Asymmetrical Information

It is indisputable that quality of life is better today than in 1973. But happiness is subjective -- most people have a "baseline" happiness level that they revert to after some change for the better or the worse. So going blind is depressing, but once you adjust to it you can be just as happy in the end as you were before. Air conditioning might make you very happy when you first experience it, but then you get used to it and it doesn't affect your happiness level.

So re happiness vs quality of life, you could both be right. If you could go back to 1973, you might be just as happy as you are today -- you'd just have a very different life, and it would take you a while to adjust. It would be like the person who goes blind and then adjusts to it. But no one would choose to go blind, and knowing what you know about quality of life today versus 1873, you wouldn't choose to go back.

Re health insurance, I would argue that the relevant statistic is life expectancy, which is increasing. So actual "quality of life" is going up, even though some people might have increased concerns about not having health insurance. But of course, they will adjust to this and once they learn to live with it it won't affect their level of happiness :-)

Tim makes some good points. And if most people do indeed have a "baseline" happiness level that they tend to revert to, then increased 'equality' through punishing the rich in the hopes that jealous poor people will become much happier would bring only temporary benefits, even to those poor people that are petty enough to enjoy the harm of others.

On those wheelchairs, my aunt got polio back in the 1920s and spent her life in wheelchairs. Her first wheelchair was a wood dining room chair with wheels nailed on the bottom. When she went to college, various football players were assigned to carry her from class to class, since the buildings weren't at all handicap-accessible (on the bright side, that's how she met my uncle).

In the 1970s, she was able to travel alone by getting herself from her wheelchair into her car, then folding up the chair and tossing it in the back seat. But that couldn't have been easy!

By the 1990s, she had not just an automated wheelchair, but also a van with an elevator to get her and her chair in and out. Without those, she would not otherwise have been able to go places by herself during the last decade or so of her life. I know that she valued that option.

Computers. In 1973, they existed only in the largest of organizations. Today, my kids each have more than one computing device (calculators, computers, video game players). Computers serve as an amplifer for the individual to be able to access more markets for their skills and services.

Communication ( via computers, cell phones and landlines). We dont think much about it today because its ubiquitous, but the advent of computers into everyones life has been transformationsal beyond belief. In 1973, you ability to communicate with other people was largely limted to your geographical location. Today due to computers and the internet, you can communicate with people anywhere at anytime for almost nothing. Think about something as simple as email and try to find the equivalent of email in 1973. You wrote a letter, mailed it, waited three days for it to get there, then waited three more days for a reply. To make a simple transaction in 1973 could take months. Email is just one of the things that computers brought to is. Is there a 1973 equivalent to this blog or the millions of others that have been created? I cant tell you the number of formerly poor people I know that live in small towns in the back country who have improved their economic situation just by using ebay as a market to sell goods and services. This was an impossibility in 1973, its a transformational technology in todays world.

Money Transfer and interstate/international banking improvements. In 1973, it was Western Union, "travellers checks" and "the float". Today, paypal, ATM's and more importantly ATM's that work anywhere in thwe world to give you easy access to your cash. How much as this changed things? Your average person today has much more access to the power of banking than they ever did in 1973. In 1973 you had a savings account and a checking account and maybe a brokerage account, but thats it. Has Etrade and access to stock market information changed things for people? You bet.Look at the number of people who own stock today versus 1973. (anyone else remember grocery store check cashing cards and the rush to get your paycheck cashed on friday? I do, and it sucked and Im glad its over.)

401k and various other self retirement planning vehicles. In 1973, you worked the crappiest jobs to just to secure your crappy pension because your "plan b" for retirement was bulk cat food. Today, you take your retirement with you and you can throw the stinkfinger up to the formerlly crappy job because you can take your retirement with you. In 1973 it was a everest climbing mark of effort just to survive to retirement. Today people have multiple jobs and careers before the finally retire.

Cars. In 1973, cars that lasted more than 100,000 miles were reserved only for the higher quality and much more expensive cars. Today its much more common that not only will even the basic cars last past 100,000 miles but that large maintenance items wont likely not occur in that period either. Compare the cost and quality of the 1973 Chevy Vega to any of todays offerings from the low cost leader Hyundai, or for that matter good old chevy itself. In 1973 cars needed "tune ups" every 5,000 miles that required replacement parts for each "tune up(Points,plugs and condensers). Today, its 75,000 miles between tune ups. Cars, even the most basic cars, are much much better today than they were in the era of the "Pinto".

Opportunity. In 1973, there was a tremendous amount of class stratification, today its much more flexible. Community colleges and technical schools have done a great deal to improve the lot of people who were previously left only to work in minimum wage jobs like car washes and truck drivers. Today there are so many ways to improve your situation that your biggest problem is picking just one opportunity from the many options available.

Home ownership. No comparison between todays home ownership levels and 1973. Its very possible for people to own a home today even at the lower income levels, in 1973 mortgages were reserved for only the highly qualified. Home ownership is the #1 way to increase wealth and this has been proved without a doubt since 1973. By in large, people have much more wealth today than in 1973 and its real estate that has provided the bulk of that wealth for most people.

For the record, I hated the 70's. I feel not the slightest tinge of nostalgia for that nasty decade.

You're right that we're getting more health care now. However another big component of rising health care costs is Baumol's cost disease since health care is a labor intensive industry. This explains why health care costs are also a problem for countries whose cost/benefit analysts don't sign off on keeping infants in incubators or facial reconstructions. To the extent that Baumol's disease accounts for rising health expenses we are not really getting more health care value (but are getting more value from capital intensive sectors).

Basically, the problem is that the world sucks. It always has, and most likely it always will. Of all the things about the world that suck, disease is one of the worst, which is why we usually prefer not to think about it. In recent years, with improving treatments, this enormous hedonic cost that we usually ignore has been made increasingly explicit. In utilitarian terms, the cost of disease is now significantly lower, but the cost is paid more in the form of (easily measured) money rather than (essentially immeasurable) suffering. Improving medical technology is forcing us to recognize the fact that the world has sucked all along.

(BTW, though, the post is a little misleading because it doesn’t look at productivity. Productivity has risen a lot in the past 5 years, generally continuing a trend that had already been established; real compensation has risen only a little. So if you give the credit/blame for what happens to compensation to the president, it still looks like “Evil Mr Bush has been Cheating America's Workers”)

Nor is the move from compensation to benefits good only for the employer. Employees like it, too. If an employee is at a 27.5% marginal tax bracket, then for his last $100 in compensation he gets $72.50, and, if he doesn't earn more than the cap, he and his employer together pay $12.40 to FICA and $2.90 to Medicare. So, leaving aside state taxes and other incidentals, the employee is getting $64.85 while the employer is paying $107.65.

If they substitute a benefit, suddenly they've got quite a bit of extra money to split up. The employee wins because he gets more than $64.85 in value and the employer wins because he pays less than $107.65. (The benefit provider, for example Blue Cross, probably grabs some of the gravy, too.)

Unions are very well aware of this, which is one reason they've negotiated some benefit heavy contracts.

"In utilitarian terms, the cost of disease is now significantly lower, but the cost is paid more in the form of (easily measured) money rather than (essentially immeasurable) suffering."

Excellent point! My father was prone to ear infections as a child, in the 1930s (granted, this doesn't fit 1973 vs. today). He frequently missed three weeks of school at a time because of ear infections, waiting at home in pain for it to go away on its own. He had problems keeping up in school and thought of himself as stupid, although he's quite smart, because he missed so much school year after year.

Antibiotics are a huge improvement over simply suffering and waiting. But if we look only at expenditures, and not at quality of outcome, it may appear that they've made things worse.

