Asymmetrical Information

1973? It depends - Do I get to be 16 again? Can I have a Camaro?

Your problem is that you choose 1973. I believe that the really smart economist, Paul Krugman, thinks 1955 was ideal since incomes were so much more equal then.

Outside the big cities, you were forced to have cable if you wanted to watch TV. And cable meant access to HBO (as part of the cable package; not part of a different tier of pricing) and the Superstation, Channel 17 out of Atlanta (Ted Turner's station) which carried all the Braves games. That's why my son became a Braves fan, even though we didn't live in Georgia.

On a more serious note, life did seem better then. Whether it was because of my age at the time, or because I was enjoying what I did, or the feeling of hope that all young couples have when starting out in life, I don't know.

"Three television channels and nothing good on any of them."

Slander! If "nothing good" means Schoolhouse Rock, MASH, Mission Impossible, The Six Million Dollar Man, Bob Newhart, Mary Tyler Moore, Hawaii Five-O, The $10,000 Pyramid, and The Waltons then I don't want to be right. Bookend 1973 with '72 and '74 and you can add Bewitched and Happy Days to the list.

They did all this with just three channels.

And it was uphill, both ways.

The 70's were a really bad time, inflation, war and gas lines. Make it 1983 and I would think about it. The only thing I would miss is the internet, and with a little extra income I could afford the airline tickets, a vcr and cable tv. I would not miss the traffic congestion, terror, war, and the high cost for college and housing.

"Three television channels and nothing good on any of them."

Slander! If "nothing good" means Schoolhouse Rock, MASH, Mission Impossible...

And we've already seen all that stuff in reruns or on YouTube. Unless we're going back to '73 without our memories of the future, but I think that overly complicates the idea.

It would be nice to see The Godfather and Star Wars on the big screen.

this really must be a generational thing. I graduated college in 1973 and between then and the invention of the Internet and cell phones, life was good. In fact, better in many ways, but to each their own.

As to television, today we have 157 channels with nothing on, so at least back in the day we didn't have to spend as much time flipping through the remote to prove what we already knew.

Two words that define why today is better:

Modern Dentistry

1983: seriously?

VCRs were upwards of $2000, NOMINAL. You'd be looking at dramatically more than a 30% supplement to median wage to afford that.

you're playing ATARI, vs XBOX360, and paying more for it.

1983's "fuel efficient" car is today's gas guzzler, and has hardly any features. CD player? WHAT'S A CD?

Brad's site is hilarious these days, and highlights the extreme unreality of the liberal left, to say nothing of the hard left. Any progress is denigrated because we have not yet reached utopia. They were discussing the horridness of cheap accomodations filled with people needing dental care, even though the poor could have color tv and a cell phone. They didn't notice that today's hovel is yesterdays' nice house. Our standards in EVERYTHING have changed, and are dramatically higher.

Teeth whitening, available from crest whitestrips, whitening toothpaste, cheap laser treatments, etc. Orthodontal care is dramatically better, cheaper, and more convenient (invisible braces, for A). Dental care (invisble fillers, laser drills, laser catalysed cement...) is better, safer, and less painful.

Clothes are cheaper and better quality, food is cheaper, better quality, and of higher variety. My grocery store has 400 cheeses, 200 olive oils, 4 types of artisanal baguettes, 50 vintage modena balsamics, 3 brands (and god knows how many varieties) of pure not from concentrate orange juice. My razor has 5 blades and you can't even nick yourself if you try.

As to no war in 1983... what? Ever present danger of instantaneous nuclear war, Soviet hordes poised to sweep through the Fulda Gap, Grenada, Marine barracks bombing in Beirut, a vastly larger army with simply huge emplacements across Europe and Asia.

People think of the "Good Ol' Days" because they forget everything bad that ever happened and only remember the highlights. Today is probably a normal day, and doesn't compare to one of the best days in your life, ergo life was so much better 20 years ago! Sorry but, er, no. Brad does give the game away, by highlighting that he doesn't really care about the data, and only wants equality. His ideal is 100% equality, which is useful, as we can easily dismiss any protestations of centrism or moderation, and toss him back with the rest of the aging Maoist hacks.

the best car from 30 years ago is a joke compared to a mediocore car from today, same with bikes, TVs, calculators, clothes (target makes sears from the 70s look silly). most everything was so much worse and so much more expensive. not a day goes by that i'm not dumbfounded by (e.g.) how cheap a good basketball is compared to 20 years ago (it's literally less in real dollars). people who somehow think they had it good materially in the 70s have amnesia (do they remember what passed for food? even good food?). (yes, yes, it's all so cheap b/c the chinese keep investing in the US, it's an illusion, etc.)

the other thing i can never figure -- even those things whose prices have raced ahead of inflation (housing and education) are available to greater portions of the population. how can that be if wages have stagnated? that is, how can housing ownership and size increased in such dramatic fashion even as everyone's struggling to get by on their ridiculous 1970s level wages?

I always judge the standard of living improvements by Halloween candy. 1970's dum-dum suckers and Bit O'honey. 2000's chocolate candy bars everywhere.

mmm, chocolate

Some of us think in terms of "Markets in Everything." The reality is that progress brings more and more benefits -- both in absolute terms and proportionally -- which are neither liquid nor easily measured nor easily traded. They are "in the air," so to speak. No one has ever fully thought through the implications of that for either economics or moral theory.

I don't understand why he's focusing on the rapid drop in prices shortly after a new product is introduced. What about the introduction itself? That's effectively a price drop from infinity. That benefit is even harder to quantify than price decreases early in a product's life cycle, but it's surely relevant.

It makes no sense at all to say that living standards are improved when a newly invented product is first sold for $1000 and then quickly drops to $100, but there is no measurable improvement in standard of living if the new product is sold for $100 immediately.

Hey:
Why don't you get a job with the government. Since you know what I want better than I do, you would fit right in.
I bought a vcr for Christmas 1984 for $300.

Your problem is that you choose 1973. I believe that the really smart economist, Paul Krugman, thinks 1955 was ideal since incomes were so much more equal then

1955 was a golden age... if you were a white, straight, working-class Protestant male.

I'm pretty sure that the $2000 vcr mentioned was intended to mean '06 dollars.

Over at The Big Picture they make the point (http://bigpicture.typepad.com/comments/2006/09/what_is_wealth_.html) that all temporal arguments are two-sided. If the poor today are supposed to feel better because they are richer than the poor (or even the rich if you go back far enough) of previous generations then so should the rich today feel bad because they are poorer than tomorrow's poor.

Clearly time comparisons make no sense to understand wealth or poverty, both of which are realtive concepts at heart. They may help at themacro level, to measure how nations get rich over time, but are useless aty the micro level. Practically any poor person in the US is richer, with better access to health care and education than many, if not most, people alive today. Does that make them feel any better or does it change the policies we want to implement in any way? Not at all. The reason is simple, they don't compare themselves to those people. Their peer group is in the US today, not in the past (or the future) or in other nations.

Jane is more interested in making the poor and middle class better off than I am in making the income distribution more equal. But that's impossible. Poverty is relative so there's no way to make them better off without some changes to the income distribution.

"The 'Bread & Circuses' are Sooo much better And less expensive today...."

