending is wasteful.
            But that’s much different than the claim that medicine is useless. Put it this way: if you got sick, would you want to be able to go to a doctor?
            Also, being middle class is a state of mind: security… that you can retire, see a doctor, afford college for your kids.
            Even if all of medicine were a giant scam, uninsured people would still be quite anxious… and doubly so when they get sick. This sense of security is arguably more important than happiness than a bundle of consumer goods.

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            • I honestly can’t believe how many totally imaginary arguments have been ascribed to me on this thread.

              Medicine isn’t useless. It’s not a giant scam.

              The rich are not demographically insignificant.

              No, not all present inequalities are necessarily justified.

              And no, I’m not saying everyone has to pack up and move to Fargo.

              Good lord. Some of the responses have been tough but fair. More than usually, though, they’ve been delusional.

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          • The two ‘branches’ you talk about aren’t mostly trying to be in the same group that I see. One can look at arguments of each on their merits; but it is really neither here nor there that they may be at odds. Moreover, I don’t know that anyone would deny that it is wiser to do without. This is about what has occurred in terms of income growth across the wage spectrum in the last thirty years. That’s really it. There is no reason a consume-less kind of person should have less concern with that than a person who likes to spend and is endangering his retirement. Saying that both will have to consume less just to maintain the saving-spending balance they had been maintaining is still a major political-economic proposition.

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  5. Jason,

    I’m well aware that leisure items and material goods are in many ways more fun and more advanced than in the past. But this says absolutely nothing about retirement security or healthcare – two far, far more important issues. Furthermore, it doesn’t speak to the preferred changes libertarians and many conservatives would like to make which would, on sum, make retirement security even less reliable. And frankly, if left to just libertarian and conservative ideas on healthcare – without the pressure liberals place on the issue – I don’t think you’d ever see anything like healthcare security for the poor and working classes. Just look at the efforts to cut people off the Medicaid rolls across the country.
     
    Furthermore, while this does a fine job at explaining how things have improved in society (and I don’t think most people are arguing that we should return to the 1950’s or the 1800’s – the idea of progress is well-rooted in the collective psyche) it says nothing at all about how things should have improved. Would we trade our high-tech middle-class existence for the low-tech middle-class existence of the 1950’s – maybe some die-hard nostalgiaits would, but most people would not, even if they believed that there was a crisis in the middle class. Asking to pick the present over the past and then using that as an example of how things must have improved is pretty paper-thin as far as arguments go. Nor does it say why things have gotten materially better. Perhaps some of these much-loathed government programs are to blame; and perhaps, too, the liberalization of markets and the lowering of tax rates have helped as well. Perhaps it is a very mixed bag with no simple explanation, just as the gains made across the board don’t tell the whole story either. But I suspect that the usefulness of libertarian economics has reached its peak. Civil liberty issues are the next frontier for libertarians who want to improve the lives of Americans – not attempts to privatize public libraries or fight for more tax cuts.
     
    Anyways, this argument also says nothing about how things will be in the future if we maintain the current course. I don’t trust that the nation as a whole will be very good with its 401k investments, or that the investment bankers who just thrashed the economy will be very wise stewards of our money. Pointing out that the middle class can afford more leisure and better toys than it used to, and that we live in more material comfort, ignores the chaos in the system, the rapidly shifting industries, the rough and tumble ride that middle class workers face, and how very important things like health insurance are for people who have none, or who lose it when they lose their jobs.

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    • “Pointing out that the middle class can afford more leisure and better toys than it used to, and that we live in more material comfort, ignores the chaos in the system, the rapidly shifting industries, the rough and tumble ride that middle class workers face, and how very important things like health insurance are for people who have none, or who lose it when they lose their jobs.”

      I disagree. I think Jason’s point is that if people today didn’t feel entitled to such extravogance they would be able to smooth out the wrinkles you described much more easily. As an example, I have a friend who is starting his own business and is using COBRA for his healthcare. He says it’s totally affordable – but he’s also very frugal, lives in a small apartment and doesn’t blow money on luxuries.

      A lot of the middle class angst (and I think you over-exaggerate this ED) is self-created, not a product of the ‘system’.

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    • Writing in April 2010 The Economist made the following points regarding the middle class and social mobility:

      1. “The recession came at the end of a period marked by record levels of inequality.”

      2. “In 2004 men in their 30s earned 12% less in real terms than their fathers did at a similar age, according to Pew’s Economic Mobility Project. This has been blamed on everything from immigration to trade to declining rates of unionisation. But the driving factor, most economists agree, has been technological change and the consequent lowering of demand for middle-skilled workers.”

      3. “Between 1970 and 2008 the Gini coefficient, a measure of income inequality, grew from 0.39 to 0.47. In mid-2008 [note, before the Great Recession] the typical family’s income was lower than it had been in 2000. *The richest 10% earned nearly half of all income,* surpassing even their share in 1928, the year before the Great Crash.”

      Keep in mind The Economist is not particularly left leaning. The article criticizes Obama’s supposed favoritism of unions writing, “In February his ‘middle-class task-force’ touted measures such as expanded child care and, less encouragingly, support for unionisation.”

      The middle classes penchant for assuming debt is undeniable but also undeniable is the real consolidation of wealth by the richest 10% of Americans.

      http://www.economist.com/node/15908469

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      • But the driving factor, most economists agree, has been technological change and the consequent lowering of demand for middle-skilled workers.”

        Which is why I find vexing the talking point that supposed to counter the ‘big lie’ that public sector workers are overpaid – that one needs to be “Controlling for education and other standard human capital variables” to see that that public sector workers are paid less than their private sector counterparts.

        Not saying that it’s not true – apples to apples public sector work pays less than the private, but that it’s vexing as a talking point. If you adjust for ‘education and other standard human capital variables’ you account for the majority of the income distribution in the US between the 0th and 90th (or even 98th – around $250K per annum) percentile. People with professional degrees earn much more than people without them. High school drop outs have a much higher unemployment rate than college graduates. And so on.

        In no other aspect of discussing the ‘war on the middle class’ – or on the flip side, the ‘war of poverty’ or any other social justice discussion – is this type of statistical re-norming commonplace.

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    • Regarding an earlier comment on another post, I asked how much should taxes be raised on upper incomes. I tend to be like Mike at the Big Stick in that I think there should be tax hikes from incomes above a certain level to include the middle class.

      Anyway, society has to decide how much taxation is enough and they also need to decide what they will fund. One the things I’ve noticed with liberals and the Left is that there are calls for taxes AND calls for expanded federal programs. Now, when the economy less dynanmic and less open in the 1950s and 60s, you could get both because the economy was booming and things were getting better and better. California could make college education virtually free because people’s incomes, as well as the balance sheet of corporations were continuously going up. So, it was no shock that that was the era when government programs increased greatly. We had the money to do things.

      The problem is, the economy has changed. It’s more dynamic and less dependable. But government has continued to operate like it did circa 1962 (yes, I know taxes were lowered). We now have this large (by American standards) federal government that we want to maintain, but we no longer can afford it. Yes we can tax people, and I’m not against it in principle, but I remember hearing on NPR that to fund current liabilities the upper tax bracket would be around 80 percent and the business tax rate would be about the 80-90 percent as well. Now, we did have tax rates as high as 94 percent in the 50s, but tax rates were high accross the board, I believe. As Mike notes, if we have one class paying the bills, we will have another class asking for everything and anything because they never have to pay for it.

      Additionally, a business class rate in the 80s would be disasterous in an modern global economy.

      We are never going to have a libertarian uptopia where government dissappears. But we can’t do things the way they have been done, and not everything can be funded. We do have to have some kind of Social Security and Medicare, but they have to be made sustainable. There are some needs for anti poverty programs and things like LIHEAP (heating assistance for the poor) but we might have to look at some creative privatison when it comes to things like Public Radio and TV, Amtrak and the arts ( all three are things I support).

      I think government has to shrink because we can’t afford it anymore. The trick is how to do that without harming the most vulnerable.

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    • “Pointing out that the middle class can afford more leisure and better toys than it used to, and that we live in more material comfort, ignores the chaos in the system”

      I think it’s pretty easy to take material comfort for granted. I mean… it’s pretty awesome.

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  6. Comparisons are harder than you think. Barely respectable middle class at the turn of the last century required at least two servants. Sure, these two servants have been replaced by washing machines, vacuum machines, and dishwashers. But the joy of bossing poor women around in your home life is gone forever, unless you are in the upper middle class. And the upper middle class of 1900 got to boss MEN around: a chauffeur or even a gardener. Oh, what joy!

    So maybe a $15K Indian engineer (2+ servants) lives better than their Murikan $120K counterpart? It depends on what you think is important.

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    • Erm, you’re identifying with the master rather than the servants in that paragraph. I don’t know that that’s what you ought to be doing given the odds of being one vs. being the other at the time.

      As someone prone to identify with the people being told what to do, I’m pleased that I can own a washing machine, vacuum, and a dishwasher.

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          • That got a belly laugh.

            On the broader subject:
            Some parents are servants, and they work hard, save their money, make their kids do a little work alongside their schooling, and say “You’re working as a servant now, but I’m working this hard so you won’t have to remain a servant.”

            Other parents are servants, and they work not-so-hard, telling their children, “Hey, this isn’t so bad,” and they get angry when they’re kids get uppity, wanting to do something better.

            I grew up in a factory town with both kinds of parents. Mine were the first kind. I’m glad I got out before the factories closed. It wasn’t my doing–it was my parents. I could just as easily have been told that I would do fine whatever I did.

            A decade later, my mother retired early by coming to live with me, and she provides free child care to her granddaughter.

            I gave some more biographical expository above in response to Blaise P. This is not intended as proof by anecdote, but as backdrop for my worldview. I’ve also seen the hard-working kids of hard-working parents fall by the wayside, even killed by gangs in that tiny factory town. (I was lucky not to literally see it when a promising young Black man of my acquaintance was gunned down.)

            Life can be hard. The answer is to do the best you can for yourself, your family, and your neighbors with what you’ve got. Never expect any gifts from on high, and make sure those gifts you do receive bear fruit that feeds many.

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            • Life can be hard. The answer is to do the best you can for yourself, your family, and your neighbors with what you’ve got. Never expect any gifts from on high, and make sure those gifts you do receive bear fruit that feeds many.

              This is beautiful.

              For my part, with the kids that I am blessed to be an “uncle” to, I try to buy books on Christmases and Birthdays. They explain to me that the Hulk toys are better than the children’s collections of Wallace Stevens (this really happened!!! amazon.com/Poetry-Young-People-Wallace-Stevens/dp/1402709250 ) but I buy books for them anyway.

              For some reason, of the eight children in our “tribe”, all eight (!!!) are boys. Half have turned seven. The half that have, have received copies of Peter Frampton’s Comes Alive! and a cd player if, for some reason, they don’t already have one.

              I cannot save every starfish. But I can do what I can with this one.

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  7. “and that we live in more material comfort, ignores the chaos in the system”

    Good point!

    Being middle class isn’t just the ability to buy stuff… it’s security: knowing that if you get sick you’ll get health care, when you retire you will be comfortable; etc.

    One of the main defenses of the globalization of labor is that this decreases the cost of consumer goods. Well, we have that now.
    Maybe it’s time to focus on the other side of the equation… finding ways to drive up the costs of labor so that the middle class can have both cheap TVs and a decent retirement.

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  8. If that deal were widely available, included health care, enough money to raise children, and heat in the North Dakota winter, I think there would be a lot of people who would take it. But it doesn’t and it isn’t, and there aren’t that many homes in Fargo, anyway, which would presumably become a big city, and the whole argument is garbage.

    Croak!

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  9. I think this post answers its own question. Our standards are higher. No one wants to live like we did in the ’50s. I don’t see any case for why that isn’t well and good. Anyone proposing that the middle class accept 1950s living standards is proposing a politically unsupportable collapse of middle class living standards. Rising living standards are the only thing that keeps politics from being a consistently revolutionary-dictatorial nightmare world. We should want this to happen. When it becomes harder to maintain what someone reasonably considers a middle-class lifestyle, including communicating via socially normative technological instruments and purchasing an occasional luxury, this is rightly noticed, and why shouldn’t it be. That “death” of the middle class is clearly an attention grabbing exaggeration is obvious, so if that’s your point, then it is… obvious.

    This is a distributional issue. We have made massive gains since the 1950s, and many of them have been enjoyed by the middle class. But the upper class has in the last thirty years enjoyed massively more of them than the middle class. There is no reason in a healthy economy, as technologies constantly mainstream, the middle class shouldn’t have been able to continue to afford hem comfortably, making reasonable trade-offs. After all, that is the only business model on which consumer technology is actually a scalably profitable enterprise – we all need for the middle class to be able to afford the best of three-to-five year old technology (i.e. HDTVs and smartphones). That is not what is going on here. The crash has changed things findamentally, at least for the moment. That has, and should have, real political-economic implications. Which doesn’t necessarily mean that we should say that the middle class is dying when what is happening is that it is very clearly being squeezed at the expense of enriching a small elite of financial and technological managers. But it is still a very profound process that is going on in our economy. Tyler Cowen says we just have to basically scratch around with what we have around us to try to make something of value. Like, you know, in the 1500s. If that’s true, it’s a major deal. We should deal with the political implications of how that differs with the tacit political-economic agreements we’ve had in place for 50 years straightforwardly, not just tell people – “Hey, you got a little too used to rising living standards for fifty years there. Your bad!”

    I’m not sure the “The Middle Class Didn’t Have VCRs in 1953!” argument is one we want to go back to to get ourselves out of all that’s coming in the next few years. It’s a deep, cold, dangerous. We haven’t been down it in a while; I don’t think we’re sure how safe the water still is.

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      • Yeah, this is just a larger extension of the’I saw somebody on food stamps buy name brand Macaroni and Cheese or *gasp* even ice cream for their kids so obviously they don’t reeeeally need food stamps’ argument I’ve heard many times.

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    • I’ll re-iterate a point made on another post the other day: We have a lot more people in the workforce now with immigration and women. I’ll also suggest the same solution which is that if you want the same level of comfort (adjusted for technological progress) and the middle class of the 1950s…get married. It’s amazing how much more comfortable my life got when my wife and I combined our incomes.

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      • It is getting harder for two-income households. That is the entire discussion that is being had here. And it leaves out the fact the the number of hours being worked outside the home in your typical two-adult household has probably almost doubled since 1950 (roughly guessing that women going to work perhaps increased it by 75% on average, since some women did work then, and not all two-adult households are two-income ones now [stay-at-home dads, w00t!], but that the number of hours necessary to hold down a solidly middle-class job has likely gone up a great deal]).

