John Stossel’s Tall Tales About Middle Class Income
For reasons that have long escaped me, ABC News thinks it’s a good idea to have a fanatical libertarian pundit on their payroll and presented as a newscaster. They don’t balance him with any social conservatives. They don’t balance him with any liberals. They don’t even balance him with any opinionated moderates. Instead, ABC News puts out a product that’s mostly banal TV news and sometimes 100-proof “we should let corporations do whatever they want,” often riddled with errors. Apparently the pundit in question, John Stossel, has a special coming out later today and he’s been hyping it on various conservative media. Hence this exchange on the Bill O’Reilly show:
O’REILLY: Do you believe the middle class in 2009 is worse off than it was 20 years ago in this country?
STOSSEL: No, I think the middle class is much better.
O’REILLY: Because that’s the liberal line. The liberal line is the middle class get pounded and they need my money and your money. You make an enormous amount of money, Stossel. The middle class needs our money because they just can’t keep up. But what about the middle class?
STOSSEL: The middle class has gone from something like $25,000 average income in today’s dollars to $75,000 today.
The basic liberal line is that middle class wages have stagnated for decades while the rich have gotten richer. I think you can make a credible counterargument that since the CPI doesn’t properly account for “new goods” (nobody had an iPhone or a DVD player in 1988, etc.) that this factoid is unduly bleak and actually there have been modest improvements in living standards due to the improvements in available gadgets. Alternatively, you could argue that this is offset by things like the increase in commute times, the decrease in air travel quality, and other elements of quality of life that have been on the decline. What you can’t really argue with is this chart that shows that something’s gone amiss:
I got that chart from Heather Boushey, one of our economists here at CAP. The other salient point here, of course, is that it’s hard to understand where Stossel got this $75,000 figure. One assumes that the median American household has a middle class income. And the median American household has an income of about $50,000 a year. That’s a lot less than Stossel’s number. Heather and I both immediately thought of some work Third Way’s done that’s probably the source of Stossel’s “finding.” In particular, Third Way (a valued progressive ally!) points out that “in 2006, the median income of working-age husband-wife couples (ages 25-59) was $73,765.” By this standard, Stossel is only being a little inaccurate about the current level of middle class income, though nobody can say where this trend information comes from. On the other hand, it’s not clear why you would redefine “middle class” from meaning “similar to the typical American” to meaning “married couples aged 25-59.” It’s interesting that married couples ages 25-59 have an average income that’s a lot higher than the income of the median American, but it’s not clear what this tells us about middle class well-being.
Here’s another chart:
One thing you could say on behalf of the Stossel/ThirdWay approach is that the ideal of a married household ages 25-59 encompasses the very essence of middleclassitude and everyone else doesn’t really count. Thus it turns out that the average middle class family makes about $75 grand a year. But all that follows from this, if you look at the chart above, is the conclusion that the United States doesn’t qualify as a “middle class” society. Instead, perhaps, we’re a country like Pakistan or Brazil (SEE CORRECTION BELOW) where there’s a tiny hyper-wealthy elite such that one percent of the population monopolizes 20 percent of the income, then there’s a larger middle class, and then a broad majority of the population that has a sub-middle class standard of living.
That, however, isn’t the standard way of thinking about a developed world democracy, and I don’t see any particular reason we should adopt it. Instead, the typical American family is a middle class family, and it’s quite a bit poorer than Stossel suggests and has been suffering from a long period of wage stagnation. I would also note that the aforementioned Third Way report was from a little while back and includes the claim that progressives are wrong to worry about rising indebtedness because those debts have been paired with rising asset values. Joke’s on them. Or the American people.
153 Responses to “John Stossel’s Tall Tales About Middle Class Income”
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March 13th, 2009 at 11:42 am
Umm, paging Ms.Palmieri…
March 13th, 2009 at 11:46 am
This guy really bugs me too. I wrote a diary about him on Daily Kos but nobody took it seriously. Stossel has way more access to the general public than any Rick Santelli and he is presented a real journalist on 20/20. I am sure his hit job tonight will be pure bunk. I was trying to organize a protest to get it pulled, but like I said, nobody at Kos cared.
We have to fight these ideological losers non-stop.
March 13th, 2009 at 11:46 am
Instead, NBC News puts out a product that’s mostly banal TV news and sometimes 100-proof “we should let corporations do whatever they want,”
You probably meant “200-proof.”
March 13th, 2009 at 11:48 am
I, for one, welcome our new Third Way overlords
March 13th, 2009 at 11:49 am
Okay, but you really don’t even need to go to the lengths of arguing that the average income of a married couple ages 25-59 is an inappropriate measure. I think it could be very interesting to look at something like that. But you can’t claim an increase by switching references! Let’s look at the progress of that average over the last 25 years. Given the median wage growth over that time, I’m pretty confident it won’t have seen any more of an increase. It’s not like we’ve been loading up on really old people or young people to bring our overall averges down.
March 13th, 2009 at 11:50 am
Great post.
March 13th, 2009 at 11:50 am
no, young man, i don’t think you can make a credible argument that the awesomeness of iphones means that the middle class is actually doing considerably better than it appears.
that is actually a “ridiculous” argument, down at the low end of your normal quality of ideas.
what is a “credible” argument, btw, is that when your health care out-of-pocket goes up, that’s not reflected in CPI, and considering that health care out of pockets have gone up since 1988, that more than offsets the swell convenience that the iphone offers its adherents.
March 13th, 2009 at 11:53 am
Instead, perhaps, we’re a country like Pakistan or Brazil where there’s a tiny hyper-wealthy elite such that one percent of the population monopolizes 20 percent of the income, then there’s a larger middle class, and then a broad majority of the population that has a sub-middle class standard of living. That, however, isn’t the standard way of thinking about a developed world democracy, and I don’t see any particular reason we should adopt it.
Why not? That’s what we’re turning into. We’ve taken the Third Way and now we’re a Third World banana republic! Yay!
max
['Thanks, Third Way!']
March 13th, 2009 at 11:56 am
I can’t think of John Stossel without this immediately coming to mind:
http://www.youtube.com/watch?v=zrX9Ca7LSyQ
March 13th, 2009 at 11:57 am
what was the median income of working-age husband-wife couples (ages 25-59) in 1986?
March 13th, 2009 at 11:58 am
It’s not hard guys…the scam is that if you want to make more money you’ve got to own your own business. There are hundreds of thousands of people willing to show up and have a nice safe job as an engineer, or technician, or even attorney. Very few are willing to roll the dice and risk their life savings to start up somethign that’s their own.
When they do, and are successful, they expect future productivity gains to be theirs to capture. After all, there are hundreds of thousands of people willing to work for nice safe bi-weekly salary, for the most part you could fire and replace anyone…sure it might take a few months to get the new guy up to speed, but it’s better than paying everyone an additional 20% that their increased productivity has given you.
you want the gains from your productivity, it’s there for the taking
March 13th, 2009 at 11:58 am
After playing all those Jon Stewart clips I have developed a serious day-dreaming problem. Now everytime I see one of these egotistical idiots like Stossel screeching some nonsense, I imagine Stewart eviscerating him.
March 13th, 2009 at 12:03 pm
Sure, you Can make that argument. But the only people doing so are over-privileged douche bags trying to justify their obscene wealth while fucking the American peope in the ass.
March 13th, 2009 at 12:05 pm
Mr. Jenkins corporate cosmology has many manifestations.
March 13th, 2009 at 12:06 pm
Why did you write NBC when you meant ABC?
March 13th, 2009 at 12:11 pm
The $75K seems like a reasonable characterization of the mid aged population range (25 to 59) but where does Stoessel’s claim about the starting value for 1988 (”$25,000 in today’s dollars”) come from? That’s what drives his contrast.
March 13th, 2009 at 12:11 pm
love you man, but have to point out the irony that you have a sentence “NBC News puts out a product…riddled with errors.” when I think you meant ABC
March 13th, 2009 at 12:18 pm
ABC plays nice with loons like Stossel because it protects them from being called “butt boys” by Limbaugh. Stossel was even on Limbaugh this week. Bottom line is that Stossel will provide cover for any recent conservative ridiculous talking point: global warming is a hoax, tax breaks raise revenue, middle class is doing AWESOME
March 13th, 2009 at 12:18 pm
It’s interesting that married couples ages 25-59 have an average income that’s a lot higher than the income of the median American, but it’s not clear what this tells us about middle class well-being.
To be nit-picky, it’s not interesting, it’s exactly what you’d expect. Husband and wife couples will, by definition, contain many two-income households. The median American’s income will, by definition, only ever contain one. Two incomes will, generally speaking, add up to more than one income.
What I’d really like to know is where he got his $25K figure. Is it really true that the typical married household has gotten 3x as wealthy, in constant dollars, in the past 20 years? That’s a breathtaking statement.
March 13th, 2009 at 12:19 pm
you want the gains from your productivity, it’s there for the taking
Unionize!