Funny, noone cares to mention the ~U$D 57 Trillion in Debt floating around today v. the Fiscal position we were in in '73, '83, etc. ...

let's see 57,000,000,000,000/300,000,000=?
57,000,000/300=?
570,000/3=?
U$D 190,000 per cap?

Amazing how little Today costs when we start spending Tomorrow(s).

Joan: You bought a VCR for $300 in 1984? Great, and an excellent example of serious price drops in electronics as they move through the adoption curve. Course that's not a very good proxy for prices in 1983.

At least according to one article, $300 in 1984 dollars was a VERY good price for a VCR at Christmastime. http://findarticles.com/p/articles/mi_m3092/is_v24/ai_3595884

I'm not saying I know what you'd like more than you, I'm saying that you have presented justifications of questionable accuracy. You'd need rather more than "a little extra income" to afford what you said would be nice to have in 1983, and you would not be able to find peace in '83, but rather a much more tense and dangerous world.

Further, housing was not so dramatically cheaper in 1983. You were paying about 13.4% for a 30 year fixed mortgage in 1983 http://www.hsh.com/natmo83.html as compared to about a 6.3% rate this year. That alone is worth an 84% difference in prices, or an annual appreciation due to lower interest rates of 2.7%, for the exact same monthly payment (the only measure that most people and financial institutions care about). Combined with CPI data that has seen prices almost exactly double since 1983, that gives a neutral price of housing in 2006 3.6 times that of 1983. Does the housing boom seem quite so extreme now, once you deflate due to CPI and lower interest rates? Not so much.

This also highlights how crazily expensive everything was in 1983. The evil predatory credit card rates we have now are what people with great credit were paying on their mortgages in 83! 1983 was not quite the evil, hairy, badly dressed, brown hell that 1973 was, but it also wasn't anywhere near as great as you seem to hink it was.

Salamandyr: Nope I was talking nominal, 1983 dollars. From what I've been able to find on Google today that may have been in the mid range, rather the cheapest available as I thought and had seen previously, but look at the link I supplied. One electronics store only sold 300 VCRs in all of 1983. That's a good indication of an early adopter product at a very high price, and they were talking about hoping to get down to $299, but were currently selling for $400 at the cheapest and more units were in the $600-$1500 range.

GT: what we are doing is demonstrating that the Left does not care about material well being. You are only concerned with status games. The Left plays to the base motives of humans to fight a class war, rather than actually trying to advance anyones material well being.

This movie sucked when it was the Church discouraging people from advancing their station in this life but to focus on attaining paradise, and thereby reinforcing feudalism and the enslaved state of the populace. It is no better now that you are trying to do it again.

Somehow I don't find it shocking that people who are trying to stoke populist resentments of material success are also stoking dislike of Israel and embracing anti-semites like Hamas and Hezbollah. This, too, is a movie we've seen before.

MEH: Yes the total indebtedness is horrific. It's also the fault of the New Deal and the Great Society. Get rid of Social Security, Medicare, and Medicaid, and we'd have essentially no debt problem. Get rid of the rest of the socialist state that we have, and paying the debt would be no problem.

But yeah, blame the conservatives for government spending!

If the poor today are supposed to feel better because they are richer than the poor (or even the rich if you go back far enough) of previous generations then so should the rich today feel bad because they are poorer than tomorrow's poor.

Um... what? That makes no sense.

For starters, it isn't a give that people in the future will be wealthier.

Secondly, the reason the poor today are better off than the poor of yesteryear is that they have more of the things they *need* -- food, clothing, shelter, et al. The rich already have everything they need; they've no reason to envy the rich of the future.

Finally, being happy at being better off than you were in the past doesn't equate to being sad that you're not as well off as you will be in the future. Most adults *expect* that it will take years or decades to achieve a better life. It's normal!

Hey,

You go on (and on) about the "unreality of the liberal left" and "Maoist hacks" and close with the subliminal "the Left does not care about material well being . . . [and] plays to the base motives of humans to fight a class war, rather than actually trying to advance anyones material well being."

Is there any reason to treat anything you say seriously, let alone give you the benefit of the doubt when you question someone else's accuracy?

Cheers,

"I believe that the really smart economist, Paul Krugman, thinks 1955 was ideal since incomes were so much more equal then."

In 1955 my grandfather was a successful small businessman, well above the median income. He and grandma owned one car. Of their four children, I think only the boy completed college. They did not have a TV (although this might have been a matter of taste or of signal availability rather than of economics). Grandma had a washing machine, but no dryer; she hung the clothes out in the back yard and hoped for dry weather. Nor did they have air-conditioning, and Omaha does get hot in the summer.

In short, they lacked things that a welfare family living in a ghetto takes for granted nowadays, and their above-median income didn't buy as much as today's welfare. Their lives were much better than that ghetto family's, but that's because they and their neighbors weren't criminals, drug addicts, or impulsive idiots who spent their money on bling-bling and then couldn't pay the utilities or buy food.

Raising a family on a lower income in the 50's was rather more difficult. My parents, baby sister, and I lived for three years in a cottage that was not much larger than a 1-car garage.

Dan,

I'll try to find it and post it but there is a lot of research that shows poverty and wealth are relative, not absolute concepts. The rich 100 years ago also had all they needed, or so they thought. Yet most poor people today, let alone rich ones, have much more than the wealthy had in the past.

This whole "we are richer than we were in the past" argument is only useful when looking at the macro level. But you are not going to convince anyone that they should feel ok today because they are richer than people in the past. Just like you are not going to convince anyone to feel better in the US because most people in the world are poorer.

What we need to clarify when debating poverty is what we are talking about. Jane says she wants to improve the lives of the poor and middle class but does not care about income inequality. But this is impossible because people view wealth and income as relative, not absolute terms. They compare themselves to others to decide if they are poor or not or rich or not.

Dan,

I'll try to find it and post it but there is a lot of research that shows poverty and wealth are relative, not absolute concepts. The rich 100 years ago also had all they needed, or so they thought. Yet most poor people today, let alone rich ones, have much more than the wealthy had in the past.

This whole "we are richer than we were in the past" argument is only useful when looking at the macro level. But you are not going to convince anyone that they should feel ok today because they are richer than people in the past. Just like you are not going to convince anyone to feel better in the US because most people in the world are poorer.

What we need to clarify when debating poverty is what we are talking about. Jane says she wants to improve the lives of the poor and middle class but does not care about income inequality. But this is impossible because people view wealth and income as relative, not absolute terms. They compare themselves to others to decide if they are poor or not or rich or not.

Rofe: Maoist is as Maoist does. GT and BJD explicitly say that they do not care about the material well being of any individual but are rather concerned with the relative status of people.

I'm not making this up, it is repeatedly stated in GT's comment. "Jane says she wants to improve the lives of the poor and middle class but does not care about income inequality. But this is impossible because people view wealth and income as relative, not absolute terms." How much more explicit does one have to get before it is fair to take their quotes at face value?

But don't take me seriously. I'm making up statistics on housing prices. I invented the costs of a VCR in 1983 and 1984. In fact, there has been no progress since 1983. It's all a sham because I call a spade a spade and say that a socialist Berkeley Prof is going far, far, far beyond "centre left". Arguments do have consequences, and when you start arguing for equal incomes regardless of material well being, you aren't just a social democrat anymore. If that offends you, then you need to be offended.