        Jason is right, of course, that there are a lot of things we have now that they didn’t try to afford, so that’s fair to point out. But what we’re really talking about is that it has seemed to be getting much harder in the last decade or so than it had been, which is well after the consumer products lifestyle became mainstreamed. If what is being suggested is that that was not a legitimate expectation for the middle class to develop over time, then that is a very major statement about where we are headed economically, and it ought to have serious political implications.

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    • I go back and forth on this specific question, and frankly I’m not even sure that it’s answerable, but I just want to say that this is an excellent response. It takes a firm position. It states its facts. Its normative position is clear. It acknowledges the indisputable core of Jason’s factual argument (living standards have continued to rise for almost all Americans in almost all areas of life, even if at different rates) rather than disagreeing with that core for the sake of disagreeing or disintegrating into apocalyptic fear-mongering, and does so even as it argues that there is a very real and very serious problem here to address.

      Arguments that do all of the above are strong and worthwhile arguments. If a few ad homs, expletives, or nasty adjectives were thrown in, I don’t think the argument would suffer on average – for some people, it would be even more effective, for others less so.

      And it’s not even that long of an argument. Better still, it wouldn’t take much to shorten it a little more so that it could pass the “Elevator Test.”

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    • If standards are higher, Americans have become detached from subsistence farming, the default posture of poverty everywhere else in the world. Homelessness was always a problem but it’s gotten substantially worse and it disproportionately affects women and children, as it did in the 1930s, when men went off in search of work. And the homeless have become the victims of crime far out of proportion to their numbers.

      It’s hard to get a grip on actual statistics: the homeless are, by definition and exigency, a little hard to track down. I have my own little ministry to the mobile homeless who sleep in the Walmart parking lot down the road from my hotel.

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      • Of course we had a solution to the homeless problem in the 1950s they were call vagrants and thrown in jail (until the Supreme court outlawed that crime). Or they were warehoused in one flew over the cuckoos nest type of places, and forgotten. We could rebuild these and the workhouse ala the UK and make vagrancy (no visible means of support, and panhandling a crime again). In the 1950s we warehoused a lot of folks who did not fit in either in jail or asylums. (Drug types were sent to Lexington Ky for treatment).

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    • Again I think this is a really excellent comment, as is Jason’s original post. I go back and forth on whether the apparently uneven gains from growth over the last 30 years are real, and if they are real whether they’re a cause for concern.

      One thing I do think is important though is to break out the effects of the crash and the recession from those of the 30-year rise in taxable-income inequality and stagnation, which has lasted through three economic cycles, including the recent very large one. Its possible that the crash was a consequence of some deep ongoing trend in the macro-economy, but the best evidence seems to say it was just an avoidable disaster. The middle class obviously got hit hard by the recession, but if it was just a very severe recession and not a harbinger of some longer term trend, their standard of living will eventually get back on its pre-bubble track.

      If that’s true, the question really is where that track is. This is a *lot* harder to figure than incomes – one of the hardest problems the BLS faces is computing the CPI is “hedonic adjustments” for changes in the quality of goods over time. We know some things got much cheaper or came into existence that weren’t there before. We also know that health care and housing at least got more expensive. But these are areas – as Tyler Cowen says, actually – where figuring out real values and therefore making correct hedonic adjustments is very hard. Would I take the communications technology from 1980 if I could buy it for its price today (in fact I probably couldn’t find most of it anywhere)? Uhm, no. Would I take the healthcare from 1980 if I could pay (inflation adjusted) 1980 prices for my health insurance? I’m not sure, to be honest. It might be a decent deal. Would I live in a house built to 1980 code in its as-new condition if I could pay inflation-adjusted 1980 prices? In a heartbeat, although it might be a bit different outside of coastal California. So there are certainly areas where its arguable that prices have risen faster than quality.

      There’s an idea that these areas where progress is debatable are more important than the areas where it isn’t. At the margin, healthcare certainly is more important than a cell phone – no-one gives up life saving medical care for any amount of consumer electronics. But if you’re looking at overall standard of living, the margin isn’t all that interesting – you’ll probably only need life saving medical care once or twice, but you probably use a cell phone a lot more than that. There’s no obvious way to compute the tradeoff between one and the other.

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      • SimonK,

        Agreed. My post certainly wasn’t meant as the end-all, be-all of discussion about standards of living. The evidence does seem clear that middle class income growth has, it not wholly stagnated, become much less steady. Tyler Cowen’s attributing that to the decline in technological advances, an argument I don’t find wholly persuasive, although it may be one causal factor.

        Most of the charts I’ve seen show median income rising steadily from the immediate post-WWII period to the mid ’70s. I think an important part of the puzzle may be the rebuilding of the world in the decades following the war, and then the growing ability to produce overseas, which is allowing the rest of the world’s laborers to achieve some of their income gains at the expense of further income gains among Americans. I’m not certain about that latter part, at all. But I think it’s notable that everyone takes the 1945-1975 period as “normal,” without being able to explain why we should treat that era as normal (other than that it’s what we would really like to be normal).

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  10. I made this point to Pooh (tee hee), I’ll repeat myself because I’m fairly pleased with it.

    Let’s say that you live in America. You don’t know whether you’ll be rich or poor, black or white, Christian, Jew, Muslim, Miscellaneous, Atheist, male, female, or other. You just know that you will be born in the US. You don’t even know where, particularly. Maybe Alaska, maybe Wyoming.

    What year would you most like to be born in, knowing that you might be poor and black? Knowing you might be female? Knowing you might be gay?

    When I shuffle through the various upsides and downsides, I come to the conclusion that I’d always (without exception) rather be born later than sooner. The kids being born today? Man, they’re going to have access to a lot of stuff that I’m never going to have access to. I have access to a lot of stuff my grandparents couldn’t dream of dreaming of when they were my age.

    Heck, let’s not limit it to America.

    Let’s put you anywhere in the world. Maybe rich, poor, red, yellow, black, white, male, female, straight, gay, tall, short, or whtevs.

    All you get to pick is the year.

    Wouldn’t you pick, at least, the year you were born and not before? Aren’t you more likely to pick more recently than that than before?

    Doesn’t that indicate that there is more going on than rich people picking the pockets of the poor?

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              • Something just snapped while I was reading through that.
                I was reading something about the Peasant Revolt of 1381 earlier today. And for some reason, I just put it into context with what’s going on in Wisconsin.
                But at least Wisconsin has something other than horribly mutilated deer to talk about.
                Things change, yes; but that never seems to remove the inordinate sameness.
                I have to wonder how much of this idea that we are so much better off today amounts to cheering on the home team.
                Were we to confine ourselves to near-worst-case examples, then it sucks to be alive at any time at any point in history.

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    • So, because we’ve advanced in this world to a point where you have fairly equal rights regardless of gender, sex orientation, or race, we’re not allowed to complain our economic system is totally out of wack. That’s a new conservative argument to explain away inequality I’ve never heard of.

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        • Yes, his argument is basically, “since you could possibly be born as a minority or woman in the past and it sucked for them, you should be happy to be born in this time period despite the economic inequity.”

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          • No, his argument is that the Difference Principle may still require some measure of inequality, even if — on strictly Rawlsian terms — we would prefer to live today rather than in any other era.

            Do note that this observation doesn’t preclude any discussion of whether existing inequalities are still justified. They might not be justified in the least. But you do have to make the case for it. You can’t just point at an inequality and postulate an obvious injustice.

            That said, even I’m suspicious of the current super-rich, who do seem to be making their wealth by gaming the financial markets. If their actions aren’t helping to create wealth, Rawls does have a prescription for that, too.

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            • Also, we should look not just at current cross-sectional data, but try to look at things in terms of how much a person could achieve in their lifetime. The existence of extremely low paying low-middle skill jobs is not problematic if they are stepping stones to future prosperity.

              But on that count attitudes must change. I learnt in secondar school in Human geography that labour intensive jobs was something that developing countries did. As they developed, they moved on to capital intensive and then further on to service and knowledge industries. (Not as part of deliberate policy, but just part of development patterns)

              One thing that struck me as odd was that america still had a significant share of primary and secondary industry jobs for a supposed first-world country.

              It seems to me now that given the condition america is in now, state action in trying to keep labour intensive jobs in america has kept americans back. And inevitably, america is going to pay the price in terms of standards of living for doing so. The thing is, there is no way in which workers in america can compete with wprkers in china. As I have mentioned elsewhere it is unreasonable to suppose that a middle class lifestyle can be maintained in a first world country by working in a third/second world type of job.

              It may very well be the case that the middle calass is feeling the squeeze, but that is because they have not taken advantage of high ROI of education.

              As to the future, the best thing to do is let the agricultural and manufacturing industries to move overseas. There will be some temporary pain, but any further efforts to keep them in the US is going to cause something a lot more horrific.

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      • Have I ever said that you weren’t allowed to complain?

        My God, man. Do you know me at all?

        Jesus Christ. I have no idea where these people see my posting a comment on a blog post saying “here is how I see the world” as me dictating to them that their freedom of speech be squelched.

        Hey, let me ruin your day and make you feel like your 4th Amendment rights have been violated: I had a really good dinner last night. Nachos.

        Seriously, this is not helping me come to any conclusion but that it’s about how people feel inside as opposed to what’s actually happening.

        Jesus.

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    • At least this post is responsive to this thread, whereas it was completely irrelevant to the discussion where you first posted it.

      I guess my response would be that even assuming I said “today”, so what? Assuming that mean/median (or however you want to slice it) life has improved on some absolute scale from some some time in the past to today, should I be happy with a situation where 95% of the improvement has inured to 10% of the people just because people in the 50th percentile happen to have seen very modest improvements? So my criticism remains that the “back in my day” argument proves too much as by your usage it’s pretty much an unassailable defense of the status quo so long as the median citizen has seen a modest increase in living standard. Something tells me you’d have much the same reaction as I do now if the top marginal rate was 90% yet life was still “better” than it was a decade before.

      Also, it’s the bear, not the other thing ;)

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      • It wasn’t completely irrelevant! (pounds table)

        Anyway, it seems to me that my responsibility to you, if any, has to do with me not infringing on your first level Maslow’s needs and with me contributing to the existence of institutions that protect your access to the stuff we’ve in place to deal with the second level of Maslow’s stuff.

        For the most part, society has done that and done that quite well.

        Where we have failed is primarily in provision of crappy education (and I have theories about how to make that better, believe me) and in societal cultivation of and reward for arrested development/prolonged adolescence (of which I am exhibit A).

        It’s not that I’m crazy about the status quo. It’s that, historically, there are people who would *DREAM* of the level of poverty that we have achieved for our lowest quintile. There are those who still do. They die trying to get here.

        That’s an achievement.

        I’m not saying we should rest on our laurels and stop trying to be better. Of course we should always try to be better. I don’t know that where we are is necessarily immoral.

        Also, it’s the bear, not the other thing ;)

        I’ll try to take as my duty to be more serious in these discussions.

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  11. Hey, I’ll go tell someone living on $13,000 a year in South Providence that, if this were the 1600s, they’d be living large. That out to solve their problems.

    When you declare some historical point to be the era against which we have to consider the needs of the worst off in perpetuity, you are in essence saying– no, you ARE saying– that human progress is reserved for those on the top alone. If our standards of living for all people along the curve don’t move equally then the engine of human progress works only for the good of the best off.

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    • When you declare some historical point to be the era against which we have to consider the needs of the worst off in perpetuity, you are in essence saying– no, you ARE saying– that human progress is reserved for those on the top alone.

      If your answer to a Rawlsian “veil of ignorance” question of “When would you like to be born?” is “it doesn’t matter because poor is Poor is POOR IS POOR!!!”, I suppose that would make sense.

      But my answer to the question is “I would rather be poor in 2011 than poor in 1600” because I believe that human progress has, in fact, made life better for all of humanity to the point where, without exception, I’d answer that I would want to be born later than sooner.

      The engine of human progress has made life better for even the poor. I reckon that it will continue to.

      My focus is on how we can get that engine moving faster and faster and faster rather than making sure that everybody is keeping up at the same pace. Everybody is moving forward… and my evidence for that is my answer that, given a veil of ignorance with no option available to me but the year of my birth, I’d pick “as soon as possible”, every time.

      Every time.

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      • 1) You don’t know what it’s like to be poor in any era.

        2) This isn’t about whether the poor have advanced, everyone has advanced, or whether anyone has regressed. You can make those points, but it’s not the conversation being had. This is about relative gains, and whether maintaining a constant standard of living relative to the rest of society is getting harder. it is about whether the middle class ought to expect to partake in some of the gains that you describe, or merely be thankful if they can do so (and what it would mean to say that the middle class is still the middle class if the standard of living they can expect by achieving that is barely above what we in fact today consider poor). And it’s about what people have to do to maintain that standard. And the political implications of all that. We’re taking for granted that everyone’s better off. Getting the engine moving right now is paramount, so we’re in agreement for the moment, but once that’s done, then there needs to be a discussion about how it can rev in a way that gains are shared. A revving engine will get everyone somewhere, but that’s no argument for why we shouldn’t try to see that it moves everyone somewhat more equally, rather than getting some far off into the distance while making others do much more work to get anywhere.

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        • 1) You don’t know what it’s like to be poor in any era.

          This does not change my answer. Would it change yours? Is there a year that you think would be best to be born poor that is not in the last 20 years?

          Getting the engine moving right now is paramount, so we’re in agreement for the moment, but once that’s done, then there needs to be a discussion about how it can rev in a way that gains are shared. A revving engine will get everyone somewhere, but that’s no argument for why we shouldn’t try to see that it moves everyone somewhat more equally, rather than getting some far off into the distance while making others do much more work to get anywhere.

          This seems odd and off to me.

          Let’s say that I figure out something in my basement. A cheap ultralight jetpack kinda gadget that will allow me, oh, 12 miles of 25-30 feet off the ground flight for the price of the electricity it takes to run a television or computer for 8 hours. It’s green! Ish.

          Now I can fly to work!

          How much better off than you am I? How entitled are you to one of these so you can fly to work? How entitled to the battery technology are you? How entitled to the sense of exhilaration of personal flight?

          By my lights, you aren’t entitled to a damn thing even though my life has improved dramatically and your life has stayed exactly where it was today.

          Explain to me how I am looking at this dynamic incorrectly. I don’t understand how you are, in fact, entitled to anything.