March 13th, 2009 at 12:23 pm
Other data point on the 25k-75k thing:
For that to be the case, married-couples’ gross household income would have to grow at an annualized 10% per year, every year, after inflation, which makes it more like 12% per year.
March 13th, 2009 at 12:27 pm
Something else to consider is whether how many of these typical $75,000 a year earning couple have both spouses working vs. how many were two earner househodls back in the day.
March 13th, 2009 at 12:28 pm
I just looked at real compensation per hour and it has grown by 50% from the 70s.
I know the differences between average and median but how much is Matt ignoring by not including all forms of compensation?
March 13th, 2009 at 12:30 pm
Isn’t it OBVIOUS why he picked married couples 25-29? This is largely two income couples before they have kids. Once they have kids, precisely when they need more income to raise them, is when they will no longer have $75K in income.
March 13th, 2009 at 12:31 pm
So the typical middle class household income was something like $15k back 20 years ago? Ok Stossel, whatever you say.
March 13th, 2009 at 12:33 pm
Married couples with children saw their real median income rise 25% from 1969 to 1996; there was a 6% increase in the median household income over that time period.
Stossel is obviously full of shit.
March 13th, 2009 at 12:34 pm
Stossel’s videos are a mainstay in the economics and civics classes my children have taken, perhaps because they’re often made available for free.
Teachers will use almost anything that’s free…..
March 13th, 2009 at 12:41 pm
Though I agree with the post & esp. with the comments pointing out the absurdity of the 25k – 75k comparison, this Atlantic article http://www.theatlantic.com/doc/200901/chuck-schumer
on Chuck Schumer did make a similar and interesting distinction about the “real” middle-class being wealthier than we typically think. The crux of the argument:
“The median-household-income statistic is too blunt an instrument, because it includes households headed by 20-year-olds (i.e., students) as well as 90-year-olds (i.e., retirees). If you earn $48,000 at 20, you’re doing fine and don’t need government help; at 90, you’re on a fixed income and have different needs (and more options) from government than someone younger. According to an analysis by Third Way, the median household income for people ages 25 to 60, the prime working years, is about $68,000; if they’re married, it’s about $78,000. If both spouses earn income at some point during the year, the number rises to $85,000. So the “middle class” most Democratic politicians imagine—that is, typical working-age families—is actually much higher on the income ladder than they realize, somewhere more in the range of $60,000 to $100,000.”
I can’t stand Chuck Schumer, but I think there’s real validity to revising the focus when talking about middle-class policies.
March 13th, 2009 at 12:41 pm
This information just reflects the fact that more households are dual income than they were in the past. Its difficult to live, save and send kids to college if both parents don’t work. Stossel isn’t presenting the whole story. But why would he? Then he couldn’t push his agenda.
March 13th, 2009 at 12:41 pm
For a number of reasons, not least the well-known deficiencies of the CPI, real median wage data is a worthless indicator of changes in middle-class living standards over time. The use of wage data to support the false narrative of middle-class “stagnation” is one of the great lies of contemporarary liberalism. Fortunately, there are a few liberal economists who are honest enough not to go along with this scam, such as Jason Furman.
March 13th, 2009 at 12:46 pm
That’s incredibly depressing.
March 13th, 2009 at 12:46 pm
32—>27
March 13th, 2009 at 12:51 pm
Excellent analysis of Stossel.
But let’s be clear about one thing: Third Way is a bunch of self-promoting weasels. Seriously.
March 13th, 2009 at 1:00 pm
Liberals Stephen Rose and Jason Furman, among others, seem to agree with John Stossel. From the American Prospect. Here’s Rose:
And here’s Jason Furman:
March 13th, 2009 at 1:01 pm
Household demographics matter. 40 years ago 40% of households in the country were married couples with children. If we were to roll the comparison forward 40 years looking just at that group, we’d see roughly what Stossel says. (And, no, we shouldn’t just look at wage levels, because as Matt knows those leave out a large and increaseing share of compensation.)
The household income numbers are affected by relative affluence. Seniors and young adults don’t live as they did a generation or two ago–because they have enough money to live independently.
March 13th, 2009 at 1:03 pm
Are we really reduced to comparing medians and means?
March 13th, 2009 at 1:16 pm
MattY, MattY’s employer (the Center for American Progress) and Stossel do agree on one thing though: we can’t give the Mexicangovernment enough political power inside the U.S. For some reason, MattY, CAP, and Stossel all want to help give that corrupt government even more power in our country and want to help them profit from illegal activity in our country.
So, at least they’ve got that in common.
March 13th, 2009 at 1:24 pm
What’s needed is something like a “well being index” which consists entirely of housing, clothing, food, education, and health care. The truth is that greater access to various shiny doo-dads simply isn’t all that relevant to the question of an individual’s or a family’s overall well being. And, as others have noted, if you’re going to consider family incomes it is also then necessary to compare the total number of hours worked to achieve those benefits. My guess is that you would find that any seeming improvements are all but wiped out when you take in to account the increase in the number of families who depend upon dual full time incomes in order to maintain the same standards of living.
March 13th, 2009 at 1:30 pm
It puzzles me. If you are going to use hedonics, then, obviously, someone making a million or ten million dollars has to be hedonically inflated too. So you made ten million in 1975, well, it is equivalent to whatever – 25 million now. So it seems like a great idea to do what O’Reilly suggests – take loads of money from these people. After all, what is the worst that can happen? They’ll still be millionaires. In fact, if we take almost everything, they will end up in the lucky ducky poor class and just roll around all day on the dole. I’m not quite sure why the “best and brightest” want to keep working at all when such a shining prospect – all the cardboard you can sleep on, free food if you can find it – is there before them.
I think the era of convincing the middle class that it isn’t having its pockets picked is over, though. Interesting to see if Strossel actually attracts anybody outside of the Alborg set to see his show.
March 13th, 2009 at 1:37 pm
It’s ridiculous to argue we’re worse off than we were in 1989.
The fair point is that the middle class has worked our asses off since 1989, and someone else has benefited from it. It’s a given at this point that being middle income means being a dual-income family, with both parents working. That’s fucking HARD.
In the 1980’s, Reagan argued that the reason middle class people hadn’t benefited from their hard work was because liberals had stolen it from them in taxes and given it to poor people, and they’d stifled economic growth by not letting powerful companies do what they wanted to. So, he and his successors lowered the top tax brackets, busted unions, deregulated, and paid for it with a huge deficit. And middle class people spent the next 30 years working harder and harder and getting less and less as the national credit card ran up.
Now, after 30 years of believing the Republican lie that liberals were stealing their money and giving it to poor people, this complete collapse has revealed the Republicans were total liars. The people who were getting all the money were CEOs and Wall Street guys. We got iphones and houses, and we just lost our retirement. As John Stewart said last night, we paid for their great adventure, they set our 401ks on fire and then got out of it rich!
It’s amazing that no one in the Democratic party seems to be realizing that the rules have changed. People KNOW they were lied to by the Republicans. They are SICK of them. They just figured out the problem isn’t that we had too much government, it’s that the government wasn’t working for them!
Dems should just do what they know works for people, and not worry about how to sell it. Pass EFCA, pass healthcare reform, put in a new 50% marginal tax bracket on people earning over 1.5 million. Pass another stimulus if you have to. All these things will be good for the middle class. Just do them. Seriously, this is the time. Don’t worry about voters buying into whether they “should” or “shouldn’t” work–voters have no idea. Just do what you know WILL work, and prepare to be judged on the outcomes.
This is a once-in-a-generation chance to change the conversation. It’s Teddy Roosevelt, trustbusting and the income tax; FDR and Social Security. Go long with what works for the majority.
March 13th, 2009 at 1:38 pm
I think the era of convincing the middle class that it isn’t having its pockets picked is over, though.
Bingo. They know rich people are stealing from them. It’s time for government to show it’s got the balls to steal it back for them.
March 13th, 2009 at 2:03 pm
What’s needed is something like a “well being index” which consists entirely of housing, clothing, food, education, and health care.
If you seriously think you can show that the housing, clothing, food, education and health care of middle-class Americans today is no better, or only slightly better, than it was in the 1970s, please do so. The truth is that Americans are vastly better off in these areas than they were 30 or 40 years ago.
March 13th, 2009 at 2:05 pm
WOW ANONYMISS! That was electrifying!
Whoo. I’m all breathless now.
March 13th, 2009 at 2:07 pm
He’s claiming that median income has tripled.
The US census reports that married-couple families had median income in 2006 dollars of $69,404 in 2006. In 1989, the figure was $60,518 in 2006 dollars – an increase of 15%, not 300%.
And if you look at all families, not just married-couple families, the median peaked in 2000 and then started down.
http://www.census.gov/hhes/www/income/histinc/f07ar.html
I think he’s making shit up.
March 13th, 2009 at 2:08 pm
put in a new 50% marginal tax bracket on people earning over 1.5 million.
Right. And ponies for everyone. Get out your magic wand……
March 13th, 2009 at 2:25 pm
He’s claiming that median income has tripled.