GT,

You are correct that people view prosperity as a relative concept. But that is not, in my opinion, a valid argument for actions to improve social equality.

What is best for society is to allocate the most resources to the most productive, and also, to allocate the least resources to the least productive. In other words, both wealth and poverty* are socially beneficial. They drive us. Wealth is what we strive for and poverty is what we fear. The carrot and the stick. Eliminate either and people will be less productive.

*I'm talking about relative wealth and relative poverty here - not advocating that the helpless should be allowed to die in the streets.

Randy,

I was simply pointing that since people do view prosperity as a relative concept Jane's objective of improving the lot of the poor and middles class will require some sort of change to the income/wealth distribution. The two concepts are linked.

You can, of course, ignore both if you so wish.

I am more interested in making the poor and middle class better off than I am in making the income distribution more equal....There are several broad categories of goods that I would like to make sure that everyone has enough of, and which I would like to see improve for everyone at roughly the same rate: food, shelter, clothing, leisure, health, education, and autonomy.

I agree, and I think we should focus communal resources on actual needs rather than on things people would like because they've seen someone else using them. But I think GT makes a good point: Our definition of "needs" has changed over time, so techonologically superior goods aren't enough by themselves to prove that our quality of life has improved.

Take cars. Cars are much cheaper and better now than they were 30 years ago, and even those were better than the cars of the 30s. In the early 20th century they were a luxury item; now the average American can afford them. More people can live farther from their jobs, so they have more options when it comes to housing. And it's much easier and faster to haul things now, so more goods are available to everyone.

But at the same time, cars have subtly changed the world we live in. For many if not most Americans, owning a car is no longer a lifestyle choice; it's a necessity. (Which is something I have to keep reminding fellow New Yorkers who gripe about suburbanites' gas-guzzling habits). Walking isn't a safe option when you're on a 55 mph country highway with no shoulder to speak of. And cars also isolate us from other drivers in a way horse-drawn wagons didn't - we're usually enclosed, and even when we aren't, we move too fast to chat with people we meet on the road.

I'll take our car culture, hands down. But that's what I'm used to. A farmer from 1905 might answer differently. What thing from his world have we lost that might make our lives richer? Maybe that thing should be considered when we start thinking about the change in our quality of life.

Gang-

A lot of the comments seem to state the folllwing: poor people who have more now than middle-class or wealthy people of the past still have it tough because by comparison to currently middle-class people they're in poverty, and that's how people see things, so we still need equality.

Look, there are also studies showing that no matter how much people make, they always feel like if they could just make about 15% more, they'd really be content. And there are studies showing that people's happiness is not that strongly correlated to their income. Etc, & co. It's not anyone's job but yours to make yourself happy. It is, more or less, a job of the gubmint to see that you are given, more or less, as good a chance as possible to do so.

Equality only has somehting to do with that if you see those hopeless, sad poor people as being incapable of bearing up under their myopic worldviews. Thank god for anointed seers like DeLong who care so much. Folks, it pisses EVERYONE off when some stereotypical rich bastard CEO gets his board to give him a brazillion dollars because the fifty million he has just isn't enough. But does that really make some single mom living in a depressed neighborhood any less happy? I'm pretty sure she has other things to think about.

Hey,

I'd take your facts more seriously if the rest of your dialog wasn't larded with absurdities like calling someone a Maoist. (In fact, I think one of the things Maoists do is murder quite a lot of their opponents. Where does that fit into your analysis?)

I sense that you fashion yourself as quite the flinty-eyed, fact-based realist, but you may want to tone down your broad-brush caricatures. That approach dilutes whatever valid points you're trying to make. (You did nail those VCR prices.)

Now, if you'll excuse me, GT, BJD and I have to go work on that little mauve book we're about to publish.

Cheers,

Jane,

The more I read you the more I find to like. You have a knack for asking the right questions and seeing things in the proper perspective.

GT,

You make valid points about the relative nature of the term "poverty" and people's own subjective perceptions of their lot in life; however, you seemingly miss Jane's point altogether. Jane clearly meant that she is more concerned with making the less fortunate of today more fortunate in the future, not more fortunate in the present. The dialogue here, and in the DeLong blog entries, clearly outlines the differences in the temporal perceptions of two different camps. It is difficult not to come to the conclusion that DeLong and others in his camp only care about the relative, contemporaneous status of people within this society. Indeed, the dismissive attitude taken by DeLong to the absolute fact of the vastly increased material well-being of nearly everyone today as compared to nearly everyone of, to use one of Krugman's favorite years, 1955 tells me that they are either not concerned at all about the future, or simply lack the ability to even conceive of a time that is not the present.

1. we're talking material wellbeing here, not spiritual (spiritual inflation is a discussion for another day). so it's irrelevant if (e.g.) the farmer from 1900 would miss the peace and quiet destroyed by cars. if given the choice, i might pick the life of a post-columbian (so there'd be horses) plains indian as the most satisfying, but that doesn't mean the material wellbeing of the plains indian compared to now or the 70s (though they'd likely score pretty high on calories and quality of feed, environmental health, etc.).

2. by saying it's all relative -- that we don't look to whether basic needs are being fulfilled, but rather whether people have what they believe to be a suitable standard of living compared to whatever they believe should be their peer group -- you create the reductio whereby poor people in the US are no better off than proto-humans shivering in caves or beggars in the streets of calcutta (because the relative differences may be better in those situations). which is ridiculous on its face.

3. rome falls, the plague arrives, nukes fly -- there's no reason to assume people 50 years hence will necessarily be richer. put another way, if you'd played this game in the "dark ages" (i know, the term's no longer favored), alot of folk would have quite reasonably picked life in ancient greece or rome as superior (assuming they wouldn't be slaves, etc.). or compare pre-weimar and weimar germany. or austria at different times. even moscow pre- and post the fall.

'I'll try to find it and post it but there is a lot of research that shows poverty and wealth are relative, not absolute concepts.'

It's statements like this that cause me not to believe GT's claim to be a Phd economist. The OFFICIAL POVERTY LINE is supposed to be three times the cost of providing a nutritionally adequate diet.

I.e. absolute.

GT,

Re; "...Jane's objective of improving the lot of the poor and middles class will require some sort of change to the income/wealth distribution.

True, from the relativist perspective, though I'm not sure Jane is speaking from that perspective. There is also the absolutist perspective which says that the poor will be objectively better off when living within a productive society. And my point is that relative poverty and relative wealth are both valuable tools for the creation and maintenance of a productive society.

According to Stan Liebowitz and Steve Margolis, Betamax went on sale in 1975, and:

'RCA began selling VHS machines in the summer of 1977 (two years after Sony's introduction of the Betamax), dubbing its machine "SelectaVision." The advertising copy was simple: "Four hours. $1000. SelectaVision." Zenith responded by lowering the price of its Beta machine to $996.'

According to the BLS inflation calculator, that's equivalent to $3,365 today.

Randy,

Agree.

I would gladly go back to 1973. Then I'd sell the house and go see Bill Gates about getting a job. Buy all the Microsoft I could. Then, to avoid taxes, buy a ranch in the LA basin.