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          • It’s incorrect because you are trying to make a single person’s experience a metaphor for how an entire economy can work. There are all kinds of ways an economy can be developed where you will still be able to invent your airplane and not share it if you don’t want.

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            • “It’s incorrect because you are trying to make a single person’s experience a metaphor for how an entire economy can work.”

              So individual experiences can’t be generalized to the entirety of society?

              That’s great, but it means that you can’t point to a bum on the street and say “this person’s poverty means that the system is a failure, no matter how good life is for the average citizen!”

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            • The fundamental problem seems to me to be a conflation of “money” and “wealth”.

              There is a lot of “money” over there. I don’t know that “wealth” has the same disparate distribution.

              I suspect that wealth is closer (though, granted, not mapping) to fair… despite the money disparity.

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              • Actually, wealth disparity in the US is even greater than income disparity. The top 1% by income earn 23% of income, but the top 1% by wealth own 35% of assets. The respective numbers for the top quintile are 52% and 80%. You may find the ‘Out of Balance’ section on this infographic interesting; people in general hugely underestimate the level of wealth disparity in the US.

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                    • I’m just going to copy and paste my comment from 107 (it’s 107 now, it may change later) here:

                      Have I ever said that you weren’t allowed to complain?

                      My God, man. Do you know me at all?

                      Jesus Christ. I have no idea where these people see my posting a comment on a blog post saying “here is how I see the world” as me dictating to them that their freedom of speech be squelched.

                      Hey, let me ruin your day and make you feel like your 4th Amendment rights have been violated: I had a really good dinner last night. Nachos.

                      Seriously, this is not helping me come to any conclusion but that it’s about how people feel inside as opposed to what’s actually happening.

                      Jesus.

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                    • Thats a dodge. The issue is not whether you are stopping them from complaining, but saying whether they have standing/justification to complain that things have gotten worse.

                      This can sloppily be construed as denying them the right to complain but there is a difference.

                      The key question of course is
                      1.whether anything could have been done in between then and now to make it even better for the worst off and

                      2. Whether the policies those complaining about the squeeze are advocating would have made it better or worse for the worst off.

                      Also it must be acknowledged that the fact that the best off do so superfantasticaly well that the definition of the middle class changes radically and therefore “squeezes” them is a completely illegitimate point to be made vis-a-vis welfare appraisals.

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                    • It seems to me that the fundamental question of how many parts and pieces of Maslow’s Pyramid am I responsible for making sure that you have has the answer of “more”.

                      Always more.

                      Or, I suppose, the answer to the question of how many parts and pieces of Maslow’s Pyramid you guys are responsible for making sure that I have is “more”.

                      Always more.

                      That doesn’t seem “fair” to me.

                      I agree that there is a floor. Sure. Now we’re haggling. Okay.

                      But I would like it hammered out where the floor is and if it comes out that the floor is always, always moving, I don’t see how it’s not a decent counter-argument to point out how the floor has always, always been moving.

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                    • Jaybird,

                      So I guess my follow up question is what is the point of this discussion? What is going on here if not an attempt to define away the proposed need/desirability for certain structural changes?

                      Regarding the pieces of the pyramid, I’m assuming the edges have been greased because that’s a mighty slippery slope you’ve set up. Yes I think we should have more responsibilities to each other than we have currently, and I don’t think it’s particularly close to the line of “enough”. It hardly follows that I would believe that in all circumstances. Context matters, and in the context of present American society, I’m perfectly prepared to accept a little to a lot more “socialism” in the interest of maintaining what I would describe as a fair society. We aren’t in any danger of reaching end stage communism any time soon, so an argument that we’re moving in some small way in that direction from where we are now carries essentially zero weight with me.

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                    • I’m not trying to define it away. I am, however, trying to figure out the *NATURE* of the fundamental problem.

                      If we establish that the problem is one of distribution of wealth, that things would be much better if we redistributed, I’d be fine with that… but, if it comes out that we redistribute and, for some reason, much of the redistribution was rotted away by graft before it got to its final destination and, once it got there, was used in such a way that did not address the problem we were hoping to address (for example, if we gave a periodic sum of money to a homeless person who went on to spend the money on drugs and alcohol rather than on a bachelor’s degree)… maybe we could agree that what we are doing is not accomplishing the things that we are hoping to accomplish and we should try something else rather than doubling down on what we’re doing.

                      What do we want to accomplish?
                      Is what we are doing accomplishing what we want to accomplish?

                      If the answer to the second question is “no”, is the main reason because of insufficient funding?

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                • Does anyone know how that Norton & Ariely study MoJo cites generated their numbers for household wealth and total wealth? I can’t find the original, only press write-ups. What I want to know is how they’re actually defining wealth here.

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                  • Simon,

                    I’m not sure which paper is referred to, but I found this working paper by them, in which they defined wealth as follows:

                    “Wealth, also known as net worth, is defined as the total value of everything someone owns minus any debt that he or she owes. A person’s net worth includes his or her bank account savings plus the value of other things such as property, stocks, bonds, art, collections, etc., minus the value of things like loans and mortgages.”

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                    • Yeah, I found the paper. I’m having some trouble with the definition (If you add all assets and debt across all households what does the number even mean? ) but I’m particularly looking for where they got the wealth distribution numbers from. I can’t work out which reference they’re actually drawn from but I’ve not looked that hard yet.

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                • I don’t know that it is. My ancestors lost their tobacco farm in Kentucky when the crops failed two years in a row. They had an outhouse. My great-grandmother could not read the Bible that she loved so much. They had to move to Michigan, of all places, where they were mocked as Hillbillies and made a new life there with indoor plumbing and everything.

                  There were a lot of things that happened to Detroit.

                  There were a lot of things that happened to Michigan.

                  There were a lot of things that happened to my family.

                  Perhaps my observations are outliers. Sure. I assure you, they’re based on things that I’ve seen with my own eyes.

                  And if life is absurd, take that up with God.

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          • Jaybird, to me the discussion hinges entirely on differing conceptions of human rights (and what you invent). Overall, you have a narrower conception of human rights, excluding many economic, social and cultural rights. Those advancing the positive rights argument see positive and negative rights as interdependent, the econ-soc rights and civil-political rights as mutually reinforcing (these don’t map on each other precisely, econ-soc doesn’t equal positive rights and civil-political doesn’t equal negative rights, but just for the sake of simplicity here). So while you present a reasonable case, under my conception of human rights your example ends up reading something like this,

            Let’s say that I figure out something in my basement. A cheap [cure for a debilitating disease] that will allow me [to avoid that debilitating disease altogether].

            Now I can [live life unimpeded by any concern over that debilitating disease]!

            How much better off than you am I? How entitled are you to one of these so you can [avoid said debilitating disease altogether]? How entitled to the […] technology are you? How entitled to the sense of [security in knowing that said debilitating disease won’t strike you]?

            By my lights, you aren’t entitled to a damn thing even though my life has improved dramatically and your life has stayed exactly where it was today.

            Explain to me how I am looking at this dynamic incorrectly. I don’t understand how you are, in fact, entitled to anything.

            You see “no free jetpacks” and move on. I see no smallpox/polio eradication, or at least a reading out of the ICESCR of “the right of everyone to the enjoyment of the highest attainable standard of physical and mental health” among other things.

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            • I think I’m willing to bite the bullet on this one. Here is what I said here:

              ordinary-gentlemen.com/blog/2011/02/02/the-importance-of-being-insured/#comment-98920

              I’ve always looked at the situation through this hypothetical:

              Imagine a wonderdrug. It will lower your bad cholesterol, raise your good cholesterol, reduce your risk of heart attack, raise your metabolism to help you lose weight, and give you a full head of hair.

              This drug will not be ready to be evaluated by the FDA until 2050. Let alone released after clinical trials! As such, it’s not even on the drawing board now. The precursor won’t even be stumbled across by a particularly happy accident until 2022.

              Here is my question: are you entitled to this drug?

              It seems to me that the obvious answer is “no”. It doesn’t exist! It won’t even go on sale until 2060!

              Fair enough. I agree.

              Now, here’s my intuition: once it exists the status of whether you (or anyone) is entitled to this drug will not change one iota.

              And, from there, I extrapolate out to other drugs, and other medical technologies.

              Now, I will say that it seems odd to me to say “I have a Right to aspirin!” (as opposed to “I have a Right to buy it!”).

              I can go to Safeway and pick up a bottle of 100 for a pittance. The same is true for a great many other drugs in that same aisle. As a matter of fact, my problem, currently, is that the government is making it very difficult for me to buy Sudafed because of some people out there who play the chemist and make a recreational drug out of the active ingredient and the government thinks that it is more important to stop recreational drug use than it is that I can breathe when I have been hit by the crud.

              (If you’d like to discuss whether the Government should have the power (aka “the Right”) to prevent you from purchasing things, I’d love to have that conversation.)

              Now I just extrapolate out from there.

              (And we can have a discussion about intellectual property, patents, the FDA, and so on if you’d care to as well)

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              • Jaybird, from the way you’ve been using Rawls I can’t make out precisely if you find him convincing or not. But in any case, would those behind the veil of ignorance chose a world of robustly enforced econ-soc-cultural rights or not? Broader or narrower conceptions of your entitlements?

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                • I find the veil of ignorance to be a delightful tool… almost as useful as the whole “you cut it, the other person gets to pick the first piece” thought experiment (indeed, it’s like that except for millions of people).

                  I don’t know that I would reach the same conclusions that he did (the main thing that I would want is slipperyness between the strata rather than evenness but that’s my taste).

                  When it comes to Rights, I find that negative Rights are a lot easier to make compatible than positive Rights. (And I understand that that’s an entire discussion on its own.)

                  I don’t believe that Rights are cultural. If it is a Right today, it would be a Right in 200 BC in China. If it would be a Right in 2600 AD South Africa, it’s a Right today. As such, I don’t see “Rights to things” as Rights. I see the Right to have unimpeded access to things as a Right… but that’s a different dynamic.

                  Rights are time-independent, that’s what I’m saying. Which, yes, takes me to some weird places. I think I’m comfortable with that, though.

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                  • Jaybird, my first thought was “You have the right to an attorney”, right or not a right?

                    The human rights are interdependent school says that economic, cultural, and social circumstances can impede your access to the negative right. So your right to due process before being deprived of your liberty is manifestly less meaningful if you don’t have access to an attorney – the negative and positive rights compliment one another. The broader human rights conception would say that “unimpeded access to things” means we need to give you some basic stuff to start out with if you’re ever to have a shot at exercising all those civil and political rights. There’s some overlap with Rawls’ notion of primary goods here. Some primary goods are timeless and others depend on the circumstances of the society you’re in. But the List isn’t static (neither for primary goods nor human rights).

                    As for the timelessness of rights, there’s certainly timelessness in the animating principles that are independent of contingent factors like when you were born. Notions like human dignity and human rights are capacious and often need to be boiled down to,

                    the government is prohibited from doing A,
                    it would be better if the government didn’t do B,
                    the government should provide C,
                    the government is required to provide D.

                    With A and B, I think I share a lot of positions with libertarians, though my reasoning might differ, so the war on drugs is an utter disaster. With C, I tend to be generous in my line drawing of public goods, so yes to free museums and other (club?) goods of that sort. And with D, I think my agreement with the much broader human rights vision means libertarians appear, well, name calling ensues: male privilege, white privilege, heartlessness, “liberty” to live under a bridge, “I got mine”, and “You want us to live in Somalia!” I don’t think libertarians will be unfamiliar with the accusations.

                    As for “the right to aspirin” versus “the right to buy aspirin”, I think the UDHR has a nifty formulation, a kind of meta-right, “Everyone is entitled to a social and international order in which the rights and freedoms set forth in this Declaration can be fully realized.” If everyone can afford aspirin, then “the right to buy aspirin” is fine with me. But if not everyone can afford to buy aspirin, as a community we’re obligated to figure out how we’re going to get those people aspirin. All that predicated on the notion that aspirin is a Rawlsian primary good.

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                    • my first thought was “You have the right to an attorney”, right or not a right?

                      There’s a lot of stuff packed into that.

                      For one thing, we’re assuming trials… this tells me that we’re also assuming government-imposed penalties. Maybe this means jails. Which means a lot of infrastructure.

                      There are a lot of things going on here in the first place to get us to “right to an attorney”.

                      This strikes me as more analogous to government-recognized marriage than anything. The government will impose X on everybody. If, however, you are married to someone else, the government will impose X – Y, where Y is a positive value.

                      So when we talk about the “right to gay marriage”, there is a *LOT* of stuff wrapped up in that, including the assumed rights of people unrelated to the particular institution having the power to prevent it in certain others.

                      To me, it seems like the focus ought to be on the imposition of X.

                      Now, of course, in practice I support gay marriage and totally think that X – Y ought to be available to those couples who want to get married.

                      But I still see the fundamental problem as X.

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          • Just because a person a financial wizard, I don’t believe that person ought to make a billion a year while people live under bridges. All it would take for the world to be a perfect place if those damn plebes would just go somewhere and die. Most of the time I enjoy your comments, but sometimes you are so cold.

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            • One of the oddest effects of some guy Makin’ a Billion is how many people he drags up with him. Now it’s true, it’s dependent on how he made that money: if he had a few good days going long on CME RBOB, taking advantage of this Libya madness, as I have, I fully expect to pay a ton of tax on that and I will, too.

              But if our Horatio Alger made his billion employing a coupla thousand of the aforementioned plebes, hey, I think he’s a hero.

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              • What percentage of hedge fund people are dragging others up with them? I don’t have a problem with rich people, I have a problem with people living under bridges. What percentage of Walmart workers make enough?

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                • Compare Costco to Walmart/Sam’s Club. Costco pays its people well and provides decent benefits. That’s why I shop at Costco, even though I have to purchase a lifetime supply of toothpaste in a single package.

                  As for people living under bridges, as Gandhi said, be the change you want to see in the world. I go out at night to find them and feed them, with food I buy at Costco.

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              • I agree with this. One of the things I find really disturbing about the current economy is a lot of the people making millions or billions of dollars employing nobody. Bill Gates, for all of his faults, brought up a lot of people with him. What about Mark Zuckerberg?

                (I suppose I could be taking a short-sighted view of things. Maybe there are lots of people employed by companies that make Facebook apps? Doesn’t seem so, but I wouldn’t really know.)

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                • Facebook employs a lot of people. The most successful Facebook-app-maker is Zynga, and their employment adds are everywhere you go around here. Neither is taking over an entire town the way Google has done, but if they continue to succeed maybe they will. My bet is they’ll both be dead and gone in 5 years, but then I’m an old cynic.

