I’ll take this opportunity to put in another plug for replacing all taxes with the Land Value Tax (fellow Georgists, give me some “likes”!). (My "pet issue", sorry Jon Saxton)
The wealthy owners of high priced land would pay a disproportionate share of the taxes while the marginal tax on income and consumption would be zero – a win-win for both progressives and free market types.
Ownership of land is a major source of unearned inequality. If you get rich by inventing that proverbial better mousetrap (or by seeing the potential and investing/risking your money with Mike’s Mousetraps), you have earned your wealth and income. But by simply owning land you have created nothing and are risking nothing. (If you build a mousetrap factory on your land, that’s great, but the part of your riches that derive not from the factory but the “location, location, location” of the land is unearned).
It sure feels like so much of the commentary here is imputing a whole lot of “pet issue” conclusions and implications to MY’s pretty narrow point, which, as he says, is essentially: “The upshot is that people who care about egalitarian economics should take a more positive view of recent trends and a more risk-averse attitude toward the future.” I don’t think he said anywhere that “egalitarian economic policy” is the be-all and end-all of the various discussions and policy choices to which it is related.
Economic inequality is a thing and likely will always will be. That’s because of the nature of capitalism and of the ruling elites who make and enforce social policy. Some policy folks (and not just “progressives”) generally think that less egalitarian economic policy has overall negative impacts on those at the lower ends of the resulting distribution of economic resources, whether income/social supports/wealth. Some policy folks think egalitarian economic policies can interfere with the optimal benefits of capitalism and with individual motivation to work and be productive. But these are only very small variables in a much larger and complex equation.
I have always been extremely interested in a more sociological concept, which is essentially, individual and collective agency. Agency is essentially the capacity of the individual or community at whatever level to have significant power over their life’s chances and choice. It means that, given the social conte4xt in which they live, can they pretty much, for instance, choose to be a doctor or a lawyer or a bricklayer. Or are these choices mostly delimited by their place in the social/economic/political hierarchy?
Economic policy and “security” in America has real consequences for one’s life chances and choices. But so does which side of the “Tracks” one is born on. Whether one is white or non-white, male or female, etc. It is quite possible to be a black person of some financial means and still be alienated or resentful if racism, like red-lining, etc., limts their life chances in ways that do not affect his/her white colleagues.
I know this is a bit of an wild generalization, but I believe that most people who immigrate or aspire to immigrate to America come here not to become wealthy, but to become empowered with the agency to live a decent life, free of exactly the sorts of legacy hierarchies and societal dysfunctions that the early settlers were fleeing and that we fought the Revolutionary War over. The original Tea Party was about the aspiration for a civic form of self-determination/agency. America was founded and built as much on that idea as any other even though the understanding of who should have such agency has had to be vigorously contested and thereby expanded over time. When one brings it up, the Americans with Disabilities Act, Title 9, and all of the Civil Rights era legislation is about the very American quest for individual agency.
Economic determinism is not a good idea on the left or the right. Economic status is simply one of the variables that matter in a country built on the idea of agency as the beating heart of human dignity and of the ability to lead a good life.
This article is a useful corrective; but the fact remains that it took almost Obama's entire first term to turn around the (pre-tax) trend, and his second term to get us just above where we were in '99.
It's great that the trend continued until the pandemic, and I agree that right now the main worry is downside risk from Republicans. But it's still understandable that people view Obama's economic achievements (aside from ACA) as weak tea.
"it’s widely held that the Obama-Biden approach failed on economic equality."
This might be widely held by Left Twitter, but it's worth saying that Left Twitter is a highly unrepresentative sample of the population. The basic position of this excellent piece - namely, that the Obama-Biden record on social program expansions and job growth was solid and beneficial - is a fairly common view out in normie-land and an uncontroversial one among rank-and-file normie Dems. After all, Left Twitter was pretty surprised when the normies overwhelmingly picked Joe Biden in the 2020 primary, despite his lack of support in the chattering classes.
Upshot of this piece is absolutely right - the Obama-Biden approach has delivered in consequential ways and the biggest downside risk is Republican-led welfare state rollbacks.
I was going to ask this in the mailbag but this seems like a fine place to mention it... I know Matt's perspective (and also many others on the left and center left) have taken the view that running a very tight labor market is a good idea for the purposes of increasing worker power (which decreases inequality).
But it would also force employers to invest in productivity-saving innovations since workers are not as cheap or freely available.
Have the recently pretty bad productivity numbers caused people to reevaluate the idea that a hot labor market would enhance productivity? Or is the consensus that poor productivity (badly negative in the first half of 2022, basically flat in Q3) is more caused by external factors like work from home, supply chain issues, workforce composition effect... and the potential productivity concerns caused by a tight labor market (more job switchers means more newbies at every job) is peripheral?
I agree with your points about external factors, but I would also just mention that I don't think most businesses have a "productivity dial" they can turn up in an instant (short of working existing staff harder, which I guess some are trying to do). I assume it would take time to appear. As Matt mentioned on Friday, he thinks restaurants will increasingly go to counter service rather than having dedicated wait staff, but they won't make this decision overnight.
Perhaps it’s my misunderstanding, but this piece seems to focus on wages. What about wealth inequality overall? Also, even median wages finally started rising in 2015 (after 15 whole years of stagnation and decline !) did they rise at a level at all commensurate with the meteoric rise in the stock markets, which disproportionately enriched the richest? Furthermore, is it even close to making up for how much less the share of the wealth American workers are getting now compared to before Reagan times, when considering the rise in productivity, and how significantly gdp increased? I just think that “increase” while important to note, just doesn’t tell the full story. I’d you’re getting a million extra dollars and I’m getting one, it’s better than for me to get none but that’s not a story of egalitarian success.
I guess I'll try to share an opinion that I'm guessing is quite unpopular on this site: I have just never been able to get upset about *per se* income/wealth inequality. I know there are people that are vastly richer than I could ever imagine to have, and...it's just never bothered me.
What concerns me more is to be continually striving to raise the baseline of basic standards of living for those most at need, and to continually strive to provide abundance in society to make that happen. That would likely have the side effect of reducing income/wealth inequality, but that would not be driving my desire, but instead to increase abundance and basic standards of living--which are very good!
The problem is twofold. First, whether the riches r are getting an unfair share. Here’s an easy example. We’re both perform the same work but I get a million dollars and you get a thousand. Why should you be upset? We are both better off . Standards of living rose.
Second aspect is whether people can get so rich that their political or social power undermines the basic equality under the law that is the basis of democracy or allows them undue political power. Put differently, there is an idea that democracy is a system of government built by and for the middle class, its erosion, including by having too powerful rich people , risks destabilizing the system.
Regarding the second point, it seems to me that for every Koch or Thiel there's a Gates or Soros.
Of course, it's not as if the only danger is that a rich right-winger will buy elections or parties: all four of them likely share interests and therefore subtly exert pressure on our politics. Furthermore, one might point out that, without support from their like, a viable candidacy of any sort is difficult.
