A Little Better All The Time

A Little Better All The Time August 25, 2008

I’ve got to admit it’s getting better/A little better all the time.
– Paul McCartney.

It couldn’t get much worse.
– John Lennon.

To the extent one gets one’s information about the state of the economy from television news, one might be forgiven for thinking that the United States is, economically speaking, going to hell in a hand basket made in China. Wage stagnation. Downsizing. Outsourcing. It’s not uncommon to hear people talking about how we are on the brink of a new Great Depression, if not something even worse.

According to W. Michael Cox and Richard Alm of the Dallas Federal Reserve, the real story is quite a bit different. Below, from their article, are some helpful charts making the case against doom and gloom:

Now I know what you’re thinking: I don’t have time to look at a bunch of charts and graphs. Isn’t there some way to convey this information that’s more entertaining, preferably with a celebrity narrator? Indeed there is:

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  • And the rest of the world?

    These charts also mostly center around consumption as a way to measure quality of life. Not sure that’s a good idea. The article says:

    “Income and wages are often used as gauges of progress, but consumption is the best measure of rising living standards. Products that began as luxuries only the rich could afford in time came within the means of just about all U.S. households.”

    This masks the fact that in capitalism products typically start off as products that only the rich can afford which then become desired by lower classes and then available to them. It’s a cycle that takes places all the time, not a sign that “things are better.”

    The article also says: “All segments of society have shared in the material progress. Over the past two decades, ownership of cars, color televisions, and household appliances has risen among poor households (Fig. 2). A quarter of poor households have computers.”

    Notice that the article still says that these households are poor.

    It also does not address the problem of credit and debt. Poor households may have more stuff, but they also probably have more debt.

    The statistics also present a monolithic picture of how “we” americans are doing, taking no account of differences among groups of americans, regional differences, etc.

    It’s amazing to me that you are passing along this garbage. You could at least pass it along and interrogate the claims of these sorts of studies with the insights of Catholic social teaching including the option for the poor, but you will not even do that. This leads me to believe you are more interested in spreading neo-liberal ideology than you are in analyzing it from a Catholic perspective.

  • blackadderiv

    And the rest of the world?

    That would be a separate post, but at least in material terms things are getting better for most of the rest of the world, too.

    These charts also mostly center around consumption as a way to measure quality of life. Not sure that’s a good idea.

    Consumption is certainly not the only way to measure quality of life. But insofar as you are interested in someone’s material condition, it’s a fair measure.

    This masks the fact that in capitalism products typically start off as products that only the rich can afford which then become desired by lower classes and then available to them. It’s a cycle that takes places all the time, not a sign that “things are better.”

    Explanation is not the same as refutation. It’s true that, say, in door plumbing, or electricity, or various medicines started out as luxuries only affordable by the rich and then became widely available to most members of society. How this is supposed to show that it doesn’t improve a person’s material condition to have in door plumbing, or electricity, or access to various medical treatments is not clear.

    Notice that the article still says that these households are poor.

    That’s true. They meet the standard of poverty set out by the U.S. government.

    It also does not address the problem of credit and debt. Poor households may have more stuff, but they also probably have more debt.

    Poorer households may well have a higher proportion of debt as compared to their income than do richer households. I would note, though, that people typically don’t lend money unless they think they are going to get it back eventually.

    The statistics also present a monolithic picture of how “we” americans are doing, taking no account of differences among groups of americans, regional differences, etc.

    I somehow suspect that if the data had been broken down by region, you still would not have been satisfied.

  • Interesting post. I always cringe at the Great Depression analogy – it insults the people who went through it. Don’t mind Michael singing “Imagine” 🙂

    “Poor” is a relative term, Indian poor is not like American poor. Many would be glad to be poor in America. Not to mention the usual misguided notion that poverty always has to be someone else’s fault (or that there is a pie of limited size)

  • How this is supposed to show that it doesn’t improve a person’s material condition to have in door plumbing, or electricity, or access to various medical treatments is not clear.

    Most of the things on your charts are luxury items like color TVs, air conditioners, etc.

    Poorer households may well have a higher proportion of debt as compared to their income than do richer households. I would note, though, that people typically don’t lend money unless they think they are going to get it back eventually.

    So then how does a country of lower class americans struggling with debt accrued for their air conditioners, digital cameras, etc. while struggling to put food on the table fit into your la-la land claim that “things are getting better”? Is debt a sign that things are getting better?

    Consumption is certainly not the only way to measure quality of life. But insofar as you are interested in someone’s material condition, it’s a fair measure.

    Not if the measurements don’t include food. Not if the measurements don’t include health.

    The study also looks at “households.” What about the homeless?

    Leave it to a well-paid lawyer living comfortably to keep on insisting that the poor have it okay, and that things are “getting better” because, look, “many of these poor people have digital cameras, like me!”

  • And the rest of the world?

    Much of the rest of the world does not have the standard of living that people in the US do, however as a result of global trade it is getting _much_ better in the rest of the world. A chart of material improvement for the poor in India or China over the last 120 years would be much more dramatic than for the US.

    These charts also mostly center around consumption as a way to measure quality of life. Not sure that’s a good idea. …

    This masks the fact that in capitalism products typically start off as products that only the rich can afford which then become desired by lower classes and then available to them. It’s a cycle that takes places all the time, not a sign that “things are better.”

