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January 16, 2008
Not stagnant
Russell Roberts
Here is Harold Meyerson in the Washington Post, singing the same old false song (HT: Co-host Don Boudreaux):
...we face an economy that's been warped by two developments we've not seen since FDR's time.
The first of these is the stagnation of ordinary Americans' incomes, a phenomenon that began back in the 1970s and that American families have offset by having both spouses work and by drawing on the rising value of their homes.
Unfortunately for Meyerson's unrelenting pessimism, median family income (median, not mean) corrected for inflation, was up 23% between 1973 (a good year in the early 1970's that the gloom and doomers like to call the good old days.)
Is that increase due to both spouses working? For families where both spouses work (so holding constant the number of workers in the family), the increase is 36%.
The data are from the US Census and can be found here.
These income numbers do not include employer contributions to health care or retirement unless they get converted into income. They correct for inflation using a flawed index that probably overstates inflation by 1% a year for the last ten years. They include composition effects of an increase in immigration that reduces the measured median by adding in newcomers who have fewer skills.
Incomes in America have not been stagnant since the 1970s.
Posted by Russell Roberts in Standard of Living | Permalink
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Comments
I could be mistaken, but don't you mean the flawed index "overstates" inflation by 1% per year?
(Fixed, Good catch, CD.)
Posted by: CD | Jan 16, 2008 10:35:17 AM
Thank you. Why is this stagnating-incomes claim so tenacious?
Posted by: jp | Jan 16, 2008 11:24:26 AM
I think frequently public sentiment is ironic. We measure satisfaction by comparing reality to our expectations. But, expectations are constantly changing. So, frequently, I think that dissatisfaction comes from raised expectations.
We are living in revolutionary times. Computers, the internet, health technology, etc. have completely transformed the world. How many times a week do each of us find ourselves reacting to some new technology by saying, "Holy cow! They can do THAT now?!" Or, for that matter, how often now do we completely take for granted the idea that we can, for instance, have a conversation with an economics professor & thousands of others, instantly, on a whim, from our den.
I think the current feeling that people have of a middle class squeeze is not the result of stagnation, but exactly the opposite. There are an ever increasing number of incredible things worthy of our attention & our resources. The result of this is that we work harder, we are drawn away from our families & friends, because every day we see all the things that are worthy of our time. This is a conflict for us. It's difficult to deal with. But it's overabundance, not stagnation. Unfortunately, for human beings, change is challenging, and since progress is, by definition, change, progress is challenging to us.
Posted by: kebko | Jan 16, 2008 12:00:07 PM
As a person who attended high school and college in the 1970's I am always astounded by the claim that the middle class standard of living hasn't changed since then. Are there really people who were alive during the 1970's who believe this? The rising standards of living are so obvious to me and examples are so numerous that I can't beleive the stagnation argument is made in good faith.
Posted by: PaulD | Jan 16, 2008 12:12:15 PM
Is that increase due to both spouses working? For families where both spouses work (so holding constant the number of workers in the family), the increase is 36%.
Right. Which means that for families where only one spouse works, the increase in median family income would be considerably less than the stated 23%, right? Which sounds about right. Americans have been boosting their incomes mostly by working more. It's better than the alternative (no work available), but it's a considerably weaker performance than many other rich countries, where -- miracle of miracles -- median wages have actually managed to increase, thereby giving people the option of taking more leisure. Moreover, while nobody from today's world would want to face cancer or heart disease with 1973's medical technology, the much more expensive health insurance of contemporary times is a further detractor from the economic well being of working Americans. I mean, that extra big bite that insurance premiums take out of a paycheck surely makes it more difficult for a healthy person to pay the mortgage, even though the corresponding larger employer contribution often filters into higher income calculations. Finally, all you have to do to grasp the wages and income picture in a nutshell is ask yourself how many American families can afford to live as homeowners on one salary these days, as opposed to thirty five or forty years ago.
I don't hold the clueless hard left blameless either in this debate. For all the bemoaning about lost factory jobs, the fact is there is plenty of opportunity in the American economy -- and much of it comes with far pleasanter working conditions than the sweaty, dangerous factory jobs of yesteryear. And bitching about Wal-Mart has got to be the most worthless waste of time imaginable, given the firm's contribution to holding down inflation and boosting retail productivity. But the right, too, seems to have blinders on when it comes to the economic condition of ordinary people. The richest country on the planet could and should be doing better.