No, according to Matt’s quote, he said: “The middle class has gone from something like $25,000 average income in today’s dollars to $75,000 today.”
The US census reports that married-couple families had median income in 2006 dollars of $69,404 in 2006. In 1989, the figure was $60,518 in 2006 dollars – an increase of 15%, not 300%.
He didn’t say “married-couple families.” He didn’t say “median income.” He didn’t say he was referring to money income as reported by the Census Bureau. He’s probably referring to all income, including the value of non-cash benefits such as health care.
March 13th, 2009 at 2:26 pm
anders,
The point is that household expenditures for housing, clothing, food, education, and health care have risen faster than general inflation with only marginal improvements in quality (if any at all). Again, wood floors and granite counter tops completely and utterly irrelevant to well being. On brand or off brand is irrelevant to the question of how well clothes serve their purpose. And more diagnostic testing is irrelevant if it doesn’t translate to better health outcomes.
I will give you food though. Most people’s expenditures (as % of income) have gone up but their is a significant substitution effect in play as people have exchanged money for leisure time by purchasing more prepared foods and fewer raw staples.
March 13th, 2009 at 2:32 pm
And the increase in household debt.
March 13th, 2009 at 2:32 pm
Eric H,
The point is that household expenditures for housing, clothing, food, education, and health care have risen faster than general inflation with only marginal improvements in quality (if any at all).
I ask again: Show me your evidence that housing, clothing, food, education and health care of middle-class Americans today is no better, or only slightly better, than it was in the 1970s or 1980s. Simply repeating your unsubstantiated assertion does nothing to support it. Where’s your evidence?
March 13th, 2009 at 2:33 pm
Oh, as for education, it’s both better and worse. More people are college educated, which is good, but the market value of that education in terms of future earnings is less.
March 13th, 2009 at 2:36 pm
Listen morons, Stossel said income for a particular group of people had tripled over 20 years.
You can’t fucking defend this by saying “it obviously hasn’t gone down” or “it’s gone up 15% in cash terms, but that doesn’t count happiness.”
March 13th, 2009 at 2:36 pm
anders,
It seems manifestly obvious to me so I’m not terribly interested doing the yeoman’s work necessary to substantiate it. Perhaps I could be induced to do so if you could provide even anecdotal accounts which challenge my intuitions.
March 13th, 2009 at 2:42 pm
For instance, take housing. What real improvements have been introduced to housing since advent of indoor plumbing and and electrification?
March 13th, 2009 at 3:07 pm
How are Stossel’s Nielsen Ratings?
Hmm…10 million households for a recent special.
Granted, it doesn’t compare to selling almost 500 copies of foreign policy book, but one takes what one can get.
March 13th, 2009 at 3:13 pm
John Stossel and his boy Bernard Goldberg are lying goatfucking sacks of shit. These two fucktards are nothing but semi-intelligent version of Glen Beck and Sean Hannity.
March 13th, 2009 at 3:14 pm
Again, wood floors and granite counter tops completely and utterly irrelevant to well being. On brand or off brand is irrelevant to the question of how well clothes serve their purpose. And more diagnostic testing is irrelevant if it doesn’t translate to better health outcomes.
Then why the hell are people buying those things and not instead using the money to actually increase their well being?
March 13th, 2009 at 3:14 pm
It seems manifestly obvious to me so I’m not terribly interested doing the yeoman’s work necessary to substantiate it.
I can only assume it seems “manifestly obvious” to you because you are just mindlessly repeating liberal talking points that you read on some left-wing website. Here’s an idea: Try thinking for yourself. Try educating yourself. Try actually learning something, instead of just uncritically believing what someone else told you.
To illustrate your ignorance, here’s some actual data on educational attainment: http://www.census.gov/population/www/socdemo/educ-attn.html. See Table A-2. Percent of People 25 Years and Over Who Have Completed High School or College, by Race, Hispanic Origin and Sex: Selected Years 1940 to 2007. As you can see, educational attainment has been increasing continuously since at least 1940. In 2007, a record 28.7% of Americans over 25 had completed 4 years of college or more. In 1980, it was just 17%. College education rates are also at a record high for under-25s. So are high school education rates. Americans are better educated than ever, and much better educated than they were even just 20 or 30 years ago.
It’s the same story for the other things you mention. Try looking up some actual information about how the size and quality of housing has increased since the 1970s. And about the vast range of new and improved medical tests, drugs and surgical procedures that have arrived over the past 30 years. And about the vastly greater variety of foods and beverages that Americans now enjoy compared to the 1970s and 1980s. Almost every class of products and services Americans consume have improved greatly over the past generation or two. “Middle-class stagnation” is a crock of shit.
March 13th, 2009 at 3:22 pm
Eric H, since you seem to think that none of those things are actually any better, how about you commit to never using any medical care that did not exist 30 years ago. Same for housing, electronics, automobiles, and communications. Sound like a deal? You won’t be any worse off, all that stuff was just as good and cost the same in real dollars back then right?
March 13th, 2009 at 3:29 pm
Average square footage of new single-family homes:
1950: 983 sq ft
1970: 1,500 sq ft
1990: 2,080 sq ft
2004: 2,349 sq ft
Source: National Association of homebuilders.
From the 2007 Census Bureau report on new housing characteristics:
In 2007:
The average single-family house completed had 2,521 square feet, 801 more square feet than in 1977.
38% of new single-family homes completed had four or more bedrooms, almost double the rate of 20 years ago.
27% of new single-family homes sold had 3 or more bathrooms, nearly triple the rate from 1987.
90% of all single-family homes completed had air conditioning.
Nearly 20% of new single-family homes sold had at least a 3 or more car garage.
The average square feet in multi-family units completed and built for sale was 1,577. This was 217 more square feet than in 1999.
March 13th, 2009 at 3:34 pm
Talking about the new toys we can buy today is just a way of changing the subject that wages in constant dollars have been flat and that household income has not increased proportionate to household labor participation. Abraham Lincoln never had a cell phone. Great, but meaningless. Just a cheap excuse to change the terms of the debate from the obvious and quantifiable to the distracting and qualitative. Long-distance phone calls are cheap, but utilities are a greater share of my budget. See? Changed the subject it did!
Even bringing in healthcare expenses to employers doesn’t offset the losses because part of that expense is the increase in the cost of healthcare — and its rationing. 30 years ago, I didn’t have to fight my insurance company for a wellness physical.
Stossel has his pile and thinks everyone else can go rot. That’s why he’s a sociopath (though we call them “libertarians” in polite company).
March 13th, 2009 at 3:35 pm
And here’s an illustration of the advances in health care over the past 30 years:
March 13th, 2009 at 3:39 pm
Heart attack mortality data is a “worthless indicator” of how health outcomes change over time, because people who don’t die of heart attacks will still die of something else. AmIrite?
March 13th, 2009 at 3:43 pm
anders,
I’m a long since reformed libertarian who used spew same asinine nonsense you are now. I’m quite familiar with the arguments. The difference being that I have come to believe that the so called “improvements” mostly amount to giant pile of steaming horse shit.
As I said previously, education is a mixed bag. More people are educated but the economic value of that education has diminished. Now I’m an education for education’s sake sort of fellow, so I can applaud a more broadly educated public. But that doesn’t alter the fact that education costs more and confers fewer advantages than it previously did.
With regards to housing, above a certain threshold I categorically reject the idea that size is an improvement. And most of the so called quality improvements are nothing other than shiny doo-dads. I’ve lived in housing built during the 50’s which hadn’t been updated in any significant way and I’m presently living in housing built within the last 5 years and they’re entirely substitutable insofar as I’m concerned. The biggest advantage of newer housing being energy efficiency but that’s entirely offset by higher energy costs (when comparing standards of living between the 50’s and the present).
Relative to the eighties, yes, we have made tremendous strides in improving medical care at the margins (eg., cancer treatment and organ transplants), but the median experience with health care is that it much more expensive and the results aren’t tangibly any better. Penicillin and indoor plumbing were last real world changing advances in health.
I don’t dispute that we’ve gotten better at indulging the polymorphous perversity of consumptive desire, I’m arguing that ultimately that amounts to fuck all.
March 13th, 2009 at 3:49 pm
household income has not increased proportionate to household labor participation.
Yes it has. You don’t know what you’re talking about.
Abraham Lincoln never had a cell phone. Great, but meaningless.
You are perfectly free not to use a cell phone, or any phone, if you seriously you think they are “meaningless.” Given the fact that cell phones are ubiquitous in our society, and that virtually every household in America has at least one phone of some kind, it’s clear that the vast majority of Americans value these devices greatly. You have to be really, really really stupid not to recognize the huge value that instantaneous communication over any distance has brought to our society.
Long-distance phone calls are cheap, but utilities are a greater share of my budget.
A greater share of your budget than what? And so what? Is there a point to this bizarre half-baked assertion?
the increase in the cost of healthcare
The cost of health care has increased because the quality of health care has increased. A vast range of new drugs, new tests and new surgeries.
