Why the Middle Class is Better Off Than You Think

The consensus view that the American middle class "is dead, dying, hollowed out" is based on an "incomplete reading of the data," says economist Russ Roberts.

John Osterhoudt | 10.31.2019 12:25 PM

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"A lot of people think the middle class is dead, dying, hollowed out," says Russ Roberts, an economist at Stanford University's Hoover Institution and host of the podcast Econtalk. "And that's a view that's held now increasingly by not just the left…but by conservatives, Republicans, [and] economists across the spectrum."

But is it true? Roberts says that many of the leading studies that support this claim offer "a misreading of the data, or at least an incomplete reading of the data, [ignoring] a much fuller story of opportunity and progress."

In this video, Roberts offers some examples of the assumptions that economic researchers have made, leading them to offer an incomplete picture of American prosperity. He argues that the middle class has fared much better since the 1970s than most people think.

Produced by John Osterhoudt. Camera by Todd Krainin.

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Metazoan 5 years ago

Slightly OT, I guess, but an often-cited cause of decline for the middle class is the ability for the same middle class to buy goods from wherever they want.

Rather than trying to ban competition and free choice, why not shine the spotlight on the regulations and taxes that make the US less competitive?

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1. tim koss 5 years ago
  
  so a guy shows some charts suggesting a typist in the typing pool at GM now works as a digital artists or something like that.
  
  it is not hard to figure out what the reall economy is doing, look at debt. anything and everything you need is borrowed.
  
  also you can't get some really good quality clothes at Goodwill. and TV are a lot cheaper so everyone has a flat screen.
  
  since I have an android instead of a landline I rent for $15 a month I am in the middle class? china makes shit cheap so I am in the middle class?
  
  I work at an Amazon whse on the outskirts of town and commute 2 hours a day to make $18.00/ hour rather than work at Sears for $14.00 with no commute so I am middle class?
  
  I can buy all manner of corn based foods heavily subsidized by US Governtemtn so I can become obese and get diabetes so I am middle class?
  
  so why are there record numbers of children on school lunch, not a luxury good, or at food pantry's? why do 4 million children have no health insurance?
  
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2. tim koss 5 years ago
  
  the whole thing is kind of stupid. the question is 2 or 3 fold,
  
  1) is my family's standard of living as demonstrated by a bushel basket of good and services , going up or down?
  
  2) is someone getting advantaged at my family's expense , either thru taxation or regulations. io?w is the government favoring other groups especially the wealthy.
  
  3) is my family safe and secure, from violence or mental and physical impairments.
  
  simply saying I moved from typist to web designer means nothing if I cannot afford a decent home or I am spending 20 hours commuting.(silicone valley)
  
  at the same giving the wealthy a tax cut thru their stock holdings or LLC drives up demand for housing stock that in most metro areas is priced out of the median percentile of our population or govts spending money at airports for private jets, and not more bus stops.
  
  and of course in the long run how do the deficit or policies benefit the middle class. if every upper middle class stay at home mom family can send their kids to public charter schools because they can drive, then what is the effect on middle class families where both spouses work and depend on a school bus to take their kids to schools losing financial support.
  
  you could go on and give 5000 examples where we use our $5T annual budget to benefit one group more than another. $400/month to AFDC is not the same benefit as mtg tax deduction on a second home or 15% tax rate on carried interest.
  
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OpenBordersLiberal-tarian 5 years ago

Even if the middle class is doing fine — which experts like AOC would surely dispute — we Koch / Reason libertarians shouldn't use that as our primary measure of economic health. Our philosophy exists to increase the wealth of people who are already worth tens of billions of dollars, like our benefactor Charles Koch. The high-tariff / low-immigration Drumpf economy has been an unmitigated disaster for Mr. Koch, causing his net worth to stagnate in the $58,000,000,000 to $61,000,000,000 range.

#HowLongMustCharlesKochSuffer?

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1. EISTAU Gree-Vance 5 years ago
  
  EVERYTHING IS SO TERRIBLE AND UNFAIR!!!!!
  
  Haha.
  
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sarcasmic 5 years ago

Oh, come on! Everyone knows we live in a caste system! The rich send their rich kids to expensive schools, after which they get ridiculously high paying jobs! Everyone else works at fast food restaurants! Nobody pays their way through college working menial jobs, and then finds a decent career where they move up the economic ladder! That's a myth! The poor get poorer and the rich get richer! How can it be any other way? With a fixed amount of wealth out there, one man's gain must be another man's loss! That's how it works! Socialism now!

(I've been homeless, home owner, laborer, professional, and I'm still moving on up. I will never be rich, but I'm a lot more comfortable than I was ten or twenty years ago.)

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1. Metazoan 5 years ago
  
  A lot of people (especially in academia) literally believe that as money is inherited, the family just keeps getting richer and without the state to stop them, the unearned wealth divide will grow indefinitely. Attempts to point out evidence to the contrary fall on deaf ears--they already have their dogma.
  
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  1. sarcasmic 5 years ago
    
    There used to be an expression in this country "shirt sleeves to shirt sleeves in three generations."
    
    There are exceptions (Kennedy family, Hiltons) but for the most part it still applies.
    
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    1. creech 5 years ago
      
      If you leave enough money, even your idiot descendants can remain rich even when they drown their date or screw anything that moves.
      
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2. Sean Hannity 5 years ago
  
  I will never be rich
  
  Of course you won't. And Trump's, Biden's, Pelosi's, Schumer's and McConnell's progeny never won't be. And there's absolutely nothing they love more than a serf like you so fucking stupid they actually revel in their subservience.
  
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  1. EISTAU Gree-Vance 5 years ago
    
    So much ugly resentment. Sad.
    