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                    • Sure. I’m not arguing Facebook doesn’t fill a need. Teenage girls have to gossip somehow and LiveJournal is soooo 2009. I just don’t think it fills a need that justified Goldman Sachs raising a special fund just to throw money at that them. In a way specifically designed to avoid forcing them to publish accounts … hmm.

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                • Tech is an interesting facet of the problem. It employs surprisingly few people in terms of how much benefit it provides on balance. Armed with nothing but an Android phone, a Fedora boot disk, a 500 dollar generobox and my friends over at Amazon Web Services, I can put together a provisional and highly scalable solution to an amazingly complex problem, literally in a few hours. Granted, it may take me a few weeks to implement all the bells and whistles, that’s where I make my money.

                  And it doesn’t even mean I’m all that smart. It means I know some smart people who offer all these services. Tech is coalescing around a few platforms which benefit great numbers of people in ways nobody can perceive directly.

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                  • Tech is an interesting facet of the problem. It employs surprisingly few people in terms of how much benefit it provides on balance.

                    Productivity growth is not a “problem.” It’s a goal we are always seeking to achieve. If you really want to see wage stagnation, stop improvements in productivity.

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                    • Well, productivity isn’t a solution, in and of itself. You still need a client trying to sell something. There’s more than productivity in play, there’s quality and efficiency. Custom made goods are still the highest markup items for sale.

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                    • Productivity is a solution in and of itself. If you’re not selling what you produce you’re not actually being productive. If you’re not increasing efficiency you’re not increasing productivity. As to quality, that’s only important if the customer wants it.

                      But I’m still curious why you think productivity is a problem.

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                    • Huh? Let me introduce you to the world of consulting. I don’t have to sell anything to be productive. I can sit down with a handful of people who do understand a problem, provide them with a less-aggravating solution than the one they’ve got and they pay me good money and call me a great guy.

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            • The majority of long-term homeless (those living under bridges) are mentally ill.

              We can have a discussion of how best to deal with the mentally ill, if you’d like… but I can see how “living under a bridge” might be preferable to some of the things done to the mentally ill in living memory.

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              • Since things are so great now I don’t think the homeless are entitled to anything, even the estimated 300,000 children that on any given night are homeless in the richest country in history. You already said that they are not entitled to your magic plane, so why would I think you think the homeless should be entitled to anything but your scorn for not having the perfect parents? Forty percent of the homeless are vets. What have they ever done for me? If we could only get the plebes to die. Sorry for the snark, but I don’t think that saying things are better today than yesterday is enough. One needs to try to make tomorrow better. You probably feel the same way, we would just go about it differently.

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                • Who’ s saying we don’t want things to be better tomorrow? Why are certain people working so hard to claim the argument says something that it doesn’t say?

                  All the argument says is that we are better off today than half a century ago, and that the reason we don’t feel like we are is that our expectations have risen.

                  There is nothing in that which suggests that this is as good as it should gets, or that “saying things are better today than yesterday is enough.” It sounds to me like you’re saying it’s not allowable to just have a discussion about that one issue; that every discussion must talk about trying to make things better.

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                  • Two things. The difference between the rich and the middle class is the largest since the depression. Two, fifty years ago my life was extremely bad. I was still living with a psychologicaly abusive drunk for a father and an extremely depressed mother who had periods of psychosis that ended with her taking a box of DCon, so I have to say yes, things are better now than it was fifty years ago. But forty years ago, after my drunk stepmother kicked me out of the house at the start of my senior year of high shcool, things got better. I found an extremely menial job that paid 32.50 in todays dollar. I could leave that job at any given time and find another that paid about the same. Just because you own a big tv does not make your life better. My life is good now. I own my house, I own my truck, and have no credit card bills. I do not live beyond my means and I think my life is good. It is not as good for many others.

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                  • Actually, my argument is explain to me why we’ve gone from a middle class family being able to put three kids through public university without much debt, outright owning their home by time they were retired, and having a pension on a blue collar salary _to_ having six-figure undergrad college debt, a worthless 401k, no job security, and a drop in real wages since the mid-70’s.

                    I mean, I realize I know have access to an ipod and HDTV so I should STFU, but I wonder how that’s a good change.

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                • “estimated 300,000 children”

                  According to the google, there are 307,000,000 people in the US. Of that, an estimated 62,000,000 are ages 0-14.

                  That’s just under 5% of all of the children in the US. 1 out of 20 (now, of course, maybe all of the homeless are 15 and up… sure). That seems a hair high to me despite our 9% unemployment.

                  I have to go for now. I’ll be back in a bit. Maribou has a handful of errands for me to run. I’ll compose an essay and post it for you when I get back.

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                • Hey, Dex. I’ll try to address this now.

                  First off, know that I don’t have any kids. My wife and I are childless by choice. As such, my ideas about childraising are all speculative.

                  So, when you say “so why would I think you think the homeless should be entitled to anything but your scorn for not having the perfect parents?”, let me ask you what any given child out there is entitled to.

                  Let’s say that my wife and I have a kid. Mazel Tov! It’s a mitzvah!

                  What are your responsibilities toward my child?

                  Asking the question makes me feel weird because my inclination is to say that my child is not any of your business.

                  Indeed, for all of the scorn you’re heaping on me for not seeing The Children as entitled to the jetpack that I have not invented (and, most likely, will not invent), I wonder what else are The Children entitled to that I haven’t invented.

                  Your anger is not directed at me for not paying taxes (which I do) and it’s not for me not doing my best to be a good “uncle” to my friends’ children (which I try to do)… it’s for me not seeing The Children as entitled to something that doesn’t exist.

                  For the life of me, I honestly don’t see how in the hell they can be entitled to such a thing.

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                  • Like I said earlier, most of the time I like and mostly agree with what you write. While I could be wrong, I do think if everybody in the world was like you then we would not need a government because I don’t think you would sell me tainted baby food. Most of the time I just read the posts and think about what I have read. I rarely reply because I know that I am dealing with people who have a few IQ points on me, have more education and are much better at writing. For some reason Hanley sets me off. I really do not believe that America middle class is better of financially than 40 years ago.
                    In my world view I do have a responsibility for your child. If I see something bad going on I have the need to say something. If I see something good going on, then I still say something. If you think that is wrong, then so be it.
                    I probably would not call that an entitlement as much as a responsibility.

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                    • Dex, please understand:

                      I have *NEVER* been in a situation where I had wished that the government had taken me away from my parents.

                      Having been in such a situation would most likely change every single one of my world views. I know that.

                      I am taking a world view from the position of someone who is in a more or less (ask me about Watership Down) healthy relationship with his parents (one deceased, age 11).

                      It seems to me that the relationship between parenting and the government be one of the benefit of the doubt being given to parents pretty much every time there is any shadow of a doubt.

                      When Maribou and I lived in “Our First Apartment” ($300 + utilities/month; since boarded up), we lived next door to a family who had their children taken away. We had the benefit of listening to them, thanks to the thin walls, reunite after the children came back home from running away from their foster parents.

                      They fought to get away from their fosters to get back to their “real” parents (two pieces of work, I can’t begin to tell ya).

                      It told me that what the government was doing, with the best of intentions, was misguided at best.

                      If we are going to take children from their parents, we need a much better foundation than the one we have now.

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        • “You don’t know what it’s like to be poor in any era.”

          So you’re honestly saying that you’d rather be poor in 1600 than poor in 2011?

          You honestly believe that you can say something like that and expect us to take you seriously?

          “This isn’t about whether the poor have advanced…”

          Did you read the blog post that started this all?

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          • No, I am not saying I’d rather be poor in 1600. I am saying I honestly don’t know what it is like to be poor in any society. So I don’t know for sure which one I’d rather be poor in. Likely this one, but I can’t be sure. The guy who invented the veil of ignorance did so with the intention of applying it to theoretical societies in which we could simply posit that being poor would be better in some than others, or, more to that guy’s point, in which we are less likely to find ourselves poor than others. Then we accept a randomly assigned place in society. So we would know by definition that it would be better. I think t is entirely likely that Jaybird is right and I’d rather be poor now than at any other time, but I don’t know that about the actual societies that have existed in that way I do about the different societies posited by Mr. R.

            I did read the post: it’s about whether it has gotten more difficult to maintain a middle class lifestyle (Middle Class appears in the title). Not sure the words poor or poverty even appear. So I’m not sure what your incredulity is based on here.

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    • Freddie,

      I don’t think Jason is saying that pay shouldn’t move along with human progress. I think what he is saying is that our definition of what constitutes a reasonable ‘standard of living’ doesn’t need to include 2 cars and satellite TV.

      Dave Ramsey used to say that if you were in debt you should be eating rice and beans at every meal and selling so many of your belongings that the kids think they are next. Today people refuse to save, have tons of luxury goods and then can’t figure out why they are facing bankruptcy 6 weeks after losing a job. My grandparents never bought anything on credit and lived in a 1,100 square foot house for 60 years. They seemed pretty darn happy right up until they died and left a bundle of savings to their kids.

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      • Again, Mike understands very well what I am saying.

        I am a great proponent of human progress. I don’t think it should be reserved for the wealthy alone, and it’s certainly not what I am arguing here.

        What I am arguing is that middle class standards and aspirations have risen, and as a result, there are a lot of people out there living beyond their actual means. Many of the answers to our current problems likely lie in thrift. Certainly not all of them, but quite a lot.

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        • If the appearance of improving standards has come mostly at the expense of living beyond our means, that too has profound political-economic implications. But if it is largely just a function of recent financial developments, then it doesn’t change the argument much.

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    • When you declare some historical point to be the era against which we have to consider the needs of the worst off in perpetuity, you are in essence saying– no, you ARE saying– that human progress is reserved for those on the top alone

      And this is why I left the League. No matter what you say, someone comes along and totally misrepresents your argument and makes an egregiously stupid criticism that is nothing more than moralistic bloviating with not one iota of logic.

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  12. But rich people have more money! Don’t you understand? RICH PEOPLE HAVE MORE MONEY. RICH. PEOPLE. HAVE. MORE. MONEY.

    I mean, that’s the only argument we need to make to PROVE that things are awful now! PEOPLE! RICH! MONEY! MORE!

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    • The rich have grown blind to the plight of the poor and have grown used to stepping on them. It is the fiercest, most hilarious irony to watch the less-than-rich folks ape this trend. Like some loyal housemaid curtsying to m’lady, the stupid people of this New Gilded Age will loudly defend the system wherein they willingly prostrate themselves, the better that they may be stepped upon, declaring it a very fine thing indeed.

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    • Amen, DDuck. From your comment near the top of the thread to here, you get what I’m saying, and get the emptiness of most of the criticisms. (Not all the criticisms are empty–the critique that there are costly items I didn’t consider is perfectly legitimate.)

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  13. Convergence of Porcher and libertarian (ish?) sentiments: I don’t know whether to be pleased or terrified. Well, I’ll go with pleased since I more or less agree. I’ve managed to live more or less comfortably on very small budgets — but the key to that has been, even more than frugality, not encountering any medical issue. I also doubt I’d have been as content to live that frugally if I hadn’t looked on the situations as temporary.

    It should also be noted that the single most incomprehensible thing about me (at least by the reactions of friends) is that I not only don’t own a TV, but have no desire whatsoever to own one. (I can watch just about any UK game I want online; and, frankly, Hulu, iTunes, and Netflix — if I bothered with an account for the latter — would, if I watched TV shows other than Mad Men, cover the rest.)

    That said — I think Freddie and E.D. do have valid concerns about this line of thought — concerns that come less from where I sense Jason wants it to go than from how it might be used/construed/viewed. But a serious re-evaluation of spending priority and frugality would, I think, open up a space for better discussion of income disparity/what-the-hell-do-we-do-about-safety-net-programs.

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      • Exactly. (Well, my current internet service that comes free with the rent freaks out if you do too much video streaming at a time, but I think this is just another example of the fact that I’ll grow up to be a miser. If I’m really lucky, Scrooge McDuck. If not, I’ll just have a hut somewhere with a KEEP THE HELL AWAY sign out front.)

        I really don’t understand the point of paying for hundreds of channels you don’t watch when you can get a lot of it for free, with the internet. So the sound is better on a TV than a computer, but that can be remedied… as can screen size…

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  14. We are living in the best of all historical worlds; we are not, by any means, living in the best of all possible worlds. So things are better now than they were in the past. Big deal. If they weren’t, we’d have had a revolution by now.

    There are really two relevant questions: is the current distribution of wealth and income fair, and is the current distribution necessary to continued growth of productivity. I don’t think the answer to either of those questions is yes.

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    • is the current distribution of wealth and income fair

      I don’t know how “fair” would be measured.

      God?
      A Rawlsian veil of ignorance followed by a dice roll?
      A gut feeling of covetousness?

      is the current distribution necessary to continued growth of productivity

      Can we compare our productivity to the productivity of other countries with “better” distribution?

      If we can, is their productivity higher?

      If it is lower, is that relevant?

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  15. Jason,

    Perhaps people would work fewer hours but very few people have that as realistic option.

    Salaried people like me must work 40 to get things like health-care. Even worse I’d like you to show me a job where I could work 32 hrs per week and make the same per hour. I’d probably take it but that option doesn’t exist, certainly not as an employee.

    TV’s and electronic toys are cheaper but making sure your kids have a decent future(ie having a house in a good neighborhood/good school district, paying for college), healthcare are not cheaper in the least.

    Husband and wife(or the gay married couple) are not both working for more toys they are working because they have too. Most people in my city don’t make what I and my girlfriend make. Together we make 4x the median household income. With only 2x I don’t know if we could afford our house. Keep in mind that we both have paid off our cars years ago.

    I’m actually doing great I can save 12k+ per year. Not many people I know socially can. My mom makes the median income and she is constantly stressed out by bills. This is made worse as she is bi-polar and frequently has to pay for expensive healthcare. She feels guilty ove the 20k I had to take in student loans even though I tell her not too.

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    • > TV’s and electronic toys are cheaper but making sure
      > your kids have a decent future(ie having a house in
      > a good neighborhood/good school district, paying for
      > college), healthcare are not cheaper in the least.

      This is a very important note.

      I really need to make the time to gather up my thoughts on this and write them out. Side note: everybody is making some good points over the last few days.

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    • As someone in a situation not too different from yours (for the time being), I would appreciate your perspective with something. My wife earns about 4x the MHI in our state. I am currently unemployed and without great job prospects (one huge exception to be mentioned later) due to where we live (due to her career).