But in the end, those are hypotheticals, and my priors say the existence of trillionaires doesn't constrain our political options in a meaningful way, except, perhaps, as a counterweight against certain kinds of abuses. I don't think you need to be an acute paranoid to want a partially constrained government*: a brief survey of global affairs should do the trick. Or, for the progressively-inclined, a look back at the Trump presidency.
* To clarify, I think our governmental gridlock is bad - I'm not talking about that. I'd be much happier to see governing majorities get a chance to enact their policies.
I don't think giving a huge amount of an accountable power to random unelected individuals is a good or effective way to keep the government in check. It rather seems like a growing element of chaos in the system, not a sound check or balance. At the end of the day we can debate how serious of a problem it is or is likely to be in the near future, but so long as we agree that there could be a theoretical point of gini coefficient and/or absolute level of wealth where it *becomes* a problem and democracy becomes seriously endangered or unsustainable then we agree - in principle - that OP's argument is incorrect, at least in theory.
I didn't mean to hide my position here & come across as concern trolling. I'm mostly with City of Trees and Dave Coffin on this. I'm in favor of providing a relatively high floor, but I don't think it's a good idea to compress wealth and income for its own sake.
Regarding the point you were responding to, I think we probably have different intuitions about how much we can engineer large-scale social systems, which is an interesting topic, but not one I have much time to dive into at the moment!
To the extent that money buys power, it’s because it buys attention (TV ads, think tanks, lobbying, etc). As long as the underlying attention is still available, limiting the amount of money people throw around for it will simply lower the price, or at best displace the competition for attention to another form. But there are always going to be winners and losers in the competition for attention, and the winners are going to be better able to influence policy. I also don’t think it’s the worst that being able to get political attention is associated with having done things in the real world… I’m not sure I’d like to see basement shitpoasters displace the Ford Foundation.
Also, I think there’s kind of a misconception going on where we compress billionaires and professional-managerial class families. Raising taxes on wage incomes over $250,000 is not going to materially diminish the influence of a Murdoch or a Soros. It doesn’t take money to show up and NIMBY, it takes time. Perhaps if you want to diminish the influence of PMC families, you should embrace RTO and long hours.
I think you are vastly underestimating the power billionaires have, above and beyond election campaign donations. Bill Gates watched a tv show when running on his treadmill and next thing we know tens of thousands of public schools kids or more are educated based on his whim… and you’re right, the argument agaisnt billionaires is separate from the argument for genera redistribution policies to fund the welfare state. Arguably making sure there aren’t any trillionaires around is an end of itself, to be pursued by specific means, which may or may not overlap with the means used to fund the welfare state and redistribution. No individual should be able to hire their own literal army, for example. Money is power and too much power in one individual (or family, or corporation even) is dangerous to freedom, especially when that power is totally unaccountable.
Ok, but, how many Bill Gates are there? I'm not sure how many B's he has but it's many times what whoever #100 on the wealth list has. The number of people who could pull off Gate's treadmill stunt is pretty small and might be in the dozens. And as far as I can tell the majority use their power for "good" in the form of charities or at least productive ideas. My point being this doesn't seem like a particularly important problem.
P.S. prioritzation is a second order question. City of Trees argued that there is no problem with extreme wealth per se. I’m arguing that there is, or could be, a problem. If we agree that it *is* a problem (or potential one) then we disagree with the OP argument, regardless of how “urgent”/“important” we deem that problem to be.
Thinking about it “constitutionally” even one person powerful enough to shake the system is one too many, and the fact the person currently in that position currently doesn’t seem inclined to do so (through sheer luck , it would seem) is small comfort.
N.B. I’m not saying Gates is necessarily in that position. Nor do I think he is the worst of his kind (think musk, thiel). However the question needs to be addressed. How much wealth is too much , ie giving someone this dangerous *potential*? Surely we ought to guarantee such potential is eliminated , or at the very least have some mechanism to control who gets this egregious power, rather than the current de facto lottery-like system?
In FL and TX the issue isn't just that it's purple enough that Dems think a regular Dem can win. It's that the primary electorate is full of the same sort of cosmpolitan liberal that controls the party everywhere else, and that electorate simply will not tolerate a person who says stuff like "I think abortion is morally wrong in most cases, but I also think the government has no business making that sort of decision for people," or "I love guns, watch me shoot some guns, look at me throw a dozen bones to conservative aesthetics and say I just want to help honest hard working laborers with Medicaid expansion."
Democrats have not won a statewide election in Texas in nearly 30 years, so a big part of the problem is just that they are flying blind there. They do not have any successful roadmap for how to crack the code in that state. Combine this with how expensive it is to compete in such a large state, they have a very short list of high-quality candidates who are even willing to run a serious statewide campaign. So their options are rather limited to begin with.
Another aggravating factor is that Texas (and indeed, most of the non-Medicaid expansion states) don't grant ballot initiative power, which would be a way to disarm the partisan chum that gets associated, and place the single issue all by itself to a vote. Florida has initiatives via constitutional amendment, but it looks like that requires a supermajority vote, and even then, as we saw with the effort to end felon disenfranchisement there, the legislature was motivated to find a way to run over that vote.
If that’s the data, then we have to accept it. But something doesn’t add up. Why doesn’t anyone I know of middle or lower income feel as though any of this is true? People who aren’t quite well off don’t just watch MSNBC and conclude based on what the talking heads say that they are the victims of economic inequality or neoliberalism or whatever. They work hard, collect their paychecks, and notice that they still can’t afford a relatively modest-but-dignified lifestyle without racking up credit card debt. This was true even before the abrupt pandemic- and war-in-Ukraine-induced decline in real wages versus the cost of living owing to a combination of inflation and gouging. But once that happened, it worsened significantly. Gas prices are helping take some of the edge off, but most non-wealthy people I know with fixed incomes are finding that what they can responsibly afford in terms of lifestyle has been abruptly downgraded, while those with higher incomes and/or more assets to begin with seem not to be tightening their belts, and some have even indulged more while the rest of us suffer! You’re a brilliant wonk—figure out why this is happening and propose a plausible set of solutions. The loud leftist specter of “neoliberalism” is so tired by now, but it’s obvious to me that there is an element of truth in that narrative. Maybe you can figure out what it is instead of seeking to cheer it on.
In 1980, median household income was $21K and median home price was $76K. In 2020 median household income was $67K and median home price was $391K. And that's before we even look at healthcare costs and expenses.
I am replying to myself, gauche though it may be, because while at work I did not have the opportunity to reply individually to drosophilist, Marc Robbins, Wigan, and David_in_Chicago as their comments came in, and my reply to each is substantively the same.