I was simply pointing that since people do view prosperity as a relative concept Jane's objective of improving the lot of the poor and middles class will require some sort of change to the income/wealth distribution. The two concepts are linked.

Yes, why not, if you're talking about abstract definitions. Not, definitely not, if you're talking about policy prescription, because it represents two different modes of thinking.

A focus on equality is a present-tense measure that necessarily requires some sort of scales balancing; the increase in the lot of the one has to be funded somehow, typically by sending out the Tax Horde to reduce the lot of the other.

A focus on improving the lot of the poor and middle-class is a long term view that sees things in terms of creating opportunity and wealth that may not have existed before. It also means that we don't really care so much what the rich are up to, so long as they obey the law (in fact, "they get richer" is a distinct possibility, since the better-off poor and middle-class will probably be more productive).

The former of the two very justifiably leads to charges of envy politics. The latter is about what has taken place anyway, although there's always room for improvement.

No anony-mouse, I am not talking about abstract defintions.

What I am saying is that people (and there is plenty of research on the topic) view poverty and wealth mostly as relative concepts so telling them that they are better off than others in the past or others in the world, while true, is not going to make any difference.

That's why if you want people to feel they are richer you will have to do something about income and wealth inequality.

On the other hand, as Randy points out, if you only care about objective measures you can certainly strive to have all people reach certain minimum levels that you define and not care what the income distribution is.

The problem with that second approach IMO is that it will never work, politically. What people really want is a moving target, based on what others have, and setting an objective level is not going to convince them they are not poor or struggling.

VHS ads claimed "four hours" without mentioning the low quality setting required. That deceit and Sony's attempt to own it all and not license are what killed Betamax, thus making people in the '80s worse off than they would have been.

GT,

Re; "...it will never work, politically. What people really want is a moving target, based on what others have, and setting an objective level is not going to convince them they are not poor or struggling."

But there are many people who, in effect, do politically support the existance of relative poverty. When we limit our assistance to those who refuse to work, or abuse drugs, or fail to follow the rules, we are recognizing that poverty serves a positive social function. We tell our children that if they drop out of school they will end up working at some low wage job, and we recognize the justice in that result. It is true that those who end up in relative poverty will be acutely aware of it. But most of us recognize almost instinctively that this is a motivator, and of great value to society. And of course, if a great many of us did not politically support the existance of relative poverty, we would already be living in a welfare state.

When we limit our assistance to those who refuse to work, or abuse drugs, or fail to follow the rules, we are recognizing that poverty serves a positive social function.

No, crank, we're not.

Like I said, Person, if this were not the case, we'd already be living in a welfare state.

But you are not going to convince anyone that they should feel ok today because they are richer than people in the past.

Why not? After all, other people convinced me of that very fact.

Randy: that does not follow. From the fact that we refuse aid to those who will waste it, it does not follow that we say relative poverty serves a useful social function. The negation of "limiting aid implies belief in a positive social function of poverty" does not imply we would be currently in a welfare state.

"We" limit aid to those who will waste it so as to save our *own* resources.

Person,

Good point. To some degree, the immediate reasoning for many is individual. But there are many examples of social reasoning as well. From early America there was the idea that, "if you don't work, you don't eat". When the company fires an unproductive worker, it is done with the good of the company in mind, and with full knowledge that it may place the fired individual in difficult circumstances. Most workers are well aware that if they didn't have to work, they probably wouldn't, and they understand that this applies to others as well. Many who vote against increases in welfare do so for fear of free riders - not just fear of a drain on personal resources, but fear of a drain on society's resources. And finally, as much as the left would like to dismiss such reasoning as simple greed, the truth is that it is valid social reasoning.

Books are still too expensive; hardcovers are a particularly egregious scam, as the difference in the cost of production to that of a paperback is miniscule. The paperbacks, on the other hand, aren't worth any price, as they disintegrate so easily.

This goes to one of the great inadequacies of the digital age: the fonts on an affordable display system have yet to achieve print's sharpness.

Cars aren't cheaper: credit is.

In 2006, I could care less what's on TV or at the movies. I'd rather be goofing around with my blog, which seems to be more fun than writing in a journal notebook ever was.

Whenever I have been unhappy with my position with regard to income/wealth distribution, I have sought to increase my production of income. This has required work, night classes, delivering pizzas for extra cash, painting for people, small engine repair, and other part time jobs. It never occured to me that I might have some claim on someone else's resources. The beyond hoped for success of welfare reform has proved that this method works for everybody who tries it.

Brett:

I am in the book business. Books may have a higher nominal list price than ever before, but in absolute terms they have never been cheaper. Ask any used book dealer, virtually none of whom have any money.

The availability of search engines to look through thousands' of book dealers' inventories relentlessly drives the price down, down, down.

There are even bots dealers run that will look for the lowest Internet price on a given book and automatically price theirs one cent less. If there are two guys running the same software, take a moment and extrapolate out where that ends up.

FORBES magazine had an article a couple years ago about relative prices of books over time. Hundreds of years ago only the very very wealthy or the Church could own them. By the 1920s, a bestseller cost roughly the same as a working man's daily income (about $2.50 IIRC). Even at list price, today they cost less than than a working person's daily income.

And now gently used books are all over the place for $1 or less plus shipping, and you can find them in about 5 seconds.

Brett-- good point. The first reason why you have a better house now than in the 70s is because you're not paying 16% on the mortgage. (The second is because shag carpeting is gone.)

Here's the commonsense way I describe the difference between then and now to people.

In 1973, what did your monthly nut consist of? Rent, electricity, gas maybe, phone, food, and a car with its gas. Yet even so, it was a time when bought Hamburger Helper to stretch a pound of meat and worried about filling their tank.

Now you have all of those things-- and you pay for cable, you pay for internet access, for a cell phone, and let's face it, you eat out a LOT more than people did then. And everyone else you know has all the same toys. Yet who, honestly, is going broke because of them? People may feel broke because they don't manage their money and their expectations, or they just don't pay their bills, but I can tell you that my mom would have had those things shut off after two months because she couldn't pay for them in 1973 on top of the real necessities, yet today she has them all and so do all of her children.

We're richer than ever. We don't feel it, partly because people forget and partly because we're less secure so even though we have it today, we worry more that we won't have it tomorrow. But we are richer than ever.

I would definitely like to go back to 1973. I remember it well - from a kid's eyes. I was ten years old. I look back upon that year fondly. Escpecially now, considering what was going on in the world of young adults. Sure, send me back, say, age 25, making what was good money then. My family, living outside of Washington, D.C. did all right.

There was A LOT of food, for one thing. McDonalds didn't magically appear to coincide with the obesity reports of the 1990s and onward...

Plus, I could go see bands like Black Sabbath at their prime.