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    1. sarcasmic 5 years ago
      
      It's Tulpa. Ignore it.
      
      Log in to Reply
3. Vernon Depner 5 years ago
  
  Nobody pays their way through college working menial jobs, and then finds a decent career where they move up the economic ladder!
  
  "Nobody" would be a slight exaggeration, but that scenario is very rare these days. College is too expensive now for working your way through to be realistic, and if you don't start out your career on a path that leads to the best positions, it's very difficult to switch tracks later. And of course, there is no "economic ladder" that leads to the top positions in major companies—the C Suite jobs are held and doled out by a hereditary cartel.
  
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JFree 5 years ago

Maybe if 'economics researchers' would stop trying to find data assumptions that confirm their own biases, then they might actually be able to provide better interpretations as to what is actually happening.

Absent that - the best interpretation of what is happening comes from polls - people's own assessments of progress over time as it affects them - eg Pew's State of the American Dream stuff - not from data that has little/nothing to do with anything other than how the researcher defines what is important and imposes that view as effectively a 'central plan'.

Certainly those polling results over time indicate why people themselves are increasingly inclined towards the political candidates/ideas of 'dissatisfaction' (Trump, Sanders, Paul, Warren, Brexit, AfD, etc) rather than the candidates/ideas of 'satisfaction'. Are those people just full of shit and stupid and ignorant of how good they really have it? Or do they perhaps - in the truest Hayekian sense - have a far better understanding of themselves and their own situation than any group of elites has?

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1. sarcasmic 5 years ago
  
  People who confuse money with wealth think they are poorer even when they become more wealthy (have more stuff), because they're only looking at their bank accounts. I know too many people who spend as much on debt maintenance as they do for a place to live. They've got motorcycles, snowmobiles, four-wheelers, go on regular vacations, all on debt, and complain about being poor because they don't have any money left in their paycheck after paying their bills.
  
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  1. DaveSs 5 years ago
    
    I don't know that the people you describe are really becoming more wealthy.
    They have more stuff, but the value of their stuff is always decreasing.
    
    I rather suspect they aren't enjoying life (and their stuff) as much as they could because paying for the stuff is a major source of anxiety.
    
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    1. Jerryskids 5 years ago
      
      Anecdotally to be sure, but I know several "struggling middle-class" families like this that seriously believe (like Bernie Sanders apparently does) that 70-80k per year is an average wage. The two of you together are making 150k, you ain't middle class and I really don't want to hear you complaining about how much your lawn service costs, how expensive things were on your trip to Italy, how much docking fees for your boat are, or the outrageous price of a tail-light for your Lexus.
      
      The American Dream was a steady job, the little house with a white picket fence in the suburbs, a wife and a couple of kids, a comfortable life someplace where you could relax on the weekend with a couple of beers and a cookout on the back patio, maybe a summer trip to the beach - it didn't involve three bathrooms and three cars, an in-ground pool, regular trips to the city for dinner and a show, kids with a couple thousand dollars worth of electronics in their rooms and several hundred dollars worth of sneakers on their feet, Disney cruises and HBO On Demand. You're watching too much TV if you think that's how normal, everyday, middle-class people live.
      
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      1. Zeb 5 years ago
        
        Yeah, unreasonable expectations (and spending habits) have a lot to do with it.
        I know people making $40k who live comfortably and support a family. And people making close to $100k who can't keep it together financially. The problem isn't primarily that the middle class doesn't have enough money.
        
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        creech 5 years ago
        
        Heck, Jack Reacher lives an adventurous life with nothing more than a toothbrush and lint in his one pair of jeans.
        
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      2. Brian 5 years ago
        
        This.
        
        When I ask these people “What do you want or have that you’re struggling with?”, it’s always something stupid, usually a version of “I’m having a hard time buying/leasing/borrowing enough for a really really nice thing I want!”
        
        Buy a used car, don’t lease. Stop using credit card balances as a lifestyle. Spend less than you make. Invest. Get a reasonable home in a neighborhood you can afford. Take care of your health so that you don’t need expensive drugs that didn’t exist 30 years ago just to stay alive.
        
        But no, entitled whiny babies whine.
        
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        JFree 5 years ago
        
        Gosh. You think those damned ingrates would show some respect to you for all the time and effort you spend showering advice on them in order to feel superior to them.
        
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  2. Sean Hannity 5 years ago
    
    This is the idiotic theory whereby we should institute negative interest rates because commodities are too cheap as measured by funny money.
    
    Congratulations, you're enabling the policies that you freely admit will prevent you from ever becoming wealthy. Stupid and proud.
    
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2. Metazoan 5 years ago
  
  We can't forget that there are currently substantial interventions in the economy that hold down household wealth, especially central banking and fiat money.
  
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  1. JFree 5 years ago
    
    And presumably there would be a lot of interest then in prioritizing the 'unshackling' of those interventions focused on the bottom-up. Unfortunately neither of those fit the DeRp agenda. D's are wedded to their bureaucrat union activists. R's to their trickle-down mindset. And libertarians themselves are too wedded to power to get outside the whole DeRp thang.
    
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    1. Metazoan 5 years ago
      
      And presumably there would be a lot of interest then in prioritizing the ‘unshackling’ of those interventions focused on the bottom-up.
      
      Why would there be such interest if people don't even know? In the market, people have a strong incentive to know what's best for them, since their own decisions will immediately affect it. This is not the case for democracy.
      
      Also...nobody has a "trickle-down" mindset; that is a strawman. And how are libertarians too wedded to power to get outside Ds and Rs? We have a party separate from the other two!
      
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      1. JFree 5 years ago
        
        In the market, people have a strong incentive to know what’s best for them, since their own decisions will immediately affect it. This is not the case for democracy.
        
