Saturday, September 14, 2013

Trust your senses...

Tomorrow, millions of middle-income Americans will recline in their climate-controlled living rooms, snack on fresh bags of chips, barbecued hamburgers, potato salad and ice cold beer, and watch their favorite football teams do battle in hi definition. Now that I think about it, millions of lower-income Americans, some on Welfare even, will enjoy the same experience. And more power to them!

Your senses do not deceive you my friends, life in America 2013 is good, very good! Better, in fact, than it's ever been. Yet, articles like the one I commented on this week, and other literary works galore, paint an entirely different picture. "They" propose that the middle-class of 2013 has been sorely compromised relative to the middle-class of, say, 1950, and some carefully-composed statistics prove it.

So, what are we to believe, our senses or "their" propaganda? Yes, propaganda! "They" have to have victims. You see, victims can be the most passionate people. Victims create best-sellers and determine elections. And when victims are insufficient in number, "they"---with a pinch of Piketty and a dash of Saez---will create them, and then exploit them to the fullest.

Regular readers know that I am not at all sympathetic to the whole stagnation story: I have attempted ad nauseam over the years to counter, as best I can, what I believe to be this most pernicious fallacy (here's one, here's another, one more).  If you, however, despite your senses (and my pleas), remain unconvinced that it is pure myth, please read this article in today's Barron's by economist Don Boudreaux. Don's angle on this topic is superb, and should disabuse you of that faulty thinking once and for all. Here's a snippet:
Perhaps the best evidence that today's Americans are better off than Americans in the age of Eisenhower is the fact that life expectancy is now 6.3 years longer. Compared with the average American in the 1950s, today's average American enjoys 9% more time on Earth. The average time that grandparents remain alive to enjoy their grandchildren is now about 25% longer than in the 1950s.

Evidence more mundane than life expectancy casts further doubt on the myth of economic stagnation. That evidence is the shrinking cost—and growing size—of ordinary Americans' consumption.

A superb way of comparing the consumption options open to Americans in the 1950s to those that we enjoy today is to study a Sears catalog from the 1950s. Sears was then the premier retailer for middle America. And because its longtime slogan—"Sears has everything!"—was not much of an exaggeration, Sears catalogs are gold mines of information about middle-class living in the past.

Let's compare a sampling of the offerings from Sears' Fall/Winter 1956 catalog to similar goods on sale today.

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