Let's take one of the lesser items, affordable long distance, and go back a little farther. In one of Butterworth Griffin's "Brotherhood of War" novels, one of his continuing characters is in the Phillipines, on the way to be an "advisor" in Nam,, Christmas 1963. He would have to wait on line for the one pay phone if he wanted to call his loved ones in the Land of the Big PX, and it would cost him $3.95 a minute. In 1963 dollars. Now, if you planned ahead, international long distance can be had for less than a tenth that, in 2006 dollars. If I wait till after 9:00 PM, 7:00 Pacific time, the cost of a phonecall to my sister in California is buried in my monthly plan base.

My memory of 1973 includes 1,2,3,5 and 6 so I think you are overstating your case.

My memory of 1973 includes 1,2,3,5 and 6 so I think you are overstating your case.

Jane's preceding words to that list were, "A few things that have become widespread since 1973...", so perhaps you overstate yours?

Look at an old travel newspaper section sometime. I happened to see one from the early 60s the other day. Folks were paying MORE in 1960s dollars to fly to Europe than we do now in 2006 dollars.

Traveling to Europe was a once-in-a-lifetime, probably unattainable, dream for average people. Traveling across country by plane almost never happened unless you were wealthy; you took a train or car and spent 3 days each way.

Now websites are devoted to people who fly thousands of miles every week as part of their jobs. Hell, there are people who COMMUTE TO WORK by plane.

Frank mentions 401(k)s. Don't forget IRAs. And the rise of mutual funds. And trading stocks for $10 online! Get hold of a commission schedule for a brokerage house from the early 1970s sometime and prepare to be stunned. Absolute theivery. Mandated, I might add.

Antibiotics. Prosthetics. Robotic surgery so you can leave the hospital in a couple days instead of a few weeks. Laser eye surgery to stop or slow macular degeneration. Glasses in an hour while you wait.

Costco/Sam's Club where you save up to 40% on purchases of staples. Online book-buying sites where you can find the cheapest copy ON EARTH of a book you want in 5 seconds (no more "I've been looking for this book for years!"). Frequent-flyer programs.

Not having to go to the library and spend an entire day doing research (looking up facts); you can do that now in a few minutes in your underwear.

Not having to go to the post office or the library to get a tax form on April 15; just download it.

Timeshifting TV shows you want to watch. Skipping past commercials.

Way, way much better dentistry and othodontics.

THOUSANDS of little things like this add up to a mountain of improvements.

There is no way in hell our quality of life is worse than in 1973. No friggin' way. Even if we were making 10% less in real terms it would be better.

Brad Delong is a moron.

James, re #6, my memories of 1973 include costs around $1/minute - in 1973 dollars - for long distance phone calls inside the US. I was working that summer for $1.60/hour. If you think long distance was affordable, your parents must have been rich!

Airplane tickets were priced out of the reach of most people. Second cars were widespread, but rather too one of them was broken down. And health care technology was a little better than witch doctors, but nowhere near comparable to what we have now.

also: video games & memory foam. (i think they invented beer before 1973, but i wasn't around to see it.)

Healthcare, as measured by average life expectancy, has improved since 1973. Depending on how you do the sums and where you get the stats your calculations may veray but figures I found in google suggest that US (and for that matter western world) life expectancy has increased by almost 10% in the last 33 years (from about a bit over 71 years to a bit under 78 in the case of the USA).

I would argue that not only is the length of life increased but in health terms the quality of it is too.

In 1973 we didn't know much about the genetic and other causes of cancer. These days many cancers are quite simply cured if detected early enough. We were unclear on the smoking/cancer link, the sun/cancer link and completely unaware of the viral cancer causes such as HPV/cervical cancer.

We had little clue (public at least - some researchers maybe) about diet vs health.

Pinhole surgery did not exist, nor did any of the related non-invasive ways to look in to your body and/or cut things. People go in for out-patient surgery to have their knees fixed or their heart/arteries scrubbed. In 1973 if you could get these things fixed it involved general anaesthetics and days of recovery.

There was no laser surgery for eyesight. Heck there weren't (m)any contact lenses. I'm not sure when the first contact lenses came out but I'm sure they only became affordable and easy to use with the disposable lenses developed around 1990.

Cars are enormously safer so we don't die so much from road accidents or suffer so many nasty injuries.

While compensation is doing better then wages the comparison of the two does contain a significant " Bill Gates" impact that causes it to overstate the divergence for the two series.
Average hourly earnings, or the income data reported by Census is actually looking at what a middle class person receives. But the compensation data is an all inclusive measure that includes the total compensation of CEOS, including stock options. So using compensation data to show what a middle class person earns
is using a biased measures that significantly overstates the case.

Frank -- the cpi is adjusted for the change in auto quality and the BLS estimates that about half of the increase in the average car price since the 1970s has actually been such improvements.

also, when you include the cost of shifting market risk from the firm to the individual the shift from defined benefits to a defined contribution is actually a significant pay cut.

The homeownership rate has increased from 65% in 1975 to 68% in 2006 -- not a big factor in the change in the standard of living. The big change in home ownership was from 1945 to 1955.

I think you need to double check your data.

triticale: If you want to go even further, take a look at my blog post on 1932 overseas telephone rates.

I'm an engineer. My job, as I do it today, was literally impossible in 1973. Desktop finite element analysis? 3-D modeling? CAD-CAM software and CNC machining? All of these things didn't exist. Hell, my calculator, a beat up old HP 48G, has more computational power than colud be found on a large college campus in 1973. All of this translates into better design and adds up to all these incremental improvements that DeLong is apparently missing.

1973 was the tail end of the slide rule era. Go back to that? Not on your life.

Wal-mart's recent decision to try selling generic drugs for $4 a pop (one month's supply) would probably save people more money than all the government prescription programs combined. And it's free! And they - probably - make a profit on it. Even with my health insurance, I still pay a $7-20 copayment for generic drugs. Is it possible private enterprise could make the government irrelevant, at least in one sphere?

Mobody's mentioned air conditioning! I can remember sweating so much in my high school classroom that my papers and books got dripped on. Only the movie theater had air conditioning. Certainly none of the cars I rode in.

Today, schools will actually close if the A/C isn't working! Kids are spoiled rotten :-)

I entered the business world just after faxes and computers became common. I can't imagine having to type up invoices and purchase orders on carbon paper to be mailed, and then having to reconcile everything by hand. Just-in-time production is not possible in that kind of system.

Francis: most of your points are on, but I've been wearing (soft, but not disposable) contacts since early 1983. At the time, they were inexpensive enough to entrust an eight-year-old with. And my parents were not wealthy. (They're still a lot cheaper now, of course.)

A/C was around in 1973, especially in the South. Nowadays even the North has a lot of A/C, even though it is not standard here yet. We purchased a home built in 1992, and it was built without A/C installed. We had central air put in a couple of years later, after one April when we had a week of 90 degree weather. Upstate New York, no less!

Reliable birth control was another innovation of that era.

Take a look at TV commericals. What percentage of advertisements are for products and/or companies that did not exist in 1973?

The biggest product categories, at least on the 100 channels I can watch, are drugs, cell phones and retail department stores. How many of these still exist in your area as they did in 1973?

The resteraunt industry did not have drive-thru's and did not have to compete with office microwaves in 1973.

And you still had to "dial" a telephone and make sure your records did not get left in the sun (If you did not buy the 8-track version)

In regard's to knzn's comments about productivity: Given a hugely increased supply skilled labor (Women entering the U.S. job market in large numbers from the early 70's to the 90's,Chinese and Indian labor from the late 90's on, etc.), downward pressure on wages in general would make sense. Because capital now has many more choices about where to plant itself, it seems likely that workers have had to satisfy themselves with relatively lower compensation in order to keep their jobs. Given that about 16 million Chinese peasants migrate yearly from the hinterlands to the cities, this trend may last for a while.

So who might have a beef, legitimate or otherwise, about the economic future?