Part of the problem today is that 'advocates' play a game of three card monty with the term poverty. There is poverty in the classical term and the image they keep shoving into our faces, but the number they keep talking about is statistical poverty which is a percentage of the population the government simply draws a line and declares everyone below it is poor. "The following are facts about persons defined as "poor" by the Census Bureau, taken from various government reports:
— Forty-six percent of all poor households own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and porch or patio.
— Seventy-six percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.
— Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.
— The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens and other European cities. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
— Nearly three-quarters of poor households own a car; 30 percent own two or more cars.
— Ninety-seven percent of poor households have a color television. Over half own two or more color televisions.
— Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
— Seventy-three percent own a microwave oven, more than half have a stereo, and a third have an automatic dishwasher.
Overall, the typical American defined as poor by the government has a car, air conditioning, a refrigerator, a stove, a clothes washer and dryer, and a microwave. He has two color televisions, cable or satellite TV reception, a VCR or DVD player, and a stereo. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family isn't hungry, and he had sufficient funds in the past year to meet his family's essential needs. While this individual's life is not opulent, it is equally far from the popular images of dire poverty conveyed by the press, activists and politicians." The Specter of Poverty in America, Robert Rector,September 21, 2004

And you wonder why they keep coming to this country by the millions every year?

Solving the poverty problem is easy- liquidate all the poor people.

The rich people of today contribute more to the welfare of the poor throughout the world than they ever have. The rich pay the majority of the taxes that are collected to fund government programs that most of them feel are wasteful. In addition, they use much of their money for helping people in other countries because we don't have a serious problem here in America. This is a good thing and may eventually bring greater prosperity throughout the world along with a greater chance for lasting peace. Incessant bashing of the rich is a self-defeating and covetous process that can only result in more misery in the world. Besides, having more money is not a recipe for happiness. Real happiness is tied to the relationships that we have with our family and friends. Our real goal should be to rebuild the basic social institutions that are besieged by the focus on wealth-building and the moral decay in our society. If you want to make the world a better place, start by working on the problems that are closest to you and by being generous and kind to those around you. We will solve nothing by focusing on redistribution of wealth. In fact, it is likely that such an approach will only bring greater sorrow and discontent for everyone. If we want to create a better future, we need to emphasize efforts that rebuild families and re-establish respect for each other.

"when cell phones were introduced, they were extremely expensive, and also would rip the pocket right out of your trousers"

Isn't that redundant?

"Schoolhouse Rock, MASH, Mission Impossible, The Six Million Dollar Man, Bob Newhart, Mary Tyler Moore, Hawaii Five-O, The $10,000 Pyramid, and The Waltons then I don't want to be right. Bookend 1973 with '72 and '74 and you can add Bewitched and Happy Days"

And you could watch them, as long as you happened to be in front of the TV when they were shown. No VCR, babes, sorry. And you had to add two more years for TWO more shows worth adding? Pathetic.

"the best car from 30 years ago is a joke compared to a mediocore car from today"

My father sold cars in the '70's. This observation is absolutely dead-on. Those cars started falling apart the moment they came off the assembly line. The number of "acceptable" defects in a car of that era would not be tolerated in the cheapest new car today. Even the way a modern car door closes would have been a marvel of engineering back then (perhaps a BMW or Mercedez would have 'felt' the same, but not cars for everyman). Power steering and windows, standard today, were problematic options back then (you would have waited for them to break down - and they WOULD do so).

The Hudson and Charles Rivers were polluted and considered beyond redmeption. (Certainly there was no value in living near them.) NY Senator Patrick Moynihan was begging the National Parks service to take over Central Park, which was also considered beyond redemption. No one made a long distance call without looking at their watch. The house I own in Hoboken, NJ was a boarding house and you could not have given it away. (Same house - seven figures today, and similar buildings are being vigorously rehabitated all over town.)

People in China and India have hope today. There are more people starting small businesses THAN EVER, by a wide margin. I don't have to replace scratched vinyl albums with another album that will inevitably get scratched. The movie I see in the theater has higher production values than ever before. (Hell, the INDY movie I see might have better prooduction values than a '70's flick. And there are more choices than ever.)

"Solving the poverty problem is easy- liquidate all the poor people."

The number of jackasses is about the same, of course. It just seems like more since they all have access to computers now.

If you want to "go back in time" to live, it's easy. Go to Mexico, or choose another country that fits the definition of the time period you want to travel to. There's a reason why people in countries that live "like we did" in, say, 1973 choose to come here. Many Diplomats from 3rd World Countries visit NYC when attending UN meetings, and there are plenty of stories of them commenting something like "This is the poor section? In my country the rich don't live this good." Ever see the movie "Coming to America" with Eddie Murphy. That was a comedy to American Audiences. I wasn't elsewhere.

There's a difference between the temporarily poor and the permapoor. The permapoor exert a lot of thinking and effort in how to game the system and gain a sense of satisfaction of having everything provided for them by the government because they are entitled to it because they breathe air. If they applied the same effort and thought to a career they would be at least reasonably successful. The work ethic is lacking and no employer would want to put these counterproductive, unproductive people on their teams. However, the permapoor are excellent at bartering for needed services and that depends on relationships and so the level of resourcefulness is a thing to be respected. I whip out a credit card because I can. I don't have to be a creative problem solver and rely on good relationships with others to get my car or house fixed. (Flipside of coin: I don't have to trade sex favors for these needed services, either.) If ever something happens to me and I can't work or support myself, and I become dependent on the state, these folks will be the first I will seek out to mentor me so I can thrive by gaming the system.

If you do not work, you do not eat is not just from early America. It is from the New Testament, apostolic writings. Also: those who fail to provide for their families are worse than an unbeliever.

Secular minded people can tend to think that equality has to be measured by income equality, however, that totally ignores basic statistics, psychological individual differences, and the market value of certain skills. If we achieve income equality, can I be made equal to the highest paid pro athlete or entertainer? I won't be happy with any income equality scheme that doesn't make me as rich as a superstar. (Kidding.)

Poverty is relative: however, we choose our reference group and it isn't everyone. It's the people around us. And we evaluate ourselves for the skills we have to offer the market, and for the sacrifices we are or aren't willing to make.

The wealthiest people I know (in terms of money) were the geeky computer scientist buddies of my brother. They invented something, quit their jobs for the big computer companies, took the risk, and formed their own companies, and became successful. They either retired at 40 or could if they wanted to. I do not envy their wealth; I don't have the math skills to even think I could become an engineer. I saw how workaholic their lifestyles were. I have always preferred a more well-balanced life with plenty of nonworkaholic time. Some of my family are better off by becoming doctors, but I don't envy them because I could not get chemistry in HS. I don't think I could function in the long waking hours of the residency years. I would have screwed up and killed someone.

So...I have fulfilled the expectations of my family to have a middle or upper middle class type white collar job with decent prestige and a reasonable income. I figured out early what my skills were, what gifts I had to offer the world, and where that would be appreciated and rewarded, and I compare how I'm doing to the range of opportunities available to me, and I'm doing well indeed...golden shackles, in fact. May I have them for my entire working life! I don't pity my poor friends either, because they are homeowners and I'm not, they have Harleys and I don't, and the underendowed one even snagged a boob job (and I don't need it). They have families and a rich network of relationships and interdependence and they are finally realizing what the best opportunities are for them after being on welfare for a decade, then working the welfare reform ick jobs for a decade. Now they know what they have that the market will reward and they are pursuing those opportunities in self-employment and small business. So yeah, Brad would have wrung his hands at their young family, early welfare lifestyle; however, that was an intentional economic choice on their part because it seemed the best economic opportunity at the time. But no one is locked in forever. My poor friends have improved their lifestyle and their circumstances. So has everyone I know.