        I don't buy that. I think people vote in their self-interest. They may be wrong about what that is. They may be ignorant about the different ways to get there. But those don't counter the reality that they vote in their self-interest. So if voters 'at the bottom' themselves aren't voting to prioritize 'unshackling', its because those advocating that aren't actually speaking to folks at the bottom. This is a plague with libertarians who mostly talk ABOUT them to a crowd that is actually middle/upper (signaling) rather than WITH them TO them.
        
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        Metazoan 5 years ago
        
        Well, people may vote in their self-interest in a very broad sense: they vote for things that make them feel good, and things that they think will make them better off. But they have little incentive to actually know what those things are, as their vote has minimal impact. So my point still stands: voters do not vote vote in their own self-interest, but their perceived self-interest, which in the case of voting (as opposed to markets) is often at wide variance with their actual self-interest.
        
        I'm not the first to come up with this idea; I'm thinking of Bryan Caplan's "The Myth of the Rational Voter."
        
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        JFree 5 years ago
        
        I think you are really parsing elitist gnats if you want to distinguish 'actual self-interest' from 'perceived self-interest'.
        
        If they don't even want to make the effort to know what their self-interest is, then they are part of the 40% who don't vote. Generally voter turnout is highly and significantly correlated with both income and education. Higher income/ed, higher turnout % - eg 35% or so of those with less than HS vote v 75% of post-grad; 50% of those with household income less than $25k vote v 80% of those with more than $90k).
        
        So maybe that is getting at what you seem to be saying but not with the same result. That people who don't trust their own perceptions or are easily confused - just don't vote in the same numbers as those who are more confident in themselves and/or less confused. But that is not at all the same thing as saying that those who vote are not rational or self-interested.
        
        If Caplan is whining that 'they' don't understand 'economics', then what he's really saying is that economics ignores that audience too and is itself caught in an elitist trickle-down notion of imposing 'what is good for them' on them. And is also I'm sure completely unaware (and thus lying about) that since voting turnout itself is skewed, so are voting outcomes. IOW - it is precisely because the upper income/educated vote in higher % that our system creates the tilted playing field and interventions that punish those at the bottom and favors those at the top. IOWIOW - self-interest.
        
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        Metazoan 5 years ago
        
        I think what I was trying to say is a bit more nuanced than that. I have no desire to impose what I think is best for others on them.
        
        What I am getting at is that voters are systematically biased to the incorrect answers: they think protectionism brings prosperity, for instance. Now, you could argue that some voters actually know that protectionism is harmful to prosperity, but value some sort of autarky instead. Then the vote would indeed be rational, though the discussion would turn to the morality of such a goal.
        
        But I think most voters actually believe that, e.g., trade deficits are inherently bad, the rich getting richer necessarily means that the poor cannot get richer, etc. Those are not correct beliefs, and it would be irrational to support policies based on the supposed outcome of those beliefs.
        
        By the way, this doesn't even touch on the fact that what people say they like (and that includes costless voting) often does not match up with what they do (which includes market activities).
        
        If Caplan is whining that ‘they’ don’t understand ‘economics’, then what he’s really saying is that economics ignores that audience too and is itself caught in an elitist trickle-down notion of imposing ‘what is good for them’ on them.
        
        He is trying to explain democracy through the lens of economics. How would he make it so that economics "understands" that audience? I can imagine, as my example above, that he might make the erroneous assumption that people actually want prosperity; maybe they actually want mediocrity, in which case perhaps their votes are completely rational, if immoral.
        
        Your last point is an interesting one though; that said, I am not sure it is so much about who votes vs. who controls the narrative.
        
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        TripK2 5 years ago
        
        I'm just going to chime in since I took a few classes with Bryan Caplan as my professor. He's actually suggesting that it makes sense that voters make "irrational" decisions in the voting booth because they have no incentive to learn the facts about policy positions unless civic duty is an outsized factor. Like Metazoan mentioned, he's not complaining about people not understanding economics, he's explaining why people's voting behavior is the way it is, through the lens of economics.
        
        Its a good book.
        
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        Metazoan 5 years ago
        
        I’m just going to chime in since I took a few classes with Bryan Caplan as my professor.
        
        very jealous...
        
        JFree 5 years ago
        
        What I am getting at is that voters are systematically biased to the incorrect answers: they think protectionism brings prosperity, for instance.
        
        I would argue re say 2016 that voters near the bottom did not vote for protectionism. They voted for Trump because he's the only pol in a long time who actually spoke TO them about their actual economic anxieties rather than ABOUT them dismissing them as humans altogether. Obama's 'bitter clingers', Clinton's 'deplorables', Romneys '47%', the whole multidecade 'free trade' mantra combined with the FYTW of 'learn to code', or this professors 'middle class doesn't know how good things are'.
        
        All of that is just signaling among different elites/wannabes talking to each other. This doesn't mean voters bought Trumpian 'economics' cuz that assumes such a thing exists and Trump is about as unthoughtful and antiwonkery as you can possibly get. They bought that he's (and Sanders to a degree - but he prob sounded like every asshole union steward they ever knew in the past who screwed their good jobs up) the only pol who bothered to talk to them.
        
        That doesn't mean those voters are not rational. It means they are open to the ideas of pols who actually speak to them with basic human decency and respect. It gobsmacked me the moment I saw that was his targeted voter group. To this day it boggles my mind that such a noncredible person like Trump can sell his horseshit there - because no one else is even bothering to show up. STILL.
        
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        Sean Hannity 5 years ago
        
        What I am getting at is that voters are systematically biased to the incorrect answers: they think protectionism brings prosperity, for instance.
        