      Our current MHI is a relatively recent development (she’s a doctor, finally practicing medicine on her own and not as a resident/fellow). It’s really, really nice to finally be able to save money. At the same time, our income (and I would expect yours) puts us in that dreaded Top 10% of earners. We’re contributing to inequality. This is represented in part due to the fact that we’re able to save at all.

      It feels as though there is a segment on the left looking at that “extra money” as something that we owe society at large. And to some extent, I don’t disagree. In order to pay off current government services, our taxes need to go up (more than just ours, I believe, but ours more than theirs). But I find myself increasingly resentful that our newfound income puts us in a category that makes us “part of the problem” for which taking more of that money is the solution.

      This is aggravated by the fact that I *might* (fingers crossed) be getting a pretty well-paying job (they’re doing the background check). Cause for celebration? You bet! I salivate at the ability to fuel our savings in a way that we have been unable to until recently. Except that it would put us at 5.5x the median salary. Thus making us a bigger part of the problem. Thus any money I make would, in the eyes of some, further be better spread around.

      I calculated it out and if we went to the pre-Reagan tax-levels (adjusted to inflation), which many consider to be more fair than anything we’ve had since, 55%-60% of our earnings excluding FICA and state income tax, which would combine for up to 2/3 of the money. Maybe that’s fair, but it’s also highly discouraging. But to do otherwise is to allow us to accumulate wealth, which I call “savings”, and contribute to the wealth chart that ED Kain and Alex Knapp like to cite. Of course, for forty since on the dollar, it’s as likely as not I decide that the new job isn’t worth my time anymore (if I were to be offered it, *knocking on wood*).

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        • So that I can dodge paying “my fair share”, accumulate wealth, and further skew the pie chart down the road?

          If I get this job, one of my first calls is going to be to a financial analyst. Even if I don’t, it’s pretty high on my to-do list. We’re going to need to figure out something for our taxes. Withholdings are a whopping 38% of our income (and that’s with me unemployed). Hopefully, that just means we’re in for a huge refund.

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          • I’m thinking something is up with your tax return being very generous or your state being way more expensive than mine.

            I checked my pay stub and I am taking home 75% of my money. That is with a pension/healthcare/etc being deducted.

            About you sitaution the question is what percent would I get it is how much would I take home.

            You would get the following benefits even with the “confiscatory” rates were happening. 1) increased social security income when you retire. 2) More money than you had before. 3) less risk of you and your beloved being screwed if she lost her job.

            But as you say it might not be worth it to you. That is fine you get more free time which is worth quiet a-lot in my eyes. In addition you are freeing up the position for one of the 10%-ish unemployed who don’t have your resources.

            My taxes are ridiculously low. They are about to get lower as I start to max out my IRA each year. This one act will net me a little more than 1k. Soon I will be able to take a mortgage deduction. Down goes my tax bill.

            For all of that I am receiving roads, a police force, a school district, a military, scientific research, and more. I should probably be paying more. I would be happy to pay more especially if we did more science, more education, and provided more health-care.

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            • Thanks for taking the time to respond. I hope you’re right about our withholdings. I need to learn more about how they work. Anyone have any good resources on that?

              Ultimately, I think I should probably be paying more, too. I mean, I think everybody should be paying more. But I think we should be paying more than the next guy. The question, for me, is how much more. And I think my view on that is pretty limited compared to a lot of people that a couple months ago I thought I was sympatico with.

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              • This totally messed me up when my wife and I first got married. We were massively overwithheld the first year, and then after I started trying to figure it out massively underwithheld for state the next year. I assumed I just didn’t get it because I’m a dumb foreigner, but then I realized most Americans don’t either, including my company’s financial controller. The best source of information is actually the tool on the IRS website that helps you compute your withholding, believe it or not – most tax people are not much help, because basically they make their money by helping you get your withholdings back. What you really want is not to withhold too much to start with.

                It basically works like this – there’s two bits of information the IRS uses, both of which you specify on your W4 – whether you’re married or single, and a number of allowances. Your withholding is basically your income, minus the standard deduction, minus the number of allowances times the standard exemption, taxed as if it was your only income for the time period.

                If you’re married and both work, or if you have a lot of deductions, filling out the W4 according to the simple instructions on the first page will get your withholding wrong. The trick is that you don’t have to follow the simple instructions – you can write whatever you like, the only catch being that if you’re constantly massively underwithheld the IRS will send your employer a “lock-in letter” that stops you from setting your own withholding. The hard part is that since the withholding system bears now real resemblance to how your taxes are really calculated, getting it right is tricky. I have a spreadsheet for doing it.

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        • I know that I wouldn’t lay off thousands then collect millions in bonuses for me and my friends on the board then bail while the books still look good to do it again with another company.

          I’d sit at home play video games/miniature games and not work. Maybe I’d find some time to exercise.

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      • I guess I don’t see a viable alternative. You make more money so you pay more taxes, but you also benefit more from society, will likely have more political influence than people in lower income brackets, better benefits, more expendable income, a more secure retirement. You pay more taxes but are less dependant on services the government provides.

        In fact, I think if income was more equal on the front end then perhaps taxation would be less necessary. I suppose in a society where most people make about 30k a year, it”s hard to muster much sympathy for top earners who have to pay more taxes. Though to be fair there’s a wide gap between the 10% mark and the top 1%.

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        • “You make more money so you pay more taxes, but you also benefit more from society…”

          How does he benefit more from society? He’s got more expendable income and a more secure retirement, but is it society providing these things?

          “You pay more taxes but are less dependant on services the government provides.”

          I…what? He pays more for the privelege of needing less? He’s charged more money to cover the fact that he doesn’t use as much? I honestly have no idea how to interpret your statement as a positive thing.

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          • > How does he benefit more from society?

            A stable society means that it is unlikely that somebody will bop you on the head and take your stuff, or come into your house and stab you. The baseline security that we all share, however, isn’t uniform. If Bad Guys rob someone with $10 in his pocket, he loses $10. What that $10 is worth to him varies. If Bad Guys rob someone with $1,000,000 in his pocket, what that million is worth to him still varies.

            Generally, though, I think it’s utterly unremarkable to say that a stable society benefits the wealthy more than the moderately well off or the poor. Because, in the event of a societal breakdown, the rich man has more to lose than the poor man.

            One can argue that “benefit more” isn’t the right metric, but while the measurement isn’t on a ratio interval this seems to be a quibble without much substantive merit.

            Can we at least agree that benefit “differently” is accurate?

            > He’s got more expendable income and a more
            > secure retirement, but is it society providing
            > these things?

            Not entirely. But neither is it true that hard work and perseverance are “providing” those things.

            For the purposes of this argument, a stable society does provide two things that a non-stable society simply does not: a baseline protection from violence, and a legal framework for property inheritance.

            The second definitely is of more actual measurable value to the person who has more to bequeath (or inherit).

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        • To a large extent, I agree. I think that the wealthy need to shoulder more of the burden. I don’t think that the current tax code is sufficiently progressive.

          But there are limits. Where I find myself getting frustrated and resentful is this notion that some people have that we can pay for everything if we just take more of their (our) money. Take away our significant portions of our expendable income and retirement security. Go after their expendable income and retirement savings, you even reduce their wealth and improve the piece chart. Two birds, one stone. It’s that easy!

          We didn’t luck into where we are. My wife went $100k in debt and worked eighty hours a week for five years averaging $10/hr ($8/12 if you want to factor hourly/overtime). For my part, I worked $10/hr jobs at multiple entry-level positions every time we moved. The rewards for this were supposed to include extra money that I am now being told really should be going to someone else.

          (It’s not just docs here. Businessmen work insane hours for often little money in the hopes of building something that will grow somewhere down the line and provide them with a nice retirement.)

          The tax hikes required, if we are to focus only on high earners, to meet current obligations would be astronomical. Marginal rates beyond pre-Reagan. (I will give you credit for supporting a VAT, though, which would lighten that burden.) But it’s that simple. No one else need feel a thing.

          Maybe five or ten years down the road, once we actually have a nest-egg set up, I will feel differently. Maybe I will get a huge refund (or hire a good tax guy) and realize how much higher our taxes can go before we hit that wall. The 28% we were getting dinged for a couple years ago didn’t bother me nearly as much as the 38% now, which I can accept a lot easier than something north of 50%.

          The difference in income between the top 10% and top 1% really is quite larger. Much larger (in both numerical and percentage terms) than the difference between the median and the top 10%. And maybe rolling out the taxes on the incomes top 1% will make us feel better. But it’s only 1% of the population and 20% of the income, so it’s not really going to fix our budget woes.

          I don’t disagree about equalizing income on the front end, though I’m less sanguine about our ability to make that happen.

          There aren’t any easy answers, in my view. I feel that way when conservatives say “Cut spending!” and think that’s the end of the conversation. But I also feel that way when high-earners are expected to solve our problems. Letting the tax cuts expire for those making over $250k a year doesn’t bring in nearly the revenue as letting them expire for those making under (though we need to do both… and more).

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          • Trumwill – thanks for the long response. When I have a bit more time I’ll follow up. I agree though – there aren’t any easy answers. That’s the fundamental truth of things. Whenever anyone says there are simple solutions or silver bullets you know something’s up.

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  16. Pingback: Tweets that mention The Middle Class Isn’t Dying — The League of Ordinary Gentlemen -- Topsy.com

  17. Super-relevant article from David Brooks here:

    http://www.nytimes.com/2011/02/15/opinion/15brooks.html?partner=rssnyt&emc=rss

    “For Sam, income and living standards were synonymous. But for Jared, wealth and living standards have diverged. He is more interested in the latter than the former. This means that Jared has some rich and meaningful experiences, but it has also led to problems. Every few months, new gizmos come out. Jared feels his life is getting better. Because he doesn’t fully grasp the increasingly important distinction between wealth and standard of living, he has the impression that he is also getting richer. As a result, he lives beyond his means. As Cowen notes, many of our recent difficulties stem from the fact that many Americans think they are richer than they are. “

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  18. Apparently I lack three essential attributes for middle-classness, since I only have one bathroom, a 1000 sq foot home, and only one television. Its not even HD. How embarassing.

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  19. My wife and I worked the first five years of our marriage and saved. We bought rural land with cash, and built a small, humble, house and with a little hep from our friends, using, in part, stone and timbers from our property. The bounty of God’s love as it were.
    My wife stayed home and took care of our babies and I worked. We had no house payments and the jobs I had paid the bills though we had a couple of ‘hard’ times. The Good Lord has healed my wife of cancer and blindness and He has healed me of Meniere’s Disease.
    We didn’t live very high on the hog but there was always laughter and love.
    In 1978 when the previous owner was showing us the property I experienced this very “other” world or spiritual irruption that went something like this: “Buy this land and do not leave.”
    Ironically it turned out our lands are over the Marcellus and Utica gas/oil play.
    I wrote this for Freddie. I’ve always liked Freddie. I like his heart.
    But I don’t think Marxist economic determinism is the answer for man’s oft times self imposed miseries, simply because it distorts/destroys the tension of man’s existence as it hinders what Blondel infers is the potency of L’Action of man in the polis. Marxist seek the perfection of the state and the individual through the machinations of the state. History has taught us otherwise. The answer lies in that faith in the God who can differentiate the light from the dark, listens for our sighs as we sleep, and loves without expectations.

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  20. Hey, how come no one invited me to the party?

    I haven’t read all the comments yet, but a clarification for the folks complaining that I’m not writing about how well the upper class is doing. The post was stimulated by claims that the middle class is getting worse off. I think that’s factually untrue, and wanted to point out some evidence that the middle class isn’t doing that badly.

    Since nobody ever claims that the upper class is worse off now, there really isn’t much reason to write a post claiming they’re doing pretty well. Get it? There was no contra claim to rebut, so I didn’t bother.

    But anybody who takes my argument about the middle class as a justification of the increasing wealth of the upper class is an ass. My post has no bearing on that issue, and neither condemns nor critiques that issue. That’s what sucks about discussing economic issues–no matter what you are trying to talk about, the rabid ideologues left and right have to complain that you’re not condemning what the want you to condemn. Quite boring.

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  21. Jake Collins,

    Hanley..says you can go to community college… although one could argue that part of the self-definition of the American middle class is the ability to send your children to a four year college.
    That’s a debateable point… although switching Yale for CC is a decline in consumer good quality that probably outweighs the cheap costs of TVs.

    Do you seriously think a middle class kid was more likely to go to Yale decades ago than now? I’ll bet you a bottle of 20 year old scotch than you’re just plain wrong. Yale in the ’50s was the province of the East Coast elite, with a few Chicago and Twin Cities kids allowed in if their parents were sufficiently wealthy. Now Harvard has a billion dollar endowment and gives massive scholarships to really smart middle class kids.

    It’s hard to have serious conversations when people are basing their arguments on wholly mythological beliefs. We might as well say the middle class is worse off because unicorns no longer fly into their bedrooms at night dropping pixie dust.

    And as to community college not being a middle class thing, I’m willing to bet you don’t live in California. And as a college prof at a 4 year college in Michigan, I can tell you that we get numerous CC students transferring in, and many of our students take some of their general ed classes at CC. And I have hung out with a friend who teaches CC in Iowa and a number of his students. Solid middle class kids for the most part. You have zero conception of who’s attending CC evidently.

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  22. Re: Retirement.

    It’s true I didn’t cover that issue. It was just a blog post, and I’m hoping to develop a larger piece out of it where I would cover those things.

    But can someone please give me some evidence that middle class people had more secure retirements in the days before IRAs and 401ks? I’m really dubious of any claims that retirement was more secure several decades ago, except for those fortunate enough to work for GM and GE (fortunately, my mom worked for the latter). Dubious, but willing to see the evidence.

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  23. Re: Housing costs swallowing up middle class gains.

    Median home sizes have more than doubled in 40 years, even as family sizes have shrunk.

    Housing costs are a self-imposed swallowing up of gains. That is, that’s what the middle class has chosen to spend its money on.

    And I never said flat screen TVs were making the middle class worse off. I said a good high def flat screen TV is actually cheaper than a black and white TV was in the 1950s. If the flat screen costs less than your grandparents’ TV cost, then obviously it’s not swallowing up middle class gains, it is the middle class gains.

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    • Housing costs are a self-imposed swallowing up of gains. That is, that’s what the middle class has chosen to spend its money on.

      Yeah, but there’s a collective action issue involved there. As houses have gotten bigger, you have to buy a bigger house to live with the kind of people you used to be able to live with in a smaller house.