1) Anyone starting out in the job market with only a high school education. This would seem to be a difference between now and 1973 for white males especially.

2) Anyone who has been working for many years but who is having trouble finding a new job paying as much as the old job, or trouble finding a job at all.

3) Anyone paying child support or alimony. I don't know if this is any more prevalent now than it was in 1973, but I don't think that anyone can doubt that it's a financial strain that makes most people who have to pay it unhappy, irrespective of how much it's actually hurting them financially.

4) Anyone paying for or contemplating paying for college.

5) Anyone whose health insurance premiums go up every year, or whose health benefits from their employer get smaller every year. This pretty much covers everyone with employer provided health insurance. It is much much better to have health benefits than to not have them, and if people thought about it in those terms, maybe they wouldn't whine so much, but the situation seems to get worse every year, and it's easy for someone affected by that to see it as a problem.

6) Anyone without a reliable car. The plight of the poor may be politically irrelevant (it's hard to imagine the Democrats winning Congress or the Presidency because the poor are getting poorer), but (in most places) it is getting progressively more difficult to participate in the economy without a car. This is something that I think has definitely gotten worse since 1973, but the number of people falling into this category may have gotten smaller too -- maybe it all balances out.

7) Anyone without job security, which is almost everyone with a job. You can say "real job security means having transportable skills that are in demand", but the addition of a new requirement that you constantly be training yourself (on your own time) for your next job while you're trying to do your current job and live the rest of your life is nothing if not anxiety-producing. Or maybe that's just me. Job uncertainty is uncertainty in a very pure form, even if you believe that you'll do ok in the end.

So, that covers a lot of people, I think, large screen TVs notwithstanding.

I don't mean to imply here that technology/lifestyle improvements mean nothing, or even that they've only reached a narrow segment of the population, but I really don't see any incompatibility between a given person enjoying an improving lifestyle and that same person harboring a high level of concern about his economic future.

On the other hand, though, I don't really see economic anxieties as necessarily translating into votes for the Democratic Party.

Great post.

You said:

"Joe Average does not feel better off than he would be in 1970."

Joe Average is feeling better about the economy than some might think, as I explain here. Although he feels better these days, he's not giving Bush any credit.

The draft. Technology improvements (and policy and spending) have eliminated the need for a draft. Huge societal and personal benifit to this.

Spencer - recent history has shown the defined benifits plans were based on more or less a lie. Ask a layed off airline pilot how he feelds about his "pension" and "defined benifits". Defined right out of existance.

Healthcare, as measured by average life expectancy

American Non-Sequitar Society: We don't make sense, but we do like pizza!

Explanation: Healthcare quality is actually a very small component in average life-span, greatly outweighed by lifestyle and genetics. What healthcare quality buys isn't life expectancy, it's quality-of-life. Those benefits have been enormous, mostly due to pharmaceuticals and low-impact surgery. In 1973 a heart attack would absolutely result in greatly decreased quality-of-life. Nowadays if you live through the first hour surgery and drugs mean you'll likely be out of the hospital in a couple of days and suffer modest impairment.

For maximal life impact of improvements since 1973, it's hard to beat the enormous quality improvements in automobiles. You can't buy a car like those my parents bought in 1973 (it would be quite illegal), but even if you could it would be almost unmerchantable, and would leave the dealer open for major liability due to unreliability. Nowadays your average car will make it to 50,000 miles with no more than an oil change and brake pad replacement, and to 100K if you change the tranny.

Improvements in clothing quality have also very large and hardly noticed.

A more simply stated criticism of modern health care would be, "in 1973 most people could afford cough medicine, but nowadays poor people are having trouble affording quintuple bypass surgery; and it's all Bush's fault!"

As a teen in 1978, I suffered a spinal injury that meant a life in an electric wheelchair. Here's my experience regarding mobility technology progress and the difference it can make:

1) In 78' the electric chairs were driven by motor/pulley and rubber belt drive. They worked well until they got wet. When slick, the belt would ride over the edge of the drive pulley and slip off. If I'm going to go in circles and get dizzy, I'd rather it follow a productive night at the pub.

2) In the latter 1990s, the manufacturers went to direct drive (i.e. motor shaft-to-gearbox) and digital controls. HUGE improvement. No more belts that derailed or slipped with wear. But also important, no requirement to purchase (whether at personal cost/Medicare/Private Insurance) a perishable item at premium prices. Additionally, digital controls replaced the mechanical relays that wore out.

3) Currently, in some models, there are no more gearboxes, hence no gears to wear out. They use a magnetic induction motor that drives the wheels directly. Again, lower cost of ownership and fewer parts to fail.

So, how does this lead to happiness? Answer: It's a cascade. Reliability equals greater independence and subsequently more dignity. More dignity equals greater happiness. I never think about my chair failing because it just doesn't. And because chair reliability (and cell phones) means no fear of being stranded alone somewhere, I do many things on my own that bring great joy. You have no idea (myself included pre-injury) how valuable and EMOTIONALLY important your independence is until it's gone.

Not all applied tech innovations make the nightly news and become universally known and appreciated. This does not mean they don't immeasurably improve the welfare and happiness of a particular class of citizens.

@Tim Lundeen
While I agree with your basic premise regarding a "baseline happiness level", unless you're blind and speak from experience, I suggest you think carefully about how you illustrate your point. And even if you do speak from experience, I think it fair to say that individuals will vary as to the impact of a permanently life changing event. As far as air-conditioning goes, I live in the Phoenix area. 'Nuff said? :-)

@knzn
The world certainly seems malevolent at times and almost volcanic with social upheaval and human strife. But it is the beauty and courage of the human spirit that it is capable of creating more than it takes while in full sight of the volcano.

Not to mention the difference in the quality and availability of pornography now than in 1973. Who would want to go back to that?

Megan is absolutely correct. In fact, this has been written about in more detail elsewhere.

Healthcare costs are eating into money that would otherwise go to salary increases. But we could be over the hump on hits.

I was a kid in 1973. 9 years old and having a ball. I have a kid about that age now. His world is completely different, but from all appearances, he is having a ball. But I don't have to think long to think of things I think make me happier than I would have been as an adult then.

Access to great information instantly. I work in science, and remember using Chemical Abstracts to try and find things. Hours and hours and hours chasing down references, then finding the abstract, then finding the journal, if your institution had it. Damn, I wish I had that time back. Now I can do the same search and be reading relevant journals online at my desk in the time it would have taken to find an empty carrel in the olden days.

Context. I am center right economically, with hard civil libertarian strains running through my political commitments. But IF one is willing to filter the throw away hate-speech prevalent on the web, most any idea or proposal will be flayed, weighed, and x-rayed by representatives of any and all political stripes. I find my understanding of principles picking up, dare I say, nuance, by reading people who see things way different from me. And I count it as good.

Software and cheap supercomputers on my desk (supercomputers by 1973 standards, for certain). I can do things now that I couldn't imagine in 1973. Scientific things, recreational things, self-expressive things.

This. Reading and writing blog comments with people from everywhere that think damn near everything. It's like one great big goddammed asynchronous world-wide barbecue. Figure out how to put a keg and some ribs in the RSS feed, and heaven will have come to earth.

I think Milton explained the happiness business best, in Paradise Lost:

The mind is its own place, and in itself
Can make a Heaven of Hell, a Hell of Heaven.

"Nonetheless, I dispute that the technology improvements since 1973 haven't brought a lot of happiness."

I actually think that the opposite is true and it isn't just because of technology. In almost every way, we are better off than we were 30-50 years ago and, because of that, we have the luxury of worrying about things that would have never crossed our minds in the past. My father grew up in a three room house and was the first person in his family to go to college (on the GI Bill). He got out and got the best job he could find and worked his ass off for the next forty years. He didn't spend any time thinking about "following his bliss" or what job he might be passionate about. He was more concerned with staying employed and paying off the mortgage. Nonetheless, he surprised me one day when he told me that he thought it was tougher nowadays since young people had so many more career choices. Things are better now but the improvements haven't eliminated angst, they have merely led to new kinds of angst.