I don't want an income equality scheme that gives something for nothing. That is offensive to human dignity. As a Christian, envy is a capital sin...desiring something of someone else, but desiring to tear them down in the process. Jealousy is safer: I desire what you have--your accomplishments, lifestyle, wealth--and I am inspired to improve myself and work towards achieving those things. I don't tear you down in the process.

How can income equality be achieved without tearing down the wealthy achievers? Teach the jealous how to achieve the same. Then it is up to their FREE WILL if they want to maximize their talents and make the sacrifices. No one can be forced to take risks or work hard. It is more fun if it is freely chosen.

If you are not strictly secular/Marxist, and can see how people have equal dignity regardless of their income, you don't need to get all twisty and upset inside and figure out how to Robin- Hood the poor into dignity. Everyone has equal spiritual dignity and equality before God. (I suppose a nonreligious person can have a metaphysical or ethical understanding of the same without reference to God.) If you respect the dignity of all persons, without contempt for the poor or the rich, then you don't need an income equality scheme.

I respect human dignity and equality by allowing people to freely choose how to exert themselves in the world and to experience whatever rewards come (or don't) as a consequence of that choice.

Rex wrote: "Outside the big cities, you were forced to have cable if you wanted to watch TV. And cable meant access to HBO (as part of the cable package; not part of a different tier of pricing) and the Superstation, Channel 17 out of Atlanta (Ted Turner's station) which carried all the Braves games. That's why my son became a Braves fan, even though we didn't live in Georgia."

WTBS didn't go onto the satellite until December 1976 and it was only on 4 systems (Grand Island, Nebraska; Newport News, Virginia; Troy, Alabama; and Newton, Kansas) at first. HBO wasn't on the satellite until December 1975 (The Thrilla in Manilla).

You've got quite a wait for something other than ABC, CBS, NBC and, possibly, PBS in 1973.

Back to 1973? Am I the only person in the world that watches "Life On Mars"?

1973 and a multi-millionaire .... mmm
70s porn was much better than today's porn.

Which brings us to the obligatory OfficeSpace quote:

Peter Gibbons: What would you do if you had a million dollars?
Lawrence: I'll tell you what I'd do, man, two chicks at the same time, man.
Peter Gibbons: That's it? If you had a million dollars, you'd do two chicks at the same time?
Lawrence: Damn straight. I always wanted to do that, man. And I think if I had a million dollars I could hook that up, cause chicks dig a dude with money.
Peter Gibbons: Well, not all chicks.
Lawrence: Well the kind of chicks that'd double up on a dude like me do.
Peter Gibbons: Good point.

For you defenders of the 1970s, don't you have any old family videos from those atrocious stone-age video cameras? All you've got to do is take a look at clothes and hair to be reminded of how truly appalling life was back then.

Seriously, CPI-based judgements of changes to "real median income" are nearly useless, as the consumption mix has changed so dramatically since then. Brad Delong's simple arithmetic of multiplying a series of 30 year-to-year percent changes in CPI is simply invalid. 1973 vs 1974 is comparable but makes error in overstating inflation; 1974 vs 2006 is just radically incomparable. Or: you can measure the cost of Internet access from 2005 to 2006; but how do you account for that in 1973, when Internet access was undreamed of?

Certainly if people were content to settle on the same basket of goods that people of 1973 subsisted on, we'd all have that basket plus money flying out of our buttholes.

According to Testimony by Jack Valenti, on April 12, 1982 :

I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.

The VCR avalanche, I told you about that. Now, what about the VCR owners. Now, from here on out, Mr. Chairman, I am going to be speaking about a survey done by the Media Statistics Inc., which is a prestigious firm out of Silver Spring, Md. We, meaning the MPAA, did not commission this survey. We bought it after it was done when we heard about it. So, this was not a case -- we have commissioned a lot of things, but this is not one of them.

Now, I want to tell you about it because I think it is absolutely fascinating. This survey was taken in October 1981. It is the newest and freshest data available. Here is what it says. Median income of a VCR owner is between $35,000 and $50,000 a year. Not a lot of what we call today the truly needy are buying these machines. One-third of all the owners have incomes of more than $50,000.

Valenti was trying to make the point that VCR owners are rich and greedy, stealing precious commercial minutes from the MPAA, but it's the same as the point above: ordinary people couldn't afford them.

kentuckyliz: Well put!

I spent a great deal of time with my Grandparents in rural Wisconsin in the early/mid 70s. MASH was a bit fuzzy, but the Lawerence Welk channel came in fine.

I remember when my Grandmother replaced her washer w/wringer for a washer with spin-dry. Still hung the clothes up to dry.

They still had an outdoor privy. It wasn't used on a regular basis, but electrical outages did occasionally take out the water pump. These days, I'm sure they would have a backup generator or at least a UPS.

It was always cold on winter mornings. The wood (and coal) fired furnance required stoking.

They were not poor. They had a car, TV, tractors, good food, nice house, garage, dishwasher (although my Grandmother rarely used it - it used too much water and filled up the septic system).

I'll take the 21st century.

1973? Disco, qualudes, big hair, free love, no HIV... I'd go back, but I'd have to live at home and work at a paint store if I did.

Randy:

From early America there was the idea that, "if you don't work, you don't eat".

Yes, there was. And if you look at the context of that idea, you'll see that what it really referred to was a shift in policy away from communist distribution. The literal meaning was more along the lines of "If you don't peformed an assigned function, you will not be awarded the fruits of the efforts of others." It addressed the problem of people BOTH not-contributing AND drawing on the labor of others. If an individual could go into the wilderness and tough it out on his own, that quote is not an attack on him.

When the company fires an unproductive worker, it is done with the good of the company in mind, and with full knowledge that it may place the fired individual in difficult circumstances.

Sometimes it is aware of this, but this result is hardly useful: it makes them more reluctant to fire them, and more likely to give him a chance despite failure. Not all workers are screwed upon firing; many can easily find another job or have significant savings.

Most workers are well aware that if they didn't have to work, they probably wouldn't, and they understand that this applies to others as well.

Some workers are like this in that they work because they have to and save as much as possible to avoid having to work. Others are well aware that they consume far more than they really need, and work with the full knowledge and acceptance that it will sigificantly delay their retirement, because driving an SUV is that important to them.

Many who vote against increases in welfare do so for fear of free riders - not just fear of a drain on personal resources, but fear of a drain on society's resources.

I don't understand the distinction. Paying for that person is going to mean more taxes for them. They don't want to support them because they don't like paying that money. It has nothing to do with some secret urge to make them suffer in the poor-house. The same people who object to welfare for people who will waste it, generally are indifferent to those who inherited or otherwise suddenly "fell into" wealth through legitimate means.

"Hey,

I'd take your facts more seriously if the rest of your dialog wasn't larded with absurdities like calling someone a Maoist. (In fact, I think one of the things Maoists do is murder quite a lot of their opponents. Where does that fit into your analysis?)"

Bullshit. During the 1960s and 70s we had plenty of useful idiots running around American campuses with their Little Red Books and calling themselves Maoists. They didn't kill anybody, but they shared his goals and beliefs.

Furthermore, the difference between them and Mao was he controlled a country and had to implement their theories in practice. Give them the country, and many of the truly committed among them would have resorted to the same practices in pursuit of their utopia.