      I once lived in a small, utilities-paid (including high-speed Internet) apartment for $300 a month. It was small, but man… $300! Great, right? Well, except for the fact that I lived with a bunch of parolees (had 7 next door neighbors over 19 months because they kept getting tossed back in prison), my car was broken into (by someone that I had helped move in!), there was a meth lab three apartments down, and so on.

      You can get a small house, but it comes with certain costs that did not exist with small houses in yesteryear.

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      • You can get a small house, but it comes with certain costs that did not exist with small houses in yesteryear.

        Did you just call everyone in my neighborhood a criminal? I find your comment to be based on some bigotry, which I recognize is based on your own personal experience. But your experience is not accurately transferable to all towns with small houses. My neighborhood is not upscale, but I have the best neighbors I’ve ever had in my life. My mom downsized when all her kids were gone and my dad died, moving two blocks away, in the same decent small town, where her neighbor regularly shovels the driveway for his 80 year old widow neighbor, knocks on her door to let her know when it’s icy, and puts salt on her porch for her.

        Small house neighborhood does not mean impoverished and high crime neighborhood.

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        • James, ahh, sweet accusations of bigotry. I should have put a qualifier in there, but… seriously?

          My experiences are what they are, covering three towns/cities of varying size. You don’t need to be in an upscale neighborhood, but if unfortunate elements are not priced out, there is a degree of unpleasantness associated with that. The apartment complex was one example. Another is just about every place I have lived in since (until our current one). Not needing space, we looked for affordability. We ended up in unpleasant neighborhoods. The more pleasant neighborhoods had bigger houses. And higher rents. We couldn’t find both. The best arrangement we found was a basement apartment.

          When people spend a lot on housing, one of the things they’re spending money on is their neighbors. Thus making it harder to get the cheap housing you would need in order to live on a part-time salary. Back when everyone lived in smaller houses, that was easier.

          I’m glad that you found a great (and presumably affordable) neighborhood. Same for your mom. Would that such opportunities were more commonly available (in places with available jobs).

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    • Ah, the myth of the “doubled home size in the past forty years, so that means middle class people are all buying McMansions.”

      In reality, yes, the average size of a new home has jumped up 40% (even thought that’s only up to an average of 2,200 feet.) However, all that statistic tells us is that developers have decided that building McMansions is more profitable than building Levittowns.

      The actual stats are that the average size of the average middle-class family home have increased only modestly. It’s gone from 5.7 rooms to a massive 6.1 rooms according to the latest statistics, which are from the late 70’s. Now, let’s be nice and say with the early 2000’s boom, things have gone all the way up to an average of 7.0 rooms, even though I doubt the number is that large. So, that means for an increase in size of a house by 22 percent, mortgages have blasted up by 69 percent.

      In addition, the number of families living in older homes has increased almost 50 percent over the past generation. About 60% own a home more than 25 years old, and almost a quarter own one more than 50 years old.

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        • Did I say it was Mumbai? I was merely pointing out the fact that the fact that new houses have grown 40% is largely a fallacy when looking at the overall housing market.

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      • It’s not a myth that home sizes have doubled. 1,000 sq. feet to 2,200 square feet is not a 40% increase, but a more than 100% increase.

        And focusing on the number of rooms is a distraction. The rooms are larger. You should check out the bedrooms in my 140 year old house–they’re tiny and either have no closet or tiny closets. Today’s bedrooms are much larger and tend to have much larger–often walk-in–closets.

        all that statistic tells us is that developers have decided that building McMansions is more profitable than building Levittowns.

        And if the middle class wasn’t buying larger homes (not all of which are McMansions, despite your attempt to substitute emotion-laden jargon for actual evidence) then developers wouldn’t be able to make more money building them. You do understand that you can’t make money building things people don’t want, while others are building the things they do want?

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        • Ah but you see all those gigantic McMansions are being bought by the 0.05% of households that qualify as rich for the purposes of this conversation. Quite what 150,000 people are doing with approximately 7 million homes a year is anyone’s guess. Possibly John McCain buys them all in a fit of forgetfulness.

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        • First, new home sizes have increased. That doesn’t mean American’s by and large are living in these new houses. As I pointed, more people than ever are living in houses that are 25 or 50 years old. Oh, and that stat is from ’05, before the economic crash, so there’s no excuse, “oh, people moved into smaller housing after they lose their big homes they irresponsibly bought.” So as it turns out, a lot of people are living in those old homes with those small bedrooms – not everybody moved out to the exurbs.

          As it turns out, developers decided they could make more money selling 10 McMansion’s for $500,000 than 25 regular-sized homes for $125,000. Thus, the rise in the ‘average new home’ size. So yes, the developers made more money, but it wasn’t this massive shift to ginormus homes among the populace.

          In reality, all that happened for the most part is that a decent chunk of the upper-middle-class moved to the McMansion’s (thus why the largest numbers per capita of foreclosures are in houses worth over $1,000,000) while other people moved to overpriced old homes due to the housing bubble and the frantic search for good schools.

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        • > And focusing on the number of rooms is a distraction.

          Focusing entirely on home size, or consumable consumer goods, is kind of a distraction, as well.

          So the baseline standard of living for a middle class person isn’t what it was in 1950. I’ll even go so far as to grant the point James was making: it’s unarguably better. So?

          Is that the only measure for the health of the middle class? Is it even the best one?

          What about mobility? Heck, what about generational mobility? If you’re a lower middle class stiff in 1950, and you retired in 1965 and left your children an inheritance in 1975, how are *their* kids looking now? Are they still middle class? Can they look forward even to the possibility of being upper class?

          What about job mobility? When a recession hits, does it hit the middle class harder now than it did in 1950? Is that because people are frittering away their money on consumables, or is it because middle class jobs are now relatively harder to get, as we don’t have the same base of manufacturing that we used to have?

          How much training does it require to get a “middle class” job now, vs. in 1950? If your industry goes away, how much training does it require to get a different type of “middle class” job now, vs. in 1950? By that measure, being in the middle class today is many times more tenuous than it was in 1950.

          Anyone can pull all sorts of metrics out of various studies to show that the “middle class” is better off than it was in 1950.

          One can also point to futures projections and argue that they aren’t. I mean, I know lots of people who were middle class of the previous generations, who lived relatively frugal lives like those espoused by people on this thread, who *aren’t* in a good financial position, either; serendipity is kind of a bitch. Not because they were wastrels, just because they did what financial advisors told them to do and invested in dot coms, or real estate, or commodities at the wrong time.

          See, one big advantage that the wealthy have over the middle class is calamity rebound. If I’m the scion of a wealthy family, and I do everything correctly… work hard, get a Harvard MBA, maybe a supplemental law degree, join an established firm, work 60 hour work weeks, invest conservatively and wisely… I can still get rooked by Bernie Madoff.

          So what happens to me then, when my $1 million in semi-liquid long term investments is gone? Am I totally screwed?

          No, because *I still make $350,000 a year* (even discounting the assistance I can get from family). I can absorb pretty big hits to my capital liquidity and still regain a position where I can put capital to work for me. I might have to forego replacing the Mercedes this year (my extravagant purchase), but by doing so I’m saving $70k.

          Now if I’m middle class guy and my liquid assets take it in the shorts during the dot com bust, if I forego buying the 50″ LCD (my extravagant purchase), I’m saving $1,500.

          If you can’t find a way to get a better return on $70k than you can off of $1,500 in a time window, percentage-wise, you’re not very financially savvy. Not to mention the fact that compound interest *rocks out* this difference.

          When you count family assistance… well, as a member of a wealthy family I have an advantage the middle class man can never have: I can get a very large interest free or low interest loan and start an entirely new business.

          The wealthy man can live relatively frugally (even within his standard of living) and recover from a financial hardship *much* faster than the middle class man, even if they are proportionally frugal and equally smart.

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          • “So the baseline standard of living for a middle class person isn’t what it was in 1950. I’ll even go so far as to grant the point James was making: it’s unarguably better. So? Is that the only measure for the health of the middle class? Is it even the best one?”

            There’s plenty of people right here in this thread who insist that “baseline standard of living” is an appropriate measure for class health, at least in the sense that higher-income persons have a better standard of living and they consider this to somehow be morally wrong.

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  24. Michael Drew,

    Anyone proposing that the middle class accept 1950s living standards is proposing a politically unsupportable collapse of middle class living standards.

    You totally missed the point. The point is that the middle class has advanced so far beyond the 1950s that today you could have that middle class lifestyle–if you were willing to settle for it–with only part-time work.

    Is reading comprehension a dead art?

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    • Where do I say I think that what I am talking about is the point you are making rather than your restatement here? Just because I anticipates implications others could draw from your point but shouldn’t doesn’t mean what I am saying isn’t a point I can make. I can say that your description is accurate as far as it goes, but that it if it’s used rhetorically in a particular way that is going to problematic politically. Is there something wrong with that?

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          • Well, Michael, since you’ve been missing the point all through this thread, I guess I shouldn’t be surprised that you’re worrying about problematic statements that nobody’s actually making.

            Personally, I think anyone proposing that the middle class accept being forced into concentration camps is proposing a politically unsupportable collapse of middle class living standards. I don’t know how that’s relevant to anything that’s being said here, but apparently relevance doesn’t matter.

            Sorry, but I’m not going to pretend to be contrite about pointing out that your statement was a non sequiter.

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              • Michael,

                As I noted before, the sole point of my post is that despite claims to the contrary, the middle class is not worse off than before, but better off, and the only reason they don’t feel better off is because of rising expectations. The only implication is that those who say the middle class is worse off now than in the past are wrong.

                That’s the only implication. There’s no implication the middle class is super duper well off and catching up with the Gateses. There’s no implication that their subjective feelings of falling behind don’t have any political implications.

                The only implication is that certain people are making a claim that is false.

                The need to assume other, perhaps more nefarious, implications, is what makes political debate in general, and blogs in particular, worse than a poke in the eye with a shit covered stick.

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                • Well, then it’s a good thing I made no such assumptions about your point. I merely ruminated on how important such rising expectations are in politics, and suggested that we should be careful before we go in the direction of questioning whether people are right to have them — which I did not suggest you did. I will note that I did this somewhere other than your blog, in a place where discussions have recently been occurring to which such questions — political implications included — are extremely relevant.

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                    • Frankly, part of the point I was making is that, if you aren’t willing to talk about what you see to be the implications of your post pointing out what anyone with eyes can observe, then as far as I can tell, your post is rather unremarkable as well. It’s an observation that, once made, begs to have its implications explored, which will involve considering inferences that some could, but perhaps ought to pause before they do, draw. Pointing out what would be problematic or just wrong to conclude, etc. Terribly sorry if that bores you.

                      As I said, unless you have something else to say about it, as far as I can see, we can just agree that middle class expectations have risen, the middle class has deserved to raise its expectations, and that’s it’s all good. Anything else we might have to say about it is going to get more and more problematic the further from that view we get, which doesn’t make all of those things wrong. We’ve been discussing some of those possibilities here lately. That’s why I took it in the direction I did. I would submit there is evidence in this thread that not everyone here founds my obvious thoughts as uninteresting as you do. I find it unlikely that anyone agrees with you that I suggested your point was other than what it was, because most folks around here have pretty good reading comprehension, in point of fact.

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        • One of the problems with this topic is that people say something, call it X, and may or may not be meaning to imply something else, X’, since X’ is commonly understood to be a consequence of X or the same as X or obviously implied by X or something. Usually X is something interesting whose political import is not obvious – for instance that income inequality has risen, or that the goods available in 1980 are now mostly much cheaper. Whereas X’ is some tedious bit of political boilerplate like “rich people have all the money!” or “who needs healthcare when you have a flat screen TV!” In most cases X’ doesn’t even remotely follow from X but some people are in fact claiming or thinking that it does or thinking that other people think that it does.

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          • My point was simply that, while James’ (really, Jason’s, since that’s whose post I was responding to) point is pretty clear on its own, it remains the case that adjusting expectations about this upward trend is going to be a major project politically. If James is silent on the political implications that someone who sees his points as salient could make, I see no reason why that means I need to be. How is that not an interesting question; why be surprised when someone raises it?

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  25. So the story here is that a single earner can pay bills and provide food and clothing for a family, send 2.5 kids to college and buy a house and car and health insurance working part time as long as they don’t want a fancy TV or use the internet, huh? I have to wonder how much James & Jason think televisions, computers and internet access cost.

    I also hear it’s possible to spend time in part of your property that might not get included in a calculation of median home size, like a backyard for instance. Crazy, I know.

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  26. Jaybird, can’t reply anymore in the same thread, sorry if this is a rights cul-de-sac.

    I don’t think I correctly understood your most recent reply, 4:08 pm, the problem is the government imposition of the institution (due process or marriage) at all? I don’t think that’s what you meant and I think I’m missing something.

    And I realized I wasn’t clear, you wrote, As such, I don’t see “Rights to things” as Rights. I see the Right to have unimpeded access to things as a Right… I was thinking of more of Miranda than I wrote out, so the particularly interesting part with respect to our discussion of econ-soc and positive rights was, “If you cannot afford an attorney, one will be appointed for you.” Should you have access to a government appointed attorney regardless of whether or not you can afford it, as of right? That’s what I meant about the less meaningful exercise of your right to due process without this complimentary positive right.

    Also, I was also curious what you meant by this, regarding Rawls, “the main thing that I would want is slipperyness between the strata rather than evenness but that’s my taste” Did you mean on balance you favor more social mobility to more wealth/income equality? Because I think social immobility is in tension with equality, more social mobility requiring more equitable distributions and more unequitable distributions reinforcing social immobility.

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    • Should you have access to a government appointed attorney regardless of whether or not you can afford it, as of right? That’s what I meant about the less meaningful exercise of your right to due process without this complimentary positive right.

      That’s a good way to look at it. I suppose I would agree with this. The problem is that anybody who can afford it knows that they’d be better off with a private practitioner who hasn’t gone out of business yet than a government-appointed one. Which likely indicates a problem right there. (Additionally, if someone is a prosecutor for 20 years, it likely means that they’re very good at their job… if someone is a court-ordered defense attorney for 20 years, I don’t know that it necessarily means the exact same thing.)

      Did you mean on balance you favor more social mobility to more wealth/income equality?

      Yes. Absolutely.

      Because I think social immobility is in tension with equality, more social mobility requiring more equitable distributions and more unequitable distributions reinforcing social immobility.