A couple of years ago I went to the Reagan Presidential Library (which I highly recommend) and they had an exhibit about the state of the country when he was elected in 1980. One of the quality of life metrics referenced in the exhibit was the price per pound of beef. I am old enough to remember people not being able to eat beef very often because it was so expensive. When was the last time you heard anyone mention their concern about the price of beef as an issue in their life?

Almost anyone (outside of New York, LA, San Francisco and a few other places) can rent an apartment with central air conditioning, cable TV, own a car, move away from their family who they can visit by taking a cheap Southwest Airline's flight, get cheap over the counter medicines like Ibuprofin, Prilosec etc. I can now take Glucosimine and Chondroitin for my knees and in five minutes on the internet I can find an exercise regimen to strengthen them.

We are much better off but, paradoxically, less happy.

I've had cancer twice (two different cancers), still dealing with them critters in my bloodstream...but it hasn't been bad at all. I am glad to have had 1992 and 2005 level medical treatment, rather than 1973 treatment. I'd stake my life on it.

Life doesn't suck, you just have too much confidence in having a lot of time left. When there's uncertainty about how much lifeline is left on your palm, everything becomes intensely enjoyable. I am living with zest. I have to contain my joy because it really bothers other people.

Life is good, enjoy it, relish it! Please, I beg you, like Emily in "Our Town." Don't you realize how precious everything is?

In life:
Pain is required.
Suffering is optional.

Never hope to get your money's worth out of your health insurance. I hope you never have to use it beyond routine care. I'd much rather go back to feeling vaguely ripped off.

The main reason to be glad to be out of the 1970's is double knit polyester outfits in really bold and ugly geometric prints. And...dare I utter...avocado, harvest gold? *shudder*

Jane makes a lot of good points, but she is addressing only half the issue. Yes, things have improved for the average person. However, income for the people at the top has risen at a far more rapid proportional rate than for everyone else.

Remember the phrase the conservatives used to sell their economic program, "A rising tide lifts all ships." That implied the increase would be rather equally distributed (i.e everyone's income goes up, say, 4% a year). And when specifically asked about it conservatives would confirm that was what they meant. Instead the system has been rigged so that most of the gains go to the rich. But of course that was the secret plan all along.

Chester White said:

"Traveling to Europe was a once-in-a-lifetime, probably unattainable, dream for average people. Traveling across country by plane almost never happened unless you were wealthy; you took a train or car and spent 3 days each way."

Maybe in 1950 you took a train cross country, in 1973 you took a jet plane just like today. Amtrak was formed in 1971 because long distance passenger train service had become totally uncompetitive with air travel.

Yes, but...in 1973 I was 23. In 2006, I am 56. Nuff said.

"Instead the system has been rigged so that most of the gains go to the rich."

Our system returns the most reward to those who contribute the most value. As does any system that doesn't steal from the productive to satisfy the greed of the unproductive.

There are very, very few trust fund babies in America today. The rich got there because they are smarter, more productive, work harder, etc. I have enough experience working with senior executives at my company to know that I could not do what they do. They earned what they have.

I'm just posting to say thanks to everyone above. This comment thread is probably the best and most thought provoking I've ever read. Well done.

Now I'm actually going to have to start reading this blog regularly. There's a productivity challenge one didn't have to deal with in 1973.

A few technological marvels since 1973:

Post-it notes (1974)
Digital camera (1975)
Push-through tab on drink cans (1975)
Industrial Light and Magic (1975)
3-D CGI, in Futureworld (1976)
MRI (1977)
Frozen yogurt (late 1970s)
Camcorder (1987)
GPS (1993)
Predator drone (1995)
Movie theaters with stadium seating (year unknown)

James Fox above has it right.

Another thing that MM refers to but doesn't go into in depth is the medical treatments that are available today. Knee replacements, hip replacements, arthroscopic surgery. A good friend played football at Northeastern for about 3 weeks in the '80's and had his knee ripped up. Now he can barely run. If that had happened today he'd be back the next season. And it's not just for jocks it's for everybody. Look at the advancements in pre and post natal care. Cures for many kinds of cancer.

Relative happiness is based on expectations. We live in a consumption crazy culture where we expect 24/7 fulfillment and we all expect to be rich. Like Mr. Fox wrote above it is all in our minds and our individual circumstasnces.

'Basically, the problem is that the world sucks. It always has, and most likely it always will. '

The world is an awesome place of endless beauty and wonder. If you think it sucks then nothing is going to change that.

1973 marked the end of the glory days of post war America when a relatively uneducated man could easily find a blue-collar job and, as long as he was willing to show up and perform adequately, the money he earned was enough to support a family, buy a car and a house, educate his children and enjoy a secure retirement financed by a pension and social Security. He had company paid health insurance, and even if the state of medical technology wasn't up to the standards of 2006, he didn't have to worry about a lingering illness sending him into bankruptcy. And he even had air conditioning! He could afford a vacation, too, and air travel once in a while was not out of the question. Imagine...all this on the wages of a single low skilled worker. And when he sold his little house in 1997 or 2002 he made a small fortune, to boot. Cheaper and better televisions and toaster ovens and cell phones and MRIs and internet connection can't make up for the fact that an average Joe who was willing to work could enjoy a secure middle class lifestyle, and now such a thing (on a mass scale) is unthinkable. If you don't understand that this is the root of the discontent, you don't understand anything. We have exchanged a system in which opportunity and rewards were apportioned fairly with a lottery. If you are one of the lucky few, good for you. If not, hey, Walmart sells cheap food and televisions, and you can chat online with strangers all day long.

I agree with Dan above about the glory days being over for a relatively uneducated man to have/earn a great living, but I totally disagree as to why: We have not exchanged systems for a new one, not in the least. In the 50's thru 70's we were a growth-based economy, still building all types of infrastructure, roads, power, sewer, phonelines, nat'l parks, etc. Many people were buying their first durables like TV's, washing machines. All of that is what happens in a developing growth based economy. But it's all done now. No policy change can bring it back, it's just the natural cycle of things. We are mature now, and in a mature economy you have to have an education of some sort to get somewhere. Many are not willing to accept this, and not willing to go out and get one. Getting an education does not make people the "lucky few", it makes people the "prepared few". If you want those glory days back again, China is the place to go, because they are at that point on the development curve, and they will be far bigger economically than we EVER were. Can't stop it, can't change it, not with policy, not with protectionism. What we can do is stop the partisan social-issue bickering and focus on developing new industries, new markets, new exports. Meantime be thankful for Walmart or ANY BUSINESS that's hiring. Things are not so bad out there unless you are living in the "glory days". They ain't coming back.

For Eduardo: A rising tide does indeed raise all ships. But you have to get on a ship, or even a dingy to benefit. You can't float on your back among ships and expect not to eventually drown or get run over. The problem with the "damn the rich" conspiracy theories, is that without the rich, there is no capital flow, no growth, no opportunity for the little guy to get richer. Most rich aren't born that way, they earned it, created it. Foreign investment from Europe's elite rich and elsewhere originally got this economy going. What if it hadn't? If you expect the government to provide all high-paying jobs for everyone without skills/trade/education, you'll be waiting a long time. That's what France and Germany have tried to do more and more, now unemployment is 12% to 15%, and taxation is totally out of control. The little guy can't even hope to start a Lemonade stand in Germany...taxes and hiring/benefits/license regulations make it nearly impossible. So, only the 1% elite rich stay rich, everyone else hopes their job's don't go away. Careful what you wish for. When you want everything gear toward making life a piece of cake for us little guys, EVERYONE becomes a little guy, and all the water drains out of the tub. The ships run aground, and then you've got nothing. Like Mexico.