        It does bring prosperity... to the hoi polloi who you relish in seeing eviscerated economically, and often literally, for your amusement. The 20 million you displaced with immigration, offshoring and NAFTA aren't better off getting the scraps from your table than they were when they lived next door. And the more you try to convince them that they are better off in the poor house of your making the more they resent you and oppose you. That IS their self interest.
        
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        EISTAU Gree-Vance 5 years ago
        
        “Maybe they actually want mediocrity”. Yup.
        
        But the worst of that lot wants someone else to pay for it. Dems appeal to this resentful group.
        
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        EISTAU Gree-Vance 5 years ago
        
        Higher income and educated people vote more?
        
        And most of them voted for Hillary or trump.
        
        Income and education might be a poor barometer for intelligence.
        
        Haha.
        
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        Sean Hannity 5 years ago
        
        So my point still stands: voters do not vote vote in their own self-interest, but their perceived self-interest
        
        In other words you are employing the exact argument made for communism: false consciousness.
        
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    2. JFree 5 years ago
      
      I should probably edit that last sentence to 'libertarians are to wedded to immediate short-term power'. The notion that one can't vote in even a single election without trying to claim some DeRp loyalty prize. People seem to prefer voting for even the losing side of DeRp or voting for DeRp when their vote doesn't remotely matter in any universe. And that habit makes it impossible for any alternative to build up over more than one election.
      
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    3. Zeb 5 years ago
      
      And libertarians themselves are too wedded to power to get outside the whole DeRp thang.
      
      They are also kind of stuck with it.
      
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      1. JFree 5 years ago
        
        I agree that changing that ain't easy. But even the Pirate Parties make that sort of reform part of their specific advocacy and part of their overarching philosophy.
        
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3. Zeb 5 years ago
  
  That's a good question. I think part of the problem is that people don't have a very good basis to compare their lives and standards of living now to those of the past. If a direct comparison is even possible.
  I'm also not sure that people's dissatisfaction has much to do with actual material well being or economic situation. Once past the point where you don't have to worry about how you are going to pay your bills, money and happiness don't correlate all that tightly.
  
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  1. JFree 5 years ago
    
    Once past the point where you don’t have to worry about how you are going to pay your bills, money and happiness don’t correlate all that tightly.
    
    If that's the case (and I agree it is) - and if Maslow's hierarchy of needs is reasonably accurate (which I also agree with) - then the nature of the 'political' would be very different. The economic needs are only the bottom 2/3 rungs on that hierarchy. If those are being met, then discussion would be more towards those upper-rung things which are not resource-constrained. If the discussion remains on those lower two rungs (or is increasingly so), then it is a massive cop-out to just assume that the bottom two rungs are simply growing faster than wealth (ie that those bottom-rung needs are unlimited over time).
    
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  2. Sean Hannity 5 years ago
    
    Once past the point where you don’t have to worry about how you are going to pay your bills, money and happiness don’t correlate all that tightly.
    
    Half the country doesn't have adequate cash flow to service a $1,000 emergency. That you are satisfied with the scraps from the billionaire oligarchy's table doesn't do anything for the poor cocksuckers who you wouldn't cross the street to spit on.
    
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    1. bvandyke 5 years ago
      
      And why don't they? Is it because they truly can't afford it or because they can't stop spending on other things. I know there are people in the first category (I know some). But there are many, many more in the second.
      
      I think the questions are asked wrong. They don't take into account what the people actually spend their money on. To me there are two big issues:
      1. Economics / Personal finance is not taught in public education - kinda like the leadership of the country doesn't want the general rube to understand it at all.
      2. Media pushes consumerism to the max, to be happy I have to have that, to look good I have to drink this, etc.
      Without #1 too many fall for #2.
      
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4. EISTAU Gree-Vance 5 years ago
  
  “People’s own assessment of progress” is colored by their exposure to incessant narratives of grievance and resentment. Everything is so terrible and unfair and all that.
  
  “Full of shit and stupid and ignorant........”? Not really. Fed a line of shit from power hungry progs whose entire platform is division and victim hood? Yup.
  
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Eddy 5 years ago

At first I thought it said the middle *East* isn't dying.

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Boomer 5 years ago

> And that's a view that's held now increasingly by not just the left…but by conservatives, Republicans, [and] economists across the spectrum.

Yeah, because when by almost every important measure the human condition is better than it has ever been in history, politicians need SOMETHING to scare people with.

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1. Sean Hannity 5 years ago
  
  Median household income is inadequate to service a loan for the median priced home... and that's with 2 people working full time where a single income would service the same debt 60 years ago. There is no yield on savings thanks to 20 years of suppressed interest rate and the creation of 5 trillion dollars in new liquidity for the banking cartel. But yeah, you can watch mindless entertainment and eat Big Macs for cheaper than ever before. What, me worry?
  
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  1. EISTAU Gree-Vance 5 years ago
    
    Nonsense. My mortgage for a 4 bedroom house with a garage and a pool in the backyard is $720 a month. Quite comfortable on a blue collar machinists income.
    
    I suppose I really should feel like a victim tho, cuz, ya know, other people are rich and stuff.
    
    EVERYTHING IS SO TERRIBLE AND UNFAIR!!!!
    
    Haha.
    
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  2. Brian 5 years ago
    
    The median priced home is much bigger and has much more shit in it than the median priced home of 1960.
    
    If you want to buy a home built in 1960 in an average neighborhood without central heating or air conditioning, you probably won’t have a hard time.
    
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  3. bvandyke 5 years ago
    
    The problem is that the definitions don't match like they used to. Home prices have skyrocketed for various reason while the average wage hasn't gone up as much - can we say inflation. Still houses are affordable for many, maybe not that brand new 2500 sqft home (i.e. about the median being built) but that 1700 sqft home that is 10+ years old is. Taxes and insurance are a big issue - the taxes and insurance (mostly taxes) on my house are more than then actual mortgage payment.
    