OP's original question was why middle class Americans don't FEEL that income inequality is decreasing. It is not an economics question. It is a vibes question. I have provided a plausible vibes answer. Nationally, the median home price is now nearly 6x times median income. Median annual income no longer covers the 20% down payment. I did a brief, completely unscientific vibes-based survey of 8 US cities. In two (Des Moines and Amarillo) its basically 1980: the home price to income ratio is right around 3.6x. In two other cities (Kokomo, IN; and Pine Bluff) its less than 3.6x. In the remaining four (Las Cruces; Waterville, ME; Grand Island, NE; and La Crosse, WI) it varies from 4.5x to 6.6x. And, just so I can bitch about it, here in Missoula MT, its fucking 11.2x. Not a coastal superstar city. Just a red state college town. Fucking 11.2x.
Point being, those are the vibes. Finance changes and tax changes may have made homeowning better for many today than in 1980. But homebuyers are looking at the sticker price, and comparing it to their income, and thinking about what their parents paid, and how much they earned, and they don't like those numbers. I know I don't.
As others have pointed out, you have to factor in the interest rate. If we take the median household income in Missoula as ~$50k, then 3.6x would be a $180k house. If we assume for the sake of simplicity the entire thing is financed, at 1980's interest rate of, say, 13.74%, you get a monthly payment of $2,096. For a house now at 11.2x = $560k and 2021's interest rate of 2.96%, you get a monthly payment of $2,349, only 12% higher.
Not to mention that you get a bigger and better house today than in 1980.
This is very frustrating for me. Please reread my responsive comment. This is not a math problem. It is a comment about middle class sticker shock from home prices relative to incomes. You and I and a few other commenters are the only Americans who spent any time today thinking about 1980 mortgage rates. Americans know how much they make, and how much a house in their community costs. And they know how much their parents paid, and how much their parents made. Those are the salient numbers when talking about how people feel about inequality.
BTW, I'm only referencing 1980 because that was the year Matt referenced in his piece when tracking inequality over time. Its a poor exemplar, as mortgage rates peaked in 1981 at over 16%. So go back 30 years instead of 40: in 1993, the rate was down to 6.74%. Median household income was $31,241, and median home price was $103,186. That's a home price to income ratio of 3.3x, lower than 1980, at halfish the interest rate.
But again, I think pay stubs and sticker prices are what matter to this question, not interest rates. Home purchase prices have skyrocketed relative to income, which leaves prospective homeowners priced out of the market and feeling like they'll never catch up. And they won't.
I'm very sorry you're frustrated by my response. Hopefully you will not be frustrated by this one as well, but I will just refrain from replying after this.
It would be silly for me to deny that house prices have increased faster than inflation, perniciously so in a few metro areas. Personally, when I was house shopping, what I looked at is what the monthly payment would be (which determines affordability), not the purchase price. And on that metric, low interest rates supported an explosion in prices because essentially people were bidding on a fixed amount of goods.
Using your (admittedly fairer) comparison, a $103,186 mortgage at 6.74% is a payment of $669. An interest rate of 3% supports a mortgage of $159,000 with the same payment, which gets you to a 5.1x multiplier *at the same level of affordability*. Now that interest rates have risen again, prices have started to come back down a bit, mercifully.
Coming back around to your main point about vibes, I really appreciate that you put some numbers behind it (which made it easier for me to throw out some of my own). I am saying that I think the payment is what people look at while you say sticker shock bothers them more - you probably have a point! But at the end of the day, people bid on houses based on affordability, so you can't decouple interest rates from prices completely.
I was just embarking on my career in 1980 and let me assure you that, with sky high inflation, Volcker-induced monster interest rates, recession (soon to be back to back), the vibe was soooooooooooooooooo much worse in 1980 than it has been recently.
Back then we weren't comforted by acknowledging that at least housing prices were less than they would be 40 years later.
Interesting to note that real estate, healthcare, education have the highest consumer goods inflation rates over time and the highest levels of government intervention.
As Noah Smith points out in his recent column, median house price doesn't mean much, because you're averaging super expensive housing in desirable metro areas with cheap housing in declining Rust Belt cities and rural areas that have no good jobs or career prospects. Most up-and-comers won't be cheered up by knowing that they can buy a super cheap house in Bumblecluck, Indiana.
1980 mortgage rates peaked at 16%; in 2020 they were just over 3%. Monthly mortgage in 2020 would be around 70% higher than what you would have paid for the $76K house in 1980, but your income is three times higher.
So for housing you're better off in 2020 than in 1980.
I think you have to include the monthly interest expense to compare these two periods. One of the reasons the median home price is $391k is the majority of the purchasing power is going towards the home equity value.
True. But worth mentioning that homes were "worse" though - in quotes because that's quite subjective, but the median 1980 home is quite a lot different from the median 2020 home. And health care was almost certainly worse as measured by life expectancy 2019 life expectancy was 5 years above 1980's level (yes, I'm leaving out 2020 to ignore covid b/c I'm not sure how it factors in).
Food, clothing, shelter: I'm not sure how different food prices were or how to compare median diets, but clothing is probably better and cheaper.
It would be helpful if you gave a little more context for those you're seeing as downwardly mobile. How old? What careers or industries? Where do they live?
In my sphere -- I'm not seeing that. Within a restaurant fire protection business I own our technicians (all high school educated or below) have seen 55% wage increases over the last 4 years - from $18 / hr to now starting at $28 + commissions. We're guaranteeing $50k / year for a post-high school apprenticeship and can't fill it. Our team's explicit comments indicate this is the strongest financially they've ever felt. We just paid our highest ever year-end bonuses. It could be our industry is unique (e.g., manual labor, requires challenging state licenses, tough hours) but I'd be surprised.
Unrealistic expectations. Material wealth has never been higher, yet people feel they deserve more. They use credit to keep up with the Joneses due to an inability to overcome hedonic bias.
Exert more control, save money, buy used cars/furniture/clothes, invest instead of vacation, get an FHA loan to buy a house instead of paying rent, don't go out to eat or spend more than a dollar on a cup of coffee. You'll wake up in 20 years and be a quiet millionaire.
It isn't that hard....but when political ideologies depend on angry people for their power, this simple logic gets overwhelmed by zero-sum "your getting shafted by elites" or "capitalism is evil" Manichean narratives.
"Exert more control, save money, buy used cars/furniture/clothes, invest instead of vacation, get an FHA loan to buy a house instead of paying rent, don't go out to eat or spend more than a dollar on a cup of coffee. You'll wake up in 20 years and be a quiet millionaire."
I am all for living within one's means in the sense of consistently spending less money than you take in, but the specific advice here is frankly terrible, because this sounds like an awful way to live for twenty years. Like...literally spend two decades never going out or going on vacation...okay. Personally, I'm fine buying used cars, furniture and clothes, but I don't know, I enjoy the wild extravagances of going on vacation and having a night out once in awhile. Guess I'm just frivolous and irresponsible!
Again, I'm all for thrift to a certain extent, but some point you have to ask: what is the point of having a wealthy and developed society if most people are just going to have joyless existences working and accumulating money?