Healthcare is still terribly distorted by federal, state, and local interventions such as the employer subsidy that ties insurance to employment, and mandates such as community rating which forces all insurance policies to have the same benefits even though we have different needs. Its these distortions that prevent us from buying the healthcare that fits our preferences, much the same way we buy homes, cars, food, and movies.

I guess this must be one of those issues of perception. Perhaps Jane grew up in an older neighborhood?

1. Air travel: Southwest Airlines predecessor, Trans Texas Airways, was in business well before 1973, with air travel all across Texas. Packaged tours of Europe were not at all uncommon in the 1960's, relatives of mine went in 1968 on a tour with their college alumni. People from the dinky town I grew up in went on a 2 week tour in 1971. The last passenger service to that dinky town ended around that time, because there weren't enough riders. This was hardly unique, as James B. Shearer points out above.

2. Air conditioning: This must be a North Eastern thing, as A/C is what made Phoenix and Houston into major cities. It's what made Disney's Florida parks possible, too. Evaporative cooling was, and is, common across a big swath of the Rocky Mountain states. Central air was an expensive, but by no means "for the rich only", option in 1973. Sorry, don't buy this one.

3. Healthcare technology: no question that this has advanced hugely since 1973. I pick an example no one has, so far, the treatment of cataracts in the eyes. This was major surgery back then, with people going to the hospital for days of lying in bed with sandbags to restrain their head. Now lens replacement is an outpatient procedure.

However, availability of antibiotics dates to the 1950's, thanks to WW II. By 1973, doctors and student health centers were handing out antibiotics such as tetracycline like candy. Would they had not done so...

4. Power wheelchairs/scooters: Available in 1973, but much improved as noted above now.

5. Second cars: Again, must be a regional thing. Virtually all the tract houses in Texas and the Rocky Mountain states built in the 1960's had two car garages. It was just the standard thing to do. It certainly was not novel in 1973 where I was living. I knew _college students_ that had two cars; of course, since both were used, they drove one while scrounging parts to fix the other...

6. Affordable long distance telephony: The fiber revolution has made this a reality, I agree.

7. Flash frozen fish: Huh? Wasn't this available first in the 1960's?

I will heartily agree that the last 10 years or so have made a big change in how one does research, as I distinctly recall approaching the High Priestesses of Reference back in the late 1980's, humbly requesting cite searches on a topic. The results took days, and as is usual with such things, well over 50% of results were irrelevent. Tracking down journal articles required inter library loan requests that were a little faster via email than snailmail, or trolling through ill-organized piles of paper in the stacks.

Now I can perform cite searches from my kitchen table in minutes. A big-dig might take an hour or two. This Is Good. Incidentally, I ran across a paper on a certain topic last year that was still relevent, even though it was written in the 1970's. I showed it to some students & challenged them to determine the font used. Nobody under 40 could identify it; the "courier elite" typeball used on IBM Selectrics rather extensively. Perhaps I should have forwarded a copy to CBS, for their research department files?

Ellipsis: I don't think there was ever a typeface called "Courier Elite". There was "Courier", and there was "Prestige Elite". Courier is still used extensively since it's the default monospaced font in Windows; Prestige is almost completely forgotten, though. I still use Prestige for printouts so people think I'm using a typewriter; it looks terrible on a computer screen, though.

I paid my way to Europe in 1974 on the proceeds of an after-school, minimum-wage job. AFAIK, a round-trip fare from Ontario to Athens was about C$600 at the time - that'd be, what? $1500, $1800 today? Not fantastically expensive, in any case.

James Shearer, ellipsis, et al:

Somewhat affordable air travel may have been available on a few routes - especially intrastate ones - prior to 1978. But airline deregulation was truly a revolutionary change for air travel. The total impact of the government exodus is still being felt by those of us in the industry and by our customers.

Air travel deregulation is also still being felt by Greyhound and any other survivors in the passenger bus industry.

It was private autos, Greyhound, and Continental Trailways, Mr. Shearer, that carried lower class and middle class travelers across the country in 1973. Passenger trains lost many more passengers to the Interstate Highway system than to the airlines.

Jon: "Our system returns the most reward to those who contribute the most value. As does any system that doesn't steal from the productive to satisfy the greed of the unproductive."

That is not what the conservatives said would happen, they said rewards would be proportional. And with good reason, since if they had sold it your way, it would have been rejected.

Remember, in the post-WWII period the economy operated according to the New Deal plan, and the growth rate was pretty good, with proportional income increases. But conservatives argued that growth would be much faster, but still equally distributed, if the country converted over to conservative economics -- much lower taxes for the rich, much less government regulation, and so on. The country was persuaded and so starting with Reagan we have been going down the conservative economic path.

The trouble is it just didn't work out as promised. The productivity growth rate, the basis for wealth, did not increase, and most of the economic gains went to the people at the very top.

What conservatives should be doing is figuring out why things are not working as they promised. Instead, being good political ideologues they are re-writing history and pretending that they promised something else, namely better technology with low wage gains and an ever-higher proportion of income and assets going to the wealthy.

By the way, on the latter, is there an upper limit you consider desirable? For instance, I read recently that the proportion of the nation's stock held by the rich has gone from 35% to I think it was 57% in the last 30 years. Suppose it went to 90%, would that be ok? 99%?

Thomas: what an idiotic response. Socialist Europe has a far different economic system than the US did in the post-WWII period -- vastly higher taxes, vastly greater government regulation. Are you so brainwashed by conservative propaganda that you don't know that?

I am not saying tax the rich out of existence. I am just saying tax them at a rate such that they are not able to take possession of a larger and larger proportion of the total national wealth.
Ditto with government regulations.

Oops, that should be social democratic Europe, not socialist europe.

Huh?

The U.S. grew by leaps and bounds in the post War era because we were about the only country on Earth that had escaped the first half of the century unscathed. We didn't have to waste resources rebuilding and we got to sell to all the countries that were rebuilding.

That growth came to a screeching halt in the 70s because of, among other things, the New Deal's horrible, deformed progeny the Great Society. Crippling redistributive taxation was driving capital from productive, growth creating investments into tax shelters. Not to mention destroying the black middle class, turning urban centers into gang-plagued wastelands, etc., etc.

Reagan won because we were at the edge of a precipice. The sales pitch that won him office was "throw out the imbeciles who've gotten us here". I don't know what sales pitch 'you' heard that you feel cheated, but lower, simplified taxation and deregulation worked exactly as predicted. We've had 25 years of world-beating growth because of Republican policies.

[Please don't try to shift any credit to Bubba Hump from Hope, either. Mr. Reagan's economic revival continued under his administration only because he was forced into Republican lite when he couldn't keep his pants on.]

Incidentally, despite Mr. Reagan's and Mr. Bush's tax cuts:

The share of income taxes paid by the top half of taxpayers reached its highest level in decades, according to new IRS data released today [blogged here]. According to the new data, the top half of taxpayers ranked by income paid 96.70 percent of the individual income taxes paid in 2004, compared to 86.05 percent in 1949, 89.35 percent in 1959, and 90.27 percent in 1969.

For more

No, I don't care how rich the super rich are. I live my life. I don't hate them for theirs.

P.S. You had it right the first time. The Europeans are a bunch of socialists.

A rising tide lifts all boats. Nowhere does that mean the titanic will rise as fast as a rowboat.