March 13th, 2009 at 3:55 pm
Than they were a generation ago. … which was the point.
In that case, the FT wouldn’t have found that the quality of Americans’ health was poorer than that of the UK, even though they spend half as much per capita. But they did.
I’ve already been through these numbers time and again, but I’ll just throw these two boners of yours out to show that you’re either stupid or dishonest.
March 13th, 2009 at 3:58 pm
AB,
I like my toys as much as the next guy. That isn’t what’s at issue. The point being that the present abundance of toys doesn’t offset the fact that it takes substantially more to meet our basic needs today than it did 30 years ago.
The health care bargain is an interesting one. Statistically speaking I’d be better off paying the health care premiums of 1980 in exchange for the quality of health care I received in 1980, but I’m not entirely sure I would take that bet considering I’m presently helping to take of my father who is recovering from a cancer which would probably have killed him 30 years ago. The fear of death induces irrationality.
March 13th, 2009 at 4:00 pm
Third Way (a valued progressive ally!)
Just wanted to let you know someone got a chuckle out of that.
March 13th, 2009 at 4:10 pm
More people are educated but the economic value of that education has diminished.
No, it hasn’t. You’re spouting nonsense again. Educate yourself.
But that doesn’t alter the fact that education costs more and confers fewer advantages than it previously did.
More nonsense. Almost everything “costs more” because of inflation. But our real wealth has increased greatly. That’s why so many more Americans now have a college education than was the case just 30 years ago.
With regards to housing, above a certain threshold I categorically reject the idea that size is an improvement.
What threshold is that? If you personally don’t care how big your housing is, fine. But you don’t get to decide that for other people.
And most of the so called quality improvements are nothing other than shiny doo-dads.
Ha ha ha! Yes, things like bathrooms and bedrooms and garages and heating and cooling and space and comfort are just “shiny doo-dads.” They’re not examples of real wealth, just worthless trinkets. Where do you get this nonsense?
Relative to the eighties, yes, we have made tremendous strides in improving medical care at the margins (eg., cancer treatment and organ transplants), but the median experience with health care is that it much more expensive and the results aren’t tangibly any better.
Yet again with the nonsense. What part of “From 1980-2000, the overall mortality rate from heart attack fell by almost half, from 345.2 to 186.0 per 100,000 persons” don’t you underdstand? Heart disease is just one example, of course. A particularly important one because it is so common and serious. But across virtually the whole range of diseases and disorders, health care has advanced since the 1970s and 1980s.
I don’t dispute that we’ve gotten better at indulging the polymorphous perversity of consumptive desire, I’m arguing that ultimately that amounts to fuck all.
That’s a philosophical claim, not an economic one. If you personally think living in a hut, growing your own food, making your own clothes and living off the land is a more fulfilling life than participation in modern American society, with all the wealth you deride as “shiny doo-dads,” then go for it. No one’s forcing you to enjoy the benefits of our modern economy and technology. But you don’t get to decide for other people what’s valuable to them.
March 13th, 2009 at 4:20 pm
But across virtually the whole range of diseases and disorders, health care has advanced since the 1970s and 1980s.
And yet people who avoid dying of one thing always die of something else. Why is heart mortality data so much more convincing to you than CPI-adjusted income data? The flaws in connecting those measures to quality of life are quite similar.
March 13th, 2009 at 4:20 pm
The point being that the present abundance of toys doesn’t offset the fact that it takes substantially more to meet our basic needs today than it did 30 years ago.
No, it doesn’t. You’re spouting nonsense yet again. The real cost of “basic” food, “basic” housing, “basic” clothing, etc. has never been lower. The fact that we spend more on food, housing, clothing, etc. than we used to doesn’t mean it costs more to meet our basic needs. It means that we are so much richer than we used to be that we can afford to buy much more and much better food, housing, clothing, etc. That’s why the quality and quantity of these products has increased so much. If you aspire merely to meet your “basic needs,” fine. But most people’s aspirations for wealth and comfort go far beyond meeting their “basic needs.”
March 13th, 2009 at 4:24 pm
Talking about the new toys we can buy today is just a way of changing the subject that wages in constant dollars have been flat
Then clearly you don’t understand what it means to say “wages in constant dollars”. Constant dollars means adjusting for the increase in price of a given basket of goods, but if the basket of goods now is far, far superior to the one 30 years ago (which it undeniably is) then your calculation of “constant dollars” is inadequate. And the way you just casually dismiss something as important as the cell phone and the effect it has had on productivity, utility, and convenience shows that you’ve already come to the conclusion that we’re worse off and are trying to work backwards from there.
30 years ago, I didn’t have to fight my insurance company for a wellness physical.
Yes, because 30 years ago you were not competing for finite medical resources (and the funds to provide those resources) with hundreds of thousands of people getting life-saving treatments that had not even been invented yet. I will present you with the same question as Eric H: would you give up your personal access to all medical care that was not available 30 years ago in exchange for not having to “fight your insurance company for a wellness physical”?
March 13th, 2009 at 4:26 pm
And yet people who avoid dying of one thing always die of something else.
So what? Are you saying that you think health care is worthless beyond everyone dies of something eventually? Or what? What’s the point of this bizarre nonsequitur?
Why is heart mortality data so much more convincing to you than CPI-adjusted income data?
Because income data is just abstract numbers whereas heart mortality data measures tangible life-or-death outcomes.
March 13th, 2009 at 4:30 pm
There is something funny about all of these claims about the benefits of progress: they are utterly irrelevant to the topic at hand. You haven’t demonstrated in any meaningful way that, say, the existence of cell phones is evidence that we need to shower the rich with more wealth. We have plenty of evidence that there are other countries where wealth is far less concentrated. They have modern conveniences too, and they also somehow manage to do better on numerous indicators of well-being.
We are better off in some ways to be sure – but it’s simply a dishonest dodge because that isn’t the question. Would we be better off if we had not shoveled so many resources into the hands of a few? The evidence that I see gives an unambiguous answer of “yes”. There has been massive fraud; massive underinvestment in the long-term health of the country; and the middle class has stagnated in numerous quantifiable metrics. In order to understand why the argument here is so ludicrous – there are plenty of cell phones in repressive countries all over the planet, and they can get the internet too. Would you take it seriously if a defender of the regime in Burma used this as a defense of their system?
March 13th, 2009 at 4:36 pm
anders,
Are you seriously arguing that a 4 year degree confers the same advantage in terms of relative future earnings potential today as it did 30 years ago?
Almost everything “costs more” because of inflation.
No shit? The point is that the rising costs of education, medical care, and housing have exceeded general inflation. Food and clothing are little more difficult to ascertain.
What threshold is that? If you personally don’t care how big your housing is, fine. But you don’t get to decide that for other people.
I most certainly do when my taxes subsidize the building of roads and other infrastructure necessary to facilitate the endless suburban/exurban sprawl which allows for other people’s big houses. And then there are the various environmental externalities to consider.
Yes, things like bathrooms and bedrooms and garages and heating and cooling and space and comfort are just “shiny doo-dads.” They’re not examples of real wealth, just worthless trinkets. Where do you get this nonsense?
So 30 years ago people were lacking things like bedrooms and bathrooms and garages and heating and cooling? I know it’s been a while, but that is distinctly not how I remember it.
Yet again with the nonsense. What part of “From 1980-2000, the overall mortality rate from heart attack fell by almost half, from 345.2 to 186.0 per 100,000 persons” don’t you underdstand?
What I understand about that statistic, which you are conveniently overlooking, is that it only makes a difference for 156 people out of every 100,000. It’s an improvement at the margin as I said.
If you personally think living in a hut, growing your own food, making your own clothes and living off the land is a more fulfilling life than participation in modern American society, with all the wealth you deride as “shiny doo-dads,” then go for it.
Pardon? I thought we were comparing the living standards of 1980 (or at least 1970 or 1950) and the present. I’m an unabashed fan of electricity, indoor plumbing, and the division of labor which allows me to not have grow my own food.
That’s a philosophical claim, not an economic one.
All economic claims entail philosophical ones.
March 13th, 2009 at 4:39 pm
anders, what’s with the black-and-white thinking?
The CPI index is an adjustment to allow for income comparisons between different years. Clearly this isn’t *irrelevant*; your argument is simply that it *understates* the improvement in living conditions over time.
Similarly, heart mortality data isn’t irrelevant, but it *overstates* the improvement in health care, because people are still dying of other causes.
March 13th, 2009 at 4:53 pm
The point being that the present abundance of toys doesn’t offset the fact that it takes substantially more to meet our basic needs today than it did 30 years ago.
No it doesn’t. That is simply not true, and the “abundance of toys” ought to tell you a little something about how much it costs to provide basic needs.
The health care bargain is an interesting one. Statistically speaking I’d be better off paying the health care premiums of 1980 in exchange for the quality of health care I received in 1980, but I’m not entirely sure I would take that bet considering I’m presently helping to take of my father who is recovering from a cancer which would probably have killed him 30 years ago. The fear of death induces irrationality.