Are there really people who were alive during the 1970's who believe this? The rising standards of living are so obvious to me and examples are so numerous that I can't beleive the stagnation argument is made in good faith.
I was alive then. I remember the 1970s well. Things pretty much sucked. But the year in question here is 1973 (the alleged high water mark of post World War II prosperity). Yes, no doubt, there is widespread evidence of increased prosperity since those days. But it has come at a price: a lot more work. Which is well and good to a point -- if you don't have young children. But if you do, it can be rough, and stressful, and a serious negative impact on the quality of life. And day care is very expensive.
Posted by: Jasper | Jan 16, 2008 12:37:50 PM
Good point, PaulD. It could mean that the argument is being pitched specifically to attract younger voters - or perhaps old senile voters who haven't stepped outside for the last 30 years.
Posted by: Randy | Jan 16, 2008 12:37:56 PM
PaulD I feel the same as you. In 1973 I lived in a middle class area of Provindece RI and some of my friends had never been out of the state (IR is only 50 by 50 miles). I and most of my friends had never eaten in a sit down restaurant. The cars were not close to as good as today's cars etc. I could go on and on.
I like to price things in minimum wage hours then and now to compare. Minimum wage buys more today.
Even the bottom people seemed to have far less then.
Posted by: Floccina | Jan 16, 2008 2:15:25 PM
Jasper --
I think you may have misinterpreted that statistic. First of all, if you look at the data, you'll notice that the definition of "family" is quite broad, and includes unmarried people.
Secondly, the statistics point out that families with both spouses working outside the home are doing 36% better today than families (again, with both spouses working outside the home) did in 1973. It's an apples-to-apples comparison intended to remove the effect of a 2008 spouse working when a 1973 spouse didn't.
Now, part of that increase probably comes from the increased participation of women in higher-paying echelons of the work force. But, it's certainly not all of the increase.
In any case, many families with two incomes can make ends meet with one spouse working. It may mean moving into a smaller house, buying used cars and not shopping at the mall. When I went back to school for three years (2003-2006), my family of four got by on about $40,000 a year (including housing, food, transportation, medical insurance &c, but excluding tuition), which was below the median income for single-earner, dual-adult families and well under the median for such families with children. The only public assistance we received was free lunches for the kids.
Posted by: Chris | Jan 16, 2008 2:30:01 PM
Meyers statement on the income for families with two families working is misleading.
The data is impacted by the number of families -- whether it is a median or a mean -- and the share of families with two earners has increased from 35% to 45% of families from 1973 to 2005 -- the share with one earners fell from 49% to 29%. These shares are not the same because of other changes in the family structure.
Of course there is another way to look at it
and Census provides it. It is to look at it
by income quintile.
The average growth rate by quintile from 1973 to 2005 was :
bottom ....0.3%
second.....0.4%
middle.....0.6%
fourth.....1.0%
highest....2.0%.
the top income share of family income rose from 43% to 50.4% of total family income-- the share going to each of the other quintiles fell.
Of course the CPI overstates inflation if you ignore the impact of housing. If you incorporate a more realistic measure of home prices, rather then home owners equivalent rent, the CPI has significantly understated inflation since the Boskin Commission --maybe by as much as two percentage points per year. Of course this would wipe out all the gains in real income for all but the top quintile reported by Census.
So there are still valid and realistic argument that Meyers and Roberts are ignoring. I'm not making any claims about what is right, just that there is still a great deal of validity to other points of view. It is not accurate that the whole world is wrong and only GMU has access to the truth.
Posted by: spencer | Jan 16, 2008 3:20:44 PM
I mean, that extra big bite that insurance premiums take out of a paycheck surely makes it more difficult for a healthy person to pay the mortgage....
Apparently not, since the median size of newly constructed homes today is over 40% larger than that of 1973. Other consumption statistics mirror this.
There's something seriously wrong with the income statistics.
Posted by: Patrick R. Sullivan | Jan 16, 2008 3:24:20 PM
In any case, many families with two incomes can make ends meet with one spouse working.