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SierraLima 5 years ago

His point is that consumer electronics are much better and much cheaper than they used to be, which is true. But housing is considerably more expensive, even though the houses are slightly bigger but built much shoddier and I certainly don't expect mcmansions in the burbs to still be standing in 100 years. Healthcare is somewhat better at a much much higher cost. I personally would prefer to pay healthcare prices from 30-40 years ago for healthcare technology from 30-40 years ago where actual health outcomes were only slightly worse and lifespans weren't that much shorter. Education (both tax payer funded K-12 and college) are much more expensive and far worse now. Housing, helathcare and education are big ticket items and the lions share of most budgets, so they should have a far greater weight in calculating inflation (and quality of goods) than the cost of your big screen TV.
Personally and anecdotally over the past 10-15 years the cost of living has gone up considerably faster than my salary and the most noticeable difference in lifestyle is that I now stream TV and movies instead of physically popping in DVDs when I'm bored and want to just veg out or kill time. Hardly important. In the big picture, personally I would rather go back 15 years. I wish I was an adult in the 80s so I could have first hand experience on cost and quality of living back then.

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1. Metazoan 5 years ago
  
  Healthcare is somewhat better at a much much higher cost. I personally would prefer to pay healthcare prices from 30-40 years ago for healthcare technology from 30-40 years ago where actual health outcomes were only slightly worse and lifespans weren’t that much shorter.
  
  I disagree with this pretty strongly. Health outcomes are only slightly better, but this convolves advances in medicine with significant decline in healthy lifestyles.
  
  More broadly, I think again that this is mostly attributable to government intervention in the economy: those sectors with most intervention and spending inflated the most, while those with minimal intervention even deflated.
  
  interesting chart that you've probably seen: https://www.aei.org/carpe-diem/chart-of-the-day-century-price-changes-1997-to-2017/
  
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  1. SierraLima 5 years ago
    
    It's true that people lead more unhealthy lives now which is bad for average health outcomes. But that is at least somewhat balanced out by that most jobs now are much less physical and in an industrial setting and hence lower incidences of workplace injuries and death which overall improves health outcomes and lengthens lifespans.
    
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2. Zeb 5 years ago
  
  Those are valid points, but I'm not sure how you convince people that the problems aren't best solved by having government throw more money at it. A lot of the increases in costs are driven by government spending or regulation. Particularly healthcare and education.
  And, particularly in the case of healthcare, you need to look at total compensation from employers, not just wages.
  
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  1. Sean Hannity 5 years ago
    
    And, particularly in the case of healthcare, you need to look at total compensation from employers, not just wages.
    
    That goes toward the whole 'spending more money to get the same outcomes' though. I'd rather pocket the increase in health insurance spending compared to 40 years ago and use the interest on the savings to pay for my health care. You fucking retards just can't stop sucking oligarch cock.
    
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3. Brandybuck 5 years ago
  
  Housing prices is a product of government design, to the point that the average consumer supposes that ever increases home prices is a GOOD thing and a marker of a GOOD economy. A housing "slump" is when there are too many houses, lowering the price of real estate. It's ass backward and nuts.
  
  All these calls for rent control would be pointless if government policy didn't keep jacking up home prices. They do it through mortgage subsidies (which homeowners consider to be their god given right) and zoning to prevent higher density housing, plus dozens of other federal, state, and local rules.
  
  Similarly with healthcare, the pricing can be directly attributed to the government. There has been a complete and total disconnect between healthcare and the market. Yet it's still called a "capitalist" system. You start with the problem of the thrid party payer, then add on layer after layer after layer of federal and state interventions. Then toss in stupid ass regulations designed to hinder the progress of medical technology and care. I work for a medical company we plan for new product to finally hit the market after twenty years. Twenty. Years. That's how much the FDA has slowed us down. We launch first in Europe because it's cheaper and easier.
  
  Education tuition prices can be laid squarely at the feet of government meddling.
  
  Etc., etc., etc.
  
  The fact that we are doing so well in spite of the government trying to drive us all into an equality of misery is itself a miracle of the market. We have the massive intrusive government that we do because we are affluent enough to afford it. Government of this size would have destroyed the authoritarian feudal societies, who only extracted 10% rents from their serfs.
  
  Just imagine how awesome we would be if government got rolled back by a mere 5%! But even that is considered crazy anarchist talk.
  
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  1. Metazoan 5 years ago
    
    Spot on. One problem that often encounter when talking to ultra-pro-regulation academic friends is that they seem to be unable to understand that the state is not some neutral, wise, omniscient arbiter. Every social problem, real or imagined, they insist that the state do something, completely neglecting that the state's "something" is often far worse than the original problem.
    
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  2. SierraLima 5 years ago
    
    Guys, I completely agree it is mostly the government's fault that housing, healthcare and education are screwed up to high heaven. I'm not remotely advocating for government solutions. I'm just stating the fact that inflation is actually worse and the middle class isn't doing as well as this video conveys.
    
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    1. Sean Hannity 5 years ago
      
      Don't waste your breath. These retarded Pollyannas are sick of your bourgie whinging. If it's good for Chuckie Koch then it's good for 'murica and freedom loving 'muricans!
      
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      1. EISTAU Gree-Vance 5 years ago
        
        Haha. “Whining”. Yeah.
        
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  3. Sean Hannity 5 years ago
    
    They do it through mortgage subsidies (which homeowners consider to be their god given right) and zoning to prevent higher density housing, plus dozens of other federal, state, and local rules.
    