Thanks for making these valuable points. Very few people realize that technology diffusion, democratization, and acceleration are the single biggest uplifters of all.

More on why these are the Best of Times.

List up folks, here’s you answer. Economists do a terrible job of estimating changes to real income. Using CPI numbers or any of the other estimates of inflation over time is useless. Let me help: there is only one accurate way of calculating real income from year A to year B. Here is the process.

1) Define the basket of goods and services
consumed by median household in (say) 1973.

2) Establish the nominal 1973 prices of those items and total up the basket. (Basket A)

3) Recreate that same basket for today in 2006 – representing the quality and characteristics as faithfully as possible. This means use a house of similar size; the worst possible car on the market today; a 20-inch CRT television if you can still find one, etc. In general you’ll naturally have to select the most obsolescent, worst quality, cheapest goods still on the market to best simulate 1973.

For today’s basket, you must take advantage of any and all price-saving innovations, such as Wal-Mart, Costco, Amazon.com, good-quality store brands, etc. For healthcare, you must attempt to account for the fact that much of what we call healthcare today did not exist in 1973; attempt like comparisons. IGNORE EVERYTHING TODAY THAT WAS NOT PART OF THE 1973 CONSUMPTION MIX.

4) Establish today’s nominal price for all those items. Total up the basket. (Basket B)

5) Now do the same for nominal median incomes, accounting for benefits as well as possible. And compare. (Income A vs. Income B)

This gives the no-shit change in REAL INCOME. (Divide Income A by Basket A to find how many baskets the 1973 income could buy. Do same for B. Find the percentage that the 2006 quantity of baskets is greater than the 1973 quantity of baskets). I suspect if you did all this you’d find median real income is at least 100% greater than in 1973, just a guess.

This whole "we are richer than we were in the past" argument is only useful when looking at the macro level. But you are not going to convince anyone that they should feel ok today because they are richer than people in the past. Just like you are not going to convince anyone to feel better in the US because most people in the world are poorer.

Let me put special emphasis on "you are not going to convince anyone to feel better in the US because most people in the world are poorer" and let me ask this - if we surveyed immigrants to the US (legal and ilegal) and asked them about the relative merits of being poor in the US versus having whatever staus they had in their home country, what do we suppose they would say?

(Hint - revealed preference suggests that, since they are in the US and free to leave, they probably prefer it here).

Personally, I think there are plenty of people who are willing to focus on their absolute, rather than relative, well-being as they attempt to gauge their happiness.

And let's toss in a poverty definition from the Census Bureau. There have been subsequent adjustments, but here is the starting point and yes, it is an *absolute* scale, as Patrick Sullivan noted:

The original poverty index provided a range of income cutoffs or thresholds adjusted by such factors as family size, sex of the family head, number of children under 18 years old, and farm- nonfarm residence. At the core of this definition of poverty was the economy food plan, the least costly of four nutritionally adequate food plans designed by the Department of Agriculture. It was determined from the Department of Agriculture's 1955 Household Food Consumption Survey that families of three or more persons spent approximately one-third of their after-tax money income on food; accordingly, poverty thresholds for families of three or more persons were set at three times the cost of the economy food plan.

You know, this isn't even remotely a new phenomenon. People in the 1970s were quite wealthy by 1940s standards. People in the 1940s were much better than people in the 1910s (I remember reading that with the invention of the light bulb, people were saying mankind had achieved Paradise on Earth.). Even the Great Depression was basically a blip in the progress of wealth.

The reason is that productivity improvements are cumulative and build on each other.

For starters, it isn't a give that people in the future will be wealthier.

Absent massive nuclear war or the global hegemony of a Luddite movement like the Taliban, the nature of things says they almost certainly will be.

I'll take the deal, assuming that (a) I also reduce my chronological age, so that I'm going back and becoming younger, and (b) I retain my knowledge of the historical events and trends.

Sure, it's better to be middle class now than rich then, but it would be WAY better to be super-rich now as the result of exploiting my knowledge then.

I'd take the deal in a heartbeat. I buy a lot of 60's shows that were on TV anyway. I love PC's and the internet but I managed to be happy when they didn't exist.

There are books, there are Avalon Hill Games, there is D & D. Less drugs on the streets, and our society hadn't yet abandoned normaly in terms of values. I could live in Massachusetts and not feel like an idiot, (of course with a Million in the 70's I could live anywhere).

Things are just things. A person is either able to be happy or not. The millions don't hurt but there are plenty of unhappy people with money.

Every era has its trade off. We should feel lucky to have what we do, but we should also be happy to make do with what we have.

Air travel in 1973 was really pretty good. It was more expensive, relatively speaking, but a much more pleasant experience than what I encounter today. Yes, you could go anywhere you wanted...unless you wanted to go to East Block
countries, that was more difficult, but far from impossible.

While I tend to agree with the thesis of the blog entry, I think you have to be very careful when applying new entertainment and technology to the standard of living, because these things are somewhat relative.

For example, in the 1970's I was fooling around with homebrew computers and amateur radio. The fact that computers are millions of times more powerful today in no way diminishes the delight I experienced back then when my homebrew serial port managed to scroll 'hello' on an old teletypewriter.

We may casually communicate around the world today on the internet, but that in no way diminishes the thrill felt in the 1970's when a 'cq' sent out in morse code on a 5w homemade transmitter was responded to by a faint response from across the world.

And cars may be much better today, but we've lost the ability of backyard mechanics to rebuild their own engines and hop up their cars - something teenagers loved to do from the 50's through the 70's. Try to do that now without precision tools and thousands of dollars worth of specialized computer interfaces and diagnostics gear.

CDs and MP3s are a great innovation, but we lost the appreciation of album cover art, liner notes, and the fun audiophile had maintaining all their analog gear.

Entertainment changes, but that doesn't necessarily mean it provides more enjoyment to a person's life. I was plenty happy with the technology of the 70's. In many ways, it was cooler than what I work with now.

On the other hand, there are so many small innovations that have truly made life better that it's very hard to compare eras - a simple example: eyeglasses. Back in the 70's, if you had really bad vision you wore heavy glass lenses that tended to distort, hurt your nose, and make you look like a geek. The first contact lenses were very expensive and uncomfortable for long periods of wear. Today, you can buy high index lenses that are light and thin, disposable contact lenses are cheap, or you can get LASIK surgery and get rid of your glasses completely. There are thousands of such innovations.

So while I think comparisons of entertainment are iffy, the straight quality-of-life enhancements are enough to prove the point.

GT, all you really seem to mean -- though to be fair I gave up about halfway through the thread after you had said the same thing for the fifteenth time -- is that:

(a) People are habitually envious rather than grateful, and habitually compare themselves to those with more than they so that they can excuse their feelings of outrage at having too little, rather than to those with less than they so that they can encourage themselves to be grateful and generous.

(b) And we should cater to this behavior and assure such people that it is, indeed, those mean old folks who don't seem interested in catering to their envy, who are the people with the moral problem.

Yeah, that's a helluva convincing argument.

Brad DeLong gets thrashed in debates quite easily. He never engages people who question his statements. I doubt if he has ever won a debate fair and square.

A simple thought experiment (a la Einstein). Take total amount of monye available. divide by total population. cut a check to every man, woman & child for their portion of the total.