Nonsense. This is not a case of simple class envy. We are talking about involuntary downward mobility. We are talking about people who were never wealthy, but used to be ok by their own standards. The standards stayed the same, and their ability to afford to meet them changed. This is not “keeping up with the joneses.” This is “keeping up with yourself 5-10 years ago” or “keeping up with your parents at your age” or “keeping up with someone with similar inflation-adjusted wages in the same metro area before the 80s.”
The “advice” to simply tighten one’s belt and save more, not go out to eat as much (if the person being advised is indeed doing to at all!) and simply “buy a home” is out of touch now. It’s not a possibility for most ordinary people. Some couldn’t afford it no matter how simply they lived, while others could only afford it if they gave themselves cancer by eating ramen and canned beef stew and almost never doing anything life-affirming that costs money, such as attending a concert. I will note that such advice almost never comes from anyone who themselves has to deny themselves the things they’re counseling others to forgo. It’s always someone who is doing alright despite the present climate who tells other people to stop buying avocados or healthy, natural foods or doing any number of things that contribute to a life worth living. It’s quite transparent.
Furthermore, “you’re getting shafted by elites” and “capitalism is evil” do not go together. They can be decoupled. Hard working people can be shafted by elites while at the same time capitalism is not always and everywhere evil. Rather, protections against predatory capitalism have eroded, and liberal elite culture has gradually lost its earlier labor-left character. That’s how the usually-not-conservative base of commenters on here has come to consistently spout elite-serving nonsense such as what you just typed to me.
You wrote: Furthermore, “you’re getting shafted by elites” and “capitalism is evil” do not go together.
Exactly, they are competing political narratives from populists on the left and right that reinforce the good vs evil scapegoating (Manichean) they need to enrage us for their will to power needs.
These narratives cause people to assume that they are being cheated out of some deserved economic benefit hence the "my generation has it harder than previous generations" delusion. It was true in my day, too.
But the absolute universal economic truth is that you need to earn more than you spend. That is axiomatic in any country, polticial system, or era. Hard, but simple.
Are you trying to argue that people don't ever make bad choices?
Or that no ordinary person who plans and saves in a reasonable way could ever afford a home?
But to your original question you specifically mentioned fixed incomes. If you're a low-wage worker on a fixed income recent inflation has meant a big pay cut. But if you have some job or wage mobility of any kind (like David in Chicago mentioned) you could probably take advantage of the surge in low-end wages and keep up. Some of my relatives fall into the first category with jobs like bus driver or hospital staff just a few years from retirement and having some trouble keeping up. But other relatives without much more education or income but less static jobs like plumber or landscaper are doing being better.
Maybe the people you know are all category #1 or in a metro that's particularly struggling or unaffordable.
The anti-Biden sentiment from progressives is not hard to understand. This is a group of people who believe that when Republicans win election and deliver anti-egalitarian policy changes that just proves that the Democrats failed by not offering a truly transformative egalitarian alternative. You can't really reason with such people. But I think you show the right direction here. Point out the positives of the Obama approach, point out the feasible best next steps along with the downside risks and get people on board with the program. Don't spend your time arguing with the Marxist geographers.
In the big picture, the US public doesn't want an extremely egalitarian income distribution. For better or worse I think the current distribution is pretty close to the median voter's preference. And they aren't crazy. The US has a really strong productivity growth record compared to other large high income countries. If you simply don't believe in capitalism you will never accept there could be a relationship between high elite worker compensation and good economic performance, but I think there is definitely something there.
TL/DR version: once again, a progressive pearl-clutching narrative of the past 2 decades is undermined by empirics.
Shocker....which one is next up:
1. America is the most racist country, like ever.
2. Or, racism/sexism/homophobia is at its all-time high ever in America, like right now!
3. Or, the world is going to burn/melt/drown if we don't all abandon civilization in 5 years, no wait, 10 years, no wait, 15 years?
4. We can replace fossil fuels with wind and solar.
5. Veganism/electric vehicles are LESS resource intensive.
6. Nuclear power is worse than climate change.
Answer: none of them because these are useful political narratives, not reality. Except that the unrelenting catastrophism is making our fragile tennagers mentally ill and drug-addled.
I agree with most of what you say, but how is veganism not less resource intensive than meat eating? Trophic levels: only 10% of the biomass at one trophic level is converted into biomass at the next trophic level. I.e., if you feed a cow 100 kcal worth of plants, you get only 10 kcal worth of cow biomass (and said cow biomass will include inedible parts like hooves and skin). Eating plants directly is much less resource intensive.
If veganism is strictly local, then yes it can be less resource intensive. But, I live at the 45th parallel in a blue coastal city that is regaled as Vegan-central. These self-righteous dear ones eat nothing but bananas and avocados all year long that are air freight delivered from the tropics.
Most of vegan meat substitutes are soy-based. Soy beans are genetically modified and require fertilizers to avoid deforestation and other soil degradations. They also use a lot of water. Non-dairy milks have similar issues.
EV's are more resource intensive to build and dispose of.....and besides the tax subsidies required to make them affordable take away revenue from public transport.
There are no free lunches. Trade-offs are the key to meaningful distinctions and yet the political zealots in my blue district reject persuasion and viewpoint pluralism for ideological bromides that often are in contrast to stated goals. It's the "defund the police" phenomenon that is rampant where I live.
Thanks for clarifying my point on solar and wind. If battery technology advances then fine....but in Italy & Spain, cultural institutions and tourism industries are pushing back on wind and solar farms as destructive uses of landscape and unaesthetic. France avoids this by beng 70% nuclear. Germany allowed Putin to knee-cap their economy based on ecophilia. The lessons are out there to be learned, but one's mind must be open to trade-offs and honest empirical data.
Veganism is less resource intensive in just about any normal set of circumstances. You'd have to compare odd extremes to find otherwise.
To the extent soy is problematic, that just means it is better to eat tofu or veggie burgers than pigs or chickens, whose metabolisms waste most of the soy that they are fed.
And #4. Obviously it is possible to replace fossil fuel with wind and solar (although not today). After all, crude oil was created from solar energy in the first place (phyto and zooplankton)...
In fairness to idonttrollonshobbas, he/she probably meant "we can't replace ALL fossil fuel use with wind and solar" due to intermittent availability and declining marginal utility. Going from 0% to 20% solar is much cheaper, easier, and more efficient than going from 60% to 80% solar.
Europe in general has higher marginal tax rates at the top.
Compared to NY or CA? lol, no.
You ignored the question about middle-income taxes.
“A more egalitarian tax policy passed in 2022 and hasn’t taken effect yet”
Which?
I’ll take this opportunity to put in another plug for replacing all taxes with the Land Value Tax (fellow Georgists, give me some “likes”!). (My "pet issue", sorry Jon Saxton)
The wealthy owners of high priced land would pay a disproportionate share of the taxes while the marginal tax on income and consumption would be zero – a win-win for both progressives and free market types.