If people lived like they did in 1973 one adult could work and they would have big saving/investment accounts.
Spencer housing cost vary greatly in the USA and much of the price rise is due to country Government's slow growth policies (see Edward Glaeser). Never the less the medican home is larger and better than ever and home ownership rates are higher.
Posted by: Floccina | Jan 16, 2008 4:56:37 PM
The seventies were wretched, especially the late seventies.
Per capita GDP rose much more rapidly over the same period, median income rose more rapidly in the preceding decades, according to the same Census Bureau figures, and the Gini index has risen rapidly in recent decades. Does that mean we're all going to hell in a hand basket? No. Does it mean that everything's coming up roses for me and for you? No. It doesn't mean that either.
I hope we won't repeat the late seventies after repeating the guns and butter policies of the sixties and early seventies, only more so. That's all I can say. I don't see any great depression parallels, but the great stagflation parallels don't seem so alarmist. Obviously, the demographic situation is very different now.
Posted by: Martin Brock | Jan 16, 2008 6:48:41 PM
Chris: "Now, part of that increase probably comes from the increased participation of women in higher-paying echelons of the work force. But, it's certainly not all of the increase."
Actually, it's practically all of it. Female earnings rose much faster than male earnings in recent decades. That's not so surprising, but if you really want to talk about "stagnation", look at the median income of males alone. Since 1973, the median income of individual male workers has hardly increased at all. I don't mean the 20 year period Roberts discusses. I mean 1973 through the present. Between '73 and '05, the increase was two percent, not two percent per year, two percent over the 32 year period.
http://www.census.gov/hhes/www/income/histinc/p02.html
Now, that's the same source Roberts gave you, only a different statistic. What are gonna do with that?
Posted by: Martin Brock | Jan 16, 2008 7:07:23 PM
Let's assume wages have stagnated, if the economy managed to produce millions upon millions of jobs for those new entrants to the labor market (like the half of the population we call women) without, at the very least, a discernable dip in wages can we still call it stagantion?--especially since historical accounts of labor markets (1500-late 1700s) tend to describe hordes of "able beggers," or the idle surplus population. Anyway. I would predict that with the absorbtion of women into the workforce largely complete (although I'd give it another decade to shake through completely), then we should be entering an era of strong wage growth, which I am sure whoever is president at the time will claim credit for.
Posted by: The Albatross | Jan 16, 2008 8:08:43 PM
floccina I grew up in providence and that city I'd far and away better than it was in the 70's.
Posted by: mcwop | Jan 16, 2008 8:16:06 PM
Martin,
I figure it means that men are starting to chill out and enjoy life more, something they are finding much easier to do now that women are entering the workplace in large numbers. Also, the percentage of men in college has not increased as fast as the percentage of women, and the average age of first marriage is climbing. I fully expect the gap between men's and women's life span to start narrowing as well.
Posted by: Randy | Jan 16, 2008 8:17:19 PM
Let's assume wages have stagnated, ...
Let's do. Let's stick with middle income male wages, because if we believe the statistics Roberts' presents when they seem to make the opposite case, it's indisputable.
... if the economy managed to produce millions upon millions of jobs for those new entrants to the labor market (like the half of the population we call women) without, at the very least, a discernable dip in wages can we still call it stagantion?--especially since historical accounts of labor markets (1500-late 1700s) tend to describe hordes of "able beggers," or the idle surplus population.
Non-sequiturs by the boatload here. We're discussing a specific claim about a specific period. When numbers seem to support Pollyanna, these numbers are the point. When numbers don't support the claim, the claim changes. Is all of human history a terrible calamity? No. Do you win every argument for this reason? No. I don't at all believe that all of human history is a terrible calamity. It's a straw man.
Median male income rose a lot in the decades preceding 1973. Rising female income accounts for practically all of the increase since, but median female income is still considerably lower. At the same time, per capita GDP has doubled, and incomes well above the median reflect the overwhelming bulk of this increase. That's what's actually happening.
Anyway. I would predict that with the absorbtion of women into the workforce largely complete (although I'd give it another decade to shake through completely), then we should be entering an era of strong wage growth, which I am sure whoever is president at the time will claim credit for.
You may predict anything you like, obviously. I don't pretend to know, but I do know that you don't know. There is no similar pattern of stagnation at higher income percentiles.