    They mostly do it through loose monetary policy. 5 trillion extra dollars and mortgage rates that haven't been above 5% since 9/11 incentivizes buying mortgages. Particularly when bankers can't get any yield on anything else but highly volatile equities, derivatives, and currency speculation.
    
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    1. Brandybuck 5 years ago
      
      That's definitely part of it. But the purpose of monetary policy in regards to housing is to explicitly keep housing prices high.
      
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      1. NJ2AZ 5 years ago
        
        as long as .gov thinks it can simultaneously promote "housing as a way to build wealth" and "housing should be affordable", this is what we got.
        
        pick one...
        
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  4. EirkKengaard 5 years ago
    
    Home prices are a consequence of changes in population, givenn that the supply of land is fixed. The US coastal states are severely overpopulated, with consequent high prices for homes.
    
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4. Flaco 5 years ago
  
  SierraLima, if you would prefer healthcare prices and technology from 30-40 years ago, you can pretty much have it. When your doctor recommends an MRI, just say no thanks. And if you need medication, ask for an older drug that is available generically. I'm not being sarcastic.
  
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  1. Sean Hannity 5 years ago
    
    Hate to break it to you but they had MRI in 1979. Pretty sure his doctor is not going to charge him a 1979 rate for the office visit either. Or the lab work. Or the X-rays. Or any fucking thing else.
    
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    1. Flaco 5 years ago
      
      Sean Hannity, let's not pretend that office visits or X-rays were exactly cheap back then either. Just reasonable. The point is, anyone who doesn't want modern expensive health care is absolutely able to avoid it. But most people don't take that option.
      
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  2. SierraLima 5 years ago
    
    Actually Flaco, my plan is if I get sick to go for medical tourism. Health outcome statistics will be just slightly worse, technology will be just slightly outdated and the cost will be 1/10th and I'll pay cash. Seems like a reasonable cost benefit analysis to me. In the next year or so I plan on getting out of my high paying career of tech and moving into an unsteady, low paying and no benefit career of flight instructing that i'll actually enjoy now that I've saved up enough, so I've thought about this sort of stuff.
    Regardless, Sean Hannity (the thread commenter, not the Fox News anchor) is right, a lot of the same procedures and basic medical care was available for decades. The healthcare system was in much better shape and wasn't nearly as regulated, insured, litigated and costs weren't quite as decouple from the patient as today. That explains the cost increases a lot more than improved technology. If it was all about better technology, then consumer electronics prices would be shooting through the roof too.
    
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Brandybuck 5 years ago

The one thing guaranteed to piss off the Left and the Right in equal measures is to assert that the world is not going to hell in a handbasket and that we're really doing pretty well.

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1. Zeb 5 years ago
  
  I often wonder why people are so in love with gloom and doom. I guess a lot of it is driven by poltics. If you can't say that you will save the country from some horrible fate, or your opponent is destroying the country, then you have to admit that this isn't "the most important election of our lifetimes" and that politicians are all full of shit.
  
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  1. TripK2 5 years ago
    
    Part of it is evolutionary biology. We're wired to identify threats and risks so we can survive. It doesn't matter how good things are, we will always find something to fret about, which is just a sanitized version of identifying a threat and risk to our safety.
    
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    1. Zeb 5 years ago
      
      Yeah, good point. Seems related to all the anxiety problems people have. In a more "natural" state (or when you are in a war or some other dangerous situation), we have things we need to be alert to and worry about all the time. When life is comfortable, we direct those systems towards things that aren't the same level of threat.
      
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      1. Sean Hannity 5 years ago
        
        Or possibly the bottom half of the country just doesn't like you pissing on their head and telling them it's not even raining because the sunshine is so bright. A substantial contingent of this country is not cocooned in navel gazing upper class comfort like you, content to lick the boots of oligarchs because the bills are all paid.
        
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  2. EISTAU Gree-Vance 5 years ago
    
    EVERYTHING IS SO TERRIBLE AND UNFAIR!!!!!
    
    Haha. Yeah. That sells. Vote for me. You’ll still be a victim, but I’ll feed your resentment with grievance narratives and division. Rinse and repeat.
    
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  3. bvandyke 5 years ago
    
    Two reasons:
    
    1. Media
    2. Lack of critical thinking - which means you believe #1.
    
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2. TJJ2000 5 years ago
  
  I don't about that - It kind of felt like life was going to h*ll in a hand-basket during the Obama Administration. I'd almost put money on the fact that it would've had he somehow become a "career" president.
  
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Vikash 5 years ago

Good one I am following you some time ago and I really like your content
https://spdlearner.blogspot.com/

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Darth Soros 5 years ago

I'm old enough to remember when the Left hated the middle class: too reactionary, self-satisfied, etc.. "Bourgeois" was the ultimate put-down term. Then the party line changed somewhere along the line. Now, every time there's an election, some "liberal" goes into a sob story called, "Lo, the Poor Middle Class." Wonder when or why that changed.

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1. Zeb 5 years ago
  
  All the hipster commies grew up and became the middle class.
  
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  1. EISTAU Gree-Vance 5 years ago
    
    Funny how that works.
    
    Grievance mining just moves on to the next abundant source: the young and gullible.
    
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TripK2 5 years ago

I didn't listen to this, but a lot of what I've seen Reason report on this is that the middle class is shrinking because more people at the edges are either becoming wealthy enough to classify as "upper class" or poor enough to classify as "lower class." Reason usually highlights that we should be encouraged since more a larger proportion of these people are becoming richer compared to those that are becoming poorer.

This mirrors what I've seen in my own life, and I don't know if its so great. I see the friends that I have that are successful becoming notably successful, earning additional money and promotions left and right. Meanwhile, some of my friends that have had less success find themselves on a treadmill with virtually no increase in standard of living from year to year and and see very little in the way of a path forward.