Ownership of land is a major source of unearned inequality. If you get rich by inventing that proverbial better mousetrap (or by seeing the potential and investing/risking your money with Mike’s Mousetraps), you have earned your wealth and income. But by simply owning land you have created nothing and are risking nothing. (If you build a mousetrap factory on your land, that’s great, but the part of your riches that derive not from the factory but the “location, location, location” of the land is unearned).
It sure feels like so much of the commentary here is imputing a whole lot of “pet issue” conclusions and implications to MY’s pretty narrow point, which, as he says, is essentially: “The upshot is that people who care about egalitarian economics should take a more positive view of recent trends and a more risk-averse attitude toward the future.” I don’t think he said anywhere that “egalitarian economic policy” is the be-all and end-all of the various discussions and policy choices to which it is related.
Economic inequality is a thing and likely will always will be. That’s because of the nature of capitalism and of the ruling elites who make and enforce social policy. Some policy folks (and not just “progressives”) generally think that less egalitarian economic policy has overall negative impacts on those at the lower ends of the resulting distribution of economic resources, whether income/social supports/wealth. Some policy folks think egalitarian economic policies can interfere with the optimal benefits of capitalism and with individual motivation to work and be productive. But these are only very small variables in a much larger and complex equation.
I have always been extremely interested in a more sociological concept, which is essentially, individual and collective agency. Agency is essentially the capacity of the individual or community at whatever level to have significant power over their life’s chances and choice. It means that, given the social conte4xt in which they live, can they pretty much, for instance, choose to be a doctor or a lawyer or a bricklayer. Or are these choices mostly delimited by their place in the social/economic/political hierarchy?
Economic policy and “security” in America has real consequences for one’s life chances and choices. But so does which side of the “Tracks” one is born on. Whether one is white or non-white, male or female, etc. It is quite possible to be a black person of some financial means and still be alienated or resentful if racism, like red-lining, etc., limts their life chances in ways that do not affect his/her white colleagues.
I know this is a bit of an wild generalization, but I believe that most people who immigrate or aspire to immigrate to America come here not to become wealthy, but to become empowered with the agency to live a decent life, free of exactly the sorts of legacy hierarchies and societal dysfunctions that the early settlers were fleeing and that we fought the Revolutionary War over. The original Tea Party was about the aspiration for a civic form of self-determination/agency. America was founded and built as much on that idea as any other even though the understanding of who should have such agency has had to be vigorously contested and thereby expanded over time. When one brings it up, the Americans with Disabilities Act, Title 9, and all of the Civil Rights era legislation is about the very American quest for individual agency.
Economic determinism is not a good idea on the left or the right. Economic status is simply one of the variables that matter in a country built on the idea of agency as the beating heart of human dignity and of the ability to lead a good life.
Matt, what are your thoughts on the workers-per-household and hours-per-worker numbers cited in https://johnhcochrane.blogspot.com/2022/12/calomiris-on-gramm-ekelund-and-early-on.html, along with the "income after taxes and transfers" numbers being cited there?
This article is a useful corrective; but the fact remains that it took almost Obama's entire first term to turn around the (pre-tax) trend, and his second term to get us just above where we were in '99.
It's great that the trend continued until the pandemic, and I agree that right now the main worry is downside risk from Republicans. But it's still understandable that people view Obama's economic achievements (aside from ACA) as weak tea.
"it’s widely held that the Obama-Biden approach failed on economic equality."
This might be widely held by Left Twitter, but it's worth saying that Left Twitter is a highly unrepresentative sample of the population. The basic position of this excellent piece - namely, that the Obama-Biden record on social program expansions and job growth was solid and beneficial - is a fairly common view out in normie-land and an uncontroversial one among rank-and-file normie Dems. After all, Left Twitter was pretty surprised when the normies overwhelmingly picked Joe Biden in the 2020 primary, despite his lack of support in the chattering classes.
Upshot of this piece is absolutely right - the Obama-Biden approach has delivered in consequential ways and the biggest downside risk is Republican-led welfare state rollbacks.
I was going to ask this in the mailbag but this seems like a fine place to mention it... I know Matt's perspective (and also many others on the left and center left) have taken the view that running a very tight labor market is a good idea for the purposes of increasing worker power (which decreases inequality).
But it would also force employers to invest in productivity-saving innovations since workers are not as cheap or freely available.
Have the recently pretty bad productivity numbers caused people to reevaluate the idea that a hot labor market would enhance productivity? Or is the consensus that poor productivity (badly negative in the first half of 2022, basically flat in Q3) is more caused by external factors like work from home, supply chain issues, workforce composition effect... and the potential productivity concerns caused by a tight labor market (more job switchers means more newbies at every job) is peripheral?
I agree with your points about external factors, but I would also just mention that I don't think most businesses have a "productivity dial" they can turn up in an instant (short of working existing staff harder, which I guess some are trying to do). I assume it would take time to appear. As Matt mentioned on Friday, he thinks restaurants will increasingly go to counter service rather than having dedicated wait staff, but they won't make this decision overnight.
Perhaps it’s my misunderstanding, but this piece seems to focus on wages. What about wealth inequality overall? Also, even median wages finally started rising in 2015 (after 15 whole years of stagnation and decline !) did they rise at a level at all commensurate with the meteoric rise in the stock markets, which disproportionately enriched the richest? Furthermore, is it even close to making up for how much less the share of the wealth American workers are getting now compared to before Reagan times, when considering the rise in productivity, and how significantly gdp increased? I just think that “increase” while important to note, just doesn’t tell the full story. I’d you’re getting a million extra dollars and I’m getting one, it’s better than for me to get none but that’s not a story of egalitarian success.
This piece and Noah Smith’s are interesting reads in conjunction of one another
I guess I'll try to share an opinion that I'm guessing is quite unpopular on this site: I have just never been able to get upset about *per se* income/wealth inequality. I know there are people that are vastly richer than I could ever imagine to have, and...it's just never bothered me.
What concerns me more is to be continually striving to raise the baseline of basic standards of living for those most at need, and to continually strive to provide abundance in society to make that happen. That would likely have the side effect of reducing income/wealth inequality, but that would not be driving my desire, but instead to increase abundance and basic standards of living--which are very good!
The problem is twofold. First, whether the riches r are getting an unfair share. Here’s an easy example. We’re both perform the same work but I get a million dollars and you get a thousand. Why should you be upset? We are both better off . Standards of living rose.
Second aspect is whether people can get so rich that their political or social power undermines the basic equality under the law that is the basis of democracy or allows them undue political power. Put differently, there is an idea that democracy is a system of government built by and for the middle class, its erosion, including by having too powerful rich people , risks destabilizing the system.
Regarding the second point, it seems to me that for every Koch or Thiel there's a Gates or Soros.
Of course, it's not as if the only danger is that a rich right-winger will buy elections or parties: all four of them likely share interests and therefore subtly exert pressure on our politics. Furthermore, one might point out that, without support from their like, a viable candidacy of any sort is difficult.