      Really? Because it seems to me that there’s a lot more “equality” historically in places like India or China (entire swaths of the country in penury!) with a lot more “sticky” social strata. There is less equality, historically, in, oh to pick a country out of a hat, the US. I suspect that the same is true in Europe. The more equality in the country, the stickier. Now, of course, if you’re stuck in the resoundingly large middle middle class, maybe you don’t see this as such an imposition. That’s a fair take too.

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      • I had a prof who was from Russia. He used to go off on the left-leaning students by explaining in detail what equality meant, as a practical matter, in the Soviet Union.

        Which doesn’t mean our current level of income inequality isn’t necessarily worth worrying about. But wealth equality, in and of itself, is not necessarily an ideal we want to achieve.

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        • I don’t think we’re in much danger of achieving “wealth equality” any time soon, so perhaps you could consider dialing back a touch on the woe facing the wealthy if things were made slightly less advantageous towards their interests?

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          • I don’t think we’re in much danger of achieving “wealth equality” any time soon

            Given that wealth inequality is seen as a problem, yea, a *MORAL* problem, I think it’s a point worth addressing.

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                • Are you saying that you think India, China, and Russia are more stable?

                  I’d argue that they aren’t. Economy is only part of the picture of social stability, of course, but the variance between the haves and the have nots is pretty marked in those countries.

                  The fact that most people are broke doesn’t make them more equal.

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                    • If India forced its landlords to forgive generations of hereditary debt, India would shoot up strongly.

                      MacArthur forced this sort of reform on postwar Japan. It did wonders for their economy, took them straight out of feudalism into the modern world. India would benefit from the same.

                      We don’t need to eat the rich, precisely. Just let’s not eat the poor and enslave them, which if you read the link, you will see is still the way India is run at ground level.

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                  • The fact that most people are broke doesn’t make them more equal.

                    My mind just blew.

                    What does “income equality” mean if not “most people in the country, certainly the ones who have to interact with each other” mean if not “most people having similar incomes”?

                    Wouldn’t the majority of people being broke fit this model?

                    Historically, why wouldn’t India, China, and Russia fit this model?

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                    • Sorry, I should explain that better.

                      Here’s a couple of examples.

                      Let’s say 20% of a country is below what is defined as the poverty level of that country. 15% are working poor, 35% are lower class, 25% are middle class, and 4% are upper class, and 1% are ultra class.

                      Country #2: 10% are at or below poverty, 10% are working poor, 20% are lower class, 40% are middle class, 15% are upper class, and 5% are ultras.

                      Country #3: 40% are at or below poverty. 40% are working poor. 10% are lower class, 6% are middle class, 3% are upper class, and 1% are the Saudi Royal family.

                      Which one has a more “inequal” capital distribution?

                      The answer is *still* it depends, of course. Again, economic mobility is very important. Still, I’m gathering that you’d say the last one is “most equal”, because most everybody is broke. But that’s not a very useful idea of equal, is it?

                      Because when it comes to systematic behavior, country #2 is going to have an economy that stays closer to equilibrium, for everyone across the scale.

                      #1 is going to have a more varied economic health. Indeed, it’s probably going to have more in the way of frequent economic interruptions than the third case. Why? Because the way the capital is distributed across the classes.

                      Now, the third one will probably have the *worst* economic events, when they occur. But the frequency will probably be less than the economy in #1.

                      Economic systems are complex systems. Complex systems typically perform in ways that resemble nonlinear manifolds. Now, my math is very rusty, but typically higher dimension manifolds produce a fairly uniform behavior until the system gets out of equilibrium.

                      When the system gets out of equilibrium, things can go to shit really fast.

                      One example of this is wave formation in the ocean. Typically, waves are a fairly uniform height in the area with a local geographic and atmospheric set of characteristics. But twiddle a bit with the frequency of some of those variables and you can get very high aberrant peaks or very low abnormal valleys, even among a bunch of normal waves (go watch a documentary on freak waves, it’s fascinating).

                      If you’re lumping a lot of capital in a small group, it might be okay. It depends on the overall liquidity of capital in the economic system. As long as the rate of change stays fairly uniform, things chug along.

                      But in a recession, when large chunks of capital are held by relatively few agents, who have wildly disparate norms from the remainder of the population, the economy can go bye-bye. In the case of the “everybody’s poor except the Royals”, the release valve is that the Royals don’t really want mobs of people cutting their heads off. They can (and in many cases will) act in concert, and distribute goods and services to the remainder of the population.

                      But in our current distribution, that doesn’t happen. Because the poor aren’t poor enough to represent that sort of threat, and the rich are disjoined from that sort of communal activity. Which is why everybody is sitting on their money – it’s basic game theory. It does everybody good if everybody starts the engine going again, but it’s not to anybody’s advantage to be the first player to dump capital back in the system.

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                    • But that’s not a very useful idea of equal, is it?

                      I don’t know that there are plenty of different definitions of equal with some of them being more useful than others.

                      I can’t help but think that if “equal” isn’t the word you want, you probably want a different one rather than saying “I’m using the word differently, and more usefully, than you are”.

                      Because, at that point, I’m sooooo lost.

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                    • Pat,

                      What’s your evidence that unequal income distributions have negative economic effects? I’ve been hearing this claim a lot lately, but not from economists. I’m willing to entertain the idea, but I just haven’t seen anybody explain how income inequality creates economic problems, with real evidence supporting the claim.

                      As to the political side of things, I have no doubt that it can cause political problems, human jealousy being what it is.

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                    • Income inequality leads to centralization of capital and monopolization and therefore less competition.

                      More income equality infers a greater spread of wealth, and therefore more decentralized wealth. Decentralized wealth means more vibrant competition .

                      One data point, wealth disparity before the great depression and wealth disparity before the recent financial collapse.

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                    • E.C.,

                      Eh, I’m not persuaded. If anything, there’s more competition in the U.S. economy now than there was before. And the explanations I’ve seen from economists about both the Great Depression and the recent Great Recession (can I call it that?) don’t mention income inequality itself as a factor. Correlation isn’t causation, right? How did income inequality cause the recent economic crisis? How did it cause the Depression? Just saying there was substantial income inequality prior to these events doesn’t demonstrate that it caused them.

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                    • Obviously your aren’t persuaded. With such a vague claim and no real evidence on my part.

                      You are quite correct, that correlation is not causation, though I’m not convinced causation exists.

                      This was addressed in another post.

                      There’s the argument that income inequality breeds wealth inequality, and that fewer and fewer winners who win more and more leads to stagnation. If 99% of all wealth in the country were in the hands of 10 individuals, would that be a neutral thing? For instance, if 99.999% of the population had access to only 1% of the wealth, but that was a sizable amount of wealth (say 1 trillion), well then what would be bad about that? So would you agree that such an extreme case of inequality would not matter as long as all boats are rising?

                      Or would you take issue with my presupposition that income inequality so easily relates to wealth inequality?

                      And of course some people would say, income inequality itself is not a bad thing, but increasing income inequality is a bad thing. My answer to that would be that in reality, income is never stagnate, it is always moving in one direction or another, either toward greater egalitarianism or less.

                      So if you take issue with my income inequality infers increasing/decreasing income inequality, and that that likewise infers increasing/decreasing wealth inequality, let me know.

                      Likewise, if you think that a scenario where 1 million people control the networth of a country of 320 million people, as long as the 319 million are no worse off in absolute terms, let me know that as well.

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                    • E.C.,

                      I’m sorry, but I didn’t understand all that. Let me just comment on a couple of things.

                      First, as you suggest, absolute wealth increases for everyone can occur simultaneously with increasing disparities in the proportions of wealth held. That’s just a simple mathematical fact, of course. It’s also a historical fact, and is what has occurred particularly in recent American history. This is part of the puzzle, as I see it, of how income inequality itself harms the economy, because inequality refers only to proportions, not absolute amounts. If my standard of living is increasing, but yours is increasing more rapidly, it’s not clear to me how that would have economic harm. Both your investing and spending and mine will increase. Yours will increase more, but that doesn’t mean mine decreases. And if everyone’s spending and investing increases, I think it has to promote continued economic growth.

                      As to “I’m not convinced causation exists,” do you mean in this case or generally? If you’re saying that in general causation doesn’t exist, then you and I are coming from such fundamentally different conceptual worlds that it’s a wonder we can communicate at all. I’m an empiricist, and I think causality is at the root of every single thing that happens (from economic changes to wars and down to the random thoughts we have while driving to work). Figuring out what causes what is, of course, devilishly difficult, but I honestly can’t conceive of a non-causal world.

                      But I’m not sure that’s what you actually said, so that may have been much blather about nothing at all.

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                    • Tabling the causality/correlation stuff, what do you say to the following?

                      99% of a country’s wealth belongs to 1% of it’s population. Is that desirable or undesirable?

                      OR

                      Is it completely fine as long as that 1% of wealth controlled by 99% of people is still growing in absolute terms?

                      Put another way, there are 10 people. At time x1, 1 person has $99, and the other 9 people have $.11 each. At time x2, 1 person has $990, and the other 9 people have $1.11 each.

                      Now at time x3, 1 person has $9950, and the other 9 people each have $5.55.

                      Am I correct to say that you feel that since wealth has grown in absolute terms for all, that is a desirable future?

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                    • > What’s your evidence that unequal
                      > income distributions have negative
                      > economic effects?

                      I’m not talking about income, directly. I’m talking about overall capital distribution, over time, in an economic system. How the money moves. Income is certainly a part of that, but it’s not the entire picture.

                      > I’ve been hearing this claim a lot
                      > lately, but not from economists.

                      Most economists aren’t stellar mathematicians. That’s okay, most mathematicians make shitty economists, too.

                      This isn’t an economic observation, though. It’s an observation about how complex systems *act*, which is actually a mathematical question.

                      My math reading is atrophied. I may be misunderstanding the literature on nonlinear manifolds. And the theory I’m outlining above requires several assumptions to be true.

                      I have to be essentially correct in the premise that economic systems operate like nonlinear complex systems. I have to be correct that capital distribution through time is an important variable in how the economic system operates.

                      Personally, I don’t find either of those assumptions to be implausible. But mathematical modeling of real world systems can always fail because your assumptions don’t match the reality. You’d have to take some steps to validate this, to be sure. But I don’t have either the mathematical chops anymore nor the economic chops to provide what you might find as compelling evidence that the theory is correct.

                      If the assumptions are correct, though, then it’s pretty much a given that the economy will act in really odd ways if a significant amount of liquid capital is constrained among a small set of agents in the system.

                      Why? Because those agents are not uniformly rational actors. When the economy is in a stable state, they act enough like rational actors that the differences become system noise. This is why long term macroeconomic analysis act like fairly predictable systems… the same reason why the planetary bodies act like relatively predicable Newtonian bodies. But during times when the system gets out of equilibrium, the rational actor bit falls right out and this exacerbates short term crisis behaviors.

                      There’s enough historical evidence to convince me that the idea holds up under my own cursory and inexpert assessment. Hell, if I could prove it to you it’d probably be worthy of a Nobel. I freely admit I’m not a Nobel :)

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                    • E.C.

                      Am I correct to say that you feel that since wealth has grown in absolute terms for all, that is a desirable future?

                      No. In fact that’s precisely the kind of assumed implications that make me irate. You’re committing–or at least imputing to me–the basic naturalistic fallacy. Really all that I’m saying is that before engaging in debate about these issues, folks need to have their facts straight. My original post was just rebutting the claim that the middle class is doing worse–and that doesn’t necessarily imply that they couldn’t or shouldn’t be doing better. And here I am just saying that income disparity in itself does not mean one set of people is getting poorer, which doesn’t imply that I have a Panglossian view of the world. This is the problem with discussions like this–a simple factual statement is treated as having all the normative freight that one’s debate opponents abhor. I’m not giving these factual claims that freight, I’m just saying we need to be clear on what the facts of the world actually are before we have a big discussion about how the world ought to be.

                      Pat Your fundamentally flawed assumption is that the economy “gets out of” equilibrium; i.e., the assumption that economic equilibrium exists. It’s not a Newtonian system in that sense. It’s much more stochastic. The economy is dynamic–there is no equilibrium unless it’s completely stagnant.

                      And underlying that further unexamined assumptions, such as that this presumed equilibrium correlates positively with relatively equal wealth distribution and that the consequences of inequitable wealth distributions are inferior to the consequences of wealth distribution, which is the point you’re trying to prove–so having it as an implied assumption is a grave error.

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                    • I swear James, I am not maliciously or nefariously trying to misinterpret you and attribute to you callous notions.

                      In fact, this is the same quibble we had during your post from times gone by about exploitation of third world labor.

                      My original post was just rebutting the claim that the middle class is doing worse–and that doesn’t necessarily imply that they couldn’t or shouldn’t be doing better.

                      Our disagreement turns fundamentally on whether in fact, you CAN be said to be doing better, if it is in absolute terms rather than relative terms.

                      Now I agree, in one sense, the MC is doing better. In another sense they are not. The MC has more bathrooms and cars and TV channels than they use to. They are also making less than their fellow citizens as well. Doing better compared to purchasing power, doing worse compared to other people’s purchasing power.

                      Now in a race (which capitalism surely is, right?!) is one doing better in the race if they are beating their prior record, but their opponent is beating his/her best time (which was lower to begin with) by even more.

                      In a race, do absolute standards matter?
                      Is capitalism a race?

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                    • E.C.,

                      Our disagreement turns fundamentally on whether in fact, you CAN be said to be doing better, if it is in absolute terms rather than relative terms.

                      OK, I didn’t realize that was our disagreement, but I think that makes sense. It certainly explains the “proportion of wealth” (or “relative standing”) vs. the “absolute gains” issue.

                      Please let me, without intending offense, express my surprise to find someone actually suggesting that absolute gains might not equal being better off. I had thought that everyone who questioned the middle class’s standard of living was claiming they were doing worse off absolutely (I know some are, because they have explicitly said so, so I assumed, I guess, that all were taking that line).

                      I understand why people feel worse off when others gain more. It’s simply easier to compare myself to people i can actually see (driving their Jags, sitting in first class, building their McMansions) than people I can’t see (my dead great grandparents, etc). If we define well-being by the subjective standard of how we “feel,” then absolute gains don’t matter.

                      But I can’t see that as a reasonable approach. Am I better off than a 19th century frontier farmer? He may have looked around at his (distant) neighbors, and said, “Hey, they’re living in soddies while I’ve got a log cabin; and 9 of their 13 children died of dysentery, but I’ve got clean water so I’ve only lost 2 of 9 kids to Scarlett Fever–I’m doing great!” Meanwhile, I’m looking at the people with the Jags and thinking I’m doing lousy with my used minivan.