It is not irrational. We’ve grown more wealthy, so we choose to spend more of that wealth on things like increasingly sophisticated medical care. Not to mention cell phones, satellite TV, and bigger houses with central air.
The argument seems to be that if you get a raise and start eating filet mignon instead of top round steak, that your income didn’t actually increase because the cost of buying beef has increased and washed out the effect of your higher income, ignoring the fact that you’re eating better beef.
March 13th, 2009 at 4:53 pm
anders,
The real cost of “basic” food, “basic” housing, “basic” clothing, etc. has never been lower.
Food and clothing I’ll give you, but it’s definitely not true that “basic” housing, health care, and education are less in terms of constant dollars now than they were 30 years ago.
March 13th, 2009 at 4:57 pm
AB,
The argument seems to be that if you get a raise and start eating filet mignon instead of top round steak, that your income didn’t actually increase because the cost of buying beef has increased and washed out the effect of your higher income, ignoring the fact that you’re eating better beef.
No. I’m pointing out that the costs of housing, health care, and education have all exceeded inflation over the last thirty years and that whatever improvements in quality there may have been they do not offset the increased costs.
March 13th, 2009 at 5:10 pm
“The point is that household expenditures for housing, clothing, food, education, and health care have risen faster than general inflation with only marginal improvements in quality (if any at all). ”
Houshold EXPENDITURES are up, but not for the same thing. If you wanted a small house with one bathroom for 4-6 people and only 2 bedrooms, a tiny kitchen and maybe a small living room, post-housing bubble you can get it at not-dramatically above 1980s prices. (And that may be because the bubble isn’t over yet).
Food you have no point at all. The selection difference available for almost all food is dramatically better now than it was in the 1970s or 80s. You can have various cheeses, meats, vegetarian fare, and exotic foods now that weren’t available to your average consumer then. And for about the same prices as awful food from the 1980s. And if you did direct comparisons (American cheese, bad white bread, 2nd rate hamburger) you’d find that the prices are lower now in real terms.
Clothing? People would wear their shoes till the dropped off and hand-me-downs were very typical. The fact that we spend more on clothing is proof of affluence not the reverse.
Health care is similar. For pretty much any drug that was available at the time, the cost is MUCH lower. Same with a large number of procedures, and the others aren’t more expensive they are just level. The problem is that you want to take advantage of the MASSIVE technological improvements in the time period and make the costs go away. That isn’t realistic.
I think education may be the only area where you have a point.
March 13th, 2009 at 5:11 pm
“No. I’m pointing out that the costs of housing, health care, and education have all exceeded inflation over the last thirty years and that whatever improvements in quality there may have been they do not offset the increased costs.”
You really aren’t making that point. The ‘unimproved’ goods that the middle class used to get are still available, except they are now staples among the poor. For the most part the increased costs are not mandatory, they are discretionary.
March 13th, 2009 at 5:20 pm
Are you seriously arguing that a 4 year degree confers the same advantage in terms of relative future earnings potential today as it did 30 years ago?
No, I’m seriously arguing that a much larger share of Americans today enjoy the economic benefits of a college education than did 30 years ago. Among your many absurd beliefs, you appear to think that the total amount of wealth is fixed, and that more wealth for one person therefore means less for another. It isn’t and it doesn’t.
The point is that the rising costs of education, medical care, and housing have exceeded general inflation.
No, they haven’t. You’re not comparing the same things. Education, medical care and housing are not fixed, unchanging commodities like a pound of coal. They are complex products that have improved dramatically over time. We pay more because we get more in return. We can afford to pay more because we are so much richer.
I most certainly do when my taxes subsidize the building of roads and other infrastructure necessary to facilitate the endless suburban/exurban sprawl which allows for other people’s big houses.
No, you don’t. You only get to decide what’s valuable to you. You don’t get to make that decision for other people. If you don’t value things like cell phones and a big house and hi-tech medicine, fine. But other people do value those things greatly. As well as lots of other products are services that you deride as “shiny doo-dads.”
So 30 years ago people were lacking things like bedrooms and bathrooms and garages and heating and cooling?
Yes. The evidence shows that Americans have more of those things today, and much better housing in general, than they had 30 years ago. Housing has improved greatly, just like virtually all other products and services. People are much richer.
What I understand about that statistic, which you are conveniently overlooking, is that it only makes a difference for 156 people out of every 100,000. It’s an improvement at the margin as I said.
Er, heart disease is the leading cause of death in the United States. If you seriously think cutting the mortality rate from heart attack in half is no big deal, you’re welcome to your opinion. I doubt Americans in general share that view. And heart disease is just an illustration, anyway. The broader point is that health care in general has improved dramatically. So your complaint that “health care is more expensive” is irrelevant. It’s like complaining that a Mercedes is more expensive than a Hyundai. It’s more expensive because it’s better.
I thought we were comparing the living standards of 1980 (or at least 1970 or 1950) and the present. I’m an unabashed fan of electricity, indoor plumbing, and the division of labor which allows me to not have grow my own food.
Huh? So “electricity” is a form of wealth, but the machines we use it to power are not forms of wealth, but merely “shiny doo-dads?” Is that it? “Indoor plumbing” is wealth, but having more than one bathroom isn’t?
March 13th, 2009 at 5:22 pm
Sebastian,
You really aren’t making that point. The ‘unimproved’ goods that the middle class used to get are still available, except they are now staples among the poor.
Rubbish. In 1970 I could have purchased a brand new house in Denver for fewer constant dollars than it would cost now for that exact same home with no improvements. Although, to be fair, I’d bet you can find a better deal now in Flint, Michigan or Youngstown, Ohio.
Food and clothing I’m willing to cede, but on health care the point isn’t that there haven’t been improvements but that those improvements don’t even begin to justify the outrageous increase in costs. As someone else pointed out above, the same improvements have delivered in other countries for substantially less.
March 13th, 2009 at 5:37 pm
The CPI index is an adjustment to allow for income comparisons between different years.
That’s right. An adjustment that, as Jason Furman points out “is almost universally believed to be biased.” It overstates inflation and therefore understates real income growth. That’s one reason why CPI-based measures of the change in living standards since the 1970s are so much lower than consumption-based measures that examine the quality and quantity of goods and services that people actually consume.
March 13th, 2009 at 5:44 pm
anders,
No, I’m seriously arguing that a much larger share of Americans today enjoy the economic benefits of a college education than did 30 years ago.
Which, as I said, is great. But the individual economic benefits are less and cost is greater.
Education, medical care and housing are not fixed, unchanging commodities like a pound of coal. They are complex products that have improved dramatically over time. We pay more because we get more in return. We can afford to pay more because we are so much richer.
Education and housing are more-or-less like a bucket of coal. Very little has changed with the education and a house built in the 70’s which has had no improvements done to it will cost you more now in constant dollars than it did when it was new.
you appear to think that the total amount of wealth is fixed, and that more wealth for one person therefore means less for another
Nothing I’ve said would entail the belief that the economy is a zero sum game. It clearly isn’t.
No, you don’t. You only get to decide what’s valuable to you. You don’t get to make that decision for other people.
While I can’t decide what other people choose to value, I most certainly do have a say in how we structure the economy. If my preferences lead to bigger houses in the suburbs costing dramatically more through the democratic process, than so much the better.
If you seriously think cutting the mortality rate from heart attack in half is no big deal, you’re welcome to your opinion. I doubt Americans in general share that view.
I think it’s great. I also think we’ve been seriously overcharged in order to line the pockets of an undeserving few.
March 13th, 2009 at 5:52 pm
anders, here’s the thing: when you cut the mortality rate from one source of death, you must increase the mortality rate from another source of death, because everyone dies eventually. Therefore focusing on heart mortality data overstates the improvement in living conditions, just as ignoring improvement in goods understates it.
March 13th, 2009 at 5:53 pm
but it’s definitely not true that “basic” housing, health care, and education are less in terms of constant dollars now than they were 30 years ago.
Prove it. Show us, for example, that the median inflation-adjusted price for the exact same houses is higher now than it was 30 years ago. Not for houses built 30 years ago that have been improved or upgraded in some way (because that would be adding value to the house), and not for the median-priced house of today compared to the median-priced house of 30 years ago (because today’s median-priced house is bigger and better-appointed), but for the exact same houses.
In fact, even if you could do that (and I’m certain you can’t), it still wouldn’t establish that “basic” housing has become more expensive in real terms, because of the aforementioned problems with the CPI. To eliminate those problems you’d have to compare the price in unadjusted dollars as a multiple of median household income, or using some other such measure that avoided the defects in the CPI.
March 13th, 2009 at 6:05 pm
You’re not fooling anyone, ‘anders’.
March 13th, 2009 at 6:15 pm
Fuck, that’s Tristan Anderson, I know him.
March 13th, 2009 at 6:20 pm
Which, as I said, is great. But the individual economic benefits are less and cost is greater.