But in the end, those are hypotheticals, and my priors say the existence of trillionaires doesn't constrain our political options in a meaningful way, except, perhaps, as a counterweight against certain kinds of abuses. I don't think you need to be an acute paranoid to want a partially constrained government*: a brief survey of global affairs should do the trick. Or, for the progressively-inclined, a look back at the Trump presidency.
* To clarify, I think our governmental gridlock is bad - I'm not talking about that. I'd be much happier to see governing majorities get a chance to enact their policies.
I don't think giving a huge amount of an accountable power to random unelected individuals is a good or effective way to keep the government in check. It rather seems like a growing element of chaos in the system, not a sound check or balance. At the end of the day we can debate how serious of a problem it is or is likely to be in the near future, but so long as we agree that there could be a theoretical point of gini coefficient and/or absolute level of wealth where it *becomes* a problem and democracy becomes seriously endangered or unsustainable then we agree - in principle - that OP's argument is incorrect, at least in theory.
I didn't mean to hide my position here & come across as concern trolling. I'm mostly with City of Trees and Dave Coffin on this. I'm in favor of providing a relatively high floor, but I don't think it's a good idea to compress wealth and income for its own sake.
Regarding the point you were responding to, I think we probably have different intuitions about how much we can engineer large-scale social systems, which is an interesting topic, but not one I have much time to dive into at the moment!
To the extent that money buys power, it’s because it buys attention (TV ads, think tanks, lobbying, etc). As long as the underlying attention is still available, limiting the amount of money people throw around for it will simply lower the price, or at best displace the competition for attention to another form. But there are always going to be winners and losers in the competition for attention, and the winners are going to be better able to influence policy. I also don’t think it’s the worst that being able to get political attention is associated with having done things in the real world… I’m not sure I’d like to see basement shitpoasters displace the Ford Foundation.
Also, I think there’s kind of a misconception going on where we compress billionaires and professional-managerial class families. Raising taxes on wage incomes over $250,000 is not going to materially diminish the influence of a Murdoch or a Soros. It doesn’t take money to show up and NIMBY, it takes time. Perhaps if you want to diminish the influence of PMC families, you should embrace RTO and long hours.
I think you are vastly underestimating the power billionaires have, above and beyond election campaign donations. Bill Gates watched a tv show when running on his treadmill and next thing we know tens of thousands of public schools kids or more are educated based on his whim… and you’re right, the argument agaisnt billionaires is separate from the argument for genera redistribution policies to fund the welfare state. Arguably making sure there aren’t any trillionaires around is an end of itself, to be pursued by specific means, which may or may not overlap with the means used to fund the welfare state and redistribution. No individual should be able to hire their own literal army, for example. Money is power and too much power in one individual (or family, or corporation even) is dangerous to freedom, especially when that power is totally unaccountable.
Ok, but, how many Bill Gates are there? I'm not sure how many B's he has but it's many times what whoever #100 on the wealth list has. The number of people who could pull off Gate's treadmill stunt is pretty small and might be in the dozens. And as far as I can tell the majority use their power for "good" in the form of charities or at least productive ideas. My point being this doesn't seem like a particularly important problem.
P.S. prioritzation is a second order question. City of Trees argued that there is no problem with extreme wealth per se. I’m arguing that there is, or could be, a problem. If we agree that it *is* a problem (or potential one) then we disagree with the OP argument, regardless of how “urgent”/“important” we deem that problem to be.
Thinking about it “constitutionally” even one person powerful enough to shake the system is one too many, and the fact the person currently in that position currently doesn’t seem inclined to do so (through sheer luck , it would seem) is small comfort.
N.B. I’m not saying Gates is necessarily in that position. Nor do I think he is the worst of his kind (think musk, thiel). However the question needs to be addressed. How much wealth is too much , ie giving someone this dangerous *potential*? Surely we ought to guarantee such potential is eliminated , or at the very least have some mechanism to control who gets this egregious power, rather than the current de facto lottery-like system?
In FL and TX the issue isn't just that it's purple enough that Dems think a regular Dem can win. It's that the primary electorate is full of the same sort of cosmpolitan liberal that controls the party everywhere else, and that electorate simply will not tolerate a person who says stuff like "I think abortion is morally wrong in most cases, but I also think the government has no business making that sort of decision for people," or "I love guns, watch me shoot some guns, look at me throw a dozen bones to conservative aesthetics and say I just want to help honest hard working laborers with Medicaid expansion."
Democrats have not won a statewide election in Texas in nearly 30 years, so a big part of the problem is just that they are flying blind there. They do not have any successful roadmap for how to crack the code in that state. Combine this with how expensive it is to compete in such a large state, they have a very short list of high-quality candidates who are even willing to run a serious statewide campaign. So their options are rather limited to begin with.
Another aggravating factor is that Texas (and indeed, most of the non-Medicaid expansion states) don't grant ballot initiative power, which would be a way to disarm the partisan chum that gets associated, and place the single issue all by itself to a vote. Florida has initiatives via constitutional amendment, but it looks like that requires a supermajority vote, and even then, as we saw with the effort to end felon disenfranchisement there, the legislature was motivated to find a way to run over that vote.
Wonderful column, thank you
If that’s the data, then we have to accept it. But something doesn’t add up. Why doesn’t anyone I know of middle or lower income feel as though any of this is true? People who aren’t quite well off don’t just watch MSNBC and conclude based on what the talking heads say that they are the victims of economic inequality or neoliberalism or whatever. They work hard, collect their paychecks, and notice that they still can’t afford a relatively modest-but-dignified lifestyle without racking up credit card debt. This was true even before the abrupt pandemic- and war-in-Ukraine-induced decline in real wages versus the cost of living owing to a combination of inflation and gouging. But once that happened, it worsened significantly. Gas prices are helping take some of the edge off, but most non-wealthy people I know with fixed incomes are finding that what they can responsibly afford in terms of lifestyle has been abruptly downgraded, while those with higher incomes and/or more assets to begin with seem not to be tightening their belts, and some have even indulged more while the rest of us suffer! You’re a brilliant wonk—figure out why this is happening and propose a plausible set of solutions. The loud leftist specter of “neoliberalism” is so tired by now, but it’s obvious to me that there is an element of truth in that narrative. Maybe you can figure out what it is instead of seeking to cheer it on.
In 1980, median household income was $21K and median home price was $76K. In 2020 median household income was $67K and median home price was $391K. And that's before we even look at healthcare costs and expenses.
I am replying to myself, gauche though it may be, because while at work I did not have the opportunity to reply individually to drosophilist, Marc Robbins, Wigan, and David_in_Chicago as their comments came in, and my reply to each is substantively the same.
OP's original question was why middle class Americans don't FEEL that income inequality is decreasing. It is not an economics question. It is a vibes question. I have provided a plausible vibes answer. Nationally, the median home price is now nearly 6x times median income. Median annual income no longer covers the 20% down payment. I did a brief, completely unscientific vibes-based survey of 8 US cities. In two (Des Moines and Amarillo) its basically 1980: the home price to income ratio is right around 3.6x. In two other cities (Kokomo, IN; and Pine Bluff) its less than 3.6x. In the remaining four (Las Cruces; Waterville, ME; Grand Island, NE; and La Crosse, WI) it varies from 4.5x to 6.6x. And, just so I can bitch about it, here in Missoula MT, its fucking 11.2x. Not a coastal superstar city. Just a red state college town. Fucking 11.2x.