Some of those that have stayed in place for a long time have become very bitter, even making a few nasty remarks when those of us that have been successful even mention their success. I have a few acquaintances (former friends) that talked about how they basically hate going to work unless their high. I mentioned that I could NEVER do my job high - too much thought is required and I'd panic. Needless to say, they didn't take kindly to my comment. I got a few snarky comments basically saying "shut up you're different from us" without explicitly saying so. They're all very very knee-deep in the identitarian far left politics these days and only going deeper.

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1. Zeb 5 years ago
  
  I could never work high in my job either. But I can imagine that there are jobs that I wouldn't want to do not high.
  I see some of what you describe. But I also see a lot of my friends on the lower end of the economic ladder making progress and moving in life. These tend to be people with actual skills: carpentry or other trades, or people with serious culinary training.
  
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  1. TripK2 5 years ago
    
    I have actively encouraged some of my friends to go to trade school. I hope they do, and I hope they see success.
    
    The ones that have become outwardly bitter I've had little choice but to separate myself from. Once you're in the mindset that everyone that has done better than you is the enemy, rather than someone you can learn something from, your mind will eat you from the inside like cancer and keep you in poverty forever.
    
    I really hope I see more progress like you are seeing, because I dislike seeing the economic stratification of my friends. I have a lot of sympathy for those that are trying hard but simply were not blessed with natural talents that lend themselves to the jobs available today.
    
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    1. Sean Hannity 5 years ago
      
      Once you’re in the mindset that everyone that has done better than you is the enemy, rather than someone you can learn something from, your mind will eat you from the inside like cancer and keep you in poverty forever.
      
      Maybe if you spent less time diagnosing them like a paternalistic condescending prick that wouldn't happen.
      
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      1. EISTAU Gree-Vance 5 years ago
        
        Haha. “Diagnosing” something that’s already clearly happened can maybe make it not happen?
        
        Ok.
        
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      2. TripK2 5 years ago
        
        You have no idea what you're talking about.
        
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2. EISTAU Gree-Vance 5 years ago
  
  “Knee deep in the identitarian far left politics......”
  
  The realist in me thinks this is sinister, purposeful division from people who gain power through grievance. The individual in me thinks that people are gullible for buying into it.
  
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3. bvandyke 5 years ago
  
  Yep, exactly. From my "friends" what I've seen is that it really isn't education or where they came from, it is work ethic.
  Many that go nowhere and are bitter, don't try and never have. They also don't think that those that have risen worked for it. They figure they put in the time and deserve to rise through the ranks, never realizing it actually takes hard work. Of course there are outliers for each. I would call it lazy but I don't think that is really the answer, they just don't have any drive to improve. They think someone else should do it for them.
  
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  1. TripK2 5 years ago
    
    I've definitely seen some people that fit exactly what you're saying. The ones that are bitter almost always fit that mold.
    
    There are a few friends I have that are spinning their wheels as hard as they can and getting no where. That sucks. Some are seriously are just given such a shit hand and are doing the best they can.
    
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Dillinger 5 years ago

there's nothing wrong with capitalism

http://www.youtube.com/watch?v=xqXAW2snGMI

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Moderation4ever 5 years ago

What the Professor Roberts is missing is middleclass anxiety. In the 1970 you likely worked for a company that would provide a job for the rest of your life. Yes today you have a cell phone and a big screen TV but you worry that the plant may close and you will be out of a job. When you left college you had a job waiting for you, today you are not so sure the same will be true for your children. The problem today is not that you want more money, but you want to be secure in the money stream. You want to know that the paycheck will be there each week. I think that is the heart of why people think the middle class is declining.

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1. DaveSs 5 years ago
  
  The 70s, particularly the latter half, were not really economic sunshine and daisies. Troubles in the economy factored heavily in both the 76 and 80 elections.
  
  If people today greatly feared they'd laid off, they'd be saving considerably more.
  
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  1. Sean Hannity 5 years ago
    
    If people today greatly feared they’d laid off, they’d be saving considerably more.
    
    Right? Like, dude, why aren't you putting those 3 dollars a month that don't go directly to bills right into that high yield savings account at 1.75% APY and rolling in your pool of gold coins?
    
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    1. TJJ2000 5 years ago
      
      Wrong approach -- Like, dude, why aren’t you cancelling those bills that don’t go directly to absolute need. You do realize you don't HAVE to keep feeding the very corporate incomes you complain about incessantly.
      
      If all your income gets eaten up by government (no choice) Obamacare, SS, Taxes, and etc... Then I'll feel for you.
      
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      1. bvandyke 5 years ago
        
        Exactly. You don't need new $800 smart phone every year or two. Don't need cable. Don't need cigarettes, alcohol, etc. You don't need 4 4k TVs. Stop buying the crap you don't need.
        
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  2. Moderation4ever 5 years ago
    
    Your observation about the 70's is correct and I would add that the 70s and 80s were really transition periods for the economy. I would suggest that these periods have set up the insecurity we see today that makes people in the middle class anxious. Many of us saw parents who worked all their lives laid off. This established a mindset that jobs and paychecks were not secure. As for savings in some cases there is not enough extra to save. People buy too much but that can also be tied to anxiety and the get it now while you can mentality. Finally I would add that market crashes in 1989 and 2008 have made people wary of saving to much. I don't think that is correct but it may be true.
    
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JAQO 5 years ago

Explain credit card debt...

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1. bvandyke 5 years ago
  
  I can explain mine - stupidity.
  
  But I learned......maybe.
  