No, they’re not less. Again, you don’t know what you’re talking about. Even CPI-based income data shows that real incomes have increased for college-educated Americans.
Education and housing are more-or-less like a bucket of coal.
No, they’re not. As I have already demonstrated to you, the size and quality of housing has increased dramatically over the past 30 years. The median-priced house of today is a bigger, better house than the median-priced house of 30 years ago. So has the quality of education. Standardized test scores have imrpoved, faculty standards have increased, facilities provided by high schools and colleges have also improved.
March 13th, 2009 at 6:21 pm
You’re not fooling anyone, ‘eric h’.
March 13th, 2009 at 6:22 pm
Oh I’m talking to Mixner? Fuck this.
March 13th, 2009 at 6:33 pm
on health care the point isn’t that there haven’t been improvements but that those improvements don’t even begin to justify the outrageous increase in costs.
Huh? So what is the “true” value of those improvements? 50% of the increase in costs? 70%? 10%? Or what? How have you determined that their “true” value is any lower than the increase in costs?
As someone else pointed out above, the same improvements have delivered in other countries for substantially less.
Neither you nor anyone else has presented any evidence that would allow us to compare either the magnitude of health care improvements between different countries, or their costs.
Stop making things up. Stop presenting your wishful thinking a empirical fact. Produce your evidence.
March 13th, 2009 at 6:34 pm
You’re not fooling anyone, ‘Barbar’.
March 13th, 2009 at 6:48 pm
when you cut the mortality rate from one source of death, you must increase the mortality rate from another source of death, because everyone dies eventually. Therefore focusing on heart mortality data overstates the improvement in living conditions,
I didn’t claim the heart attack mortality data tells us anything about the magnitude of “improvement in living conditions” so I can’t be “overstating” it. The heart attack data illustrates the dramatic improvement in the quality of health care. Health care is an important aspect of “living conditions,” but not the only one.
You still haven’t explained why you think this “everyone dies of something eventually” observation is relevant either to the heart attack data or anything else. Yes, everyone dies. So what?
March 13th, 2009 at 7:05 pm
I want Eric H to show us all these “basic” houses he seems to think exist that haven’t had any value added to them since the 1970s. No new paint or wallpaper? No new appliances? No electrical or plumbing upgrades? No improvements to heating or cooling? No new landscaping? You’d have to search long and hard to find a house that hasn’t been improved in some way.
In fact, you don’t even need to change the house at all to increase its value. A new park or school or road in the vicinity would add value to the house even if the house itself remained exactly the same.
March 13th, 2009 at 7:28 pm
I didn’t claim the heart attack mortality data tells us anything about the magnitude of “improvement in living conditions” so I can’t be “overstating” it. The heart attack data illustrates the dramatic improvement in the quality of health care. Health care is an important aspect of “living conditions,” but not the only one.
So you’re saying that heart attack mortality data illustrates dramatic improvement in health care, and health care is an important aspect of living conditions, but the heart attack mortality data doesn’t tell us anything about the improvement of living conditions.
March 13th, 2009 at 7:37 pm
Barbar, I don’t know if you’re just being obtuse or what, but you are making yourself look silly. Improvement in heart disease mortality is saving lives. Yes, we all eventually die, but many people would have died sooner were it not for advances in treatment of heart disease. Would you also argue that the lives saved by airbags are irrelevant because all those people will eventually die from some other cause?
March 13th, 2009 at 7:39 pm
the heart attack mortality data doesn’t tell us anything about the improvement of living conditions
Umm, being alive instead of dead is an improvement in living conditions, wouldn’t you say?
March 13th, 2009 at 8:07 pm
My comment in 99 directly quoted from the italicized portion I copied from 97, but that makes *me* look silly?
And why are we fucking discussing this? John Stossel said that middle-class incomes have tripled in real terms in the past couple of decades.
March 13th, 2009 at 8:15 pm
Your entire line of argument re: heart attack mortality makes you look silly. As does comment #99, where you extrapolate from him saying he did not specifically mention the magnitude to “doesn’t tell us anything about the improvement”.
And why are we fucking discussing this? John Stossel said that middle-class incomes have tripled in real terms in the past couple of decades.
It’s called a tangent. But I can see why you’d prefer that we move on, because you keep digging yourself a deeper hole. Stossel’s comment was ridiculous, but no more so than these two:
Heart attack mortality data is a “worthless indicator” of how health outcomes change over time, because people who don’t die of heart attacks will still die of something else.
….
when you cut the mortality rate from one source of death, you must increase the mortality rate from another source of death, because everyone dies eventually.
March 13th, 2009 at 8:23 pm
So you’re saying that heart attack mortality data illustrates dramatic improvement in health care, and health care is an important aspect of living conditions, but the heart attack mortality data doesn’t tell us anything about the improvement of living conditions.
No, I’m claiming what I just said: that heart attack mortality data doesn’t tell us anything about the magnitude of the improvement of living conditions. You just accidently cut out those two words from your paraphrase of what I wrote, did you? Funny that, considering they’re right there in the block of text you quote. A less charitable person than myself might be tempted to conclude that you deliberately omitted them to create a strawman.
A huge reduction in heart attack mortality certainly is an improvement in “living conditions,” but it’s just one of many such improvements from better health care. And better health care is just one of the ways in which living conditions have improved dramatically since the 1970s. This isn’t really a difficult idea to understand. I’m not sure why you’re having so much trouble.
March 13th, 2009 at 8:29 pm
Anders/Mixner hasn’t done anything to quantify the magnitude of the improvement in living conditions over the past two decades. He has put forth some reasons to think that the CPI-adjusted income measures understate the magnitude of improvement. Since the CPI-adjusted income measures say that the magnitude of the improvement is 0, Anders/Mixner is proudly declaring that the magnitude of the improvement is actually greater than 0. Unless he left out some reasons why the CPI might overstate the improvement, which is always a possibility.
This is quite an exciting debate you guys are having over here.
March 13th, 2009 at 8:39 pm
AB, my point about the heart attack data is the exact parallel of Mixner’s point about the CPI-adjusted income data. The CPI-adjusted income data may understate improvements in living conditions, but it’s not “completely worthless” (if you look carefully these were originally Mixner’s words, not mine).
And my second point is almost certainly true. Unless people are living dramatically longer (the vast bulk of the increase in life expectancy over the 20th century has been the result of public health improvements), fewer heart deaths mean more deaths by other causes.
March 13th, 2009 at 8:42 pm
Actually, the words weren’t “completely worthless,” just “worthless indicator.”
I guess Mixner’s boss never has to give him a cost-of-living salary increase, because of iPhones and better medical care for heart disease.
March 13th, 2009 at 8:50 pm
Anders/Mixner hasn’t done anything to quantify the magnitude of the improvement in living conditions over the past two decades.
Barbara, it’s not really possible to “quantify” the improvements in the standard of living over time. What we can do is point out that the quantity and/or quality of the products and services that middle-class Americans consume has improved substantially over the past two decades. And improved even more over the past three decades. And we are also pointing out that this shows that the liberal meme of “middle-class stagnation” is a total crock of shit.
March 13th, 2009 at 8:58 pm
Barbara,
No one has written that CPI-adjusted income data is “completely” worthless. It’s worthless as an indicator of changes in middle-class living standards over time, because it overstates inflation and therefore understates real income growth. Even a small error in the CPI produces a huge error in income figures after being compounded annually for decades.
March 13th, 2009 at 9:00 pm
Wow, I gave you an out, but you instead decided to double down on idiocy.
And my second point is almost certainly true…fewer heart deaths mean more deaths by other causes.
Let me break out the handpuppets for you: People used to be much more likely to die a premature death due to heart disease. Advances in medicine have reduced those deaths. While it is of course true that every single person who would have died of heart disease without those advances will still die at some point in the future from some other cause, their lives were improved by not dying from the heart disease. Dying in 5 years is better than dying right now. So while their CPI-adjusted income may not be any higher than 30 years ago, their lives were substantially better than they would have been, this being only one of the reasons why. Your point is true in the same way that saying “everyone’s car will run out of gas” is true. That doesn’t mean one should not want better gas mileage.
Answer me this, would you also say that the invention of airbags has not improved living conditions, since everyone who was saved by one will eventually die anyways?
March 13th, 2009 at 9:02 pm
Unless people are living dramatically longer (the vast bulk of the increase in life expectancy over the 20th century has been the result of public health improvements), fewer heart deaths mean more deaths by other causes.
No, fewer heart deaths means more deaths from other causes regardless of how much longer people are living. So exactly what is your point with this “everyone dies eventually” nonsense? Are you saying you don’t think it matters how long anyone lives? Are you saying you don’t think reducing deaths from heart disease (or cancer, or stroke, or AIDS, or diabetes, or anything else) is worth anything, because all the people who are saved will eventually die from some other cause anyway? Or what?