I don't disagree with anything in your original post. But I am amused that so many people took up
Commentator 99 's use of 1973 as a baseline. From what I recall, 1973 was a beast of a year. Inflation, an oil shock(?), Watergate rising,
the contined presence of bell-bottomed trousers, Jimmy Carter to look forward to . . . . I would like to quote from a book written in 1996,"The Day Before Yesterday" by Michael Elliott":

"Americans whine. They live in the most prosperous society the world has ever seen. They have a greater level of creature comfort than any nation has ever known before. They enjoy great personal freedom and their government is systematically constrained in the ways in which it can intervene in their lives. And yet they are convinced that their lives are miserable. More than 60 percent of aAmericans routinely tell their pollsters that the country is 'on the wrong track.'"

Well, clearly many of the people who read this blog don't feel that way. I think a psychological profile of those who habitually look back to some mythical golden age compared to those those who look forward to an extension of progress more of what today is like would be very interesting.

jon: "That growth came to a screeching halt in the 70s because of, among other things, the New Deal's horrible, deformed progeny the Great Society. Crippling redistributive taxation was driving capital from productive, growth creating investments into tax shelters."

As to the New Society getting us in a mess, fine, so go back to the successful policies of the 50's, not the radical conservative revolution (by the way, a key reason the New Society lead to a radical mess is that LBJ wanted both guns and butter, which is the same mistake Bush is making). It's like Bush saying that taxes had to be radically cut because under Clinton's tax regime the rich had no money left to invest. But if that was so, how come we had a major sustained boom in the 90's?

jon: "I don't know what sales pitch 'you' heard that you feel cheated, but lower, simplified taxation and deregulation worked exactly as predicted. We've had 25 years of world-beating growth because of Republican policies."

I have been following the conservative movement for about 45 years, and I am talking about the pitch they, including Reagan, made from the beginning. They didn't say, "Follow conservative economic policies and the rich will get a larger and larger proportion of the wealth of the nation." They said that wealth would rise in roughly equal proportion for everyone. I heard them say that many times (it was their response to the accusation from liberals that the conservative plan was unfair), and if they had said what actually was going to happen, it is far less likely that the nation would have decided to follow them.

Furthermore, the change in wealth distribution was part of the plan. Conservatives have a radical agenda: basically abolish everthing from the New Deal and progressive legislation before it like the Sherman Anti-trust Act, and the FDA, and also everything afterwards like the EPA. The problem is that the majority of Americans just don't support that agenda (as exemplified, for instance, by the massive rejection of Bush's rather modest proposed changes to Social Security, or how conservative politicians have to lie to the public and pretend they are pro-environment).

The conservatives decided to go ahead and try to turn government to their wishes, anyway. One of the things they needed to carry out their political plans was an enormous amount of money, and so they made a deal with the rich (who they tend to like anyway): "Give us billions and we will enact any legislation you want, whether it is good for the country or bad." And of course what the rich wanted. among other things, was a set of ways to get a greater and greater proportion of the national wealth, so that is what the conservatives have been working away at, with quite unfortunate success.

jon: "The share of income taxes paid by the top half of taxpayers reached its highest level in decades, according to new IRS data released today [blogged here]. According to the new data, the top half of taxpayers ranked by income paid 96.70 percent of the individual income taxes paid in 2004, compared to 86.05 percent in 1949, 89.35 percent in 1959, and 90.27 percent in 1969."

I'm talking about the rich, like the top 1%, not the top 49%. But you knew I was right about how the rich are getting a larger and larger proportion of the wealth, so you switched over to the question of the top half.

jon: "No, I don't care how rich the super rich are. I live my life. I don't hate them for theirs."

The question is not what you, with your undoubtedly strange psyche, want. It rather is what is good for the nation as a whole -- which, as you apparently are unaware, is what traditional conservative philosophy is about.

I think it is bad for the country. Eventually you end up like Latin America.

If your believe that it is good for the rich to own a higher and higher proportion of the total wealth of the country, why don't you just come out and say it, instead of dodging the issue by focusing on your own personal wishes?

jon: "P.S. You had it right the first time. The Europeans are a bunch of socialists."

No, they are not, they are social democrats. Just because the idiot wingnut talk show hosts you listen to say they are socialists doesn't mean they actually are. And just because it makes you feel good all over to call them socialists doesn't mean it is so. Believe it or not, political discourse in a democracy actually works better if people try to stick with reality.

Frak wood: "I think a psychological profile of those who habitually look back to some mythical golden age compared to those those who look forward to an extension of progress more of what today is like would be very interesting."

Neither I nor anyone else here said said the 50's were a golden age. What we said is they were better in some ways. Do you have a reading comprehension problem, or were you intentionally distorting what was said?

This is all so sad. I am not a conservative. I'm a moderate, which means I think the conservatives are right about some things but wrong about others. Back in the old days conservatives had a committment to reality and rational argument. Over the last couple of decades I have watched the conservative movement degenerate, and now it is dominated by idiots who just make things up to please them, and have a very poor and distorted understanding of conservative philosophy. You guys should spend some time reading what Adam Smith had to say about rich people and why society needs to keep them under control, instead of indulging their every wish.

jon: "That growth came to a screeching halt in the 70s because of, among other things, the New Deal's horrible, deformed progeny the Great Society. Crippling redistributive taxation was driving capital from productive, growth creating investments into tax shelters."

As to the New Society getting us in a mess, fine, so go back to the successful policies of the 50's, not the radical conservative revolution (by the way, a key reason the New Society lead to a radical mess is that LBJ wanted both guns and butter, which is the same mistake Bush is making). It's like Bush saying that taxes had to be radically cut because under Clinton's tax regime the rich had no money left to invest. But if that was so, how come we had a major sustained boom in the 90's?

jon: "I don't know what sales pitch 'you' heard that you feel cheated, but lower, simplified taxation and deregulation worked exactly as predicted. We've had 25 years of world-beating growth because of Republican policies."

I have been following the conservative movement for about 45 years, and I am talking about the pitch they, including Reagan, made from the beginning. They didn't say, "Follow conservative economic policies and the rich will get a larger and larger proportion of the wealth of the nation." They said that wealth would rise in roughly equal proportion for everyone. I heard them say that many times (it was their response to the accusation from liberals that the conservative plan was unfair), and if they had said what actually was going to happen, it is far less likely that the nation would have decided to follow them.

Furthermore, the change in wealth distribution was part of the plan. Conservatives have a radical agenda: basically abolish everthing from the New Deal and progressive legislation before it like the Sherman Anti-trust Act, and the FDA, and also everything afterwards like the EPA. The problem is that the majority of Americans just don't support that agenda (as exemplified, for instance, by the massive rejection of Bush's rather modest proposed changes to Social Security, or how conservative politicians have to lie to the public and pretend they are pro-environment).

The conservatives decided to go ahead and try to turn government to their wishes, anyway. One of the things they needed to carry out their political plans was an enormous amount of money, and so they made a deal with the rich (who they tend to like anyway): "Give us billions and we will enact any legislation you want, whether it is good for the country or bad." And of course what the rich wanted. among other things, was a set of ways to get a greater and greater proportion of the national wealth, so that is what the conservatives have been working away at, with quite unfortunate success.

jon: "The share of income taxes paid by the top half of taxpayers reached its highest level in decades, according to new IRS data released today [blogged here]. According to the new data, the top half of taxpayers ranked by income paid 96.70 percent of the individual income taxes paid in 2004, compared to 86.05 percent in 1949, 89.35 percent in 1959, and 90.27 percent in 1969."

I'm talking about the rich, like the top 1%, not the top 49%. But you knew I was right about how the rich are getting a larger and larger proportion of the wealth, so you switched over to the question of the top half.

jon: "No, I don't care how rich the super rich are. I live my life. I don't hate them for theirs."

The question is not what you, with your undoubtedly strange psyche, want. It rather is what is good for the nation as a whole -- which, as you apparently are unaware, is what traditional conservative philosophy is about.

I think it is bad for the country. Eventually you end up like Latin America.