                      Since I feel less well off than the 19th century farmer did, am I actually less well off?

                      None of my kids have died of disease, and the odds are slim that any will. I’m not physically broken down at age 45. I have a house with electricity and insulation. I have access to education and health care. I can afford to buy books, take vacations, watch sports on cable TV, surf the ‘net. eat meat every day, three meals a day.

                      Perhaps psychologically the 19th century guy was better off. It’s true that material well-being doesn’t directly translate, if it translates at all, into psychological well-being. But when we’re talking about incomes and wealth, we are talking about material well-being.

                      Another way to look at it is to ask yourself, “If you had a time machine that could take you back to the 1950s and put you in the same proportionate economic position as today, would you turn it on and push the button?”

                      I think it’s entirely legitimate to say yes. People’s preferences differ, and I wouldn’t find such a preference offensive or shocking. But I think that the vast majority of middle class people, once they understood what they would be giving up, would choose to stay where they are. Perhaps I’m wrong, as a factual matter, about that, but I would be surprised to find I am. And if they would in fact prefer the now to the back then, then I think we have to conclude that their revealed preferences show that they are better off now.

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                    • “Now in a race (which capitalism surely is, right?!)”

                      …really? You’re really going to insist that life is a zero-sum game, that wealth is a fixed quantity, and that one person’s gain is invariably the direct result of someone else’s loss?

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                    • James makes a valid critique, I should unravel better.

                      I’m doing better in the sense that there has been progression from my state earlier to my state now. And I’m not claiming that the middle class doesn’t have a lot going for them. They are doing better, and they (me, we) should be happy.

                      But I don’t want to say unqualified that doing better is always relative to my previous position in the larger sense.

                      If I get my leg chopped off, and then get it a prosthetic, I’m doing better, relative to my immediately previous circumstance, but in absolute terms? I don’t think it’s so clear.

                      If I were extreme, I might say, relative to fictional state of veiled ignorance, in which I could be born into any number of social/economic positions, will I be born into a better one comparatively now or not?

                      That’s probably a bit to theoretical and lofty for your empirical/libertarian leanings.

                      But it harkens back to the third world laborer. Now that he/she is being exploited, at least they can eat! They are doing better!

                      With regard to all possible alternative situations, are they doing better with the factory? Not unless they get above a baseline.

                      So you’re right, I’ve obfuscated the term better. What I really mean to do is throw it out all together. There. In a very roundabout way, you James have helped clarify for me that what I really mean to say is that I reject your very notion of better in this instance. Doing better is not as important as doing well. So I give, we are doing better (by inches perhaps), but renounce the entire project of better.

                      As for density, capitalism, in it’s pure unregulated form, is like a game of monopoly. At some point you win by taking what everyone else has. The import of the state, for me, is to make sure that competition and innovation go fast enough to keep that from happening.

                      For every example you show me of capitalism allowing for, or including mutual gain, I’ll show you an instance where it does just the opposite.

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                    • Now would be a good time to add that, as the “middle class” necessarily refers to a swath of people largely in the middle. How they are doing in absolute terms matters not at all.

                      You can not be the middle class and have less that 50% of the country’s net worth.

                      So in fact, the middle class is dieing, or better yet, it died a while ago. Now we’re simply smelling the rot of its remains.

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                    • That’s probably a bit to theoretical and lofty for your empirical/libertarian leanings.

                      Yeah, a bit. (wry smile)

                      But it harkens back to the third world laborer. ..With regard to all possible alternative situations, are they doing better with the factory? Not unless they get above a baseline.

                      I think the relevant baseline is always, “how am I doing right now?” Every future event is an improvement or a decline. Any other baseline is wholly artificial, derived from some “ought” rather than an “is.” Oughts are too fuzzy and uncertain. I may think the appropriate baseline is a western middle class income. Someone else may think it’s what allows a person to live a middle class life in the person’s own country. Who’s right? How could we possibly determine an answer? But we can clearly determine whether someone has improved from the status quo. And there’s no implication there that we should be satisfied with just that improvement from the status quo. We always want to improve from the status quo–and that’s back to rising expectations. But if in two generations that Nike worker’s grandkids have indoor plumbing, satellite TV, and a life expectancy 20 years greater than their grandparents, would we really say they’re not better off just because the country’s elite have teleporters and vacation homes on Jupiter?

                      Doing better is not as important as doing well.

                      But then we have a whole new issue for discussion, what do we mean by “doing well.” I’m very inclined to agree with you, and one of the implications people could legitimately have taken from my original post is that having a 1950s middle class lifestyle is in fact doing well. But I have no idea if you and I are using “doing well” in the same way. If by “doing well” you mean, “keeping up with others in a relative sense,” then I’m afraid I’d have to argue that your definition of well is based on jealousy and envy. But I honestly don’t know what you mean by “doing well,” so I could be way off base here.

                      Now would be a good time to add that, as the “middle class” necessarily refers to a swath of people largely in the middle. How they are doing in absolute terms matters not at all.

                      Oh, no, I must object. For definitional terms the absolute doesn’t matter, but that’s merely for defining social aggregates. It’s a matter of convenience, not substance. For concern about human material well-being, the absolute absolutely does matter. If it didn’t, then you wouldn’t mind trading places with a slum-dwelling Brasilian–somehow I suspect you would mind just as much as I would.

                      capitalism, in it’s pure unregulated form, is like a game of monopoly. At some point you win by taking what everyone else has.

                      Honestly, this kind of argument drives me crazy. Have you actually studied economics, or are you, like so many others, persuaded that you can actually understand it deeply without some dedicated study?

                      One great thing about the field of economics is that there is a large amount of literature accessible to the intelligent layperson. I use that kind of stuff in my political economy class, rather than highly mathematical stuff because it does a much better job of getting students to understand how economists think, and how economic behavior actually plays out. I’d willingly buy you the books, if you’d agree to read them. But whenever someone says capitalism is like monopoly, I’m pretty confident they’ve studied economics about as carefully as I’ve studied physics.

                      I don’t mean that to be snarky, although I’m sure it inevitably sounds condescending. But I really don’t understand why people argue as though they have real understanding of something they clearly haven’t studied. It’s entirely possible to study economics and end up not wholly agreeing with me–Paul Krugman knows far more about economics than I ever will, and he disagrees with me on many things (not that he knows I exist; and of course there are economists who do agree with me, not that they know I exist, either). But I can guarantee that even a staunchly liberal economist like Krugman won’t agree that capitalism is like a monopoly game. His books would be a great place to start reading–Peddling Prosperity, The Accidental Theorist, and Pop Internationalism are all prominent on my bookshelf–because you could be assured I’m not dishonestly trying to indoctrinate you into a conservative or libertarian view.

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                    • James

                      > Your fundamentally flawed assumption
                      > is that the economy “gets out of”
                      > equilibrium; i.e., the assumption that
                      > economic equilibrium exists. It’s not
                      > a Newtonian system in that sense.
                      > It’s much more stochastic.

                      Yes, I know that. I don’t know how much you know about nonlinear systems; I’m not talking about equilibrium in the sense that it is at a completely steady state.

                      What I’m talking about, in the sense of equilibrium, is when the economic system gets out of its normal range of behaviors.

                      Now it certainly could be the case that this is desirable. Perhaps a cycle of boom and bust is better off, overall, than a more relatively modest increase. I don’t know. But I suspect not.

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          • See, this is exactly what I’m complaining about when I say people are making false implications. There’s absolutely nothing in my argument that suggests I am even remotely suggesting concern for the wealthy, much less “dialing up the woe” for them. I know E.C. doesn’t want me to be condescending, but how exactly does one treat a comment like this with anything but condescension?

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            • Let’s parse this sentence: But wealth equality, in and of itself, is not necessarily an ideal we want to achieve.

              This statement about wealth equality, however much it may be squished and pulled like so much philosophical topological taffy, seems to imply wealth equality isn’t an ideal worth pursuing. It may be demonstrated where the terminus of unregulated capitalism leads: to Banana Republics. Where the rich own everything, the rich will live behind high walls, topped by electrified barbed wire and fortified towers, as I do in Guatemala City. If this is not so, please expand on your caveat in and of itself.

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              • “It may be demonstrated where the terminus of unregulated capitalism leads: to Banana Republics. ”

                I look forward to your explanation of why “suggesting that the middle class isn’t worse off is an argument that leads DIRECTLY to support for Banana Republics” is not a slippery-slope argument.

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            • So that I’m clear, hyperbolic references to Soviet times are ok, but pointing out that we aren’t in much danger of that happening in the present day USA is over the line? I guess I think it’s extremely rich to worry about people ascribing “false implications” to when your argument against people expressing the wish for more equality is a reference to the horrors of Marxist-Leninism.

              I’ll ask you then, what is your purpose in your argument that the middle class is doing fine other than as a defense of the status quo? Alternatively, couldn’t your argument be used to defend any status quo in which technological progress allowed for a degree of absolute progress for the (roughly defined) middle? How does an argument that malleable have any utility whatsoever? What normative significance are you ascribing to the finding that the middle class is “better off” in absolute terms?

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      • The problem is that anybody who can afford it knows that…

        I agree with this, I think the US is woefully behind in the econ-social rights sphere generally. The UK was beyond the 60th anniversary of the Beveridge Report and the social welfare consequences while the US is just wrapping up, and still in court over, insurance provision to regularize access to healthcare for 30+ million people.

        Because it seems to me that there’s a lot more “equality” historically in places like India or China…

        I was thinking of peers of the US, consider the OECD’s report – a literature review really – “Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations? A Review of the Evidence for OECD Countries” (pdf). Immobility and inequality tend to track one another – I’m not sure, but I don’t think adding data from developing countries would change that story. The mechanisms for the reinforcing and transmission of inequities are well documented, like differences in parents’ social capital, earnings, and wealth – Pat Cahalan has referred to a “calamity rebound” upthread. I was thinking of the capability to develop one’s talents, the OECD report points out,

        Perhaps most importantly in an intergenerational perspective, wealth reduces the importance of capital market failures. In an ideal world, people would be able to borrow on capital markets to finance investments in human capital, so parental background should have no impact on whether people engage in such investments – all that should matter is whether they can benefit from them sufficiently to service the debt. In practice, such borrowing against future earnings is difficult, and so liquidity constraints affect investment in human capital (Becker and Tomes, 1986). Low-income parents might not invest optimally in their children’s human capital: poverty risks, joblessness and lack of education are therefore likely to accumulate and result in a larger share of individuals at higher risk of social exclusion. (p. 17)

        Rather than sending you off to root through 100+ page documents, though the OECD report’s work a look, I wouldn’t want someone to say to me, go re-read Anarchy the State & Utopia – most of the relevant charts, tables, and concerns are more condensed here, The role of education in enhancing intergenerational income mobility.

        Earlier, Jaybird, you’d been asking before “When” people behind the veil of ignorance would prefer to be born. I accept that nearer to today is my answer. But I’ll turn the question on you and ask “Where” would people behind the veil of ignorance choose to be born? According to the literature roundups of the OECD and Australian Treasury, and the Human Development Index, people in the Original Position would not select the USA.

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        • But I’ll turn the question on you and ask “Where” would people behind the veil of ignorance choose to be born? According to the literature roundups of the OECD and Australian Treasury, and the Human Development Index, people in the Original Position would not select the USA.

          Dude. That’s an awesome point. Well worth fighting over.

          *WHY* would they not pick here? What could we do as a country to make sure they would do so?

          At any point in the past, if given the opportunity, would they pick here? WHY? Does it have to do with our intrinsic properties or our relational ones?

          These things are important!

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          • It is probably says something about me that I have a favorite section, Rahm’s “a crisis is a terrible thing to waste” has a British antecedent, from Beveridge,

            In proceeding from this first comprehensive survey of social insurance to the next task – of making recommendations – three guiding principles may be laid down at the outset.

            The first principle is that any proposals for the future, while they should use to the full the experience gathered in the past, should not be restricted by consideration of sectional interests established in the obtaining of that experience. Now, when the war is abolishing landmarks of every kind, is the opportunity for using experience in a clear field. A revolutionary moment in the world’s history is a time for revolutions, not for patching.

            The second principle is that organisation of social insurance should be treated as one part only of a comprehensive policy of social progress. Social insurance fully developed may provide income security; it is an attack upon Want. But Want is one only of five giants on the road of reconstruction and in some ways the easiest to attack. The others are Disease, Ignorance, Squalor and Idleness.

            The third principle is that social security must be achieved by co-operation between the State and the individual. The State should offer security for service and contribution. The State in organising security should not stifle incentive, opportunity, responsibility ; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family.

            The Plan for Social Security set out in this Report is built upon these principles. It uses experience but is not tied by experience. It is put forward as a limited contribution to a wider social policy, though as something that could be achieved now without waiting for the whole of that policy. It is, first and foremost, a plan of insurance – of giving in return for contributions benefits up to subsistence level, as of right and without means test, so that individuals may build freely upon it.

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  27. I want to thank Jason for his complimentary treatment of my post. And I apologize for my ill-temper.

    I will be so ungracious, however, as to note that it seems clear that the idea of a dying middle class is something of a sacred and unquestionable truth in America, perhaps mostly among liberals, but among a sizable set of conservatives as well, although the two groups seem to attribute different causes (evil bosses, capitalism in general and bad gov’t policy vs. evil immigrants and (different) bad gov’t policy). Many of the comments here, and over at Dispatches where I’ve been having this debate, substitute ideology for factual analysis.

    The most offensive response of all, which comes in forms ranging from subtle implication to direct accusation, is that noting the relatively good status of the middle class means one is praising the status quo and/or arguing that the increasing distribution of wealth is a good and unquestionable thing. No such implication follows, of course, but such is the course of all political debate–logic and facts cannot be allowed to obstruct impassioned emotional appeals.

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    • I missed the thread, so I’m not sure what you’re referring to. I do know that you comment in a different voice than you write in. It took me a while to figure it out. But it’s like you’re in teacher mode in the comments. You take a bit of getting to know, Hanley.

      But the basic premise strikes me as a reiteration of Greenspan’s value-added statement, which is insufficient in that, where no goods exist to substitute away from, then no substitution effect can exist.
      For example, people carry cell phones nowadays rather than dropping a dime into a pay phone. That’s the ownership society for you. But the substitution effect is practically nil these days.

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    • You have to understand, James, that it is only in your head that the discussion here was a response to your post directly. It was in fact part of a larger debate going on here into which Jason Kuznicki brought your descriptive obs