March 13th, 2009 at 9:03 pm
Let’s review:
1. Real middle-class incomes have in fact stagnated over the past few decades.
2. The average single-family home is bigger than 30 years ago. [houses have also gotten considerably more expensive]
3. More people finish college than 30 years ago. [still less than a third of the population]
4. Fewer people die of heart disease than 30 years ago. [but you don't bother to show the overall change in life expectancy]
Well, that’s an overwhelming argument if I’ve ever seen one. “Crock of shit” indeed!
March 13th, 2009 at 9:06 pm
Are you saying you don’t think reducing deaths from heart disease (or cancer, or stroke, or AIDS, or diabetes, or anything else) is worth anything,
Fuckwit, I am saying that focusing on improvements in treating one disease will overstate the overall improvement in mortality. You know, the exact same way that Mixner is arguing that CPI-adjusted income understates the improvement in living conditions. Why is one argument so much easier for you to understand than the other? And what’s the change in life expectancy over the past 30 years?
March 13th, 2009 at 9:11 pm
Anders/Mixner hasn’t done anything to quantify the magnitude of the improvement in living conditions over the past two decades.
OK, then I will. The living conditions score has increased from 1452.8764 to 1465.9982, give or take a few thousandths. I rounded to 4 decimal places if that’s OK with you.
More handpuppets: Medical advances that improve the survival rate of the leading cause of death in the US are an improvement in living conditions that will not be captured by CPI-adjusted median income.
March 13th, 2009 at 9:11 pm
To turn this around, are you guys saying that it doesn’t matter how much money people actually make, that the CPI-adjusted income stats mean ABSOLUTELY NOTHING and that if the median income was $10 that would still be OK because the Wii is much better than the original Nintendo system? Because that’s how your questions about the heart disease stuff sound like to my ears.
March 13th, 2009 at 9:13 pm
Fuckwit, I am saying that focusing on improvements in treating one disease will overstate the overall improvement in mortality.
Shit-for-brains, even this assertion is wrong. If the improvement in mortality for the disease in question is lower than the average improvement then focusing on that one disease will understate the overall improvement in mrotality.
Of course, since no one has claimed that the improvement in mortality rate from heart disease is representative of the improvement for diseases in general, your assertion would be a nonsequitur even if it were correct.
March 13th, 2009 at 9:15 pm
Of course, since no one has claimed that the improvement in mortality rate from heart disease is representative of the improvement for diseases in general,
So why bring it up? Why not just show life expectancy statistics? People are more likely to get autism now than they were 30 years ago. So what?
March 13th, 2009 at 9:17 pm
Real middle-class incomes have in fact stagnated over the past few decades.
No they have not. Middle-class incomes adjusted for CPI have stagnated over the past few decades. CPI does not reflect the increases Americans have had to their standard of living over the same time period, so to call it “real” income is inaccurate and misleading when your intent is to suggest that the middle class is not better off now than they were then.
March 13th, 2009 at 9:27 pm
1. Real middle-class incomes have in fact stagnated over the past few decades.
False. Real middle-class incomes have in fact increased over the past few decades.
2. The average single-family home is bigger than 30 years ago. [houses have also gotten considerably more expensive]
Since Americans are considerably wealthier than they were 30 years ago, they can afford the extra expense of those bigger homes. If they couldn’t, homes wouldn’t have gotten so much bigger.
3. More people finish college than 30 years ago. [still less than a third of the population]
The proportion of the population that has completed 4 or more years of college has almost doubled over the past 30 years, from about 15% to about 29%.
4. Fewer people die of heart disease than 30 years ago. [but you don’t bother to show the overall change in life expectancy]
No, the mortality rate from heart attack is about half what it was 30 years ago. Average life expectancy at birth has increased by about 5 years.
March 13th, 2009 at 9:28 pm
are you guys saying that it doesn’t matter how much money people actually make, that the CPI-adjusted income stats mean ABSOLUTELY NOTHING and that if the median income was $10 that would still be OK because the Wii is much better than the original Nintendo system? Because that’s how your questions about the heart disease stuff sound like to my ears.
If you’re just going to toss around straw men then I won’t waste my time. The original suggestion was that the CPI-adjusted median income is somehow indicative of the lives of the middle class not improving. We pointed out how flawed of a measure this is, and gave a few examples of how their lives have improved greatly, things that would not be captured in CPI-adjusted income.
March 13th, 2009 at 9:33 pm
So why bring it up?
As I said in the post in which I brought it up, as an illustration of the advances in health care over the past 30 years.
Why not just show life expectancy statistics?
Because the issue in question was advances in health care, not life expectancy. Average life expectancy is a poor measure of the state of health care.
People are more likely to get autism now than they were 30 years ago. So what?
Yes, so what?
March 13th, 2009 at 9:50 pm
anders / carsond / charles / jason / dieter / scott / jonas / harold / jt / jack / carsond / james / donald / hatsoff — at least 13 since his return.
Let’s see if Mixner can run six separate socks on one thread. His record is five.
(Does TP wants this comment section to be anything other than Mixner’s multiple personalities jerking each other off?)
March 13th, 2009 at 9:58 pm
Forgot a few:
stefan / Ralph/ duBois / El Cid / DTM / jacl lecou / wiley / SLC / Adam / Gabriel / Benny Lava / Njorl / roac
That’s all I’ve found so far, but I’m still counting.
March 13th, 2009 at 10:00 pm
You’re not fooling anyone, ’soullite’.
March 13th, 2009 at 10:59 pm
Are SLC and DTM both Mixner? Wow, I didn’t know that. I actually like DTM.
March 14th, 2009 at 1:10 am
You’re not fooling anyone, ‘burritoboy’.
March 14th, 2009 at 1:23 am
Regarding some lying figures – it’s true that new housing sizes are up, way up by past standards. So what?
The reality is that the number of rooms in the house of a median family has gone from, on average, 5.8 to 6.1 rooms. The increase has been either in a second bathroom or another bedroom, but not both. Also 50% of all families living in a house live in a dwelling that is over 25 years old, with all the attendant complications of an aging wooden structure (I know, my house was built sometime in the 20’s.)
And so on and so forth, liars can figure, yadda yadda. How about the flip side? The hedonic adjustments? Well, notice that people pushing this meme are always careful not to give any real numbers to these adjustments. They want all the qualitative benefits without having to do anything so laborious as defending a quantitative assessment.
Take the desktop computer, for instance. The one I’m using right now is nothing remarkable by modern standards. By 1950’s standards? Worth hundreds of millions of dollars. Do any proponents of hedonic adjustment want to claim that by 1950’s standards, the average computer/cell phone/wifi owner is a multimillionaire? No, they don’t. For the good and simple reason that the overwhelming majority of people would laugh long and loud at the notion. So what they do is try very, very hard to make the insinuation of vastly increased wealth without outright committing to a figure.
Oh, and Mixner? The best thing you could do for people on your side of the isle is to just shut up. So by all means continue with the with the deliberately obtuse, willfully obstinate sockpuppetry.
March 14th, 2009 at 1:38 am
By this time of night / stage of the thread, Mixner’s reading back over how he lured yet another unsuspecting chump from what at first looked like a rational argument into a pointless back-and-forth exercise in hairsplitting and meaningless point-scoring, while jacking off.
March 14th, 2009 at 2:17 am
Regarding some lying figures – it’s true that new housing sizes are up, way up by past standards. So what?
So, one of the ways in which Americans are wealthier is that they have bigger housing.
The reality is that the number of rooms in the house of a median family has gone from, on average, 5.8 to 6.1 rooms. The increase has been either in a second bathroom or another bedroom, but not both.
I don’t know where you’re getting your numbers from (thin air?), but as reported by the Census Bureau, between 1973 and 2007, the share of new homes with 1.5 bathrooms or less fell from 40% to just 5%. The share of households with 2.5 bathrooms or more jumped from 19% to 59%. The share of new homes with 2 bedrooms or less remained constant at 12%. But the share with 4 bedrooms or more jumped from 23% to 38%. So both the average number of bathrooms and the average number of bedrooms have increased.
In all sorts of other ways, housing today is superior to housing of 30 years ago. Better heating and cooling (the share of new houses with air conditioning jumped from 49% to 90%). Better appliances. Better plumbing and electrical work. Better insulation. Better soundproofing. And so on.
Also 50% of all families living in a house live in a dwelling that is over 25 years old, with all the attendant complications of an aging wooden structure
Unless this was less of a problem 20 or 30 years ago, it’s irrelevant to the issue.
Well, notice that people pushing this meme are always careful not to give any real numbers to these adjustments. They want all the qualitative benefits without having to do anything so laborious as defending a quantitative assessment.
Gibberish.
Take the desktop computer, for instance. The one I’m using right now is nothing remarkable by modern standards. By 1950’s standards? Worth hundreds of millions of dollars. Do any proponents of hedonic adjustment want to claim that by 1950’s standards, the average computer/cell phone/wifi owner is a multimillionaire? No, they don’t. For the good and simple reason that the overwhelming majority of people would laugh long and loud at the notion.