If your believe that it is good for the rich to own a higher and higher proportion of the total wealth of the country, why don't you just come out and say it, instead of dodging the issue by focusing on your own personal wishes?

jon: "P.S. You had it right the first time. The Europeans are a bunch of socialists."

No, they are not, they are social democrats. Just because the idiot wingnut talk show hosts you listen to say they are socialists doesn't mean they actually are. And just because it makes you feel good all over to call them socialists doesn't mean it is so. Believe it or not, political discourse in a democracy actually works better if people try to stick with reality.

Frak wood: "I think a psychological profile of those who habitually look back to some mythical golden age compared to those those who look forward to an extension of progress more of what today is like would be very interesting."

Neither I nor anyone else here said said the 50's were a golden age. What we said is they were better in some ways. Do you have a reading comprehension problem, or were you intentionally distorting what was said?

This is all so sad. I am not a conservative. I'm a moderate, which means I think the conservatives are right about some things but wrong about others. Back in the old days conservatives had a committment to reality and rational argument. Over the last couple of decades I have watched the conservative movement degenerate, and now it is dominated by idiots who just make things up to please them, and have a very poor and distorted understanding of conservative philosophy. You guys should spend some time reading what Adam Smith had to say about rich people and why society needs to keep them under control, instead of indulging their every wish.

As I understand the macroeconomic data, when we look at the share that goes to labor in the US
from GDP, it's been fairly constant at about 70%
for the past few decades. This share includes wages and fringes like health benefits. This share has recently dropped below 70%. Workers may be getting "paid" in health care but corporate profits are up and it's workers who are squeezed. It's no wonder people feel as if they're falling behind because many people,
as the data shows, truly are.

Eduardo,

You talk about "reality and rational argument" when you've just gone on about conspiracy theories ("part of the plan") without any evidence.

"of course what the rich wanted. among other things, was a set of ways to get a greater and greater proportion of the national wealth"

I've tried to find the key to your claims and concerns, and it seems to be the idea of a zero-sum economic system. The mere fact that the rich have more is proof, to you, that they have somehow successfully conspired to change the system, in order to steal from the poor.

The zero-sum approach is dangerous. The reason communism has failed so miserably, and socialism less dramatically, is because they ignore incentives (as well as basic fairness) and place an excessive emphasis on distribution. Wealth first has to be created. Why shouldn't those that create wealth be allowed to keep a portion of it?

Is it really worth killing the goose that lays the golden eggs, in order to prevent that goose from keeping even one of the many eggs that are helping everyone? What evidence do you have that any and all wealth has been stolen? How has total wealth increased if it can't be created?

I liked 1973. The economy was more stable, most people could afford a house on one salary. Almost everyone had pensions and heathcare. My parents didn't have to work day and night to make ends meet. Air conditioning is great if you can afford the bills. Air travel may be more affordable, but it is such a nightmare, it isn;t worth going anymore.

Just keep trying to convince yourself that neo liberal econmics works for the middle class. It is amusing to watch.

Ann: "You talk about "reality and rational argument" when you've just gone on about conspiracy theories ("part of the plan") without any evidence.

"of course what the rich wanted. among other things, was a set of ways to get a greater and greater proportion of the national wealth"

One of the things I find distressing about conservatives today is that most of them have such a poor understanding of conservative philosophy. You should read some Adam Smith, who is quite clear that the rich only want to get richer, and will quite eagerly do things contrary to the interests of the country if they think they can make more money that way. Are you really so naive and ignorant to think that the rich don't want an ever-increasing proportion of the national wealth? Perhaps you think that they had a sudden moral conversion the last few decades, just like communists believe that under communism all workers will become totally unselfish?

As to the conspiracy, you should check out the book Off Center by Hacker and Pierson. The rich provide a large proportion of the funding for the conservative movment, like Richard Scaife and Joseph Coors, and in exchange the conservatives push through policies like radical tax cuts, that help the rich get richer. I am not saying that is the only reason they do it, but is certainly is a major one. That is one reason why, for instance, so many conservatives supported Bush's tax cuts, even though they would increase the deficit, something that conservatives have always argued against. Are you so naive that you believe that conservative politicians never sacrifice conservative principles in order to get money to fund their campaigns?

Ann" I've tried to find the key to your claims and concerns, and it seems to be the idea of a zero-sum economic system. The mere fact that the rich have more is proof, to you, that they have somehow successfully conspired to change the system, in order to steal from the poor."

Do you have a reading comprehension problem? What I keep saying is that under New Deal-type liberalism incomes for everyone rise in approximately equal proportion. That's not zero sum, its positive sum. Are you really so stupid you can't understand that?

Ann: "The zero-sum approach is dangerous. The reason communism has failed so miserably, and socialism less dramatically, is because they ignore incentives (as well as basic fairness) and place an excessive emphasis on distribution. Wealth first has to be created. Why shouldn't those that create wealth be allowed to keep a portion of it?"

I am not arguing for the rich to be taxed at 100%, but only at a high enough level that they don't get a constantly increasing proportion of national income and wealth. Do you believe it is good for the nation if non-rich have a smaller and smaller proportion of national income and wealth? If you do, why don't you come out and say it, instead of evading the issue by misrepresenting what I am saying?

As to socialism, I know the ignorant, lunatic wingnut talk show hosts you listen to all day and worship as living gods tell you over and over again that there are only two economic systems, conservative and socialist, and so a person arguing against conservatism must be a socialist. Are you really so ignorant you don't know that New Deal liberalism is not socialism? If so, you are truly hopeless. To be that ignorant, you have to really work at it, you have to have an overwhelming drive to stay ignorant, and I doubt you will ever get over it.

malcolm: "As I understand the macroeconomic data, when we look at the share that goes to labor in the US from GDP, it's been fairly constant at about 70% for the past few decades."

I have been talking about the proportion of income and wealth that goes to the top one percent, that that has risen dramatically. You know that is true, but don't want to admit it, so you switch to a different topic.

la: "I liked 1973. The economy was more stable, most people could afford a house on one salary. Almost everyone had pensions and heathcare. My parents didn't have to work day and night to make ends meet. Air conditioning is great if you can afford the bills. Air travel may be more affordable, but it is such a nightmare, it isn;t worth going anymore.

"Just keep trying to convince yourself that neo liberal econmics works for the middle class. It is amusing to watch."

The Soviet Union was hell on earth, but communists insisted that it actually was a workers paradise, because that is what their ideology predicted.

There is something similar going on among conservatives today. Their ideology says the conservative economic path is 100% certain to produce overwhelming benefits for all of society, and so they insist it actually is doing this, inspite of important evidence to the contrary. Conservatism has become a closed intellectual system, impervious to empirical disconfirmation.

"You should read some Adam Smith, who is quite clear that the rich only want to get richer, and will quite eagerly do things contrary to the interests of the country if they think they can make more money that way."

How does that make them different from the poor, or the middle class, or you? Adam Smith said that everyone wants more. But their wanting more isn't proof of a vast conspiracy, and neither is their support for tax cuts or voting Republican. Surely you have more evidence than this?

Yes, you keep claiming that New Deal liberalism offers rigidly proportional benefits to all, but you don't offer any evidence.

And what you haven't explained is your obsession with proportional wealth. If you mandate that 'the rich' (are you going to tatoo their foreheads to keep track of them?) can get only x% of total wealth, with any excess forcibly taken, then you're going to remove their continued incentives to keep producing. This will hurt everyone, since part of the excess that they otherwise would have produced would have been shared with others.

Why do you care only about proportional share of output? Why prevent wealth from being created rather than allowing the creators to keep some proportion of the benefits? I compared your attitudes to those of communism and socialism because you won't even talk about wealth creation - you're obsessed with relative distribution, to the exclusion of all else.

"How does that make them different from the poor, or the middle class, or you? Adam Smith said that everyone wants more. But their wanting more isn't proof of a vast conspiracy, and neither is their support for tax cuts or voting Republican. Surely you have more evidence than this?"

