We complain a lot, but..
"This is such a great chart for showing how good economists have gotten at stabilising the economy"
"Total US wealth increased 618.18% just between 1959-2022."
I noted that there was a slight flattening as I graduated college, a slight acceleration in the 80s and 90s, a teeny dip during the dot-com bust and another during the "worst economy in 30 years*" in 2008 and an actual small dip because of Covid, but even a hampered, half-hearted free market just keeps on ticking.
One of the people who sent one of these is fond of noting how absolutely insane the belief among the young that this is a dire economy actually is. "Other than modern medicine, astounding technology, and dozens of luxuries that would have been unthinkable to our ancestors, 2023 is really awful."
I skipped bringing my discussion of Greg Easterbrook's The Progress Paradox: How Life Gets Better While People Feel Worse from my January 2006 batch because I didn't think it was that pertinent now. Guess not. Based on my reading of his book, this was my final paragraph then, and I think I should have been paying more attention to it over the last decade.
Easterbrook believes that stress and anxiety are the default positions for the human personality. The people who worried about the fire going out and listened for war drums over the hill survived; those who stopped to appreciate sunsets got eaten by something. We think relaxation should be our default mode, and when problems go away we should just naturally relax. Probably not. More typical is that we transfer our worry and stress to the next-largest problem. Relaxation has to be cultivated and learned for most of us.
*They keep saying things like that.
Need to look at median income, not just total national income, to get a feeling for the typical experience.
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ReplyDeleteAnd scale by inflation--not the official statistics, but using median housing costs, or media car prices, or basic grocery prices. There'll be seasonal variations, and boom/bust effects, but long term trends should be interesting. Probably still rising, but not as fast.
ReplyDeleteI think I get your point and am broadly sympathetic, but "past performance is not a guarantee of future results" as every prospectus states. I don't think any objective analyst would dispute that we've lived through an almost unprecedented period of general peace and prosperity since 1945. The next few decades may be more interesting.
ReplyDeleteThis suggests inflation adjusted median income went from around $55k in 1975 to around $75k today: https://www.multpl.com/us-median-real-income
ReplyDeleteI’ll admit I’m quite fascinated not just in wealth but in what I’ve heard called “lifestyle inflation”, the tendency of people to increase their expectations for what an “average life” looks like. I have a friend in her late 20s who has spent the last few years posting socialist-to-communist memes on Facebook. Lots of “boomers don’t get it” stuff. I ran in to her recently and asked what she was up to, and she mentioned she now has a work from home job and spends 6 weeks at a time in exotic locales, paying less than rent to visit everywhere she’s ever wanted to go. Her job is nothing special and I would guess she makes less than median income, yet lives a life unthinkably luxurious to anyone even 15 years ago. Her Facebook rants always mention everything her parents generation got that she didn’t, but somehow the things she has that they didn’t never seem to get worked in.
I agree we can’t see the future, but at this point dropping back to the living standards we had in 1980 would be considered a huge step back for most. Seems like something to be grateful for.
"Her job is nothing special and I would guess she makes less than median income, yet lives a life unthinkably luxurious to anyone even 15 years ago. Her Facebook rants always mention everything her parents generation got that she didn’t, but somehow the things she has that they didn’t never seem to get worked in."
ReplyDeleteYes, I think there's a lot of this.
As people become parents later in life, the gulf between what a child can afford when they move out on their own and their standard of living the last year(s) in the family home becomes wider.
ReplyDeleteI think that probably does color expectations over time quite a bit. My stepfather was eventually quite wealthy, but I grew up in a second-floor apartment, then a duplex, and only at the very end a three-bedroom ranch. The day I left the family home in order to head for college was actually almost exactly the pivot day for them moving to a wealthy Boston suburb. They were upper middle class and more from that day forward. I only was for two summers and other vacations.
ReplyDeleteTherefore, I did not fear any stigma of living in a cheap apartment and then a very small (800sf) house when first married. But we know young people who are quite uncomfortable even considering such accommodations now.
We've accumulated a number of things (e.g. tools) over the years as we needed them, and by now everybody's used to me having what's needed. Right out of the gate, first year in college, all I had was a couple of screwdrivers and a pair of pliers. Huge gap ...
ReplyDeleteNote the radical change with the implementation of Keynesian countercyclical policy.
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