Posted by: Martin Brock | Jan 16, 2008 9:13:15 PM
I figure it means that men are starting to chill out and enjoy life more, something they are finding much easier to do now that women are entering the workplace in large numbers.
Gee. That's not what you thought at 12:37:56 PM. Then it was a political tactic aimed at old senile voters who haven't stepped outside for the last 30 years. Give us any facts, and we'll tell how they confirm our assumptions.
Also, the percentage of men in college has not increased as fast as the percentage of women, and the average age of first marriage is climbing. I fully expect the gap between men's and women's life span to start narrowing as well.
You're probably right about that, but it doesn't explain the fact that median income has stagnated while higher percentiles have not. I know it's all fair, but that doesn't explain anything either.
Posted by: Martin Brock | Jan 16, 2008 9:22:57 PM
Martin,
Not sure what you're getting at in comparing the posts. PaulD was saying the standard of living has gotten better and I completely agree. My life is better and easier than my father's. This has little to do with having higher incomes, especially for men who used to spend most of their income taking care of others and now spend a large percentage on themselves. I don't question the statistic on men's wages - I've seen the figures and have given some thought as to why. I'm not joking. I truly believe that the primary reason that men's wages have stagnated over the last few decades is that men are not as driven as they were in earlier generations.
Posted by: Randy | Jan 16, 2008 9:36:14 PM
...and perhaps it does explain why the higher percentiles have not declined. The guys in the higher percentiles are still driven. The culture no longer drives them, but they continue to drive themselves.
Posted by: Randy | Jan 16, 2008 9:39:52 PM
And the 30 years prior to 1973 it appears to have went up 104%.
Is that the difference between a democratic era or a republican era?
Policy obviously matters.
Posted by: muirgeo | Jan 16, 2008 10:14:51 PM
Muirgeo,
So your starting point is 1943. Okay, so you're saying that the primary forces shaping the economy between 1943 and 1973 had to do with which American political party had the most people in office. Good one :)
Posted by: Randy | Jan 16, 2008 10:30:25 PM
Please correct me if I'm wrong but I think Russ has seriously mis-represented the numbers here.
"Is that increase due to both spouses working? For families where both spouses work (so holding constant the number of workers in the family), the increase is 36%."
Russell Roberts
Does this account for total family hours worked??
A married couple wife the wife NOT working saw his income go up 2%. And again the 30 years prior to 1973 their income went up 104%.
WOW! Some one has some splaining to do!!!
Posted by: muirgeo | Jan 16, 2008 10:39:42 PM
Yep! Everything I can find on it suggest average hours worked by families IS increasing do to mom's working out of the home.
http://www.epinet.org/images/snapshot20040707.gif
You guys seem to be in denial about what's happening to the average working family.
Posted by: muirgeo | Jan 16, 2008 10:58:09 PM
Muirgeo,
So your starting point is 1943. Okay, so you're saying that the primary forces shaping the economy between 1943 and 1973 had to do with which American political party had the most people in office. Good one :)
Posted by: Randy
Yeah. What's your explanation? 103% vs 23% is a BIG difference especially when family hours are worked into the equation.
Posted by: muirgeo | Jan 16, 2008 11:01:48 PM
Well, Muirgeo, I'd say the fact that America came out of the war with productive capacity and institutions intact, while much of the rest of the world's productive capacity and institutions were either in ruins, bankrupt, or under the sway of paranoid philosophies, would be worth at least a mention. It was a slam dunk for American industry. And then the world recovered.
Posted by: Randy | Jan 16, 2008 11:28:00 PM
But Randy how where we able to even fight and win a frickin world war in 4 short years then recover to have the worlds strongest economy while FDR and Truman were in charge with all of their burdensome regulation? You would think all those rules would have made us a week nation. Too week to fight such a war or to have such a strong economy.
Those facts and the current trends and the stagnant wages don't fit much at all with the libertarians claims.