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JPD 5 years ago

Thank you for this analysis. I have been waiting for this approach for a long time. Politicians need to start with a definition of "middle class." Does the middle quintile of income make sense to anyone else? Looking at how individuals do over time makes more sense to me than just saying the the middle class is not doing well. Some get better, some get worse, but we all have the opportunity to do better for ourselves.

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Robes Pierre 5 years ago

When these clowns pontificate about the middle class, or poor people, it becomes painfully clear how completely out of touch and intellectually bankrupt the GMU 'economists' really are.

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EirkKengaard 5 years ago

The middle class has been diminishing since 1965.
The middle class was better off from 1870 to 1965, in the sense that a tradesman's salary would cover a home, provision for wife and children, and university education for the children (tuition at UCB Berkeley was zero from 1868 to 1968). My grandfather, my father and I lived such middle class lives. My children and grandchildren will not.
The major factor in the decline of the middle class was the passage of Hart-Celler in 1965. Another factor was the Reagan tax cut of the 1980s.

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1. EISTAU Gree-Vance 5 years ago
  
  Haha. Tax cuts are bad?
  
  Yeah, if only the bloated government was taking more money maybe tuition would be more affordable.
  
  Ok.
  
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2. Don't look at me! 5 years ago
  
  Tax cuts make people poorer? LOL
  
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3. TJJ2000 5 years ago
  
  I'd think you'd find better wisdom by investigating how much government sponsored "communism" in the marketplace has grown since 1965.
  
  You just might find a direct correlation between "climate change", "The New Deal", "Obamacare", "Common Core", etc... etc... and a LOST standard of livable income.
  
  So far - Ever year Trump is in office deregulating the standard seems to be getting better. Heck, I'm lazy as h*ll but I got my trade degree, support a wife and kids and even have extra to pay for unlimited movies on Netflix. Then again; I didn't major in "female studies" or some political cult degree that didn't exist in 1965.
  
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  1. Moderation4ever 5 years ago
    
    Just a note that Common Core, like the Affordable Care Act, has its roots in conservative thinking. The idea of a national curriculum was pushed especially by business groups. Right up until it became unpopular and then it was abandoned on the door steps of liberals. Conservatives yelled "its not ours" who you going to believe us or those papers we wrote years ago.
    
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    1. TJJ2000 5 years ago
      
      Has its roots in RINO thinking -- I don't think you understand the word conservative.
      
      Its quite humorous how you define your idea of Liberals stealing all their ideas from RINO'S as "abandoned on the door step". Does that mean liberal ideology is nothing more than the trash collected from the RINO'S???? That sure seems like the premise your making.
      
      Either way; Many GOP members certainly can receive blame. McCain killing the Obamacare repeal and many more. In the big picture though the GOP tries to be conservative a WHOLE HECK of a lot more than the DNC does and that fact is so obvious its not even a debate.
      
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      1. Moderation4ever 5 years ago
        
        " In the big picture though the GOP tries to be conservative a WHOLE HECK of a lot more than the DNC does and that fact is so obvious its not even a debate."
        
        I think you are kidding yourself here.
        
        Log in to Reply
        
        TJJ2000 5 years ago
        
        I need but mutter two words of today's DNC agenda, "Medicare for all" and "The New Deal". I dare you to come up with any number of GOP agenda's that come even close to just one of those.
        
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        Moderation4ever 5 years ago
        
        The Ds don't pretend to be conservatives and so your argument does make much sense to me. The Republicans claim to be conservative yet it is not difficult to find contradictions to that claim. The easiest point out is their willingness to spend money and increase the debt. They also seem to be more supportive of authoritarian state when its their values they want enforced. So I would stick by my claim that the Rs are not the conservatives they claim.
        
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        TJJ2000 5 years ago
        
        And the Ds pretend not to be communists yet it is not difficult to find communism in every one of their agenda's. You're certainly right though; There are very very many RINO'S exist in the GOP. They disgust me too.
        
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        Moderation4ever 5 years ago
        
        I have a problem with your term RINO's and who are the RINO's. When your talking about fiscal conservatives I think of Never- Trumpers. It is hard to see any of the usual Republican values in President Trump and yet many would argue that those Republicans opposing Trump are RINO's. I wonder if RINO is just a term ready for the trash heap?
        
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4. canino 5 years ago
  
  in the sense that a tradesman’s salary would cover...university education for the children (tuition at UCB Berkeley was zero from 1868 to 1968)
  
  College was not free back then. UC Berkley is only one university of many.
  
  And average people were not going to college in anything approaching significant numbers during that time period. College was mostly for the uber-wealthy during that era and colleges made that clear to everyone that that was the case. So this point doesn't really fly.
  
  Plus, while tuition at UC Berkley was "free" back then (they were unique in that), they charged fairly hefty yearly fees during that time, with tuition costs slowly being phased in starting in 1960 (incidentally that falls in the time period you proclaim to be the best).
  
  As much as today's student loan system sucks, we've never had more college students and grads than today.
  
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TJJ2000 5 years ago

Lefty Media = 1,000,000,0001 "factoid" reasons to complain about people with fish and 1,000,000,0001 excuses to steal another mans fish ---- but NEVER, EVER a single lesson on fishing.

"Progressing" the end game goal of, "You don't own you --- [[WE]] own you." Please stop pretending your an individual and SELL your soul to the [WE] foundation.

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nosib66910 5 years ago

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tim koss 5 years ago

how do you edit a comment after posting?

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1. Don't look at me! 5 years ago
  
  Lolz. Wait till hell freezes over.
  
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2. TJJ2000 5 years ago
  
  I don't think you can edit on Reason.
  
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Why the Middle Class is Better Off Than You Think

The consensus view that the American middle class "is dead, dying, hollowed out" is based on an "incomplete reading of the data," says economist Russ Roberts.

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