I really, really, really wish that you would stop attributing to me things I didn't say. I never said that others don't want to get more wealth. Do you have a reading comprehension problem? Or do you intentionally claim I said things that you know I don't, because you don't have good arguments against what I do say?

As to a conspiracy, you have the rich wanting lower taxes, they tell the conservative politicians they want lower taxes and give billions to them, thereby helping them get elected, and the conservatives pass the tax cuts the rich want. Do you deny that is how things happened? I never used the term "conspiracy," instead I said "plan," and if that is not a plan, then I don't know what is.

"Yes, you keep claiming that New Deal liberalism offers rigidly proportional benefits to all, but you don't offer any evidence"

I say that because in the post-war period the proportion of total wealth that the rich had was relatively constant. Are you arguing that the drastically lowering the tax rates for the rich in the last three decades has not help them gain an ever-larger growing proportion of wealth?

"And what you haven't explained is your obsession with proportional wealth."

It is bad for the country if the majority of the population has an ever-shrinking proportion of total wealth. One of the reasons American democracy has been so successful, and we haven't had highly divisive leftist movements like Europe and Latin America is that for most of our history people could see that the system was designed so that increased wealth was relatively equally distributed. If you think that the country can do well with the wealthy having an ever-increasing proportion of the wealth, you should present arguments for this idea. And is there an upper limit? Would it be all right for the functioning and morale of the country if the top 1% had 99% of the total wealth? 99.9%?

Also, you need to address my point that this is very different from what the conservatives promised. From the beginning, conservatives have argued that tax rates for the rich should be radically cut. Liberals of course resisted this idea, and one of their main arguments was that this would result in the rich having a larger and larger proportion of total national wealth.

The conservatives always replied to this by saying no, that would not happen. They promised that if say the economy was growing at 3% a year, everyone at the bottem, middle and the top would get approximately 3% a year richer. That was important, because if the nation had not been persuaded the conservatives were right on this, it almost certainly would not have bought into the plan.

But people did believe the conservative promise, and the nation was persuaded to put the conservative plan into action. However, things didn't work out as the conservatives promised, at least on this aspect. The honest thing for conservatives to do today is admit they were wrong. Alas, conservatives, who used to be a pretty honest bunch, seemed to have abandoned honesty as a political principle, and so they duck and weave on the issue like you are doing.

"If you mandate that 'the rich' (are you going to tatoo their foreheads to keep track of them?) can get only x% of total wealth, with any excess forcibly taken, then you're going to remove their continued incentives to keep producing."

Once again, you are misrepresenting what I am saying. Under the pre-conservative system, the wealthy did not get anywhere near all the increase in wealth taken away. Investment by them lead to increase in national wealth, and they got a proprotional share of that increase, so they were motivated to keep investing.

(Also, as far as identifying the rich goes, at present the government does this by examining their IRS returns. Are you suggesting that this traditional method is totally unreliable? If so, I am sure the government would be interested to hear your arguments.)

This, by the way, is how things operated throughout most of the history of the country, and the result was an excellent record of growth. If it had operated the way things work now for all that history, then the wealthy by now would have 99% of all wealth.

You are operating out of the delusion that there are only two possible sorts of tax arrangements. In one, the rich are taxed at such a high rate that all increase in wealth is taken away from them. In the other they are taxed at such a low rate that they allowed to gain an ever-increasing proportion of national wealth. What you don't understand that it is possible to have a middle level for tax rates that provides sufficient rewards for investors, but keeps proportions the same.

You seem to have a cognitive or emotional disability that prevents you from understanding this very simple point. I think you should get in touch with an economics professor, preferably one who is a conservative, and have him read over what I am saying and explain it to you. I am not saying he would agree with everything I am saying, but he might get you to actually understand it.

Jane, why don't you add a comment here, or do a post on this topic?

...the rich only want to get richer, and will quite eagerly do things contrary to the interests of the country if they think they can make more money that way."

How does that make them different from the poor, or the middle class, or you?

It doesn't. But lets assume that all people are greedy and rent seeking. Changing proportions of wealth distribution may change the effectiveness of rent seeking for various groups. Balances of power promote laws and law enforcement. Lack of such balances undermines the creation of fair laws and their enforcement.

Of course, government is as friendly to corporate special interests as anyone, and the ability to move from labor market to labor market in an economically globalized world is going to inevitably increase the wealth disparity regardless of what governments do. Money is mobile. It can easily flee areas with high tax rates.

Inequality is a problem, (just as taxing people unequally is also a problem). But the question remains; what can be done to fix it that won't exacerbate things? How many investment dollars are we willing to see leave America in order to maintain a power distribution that would promote lawfullness? Or are there enough ethical altruists that we don't need to? I don't claim to know.

Regarding the notion of "baseline happiness."

SSRIs seemed to partially contradict this notion. There isn't nessicarily a 'conservation of happiness.' Some people are chronically depressed. Stress measurably affects them more and the rate of suicide for people who are clinically depressed is higher. While people may acclimate to their situation, the support for a true 'baseline' which people always return to is a bit sketchy.

lets assume that all people are greedy and rent seeking. Changing proportions of wealth distribution may change the effectiveness of rent seeking for various groups."

Actually, most people below the top 20% or so have few if any opportunities for rent seeking.

"Balances of power promote laws and law enforcement. Lack of such balances undermines the creation of fair laws and their enforcement"

Exactly.

Of course, government is as friendly to corporate special interests as anyone,"

No, under the conservative economic policies we have been operating under for several decades, it is considerably more friendly to corporate special interests.

and the ability to move from labor market to labor market in an economically globalized world is going to inevitably increase the wealth disparity regardless of what governments do. Money is mobile. It can easily flee areas with high tax rates

Inequality is a problem, (just as taxing people unequally is also a problem). But the question remains; what can be done to fix it that won't exacerbate things? How many investment dollars are we willing to see leave America in order to maintain a power distribution that would promote lawfullness? Or are there enough ethical altruists that we don't need to? I don't claim to know.

You raise some important questions. My own view is that the best economic policy is one that aims at a healthy middle class, and if you do their purchasing power will incentivize the rich to invest in this country. I am not totally sure this is right, but would you agree that things have turned out differently that the promised, at least on the matter of wealth distribution and so we should at least look into other options?

Ryan - I agree that rent-seeking behavior can be a problem. If the rich are able to change the rules, then they may be able to gain additional wealth without creating it, which isn't good for society. My point above was responding to Eduardo's claims - I asked him what evidence he had of a 'plan', and he replied that if I wasn't so stupid, I would know that Adam Smith had explained that the rich are greedy. I didn't see how this, by itself, made his point.

"You seem to have a cognitive or emotional disability that prevents you from understanding this very simple point. I think you should get in touch with an economics professor, preferably one who is a conservative, and have him read over what I am saying and explain it to you. I am not saying he would agree with everything I am saying, but he might get you to actually understand it."

This posting says that it was done by Ann, but it would seem to be from Eduardo, since he's the one that responds to all arguments through insults, followed by repetition. Any lack of agreement by others is instantly put down to the other's 'cognitive or emotional disability'.

You haven't explained how the tax system could enforce this rigid proportional scheme, especially given that those in the top income group change from year to year. Suppose someone spent her entire life building a business and gets a big payoff in one year - what proportion will you take from her, as punishment for 'the rich' having had too big a share last year? What if 'the rich' just keep being more and more productive? Would you raise their taxes retroactively, to punish them for producing too much? You claim that I'm just too stupid to understand, but you haven't given any details, only insults.

There's clearly no point trying to have a rational discussion with you, but I would like to point out that I am a professor with a PhD in economics. I don't need a male colleague to read your simple repetitive claims to me.

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