Posted by: muirgeo | Jan 16, 2008 11:40:40 PM
Martin,
The historical point was to illustrate a fundamental shift in the labour force in the last 30 years. In the centuries before, massive influxes of workers seeking employment would drive down wages and unemployment would still be high. The last 30 years has seen the labour market open up to half the population. Would such an increase in supply not drive down the price of any other good or service? Ceterus paribus no. So if we take the apparent worst case scenario--wage stagnation--then it must be in the context of a huge increase in labor supplied coupled with historically low levels of unemployemnt. I find the fact that the economy has been able to find so many things for these people to do amazing--especially since people in other countries complain so much about finding or creating jobs for people.
If the data does not underestimate income growth as Dr. Roberts suggests, then supply and demand would explain the stagnation in men's wages--women started competing with men for jobs. At the same time the shift in the economy from jobs that only men could do (heavy manufacturing, etc) to more ambi-sex (made up word) service occuaptions would exacerbate the effect on men's wages. At the same time I am quite willing to accept the trade-off of a stagnation in men's wages in return for opportunties and higher wages for women and subsequently greater income for married couples. If we really wanted to raise men's wages we could just kick the womenfolk back to the kitchen.
As for my prediction--well hey its a prediction. Part of it is based on Baldy Harper's Why Wages Rise, which demonstrates the almost perfect link between productivity and wage growth, and productivity has been growing at a faster clip lately. The second is a simple prediction based on supply and demand--I don't think there is another woman equivalent labor tidal wave that was previously excluded from the workforce comming. Furthermore, as our population ages and the Mexican birthrate declines the supply of labor will grow slower, so I predict a trend of higher wages, which is merely an extrapolation of the last 200 years--I just thought the trend my accelerate a little soon as the economy finished digesting such a massive influx of labor supply, but then again the fun thing about economics is that it is so complicated that predictions are almost always wrong.
Posted by: The Albatross | Jan 16, 2008 11:45:57 PM
Not sure what you're getting at in comparing the posts. PaulD was saying the standard of living has gotten better and I completely agree.
Do you earn $30,000 annually, the median income of a male today and also 30 years ago? I'm guessing not. If you earn more, you're at a higher percentile. Higher percentiles rose a lot in the same period.
My life is better and easier than my father's. This has little to do with having higher incomes, especially for men who used to spend most of their income taking care of others and now spend a large percentage on themselves.
My life is better too, and it does have something to do with income, but don't imagine that I don't take care of others. I spend something less than half of my take home pay supporting my children. My living standard isn't that much higher than my father's at a comparable stage of life in fact. I have better toys, a nicer car and other things I appreciate, but things haven't changed all that much. Maybe my income at this stage of my life is a higher than his at the same stage. It probably is, but my income is also well above the median. It's nearly triple. Where do you get the idea that common men spend so much more on themselves now? I don't pretend to know. How common are you?
I don't question the statistic on men's wages - I've seen the figures and have given some thought as to why. I'm not joking. I truly believe that the primary reason that men's wages have stagnated over the last few decades is that men are not as driven as they were in earlier generations.
Do you have any evidence for it? You're free to believe anything you like, but when Roberts was telling us that incomes had risen, you expressed a different theory. Then stagnant wages were only politics, and wages really had risen, so guys presumably were driven more. I think you have an expanation for everything. Everything is fair. That's the explanation. That's fine if it makes you feel better, but it doesn't explain anything to me. We all get the government we deserve and the life we deserve. O.K. That's tautological if you want it to be, but it explains anything and everything, so it's not very interesting. Why did we bother throwing off King George? He had a divine right after all.
Posted by: Martin Brock | Jan 17, 2008 12:23:36 AM
Randy: "...and perhaps it does explain why the higher percentiles have not declined. The guys in the higher percentiles are still driven. The culture no longer drives them, but they continue to drive themselves."
This is just more of the same. Whatever is is fair, because it is, and whatever is is fair. I just don't care that it's all fair. If "drive" accounts for it all, define "drive" and explain to me how "drive" develops and why it developed less in men entering the work force in the seventies and thereafter?
Your focus is so narrow that if your "drive" theory is not correct, you blind yourself to the truth.
Posted by: Martin Brock | Jan 17, 2008 12:31:42 AM
A married couple wife the wife NOT working saw his income go up 2%. And again the 30 years prior to 1973 their income went up 104%.