Sit back. What would be the distibution of worth within 1 year? 5 years? 10 years?

I'll bet everything I have that there would be unequal distribution.

1) It will be a big party for some, but the liqour stores, convenient marts and state govenments will soon collect all the money spent on booze, cigarettes and lottery tickets. MOve to left side of wealth distibution.

2) Entrepeneurs will devise businesses to make money. Move to right of distribution.

3) Most will go back to work and form the 1 sigma group known as the middle class.

Income equality is an irrational number. You can't get there from here in a free society. Proofs are abundant - communism, socialism etc. I'll bet this is Brad Delong's muse.

coggieguy,

Couldn't you use the Katrina cash card for a real world version of your
thought experiment?

Sprite,

"I'll take our car culture, hands down. But that's what I'm used to. A farmer from 1905 might answer differently. What thing from his world have we lost that might make our lives richer? Maybe that thing should be considered when we start thinking about the change in our quality of life."

Well, one thing we lost is tons of manure that the horses pulling
the carriages that clogged the city streets produced on a daily basis. According to The Encylopedia of the Horse:

"In 1900 it was estimated that American cities had between three and five million horses."
"New York City had 150,000-175,000 in 1880, and a town such as Milwaukee, with
a population of 350,000 had 12,500 (horses).
Adding to the congestion in the city streets were the carts brining in enormous supplies of fodder each day. That was all converted to excrement, and its precence and removal created major difficulties and health hazards in urban areas. Milwaukee's 12,500 horses produced 133 TONS of manure a DAY. In Rochester, NY, 15,000 horses produced, in a year, enough manure to make a pile 175 ft high, covering and acre of ground and breeding 16 million flies..."

Imagine the richness we have lost! I was thinking of the good
old days, while trying to choose between the 100's of cheeses
at the local Whole Foods. When I moved to NYC in 1980,
I lived in a small rat trap of an apartment with the bath tub in the kitchen, I would window shop at Balducci's, wonder what all
those imported cheese might taste like, I didn't know anyone
who could afford them. Now my single mother friend earning
$15 an hour can have a party with a cheese platter. How times
have changed....

Ann NY

Somewhat on topic, if the topic is CPI bias: per the definition of poverty, income levels were determined for different types of households for some base year as being at the poverty line. For subsequent years, the "poverty line" is moved up by the CPI.

But if the CPI is upwardly biased, then the number of folks living in (absolute, not GT) poverty is overstated.

Put another way - it used to be that a poor person had to squint at a grainy 9" Black and White television; now, for the same money, they endure a 21" color TV.

Some interesting points here, but watch out for the overstatements. Just on one subject that's easily checked:

"Outside the big cities, you were forced to have cable if you wanted to watch TV."

I'm not sure what you're defining "big city" as, but by 1973 the Big Three networks had hundreds of affiliates across the country. Yes, very rural areas might not have had any TV, and reception may have been poor even if you were in an urban area, but the idea that you had to be in a big city to watch TV is absurd.

"You've got quite a wait for something other than ABC, CBS, NBC and, possibly, PBS in 1973."

Yes, there were many fewer TV options in 1973, but it's not like independent stations didn't exist. In my own hometown of Los Angeles, we had Channel 5 (KTLA, now CW network), Channel 9 (KHJ, now KCAL), Channel 11 (KTTV, now a FOX affiliate), and Channel 13 (KCOP, now a MyTV affiliate). That's 4 independent stations just on VHF. On UHF, we had specialty stations KWHY (22, business news), KHOF (30, religious), KMEX (34, Spanish), KXLA (40, religious), KBSA (46, religious), KBSC (52, Kaiser), plus KCET (28, PBS) and KLCS (58, PBS/school district). By my count that's 15 channels operating in 1973. A lot of those were specialty channels, but hey, that's what a lot of cable TV is now, too.

Obviously Los Angeles is/was a big metropolis and there was a lot more variety here than in other places, but independent stations did exist in other parts of the country, mostly in big cities.

I agree wholeheartedly '73 sucked, popular music was about to undergo a near fatal tailspin with the advent of progressive rock and disco the 2 genres I most despise. Think about how much longer it took to accomplish simple tasks; Fax machines were the size of my car in those days and who even uses a fax today unless as a last resort?. I can empathize with the nostalgic yearnings for a simpler time; we are all overwhelmed by the sheer pace of our day to day lives from time to time, but in no way could the overall quality of life in '73 be considered superior to what we enjoy today. Crikey! I was 14 in '73; Hippies still roamed the plains, their vast numbers stirring pathogenic dust storms that blotted out the sun.

Gee, MIR, I hadn't thought about it like that. Thanks for the illumination.

So, by melding Hey's rhetoric and your logic, we can assume that a staunch anti-communist like yourself - were he to live in the Third Reich - would be a brownshirt or a blackshirt, helping to liquidate the Communist opposition. Nazi hack!

See how easy.

See how ridiculous.

Cheers,

"Poverty is relative"

Yes, but starvation is not.

Ever notice how many grossly overweight people you see in any state's DHR application lines? There are always a few scrawny people who look like they could use a handout, but by and large, most welfare recipients look like they've never had less than five meals a day their entire lives.

I'm sure every one of those 400-pound welfare queens would rattle on and on about how desperately poor they are, that their children have to sleep on piles of urine-soaked rags just so they can afford their $200 daily manicures.

Personally, I favor income standards that are based on hard data, rather than relative perceptions. You need food? Fine. You need shelter? Fine. You need a $6000 diamond grille? Screw you.

How fucking stupid do you have to be to swallow Jane's line. No Internet in 1973 means no Internet--you don't know what you're missing. If you ratchet up the hypothetical to assume that you know how things are in 2006 while living in 1973, then I would DEFINITELY take you up on your offer. For starters, I would assume the savings rate among Americans applies--and I would be able to bank more of my salary. Imagine how it would have grown, considering the market trends of the last 33 years--and that I would have full knowledge of what was to come.

I'm all for going back to '73, waiting a few years to give that smart Gates kid some money, and for holding Jane Galt back in school till she gets it right.

PS: Tatterdemalian: What the fuck? You cite the number of fatties in a DHR line (spent much time there?), then you favor income standards based on hard data RATHER THAN RELATIVE PERCEPTIONS?!?

So you see fat people among the poor and surmise that the absence of starvation means they're welfare queens? Tell me, please, does it hurt to be so fucking stupid?

Personally, I wouldn't take the deal . . . and not just because I'd be the one stuck at home trying to make the Harvest Gold drapes match the new Avocado refrigerator. 1973 means no internet. No cell phones. No cheap air travel to exotic foreign climes. No computers.

No brain-dead American twats like you being unbelievably stupid? I'd go back in a heart-beat.

Brad says: "Think about it. If there is 20% of CPI bias in the past 30 years, then median male real earnings have risen by 30% instead of the 10% in official statistics. But real national income per capita has risen by 125% rather than by 90%."

I'm not sure that's true. GDP is GDP (and measured by the GDP deflator). Bias in the CPI comes in part because of how people select among products that are part of GDP. If people switch from beef to chicken that's missed in the standard CPI, but not missed in measures of GDP. If there's a large gap between the CPI and the GDP deflator then you have an issue. So CPI bias can potentially have a real effect here.