Point being, those are the vibes. Finance changes and tax changes may have made homeowning better for many today than in 1980. But homebuyers are looking at the sticker price, and comparing it to their income, and thinking about what their parents paid, and how much they earned, and they don't like those numbers. I know I don't.
As others have pointed out, you have to factor in the interest rate. If we take the median household income in Missoula as ~$50k, then 3.6x would be a $180k house. If we assume for the sake of simplicity the entire thing is financed, at 1980's interest rate of, say, 13.74%, you get a monthly payment of $2,096. For a house now at 11.2x = $560k and 2021's interest rate of 2.96%, you get a monthly payment of $2,349, only 12% higher.
Not to mention that you get a bigger and better house today than in 1980.
This is very frustrating for me. Please reread my responsive comment. This is not a math problem. It is a comment about middle class sticker shock from home prices relative to incomes. You and I and a few other commenters are the only Americans who spent any time today thinking about 1980 mortgage rates. Americans know how much they make, and how much a house in their community costs. And they know how much their parents paid, and how much their parents made. Those are the salient numbers when talking about how people feel about inequality.
BTW, I'm only referencing 1980 because that was the year Matt referenced in his piece when tracking inequality over time. Its a poor exemplar, as mortgage rates peaked in 1981 at over 16%. So go back 30 years instead of 40: in 1993, the rate was down to 6.74%. Median household income was $31,241, and median home price was $103,186. That's a home price to income ratio of 3.3x, lower than 1980, at halfish the interest rate.
But again, I think pay stubs and sticker prices are what matter to this question, not interest rates. Home purchase prices have skyrocketed relative to income, which leaves prospective homeowners priced out of the market and feeling like they'll never catch up. And they won't.
I'm very sorry you're frustrated by my response. Hopefully you will not be frustrated by this one as well, but I will just refrain from replying after this.
It would be silly for me to deny that house prices have increased faster than inflation, perniciously so in a few metro areas. Personally, when I was house shopping, what I looked at is what the monthly payment would be (which determines affordability), not the purchase price. And on that metric, low interest rates supported an explosion in prices because essentially people were bidding on a fixed amount of goods.
Using your (admittedly fairer) comparison, a $103,186 mortgage at 6.74% is a payment of $669. An interest rate of 3% supports a mortgage of $159,000 with the same payment, which gets you to a 5.1x multiplier *at the same level of affordability*. Now that interest rates have risen again, prices have started to come back down a bit, mercifully.
Coming back around to your main point about vibes, I really appreciate that you put some numbers behind it (which made it easier for me to throw out some of my own). I am saying that I think the payment is what people look at while you say sticker shock bothers them more - you probably have a point! But at the end of the day, people bid on houses based on affordability, so you can't decouple interest rates from prices completely.
I was just embarking on my career in 1980 and let me assure you that, with sky high inflation, Volcker-induced monster interest rates, recession (soon to be back to back), the vibe was soooooooooooooooooo much worse in 1980 than it has been recently.
Back then we weren't comforted by acknowledging that at least housing prices were less than they would be 40 years later.
Interesting to note that real estate, healthcare, education have the highest consumer goods inflation rates over time and the highest levels of government intervention.
This is a good example of where "correlation doesn't imply causation" might apply.
As Noah Smith points out in his recent column, median house price doesn't mean much, because you're averaging super expensive housing in desirable metro areas with cheap housing in declining Rust Belt cities and rural areas that have no good jobs or career prospects. Most up-and-comers won't be cheered up by knowing that they can buy a super cheap house in Bumblecluck, Indiana.
1980 mortgage rates peaked at 16%; in 2020 they were just over 3%. Monthly mortgage in 2020 would be around 70% higher than what you would have paid for the $76K house in 1980, but your income is three times higher.
So for housing you're better off in 2020 than in 1980.
Thanks for doing the math! Also to Wigan's point - housing quality has improved. The average house in the 80s was 1740 sqft. Currently it's 2700.
I think you have to include the monthly interest expense to compare these two periods. One of the reasons the median home price is $391k is the majority of the purchasing power is going towards the home equity value.
True. But worth mentioning that homes were "worse" though - in quotes because that's quite subjective, but the median 1980 home is quite a lot different from the median 2020 home. And health care was almost certainly worse as measured by life expectancy 2019 life expectancy was 5 years above 1980's level (yes, I'm leaving out 2020 to ignore covid b/c I'm not sure how it factors in).
Food, clothing, shelter: I'm not sure how different food prices were or how to compare median diets, but clothing is probably better and cheaper.
It would be helpful if you gave a little more context for those you're seeing as downwardly mobile. How old? What careers or industries? Where do they live?
In my sphere -- I'm not seeing that. Within a restaurant fire protection business I own our technicians (all high school educated or below) have seen 55% wage increases over the last 4 years - from $18 / hr to now starting at $28 + commissions. We're guaranteeing $50k / year for a post-high school apprenticeship and can't fill it. Our team's explicit comments indicate this is the strongest financially they've ever felt. We just paid our highest ever year-end bonuses. It could be our industry is unique (e.g., manual labor, requires challenging state licenses, tough hours) but I'd be surprised.
Noah Smith had an interesting column on this topic recently: https://noahpinion.substack.com/p/why-the-us-middle-class-is-feeling
Paywalled. Tl;dr pls?
1. High cost of labor-intensive services like childcare, healthcare, and college education. (Baumol's cost disease says hi!)
2. Skyrocketing prices of housing in desirable metro areas
3. Having to get more education = delay onset of wealth accumulation "well into the child-rearing years"
4. A subjective feeling of a mismatch between reality and expectations.
Thanks! But how do we square #1-3 with the recent data on ppp adjusted median income ?
Unrealistic expectations. Material wealth has never been higher, yet people feel they deserve more. They use credit to keep up with the Joneses due to an inability to overcome hedonic bias.
Exert more control, save money, buy used cars/furniture/clothes, invest instead of vacation, get an FHA loan to buy a house instead of paying rent, don't go out to eat or spend more than a dollar on a cup of coffee. You'll wake up in 20 years and be a quiet millionaire.
It isn't that hard....but when political ideologies depend on angry people for their power, this simple logic gets overwhelmed by zero-sum "your getting shafted by elites" or "capitalism is evil" Manichean narratives.
"Exert more control, save money, buy used cars/furniture/clothes, invest instead of vacation, get an FHA loan to buy a house instead of paying rent, don't go out to eat or spend more than a dollar on a cup of coffee. You'll wake up in 20 years and be a quiet millionaire."