We do need to remember that the people earning the median income in 1973 are not the same people earning the median income in 2005; however, a man earning the median income in '73 was much better off than a man earning the median income in '47, while the following 30+ years saw no gain for this percentile. Among males alone, the poorest half of the population is as poor as it was more than 30 years ago. Many males in this category share income with women, so families at this level have gained income over the period, but the median wage has stagnated in fact.
A feminist could decry the fact that median female income hasn't caught up to the median income of males in 1973, especially if she omits the fact that median male income haven't risen at all.
Posted by: Martin Brock | Jan 17, 2008 12:43:00 AM
Does this account for total family hours worked??
Probably not, but the most significant factor is rising female income. Look at the sum of median male income and median female income. The sum rises 20% between '73 and '05, and rising female income accounts for practically all of the rise. The female component alone rises nearly 80%. I'm guessing that both halves of a median two earner family rose more than median male income. Childless males probably have something to do with it. The later period has more of them, but more childless males probably exist at higher percentiles too.
Posted by: Martin Brock | Jan 17, 2008 1:00:23 AM
Roberts: "Incomes in America have not been stagnant since the 1970s."
Troll: "I have better toys, a nicer car and other things I appreciate..."
How did the Troll manage to have better stuff than his father if his income did not rise? It is the rare fellow who lags his father's luxury. I suggest there is more to be learned from examining that personal *failure* than insisting a macro trend does not apply to every instance.
Troll: "...incomes well above the median reflect the overwhelming bulk of this increase."
All those rising incomes below the median count as stagnant in Troll logic?
Troll: "the fact that median income has stagnated while higher percentiles have not"
Yet the Troll also states that incomes on both sides of the median have increased, although in different proportion. Perhaps there is no Troll logic after all.
spencer: "there is still a great deal of validity to other points of view"
Validity seems to have increased in more places than others. The trick is deciding who is after truth and who is blustering from beneath a bridge.
Posted by: foxmarks | Jan 17, 2008 1:08:36 AM
That's a good point M. Brock - many things are better in 2003 than 1973, but then 1973 things were better than 1943, and 1943 things were better than 1843, 1543, etc. Similarly, what if those who reminisce about the '70s were young men during the '70s? Perhaps they were at the prime of their life and for getting a job whereas nowadays they're grumpy old farts and they're not overly employable and still don't fully understand computers?
Still I do wonder why hasn't there been a laissez-faire argument of "who cares if wages have risen or not"? If people are pro-active and productive then there's no problem. If people aren't particular skilled or productive or clinging to increasing obselete ways of doing things then that's their problem. If a lot of jobs are lost to oversea workers, so what? They are more competitive, period.
Posted by: Gil | Jan 17, 2008 1:33:43 AM
Years of Presidency from 1943-1973
Roosevelt 1943-1945, Truman 1945-1952, Eisenhower 1952-1960, Kennedy 1960-1963, LBJ 1963-1968, Nixon 1968-1973
Republicans 13 years, Democrats 17 years
Years of Presidency 1973-2007
Nixon 1973-1974, Ford 1974-1976, Carter 1976-1980, Reagan 1980-1988, Bush 1988-1992, Clinton 1992-2000, Bush 2000-2008
Republicans 23, Democrat 12
I'm not sure what kind of moron could take this data, ignore every other possible input, then make a conclusion.
What if we did it not by median income but by cool inventions (personal computers, Internet, CD players, DVD, iPods, hybrid cars, digital cameras, etc.), the Republicans would be touted as inspiring innovation.
Let's do it by military casualties. The Democrats fail miserably and should never get in power again if you look at these numbers and ignore everything else. Look how many soldiers died between 1943-1973 compared to 1973-2003. About 150K to 10K. It's amazing. Let's do all analysis at this extremely deep level.
Posted by: Python | Jan 17, 2008 1:38:43 AM
Martin,
So basically Russell is wrong and Harold Meyeson is right. Incomes HAVE been stagnant. Only increased hours worked by the female spouse has made much difference.
And again the gains the 30 years prior to 1973 were over 100%.
Posted by: muirgeo | Jan 17, 2008 1:46:32 AM
From the text of the census report.
• The real median earnings of both
men and women who worked full-
time, year-round declined between
2004 and 2005 (Table 1). The
median earnings of men declined
1.8 percent to $41,386. The
median earnings of women
declined 1.3 percent to $31,858.9
race.)