No, for the good and simple reason that it’s difficult to assign a clear dollar value, in 1950s dollars, to the ownership of a home computer in the year 2009. So what? It doesn’t alter the fact that home computers, and especially the internet, provide enormous utility (that is, wealth) to people. That is why home computers and internet access have become so ubiquitous over such a short period of time.
The best thing you could do for people on your side of the isle is to just shut up.
The best thing you could do for the people on your side of the aisle is go away and never come back. You’re making a fool of yourself.
March 14th, 2009 at 2:20 am
By this time of the night, DMonteith is sitting back and masturbating as he dreams of Mixner’s sweet blue eyes.
March 14th, 2009 at 2:52 am
Regarding some lying figures – it’s true that new housing sizes are up, way up by past standards. So what
It means that Mixner has an extra 0.3 of a room to hide in, unemployed and unemployable. That clearly matters, because it gives him at least 18 hours a day to troll this website in as many personalities as his mental illness allows.
March 14th, 2009 at 3:04 am
Hi. My name is DMonteith, and I’m a psychopath.
March 14th, 2009 at 3:04 am
You’re not fooling anyone, “Mixnerspotter”.
March 14th, 2009 at 3:06 am
You’re not fooling anyone, “DMonteith”.
March 14th, 2009 at 3:09 am
You’re not fooling anyone, “DMonteithspotter”.
March 14th, 2009 at 3:11 am
You’re not fooling anyone, “Mixnerspotter”.
March 14th, 2009 at 9:37 am
Two points:
If $75,000 is the income from a family with two wage earners, then each is earning about $37,500. Not too great here in the metro New York area.
Stossel showed middle class folks living it up with all sorts of expensive toys. I wonder what their debt is?
March 14th, 2009 at 12:17 pm
First, old business:
I’ll remark on Mixner’s basic innumeracy once again by noting that nothing he has written contradicts what I said. Yes, we all know that new housing is bigger, better, and badder all around. That in no way contradicts the fact that for the median family owning their homes, they’ve gone from living in a 5.8 room house to living in a 6.1 room house. How is this possible? Quite simply, because builders have been targeting the upper quintile, figuring quite rightly that (over the last thirty years) this is where the money is. Note that all things being equal, there should be a sub-linear relationship between square footage and cost; quite obviously, that hasn’t been the case. Note also that these statistics are for everyone, renters as well as owners.
But then I guess it’s no surprise to anyone here that Mixner has difficulties with basic arithmetic or interpreting simple facts with numbers attached to them. I gave him the heave-ho when he claimed that if a:b as c:d – a ratio – and we knew the values of a,b, and d, we would not know the value of c, and that ‘it depended’. ’nuff said.
New business:
Where has the money gone is good question, and not too hard to ferret out. As someone upthread mentioned, housing, healthcare/insurance, and education are the primary money-sinks. Additionally, there related expenses to becoming a two-income family: (usually) a second car, daycare, . . . and taxes. Further, not only are these costs large, they are fixed. Yes, people do buy plasma-screen TVs. But they don’t have to, and they really aren’t – in the grand scheme of things – all that expensive. So the four member household of thirty years ago makes around 39k, and puts approximately half it’s money towards these fixed costs. The same modern four member household makes around 68k. But it puts about three quarters of this towards the fixed costs in their budget. The upshot is that after these have been subtracted out, our canonical family of thirty years ago had a discretionary income of about 18k to budget for luxuries like the new-fangled microwave. Today, discretionary income has dropped to about 17k, even though more money is coming into the household. And this is comparing a one-income family to a two-income family!
No, new toys, cell phones, espresso machines, etc are definitely not what’s driving the new debt.
March 14th, 2009 at 2:31 pm
For the record, the commenter (me) at 128 is not DMonteith.
March 14th, 2009 at 3:17 pm
With all respect to homosexuals, Stossel looks like and sounds like a homosexual.
March 14th, 2009 at 3:42 pm
You’re not fooling anyone, ‘not a previous commenter’.
March 14th, 2009 at 4:24 pm
This from an ‘07 report of the conference board.
“Between 2002 and 2006, the percentage of U.S. households with discretionary income increased from 52.1 percent (57 million households) to 63.5 percent (73 million households). Aggregate discretionary income in the United States topped $1.7 trillion in 2006, with the household average at $24,335. In addition to offering findings on these and other general trends, A Marketer’s Guide to Discretionary Income looks at the U.S. discretionary income population in terms of age, occupation, education, region, and several other categories. The report also contains a detailed discussion of the methodology used to determine the definition of discretionary income and compute discretionary income thresholds and amounts.”
And this from NewsBusters.
“Summarizing, here is the progression of Americans with discretionary income:
– 1983 – 33%
– 1987 – 30%
– 1997/1998 – 52%
– 2002 – 52.1%
– 2003/2004 – 51%
– 2006 – 63.5%
In everyday language, this means that about 12% of the population went from just getting by to having money to spare in a span of two or three years.”
To be found at: http://newsbusters.org/blogs/tom-blumer/2007/11/10/stunning-report-discretionary-income-old-media-uses-its-discretion-ignor
Beginning in the later ’90s things definitely picked up, and pretty much continued up to ‘07–when the picture changed dramatically.
Household debt, however, went from 13.77% in ‘83 to just over 18% in ‘08.
It may be that this increasing debt service, coupled with the current recession, is impacting everyone’s perception of how well off they are. When you couple this with savings in many cases being cut in half, and with fear of losing jobs, there is probably right now a very real loss of real wealth compared to just a few years ago, which is what most people will use for comparison.
This entire discussion may look quite a bit different in a few years.
March 14th, 2009 at 5:25 pm
Re: Additionally, there related expenses to becoming a two-income family: (usually) a second car, daycare, . . . and taxes.
Families usually had two cars even when wives were at home all day. They needed transportation for the various domestic and childcare errands they performed during the day. There were still quite a few stay-at-home housewives when I was growing up in the 70s, but I cannot think of a single family on our block that had just one car. Often enough families with an older teenager had a third car as well, generally a barely-running junker for the kid.
March 14th, 2009 at 5:26 pm
as someone implied, the use of averages by Stoessel is incredibly misleading.
Bill & Melinda Gates are a married couple aged 25-59.
Example: consider 100 married couples.
Case A:
99 couples make $ 50,000 per year.
1 couple makes $ 150,000 per year.
Average “Case A” income
= (99 x 50k + 1 x $150k)/100 = $51,000
Case B:
99 couples make $ 50,000 per year.
1 couple makes $5,050,000 per year.
Average “Case A” income
= (99 x 50k + 1 x $5,050k)/100 = $100,000
Clearly, average income in case “B” is almost twice as high.
Whats does this say about the “middle class”?
Nothing.
Using average family income to describe the “middle class” is simply misleading as all hell, and anybody who does it in public should be riducled as a lying scumbag.
March 14th, 2009 at 5:52 pm
Whats does this say about the “middle class”?
Nothing. You can’t show anything about the middle class by just making up numbers, you stupid idiot.
March 14th, 2009 at 7:45 pm
JonF, look at Table 8.4:
I usually cite my material, but given the nature of the correspondents, I just gave the reduced figures. My fault. If you need sources for any of the other figures, I’ll be happy to link. Anyway, memory being as friable as it is, it’s not a good thing to trust to childhood experiences. My own recollections of suburban life before we moved to the country (in the 60’s) is one slightly more impoverished than yours. We only had but one car most of the time, and Dad would car pool with his buddies so that Mom had the car during the day. Another ritual that we’ve lost, btw. I haven’t seen anyone carpool regularly in years.
March 14th, 2009 at 7:58 pm
>>>>Nothing. You can’t show anything about the middle class by just making up numbers, you stupid idiot.
maybe when you draduate from 8th grade, you’ll understand the point.
March 15th, 2009 at 8:26 am
Re: JonF, look at Table 8.4:
How many of these households are the sort I was talking about: middle income and non-elderly married couples. I’m sure in any era you can find lots of single people who only had one car, as well as retirees with only one. I also don’t doubt that among the poor car ownership was much lower.
I grew up in a very middle-middle subdivision. The neighbors consisted of the better off sort of working class folks (like my father), policemen and other municpal employees, teachers, small business owners, middle management types and a couple of foreign doctors. Of the wives in this neighborhood most did not have full time jobs, but about half did work part-time and the rest, like my mother, did not work. The usual situation was for the family to own one new car and one used car (but not a clunker). We were a bit extravagant in that we had two new cars. By the way, I have old photos going back to when my parents were first married (1959) showing both had cars parked in the drievway.
March 15th, 2009 at 12:06 pm
I don’t know what to tell you, JonF, that’s the tabulated data. If you look at table 8.3, you’ll see that the average number of vehicles owned in 2006 is just 1.9, and that this also matches the number of vehicles for households who report the median income.
You might want to look at this.
Looking at the cites and sources, there’s nothing particularly slanted or partisan about them. But this testimony does show the myth of over-consumption for what it is.
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