I am all for living within one's means in the sense of consistently spending less money than you take in, but the specific advice here is frankly terrible, because this sounds like an awful way to live for twenty years. Like...literally spend two decades never going out or going on vacation...okay. Personally, I'm fine buying used cars, furniture and clothes, but I don't know, I enjoy the wild extravagances of going on vacation and having a night out once in awhile. Guess I'm just frivolous and irresponsible!
Again, I'm all for thrift to a certain extent, but some point you have to ask: what is the point of having a wealthy and developed society if most people are just going to have joyless existences working and accumulating money?
As Buffet said to why more don't follow this path ... "because no one wants to get rich slowly."
Nonsense. This is not a case of simple class envy. We are talking about involuntary downward mobility. We are talking about people who were never wealthy, but used to be ok by their own standards. The standards stayed the same, and their ability to afford to meet them changed. This is not “keeping up with the joneses.” This is “keeping up with yourself 5-10 years ago” or “keeping up with your parents at your age” or “keeping up with someone with similar inflation-adjusted wages in the same metro area before the 80s.”
The “advice” to simply tighten one’s belt and save more, not go out to eat as much (if the person being advised is indeed doing to at all!) and simply “buy a home” is out of touch now. It’s not a possibility for most ordinary people. Some couldn’t afford it no matter how simply they lived, while others could only afford it if they gave themselves cancer by eating ramen and canned beef stew and almost never doing anything life-affirming that costs money, such as attending a concert. I will note that such advice almost never comes from anyone who themselves has to deny themselves the things they’re counseling others to forgo. It’s always someone who is doing alright despite the present climate who tells other people to stop buying avocados or healthy, natural foods or doing any number of things that contribute to a life worth living. It’s quite transparent.
Furthermore, “you’re getting shafted by elites” and “capitalism is evil” do not go together. They can be decoupled. Hard working people can be shafted by elites while at the same time capitalism is not always and everywhere evil. Rather, protections against predatory capitalism have eroded, and liberal elite culture has gradually lost its earlier labor-left character. That’s how the usually-not-conservative base of commenters on here has come to consistently spout elite-serving nonsense such as what you just typed to me.
You wrote: Furthermore, “you’re getting shafted by elites” and “capitalism is evil” do not go together.
Exactly, they are competing political narratives from populists on the left and right that reinforce the good vs evil scapegoating (Manichean) they need to enrage us for their will to power needs.
These narratives cause people to assume that they are being cheated out of some deserved economic benefit hence the "my generation has it harder than previous generations" delusion. It was true in my day, too.
But the absolute universal economic truth is that you need to earn more than you spend. That is axiomatic in any country, polticial system, or era. Hard, but simple.
Are you trying to argue that people don't ever make bad choices?
Or that no ordinary person who plans and saves in a reasonable way could ever afford a home?
But to your original question you specifically mentioned fixed incomes. If you're a low-wage worker on a fixed income recent inflation has meant a big pay cut. But if you have some job or wage mobility of any kind (like David in Chicago mentioned) you could probably take advantage of the surge in low-end wages and keep up. Some of my relatives fall into the first category with jobs like bus driver or hospital staff just a few years from retirement and having some trouble keeping up. But other relatives without much more education or income but less static jobs like plumber or landscaper are doing being better.
Maybe the people you know are all category #1 or in a metro that's particularly struggling or unaffordable.
The anti-Biden sentiment from progressives is not hard to understand. This is a group of people who believe that when Republicans win election and deliver anti-egalitarian policy changes that just proves that the Democrats failed by not offering a truly transformative egalitarian alternative. You can't really reason with such people. But I think you show the right direction here. Point out the positives of the Obama approach, point out the feasible best next steps along with the downside risks and get people on board with the program. Don't spend your time arguing with the Marxist geographers.
In the big picture, the US public doesn't want an extremely egalitarian income distribution. For better or worse I think the current distribution is pretty close to the median voter's preference. And they aren't crazy. The US has a really strong productivity growth record compared to other large high income countries. If you simply don't believe in capitalism you will never accept there could be a relationship between high elite worker compensation and good economic performance, but I think there is definitely something there.
TL/DR version: once again, a progressive pearl-clutching narrative of the past 2 decades is undermined by empirics.
Shocker....which one is next up:
1. America is the most racist country, like ever.
2. Or, racism/sexism/homophobia is at its all-time high ever in America, like right now!
3. Or, the world is going to burn/melt/drown if we don't all abandon civilization in 5 years, no wait, 10 years, no wait, 15 years?
4. We can replace fossil fuels with wind and solar.
5. Veganism/electric vehicles are LESS resource intensive.
6. Nuclear power is worse than climate change.
Answer: none of them because these are useful political narratives, not reality. Except that the unrelenting catastrophism is making our fragile tennagers mentally ill and drug-addled.
I agree with most of what you say, but how is veganism not less resource intensive than meat eating? Trophic levels: only 10% of the biomass at one trophic level is converted into biomass at the next trophic level. I.e., if you feed a cow 100 kcal worth of plants, you get only 10 kcal worth of cow biomass (and said cow biomass will include inedible parts like hooves and skin). Eating plants directly is much less resource intensive.
If veganism is strictly local, then yes it can be less resource intensive. But, I live at the 45th parallel in a blue coastal city that is regaled as Vegan-central. These self-righteous dear ones eat nothing but bananas and avocados all year long that are air freight delivered from the tropics.
Most of vegan meat substitutes are soy-based. Soy beans are genetically modified and require fertilizers to avoid deforestation and other soil degradations. They also use a lot of water. Non-dairy milks have similar issues.
EV's are more resource intensive to build and dispose of.....and besides the tax subsidies required to make them affordable take away revenue from public transport.
There are no free lunches. Trade-offs are the key to meaningful distinctions and yet the political zealots in my blue district reject persuasion and viewpoint pluralism for ideological bromides that often are in contrast to stated goals. It's the "defund the police" phenomenon that is rampant where I live.
Thanks for clarifying my point on solar and wind. If battery technology advances then fine....but in Italy & Spain, cultural institutions and tourism industries are pushing back on wind and solar farms as destructive uses of landscape and unaesthetic. France avoids this by beng 70% nuclear. Germany allowed Putin to knee-cap their economy based on ecophilia. The lessons are out there to be learned, but one's mind must be open to trade-offs and honest empirical data.
Veganism is less resource intensive in just about any normal set of circumstances. You'd have to compare odd extremes to find otherwise.
To the extent soy is problematic, that just means it is better to eat tofu or veggie burgers than pigs or chickens, whose metabolisms waste most of the soy that they are fed.
And #4. Obviously it is possible to replace fossil fuel with wind and solar (although not today). After all, crude oil was created from solar energy in the first place (phyto and zooplankton)...
In fairness to idonttrollonshobbas, he/she probably meant "we can't replace ALL fossil fuel use with wind and solar" due to intermittent availability and declining marginal utility. Going from 0% to 20% solar is much cheaper, easier, and more efficient than going from 60% to 80% solar.
There's probably a good galaxy-brain meme in there about all energy already coming from fusion.