And look to fig 3 in the report to see that male median incomes are stagnant.
http://www.census.gov/prod/2006pubs/p60-231.pdf
Posted by: muirgeo | Jan 17, 2008 1:53:00 AM
Python,
You're squirming. Basically were talking two major policy differences between those eras and you know it. One was post FDR and largely run by the democrats especially when the house and senate are considered and one post Reagan when republicans and their "deregulatory" trends set policy.
The data is sorely against those who might claim that republican policies... deregulatory policies are better for the economy in general or for average Americans specifically.
The post FDR era should have been a total disaster according to folks like you but it was the most prosperous time ever for our country. That's gotta really nag the crap out of people like you.... leaving you with nothing but name calling for a last defense.
Now the country and it's economy are in shambles and you guys have to deny the facts to protect a hopeless ideology that almost no one in this country supports when they understand its implications.
Posted by: muirgeo | Jan 17, 2008 2:11:30 AM
I leave for 10 minutes, and....
Muirgeo: "But Randy how where we able to even fight and win a frickin world war in 4 short years then recover to have the worlds strongest economy while FDR and Truman were in charge with all of their burdensome regulation?"
This would get you thrown out of court. It will get you statistically thrown out of here (you too, Krugman).
http://bea.gov
http://www.nber.org
Dumbass, state appropriation of the means of production. In a time of war. Before we understood monetary and fiscal policy. And FDR's stupidity. And prices were frozen, after which we experienced the SINGLE LARGEST POP in inflation (due to the previous price freeze).
Muirmoron, pick any measurement from the above websites, and tell us how government 1) exceeded at economic stimulus and revenue and 2) improved the overall economy. Go ahead. Pick any one. 1929 – 1943.
Muirgeo, dude, I only have so much time. It’s extremely cumbersome (but refreshing, like Fresca) to debunk all of your pathologic economic misconceptions.
You have, however, given me a wonderful idea and title for a book:
Drool: The teaching of prominent liberal economist
I’m thinking of doing an album to support the book. Can you play the noseharp, monkey?
Posted by: Mesa Econoguy | Jan 17, 2008 3:18:06 AM
I've always questioned these statistics because when you look at the reality, life is _so_ much better now than it used to be. All one would have to do is take a picture of an average home in the 70s and compare it to now. You wouldn't even recognize it. Comparing real wages just doesn't seem to cut it.
I would guess that the growth of real wages prior to the 70s was largely driven by increases in the productive capacity of people, targeted mostly at the basic, non-luxury goods that are easy to measure.
Since that time, it would seem that most of the increase in our quality of life comes from what we would have previously considered luxury goods, even though those goods are now available to most. Compare a car in 1975 vs. a car now. Sure their core use is basically unchanged, but a modern car is so dramatically better in almost every way - stereos, power everything, AC, etc. Yet that wouldn't be reflected in CPI numbers and thus not in real income.
I would be interested to see if there are studies that have determined how much it would cost today to live like an average family in 1950,60,70,80,etc. I'd think it would be fairly easy to live on a single income in most parts of the US if the standard was 1973.
Posted by: Jon | Jan 17, 2008 5:41:39 AM
Jon,
Agreed. And not only luxury goods, but a luxury lifestyle. As compared to working men of earlier generations, we start working years later, work in jobs that are far less physically demanding, keep a larger percentage of our earnings for personal use, and retire years earlier. I'm a boomer, but from what I've seen of the younger guys I work with, they have every intention of continuing the trend.
Posted by: Randy | Jan 17, 2008 6:54:42 AM
The best pop music ever recorded was in the mid-sixties, when a Democrat was in power. Coincidence?
The seventies, in pop music terms, was awful until the punk & new wave movements. By then the president was a Democrat. Before that they were Republicans. Coincidence?
Musically, the eighties blew. See, a Republican was president. Coincidence?
The nineties had potential, but the Republicans took over congress, & the music sucked. Coincidence?
Currently, pop music is the worst it's ever been. Coincidence?
Policies matter, people! These solid facts are so conveniently ignored by you libertarians! You'll twist anything around to support your hopeless free-market ideology!
Posted by: Hans Luftner | Jan 17, 2008 6:59:26 AM
Muirgeo,
"But Randy how where we able to even fight and win a frickin world war in 4 short years then recover to have the worlds strongest economy while FDR and Truman were in charge with all of their burdensome regulation?"
You assume that our involvement in WWII was necessary. Many at the time did not. Second guessing history is only good pointless fun, but I think a good case can be made that it was FDR's Progressive Nationalist Idealism (following Wilson's lead) that got us into WWII, and that we would be a wealthier nation even than we are now had we stayed the hell out of it.
Posted by: Randy | Jan 17, 2008 7:04:21 AM
Martin,
Re; "Why did we bother throwing off King George? He had a divine right after all."
Its a good question. Why do rent payers care who's collecting the rent when all that really matters is the amount of rent they have to pay? The king said he had a divine right to collect rent. The modern owners claim they have a mandate from "the people" to collect rent. Nonsense all around. a better question would be, why do rent payers so easily buy into the propaganda of their times? I suspect the answer is that its easier to go with the flow than to fight it.
Posted by: Randy | Jan 17, 2008 7:56:22 AM
Martin,
Re; "If "drive" accounts for it all, define "drive" and explain to me how "drive" develops and why it developed less in men entering the work force in the seventies and thereafter?"
Question; Why do people retire? Answer; Because they can. Savvy?
Posted by: Randy | Jan 17, 2008 8:04:41 AM
Russ said these numbers do not include employer contribution for health care or retirement. However, the Census gets it data from BEA and if you go to BEA,Personal Income and Outlay, Table 1, you find that the personal income data includes employer contributions for employee pension and insurance as well as social security.
Russ, where did you get the idea that personal income data did not include employer contributions for fringe benefits?
Posted by: spencer | Jan 17, 2008 8:39:38 AM
muirgeo:
So basically Russell is wrong and Harold Meyeson is right. Incomes HAVE been stagnant. Only increased hours worked by the female spouse has made much difference.
No. It's not just the hours. Median female wages have risen. Median male wages haven't. Higher male and female wages have risen. Per capita output has grown a lot, but middle income males aren't getting any more of it than they did 30 years ago. Middle income females get more but still less than middle income males. Most of the increase goes to people with higher incomes.
I've seen lots of evidence that CEO compensation has risen by orders of magnitude, and I suppose other corporate officer compensation has risen too. I've seen evidence that the income of Federal employees has grown much faster than private sector income (especially during the Bush II administration). Except for rising female wages, I haven't seen a lot of other evidence accounting for the change.
If Roberts has some evidence, I'd like to see it. I suppose the income of economics professors at public universities has risen too. Tuition certainly has. Is it really all a matter of education boosting the productivity of a few, or is it a matter of entitlement directing output toward a few? I suppose it's a matter of both.
Posted by: Martin Brock | Jan 17, 2008 8:59:44 AM
Gil: "If a lot of jobs are lost to oversea workers, so what? They are more competitive, period."
It's not about the loss of jobs to overseas workers. It's about the income of corporate managers and Federal employees, among others, rising much faster than other incomes. Total income in the U.S. is much greater than in the past. I've seen no evidence that anyone "clings" to anything. If that makes you feel better, you can believe it, but you present no evidence for the belief. You can cling to any belief you like. I'll wait for more evidence before leaping to a conclusion.
Posted by: Martin Brock | Jan 17, 2008 9:09:14 AM
The Democrats fail miserably and should never get in power again ...
Completely irrelevant to the point and irrelevant to the last election as well, not to mention the next election. You're getting the Democrats back, probably for a long time. Better get used to it. It's the Social Security benefits, among other things.
Can we discuss freer, more democratic (market based) alternatives with less centralized authority that might serve most of us better? Sure. I do it all the time. Have Republicans moved us in this direction? Not remotely. Will Democrats now? Don't hold your breath.
Posted by: Martin Brock | Jan 17, 2008 9:17:53 AM
Hans writes Musically, the eighties blew. See, a Republican was president
Totally disagree. The eighties produced some fantastic bands and set the stage for the early nineties. There were tons of great punk, hardcore, and independant bands in the eighties. The Bad Brains alone made the eighties worth it for me.
Posted by: Mcwop | Jan 17, 2008 9:25:19 AM
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