    Well, if 50% of “the poor” had air conditioners in 1984, and 80% of them do now, I would guess that (at least down here where it’s been 100F nearly every day for the last two months) it’s a lot less miserable to be poor than it was 24 years ago.

    Similarly, if it takes half as many hours of work to pay for a bag of groceries now as compared to 1950, I would guess that “the poor” are a lot less hungry now than then. (And sure enough, obesity is endemic among lower income people in the US now, which was certainly not the cast 50 years ago.)

    Notice that the article still says that these households are poor.

    This, I think is an important thing to note, because it causes us to ask, “What exactly do we mean by poor?” Most of our definitions of poverty that are used for statistical purposes are such that no matter how materially well-off a society gets, there will always be “poor” because the poor are simply those who make less than everyone else, even if by global and historical standards that is still a great deal more than most people have had.

    How would you define “poor” in a useful way?

    Seriously: honest question.

    Certainly, as Christians we believe that poverty encompasses much more than our material possessions, but when we’re talking about the political realm, people usually mean some sort of material situation.

    Does being poor simply mean that others have much more than oneself? If a family has a roof over their heads, a car in the driveway, no difficulty obtaining food and clothing, and time for education and leisure — are they poor because other people make ten times or a hundred times more, but drive more expensive cars and wear more expensive clothes?

  • Many would be glad to be poor in America.

    You clearly don’t know any poor people in america.

    Not to mention the usual misguided notion that poverty always has to be someone else’s fault (or that there is a pie of limited size)

    That notion is usually more correct than the more misguided notion that poverty is the fault of the poor person.

  • Similarly, if it takes half as many hours of work to pay for a bag of groceries now as compared to 1950, I would guess that “the poor” are a lot less hungry now than then. (And sure enough, obesity is endemic among lower income people in the US now, which was certainly not the cast 50 years ago.)

    Check it out, BA, your kind of thinking: Obesity among the poor is actually a good sign that things are “getting better!” Make a chart out of it and spread widely.

  • S.B.

    Many would be glad to be poor in America.

    You clearly don’t know any poor people in america.

    You clearly don’t know any Third World poor people. My daughter adopted from Haiti at age 6 says that one of her jobs was emptying the pail of excrement into the street. It’s also common in Haiti for people to eat dirt biscuits — literally made of dirt and oil mixed together, and dried in the sun. Is that sort of thing common in America? Enlighten me.

  • Michael,

    No obesity is not a good sign, but it’s a better sign than starvation, wouldn’t you say? Would you rather eat too much unhealthy food and not get enough exercise, or have so little food that you couldn’t exercise even if you wanted to?

    Honestly, are you hear to help us understand your thinking on this, or just to score cheap points?

  • I encourage all Republicans to speak enthusiastically about the current “good times” to everyone who will listen. I would emphasize how Republicans would continue current trends to make things even better.

  • That productivity exists is unquestionable. If you trim the “What Work Buys” graph at 1970 and work rightward, the series isn’t all that impressive. Careful observers will note that a liberalization in trade policy occured around the time. During the time of great growth, the rich were also taxed heavily, etc.

    As with most cases where we are attempting to discern significance, the question to ask is if we would expect otherwise. Given that technology is inherently deflationary, we would not expect technological goods to become more scarce even if tougher economic times and we include better technological goods that were substituted.

  • Honestly, are you hear to help us understand your thinking on this, or just to score cheap points?

    I’m clearly not here just to “score cheap points.” I’ve pointed out several glaring problems with the study BA has cited.

    And I ask him (and you too, Darwin, if you are up for it) again:

    What precisely about his Catholic faith informs his economics? Where do we see one shred of Catholic social thought in the claims that this post makes?

  • Matt & MZ,

    Agreed that these indicators do not necessarily show that times are “good” right now, though I think that any reasonable looks shows that comparisons to the Great Depression are ludicrous. Though perhaps that one sense in which it is relevant to the short term outlook is that we have come, as Americans, to expect things to be so good and so cheap all the time that when thing stop improving (but don’t really measurably contract much) we have a collective freak out and pity party.

    Michael,

    And I ask him (and you too, Darwin, if you are up for it) again:

    What precisely about his Catholic faith informs his economics? Where do we see one shred of Catholic social thought in the claims that this post makes?

    For myself, I’m not clear to what extent our Catholic faith informs our economics per se, because it seems to me that economics is primarily descriptive rather than prescriptive. Economics can tell you what the results of your actions will be, but not what you should do.

    How is the data presented here relevant to a Catholic?

    I think that from a Catholic perspective we should see it as a positive good for everyone in our society to be able to achieve certain basic things: housing, clothes, food, leisure time, education, a few luxuries that make life more pleasant. It is, perhaps, far from the most important concern (whether we are prepared to be united with God for eternity in heaven is far more important than whether we have air conditioners in the summer heat) but it is a something that adds to human thriving.

    Christians often ask themselves whether, beyond our obvious duty to treat all those we personally encounter with justice and charity, we should re-organize society in some fundamental way that would assure that more people would be given basic material goods which they might be denied because not everyone in society does treat those they deal with personally with justice and charity.

    Data like this (and a host of other data comparing centralized, planned economies with free market ones) helps to underline that despite the selfishness which often typifies human behavior, a free economy generally does allow increased material goods for all over time. While attempts at centralized/planned economies have generally not succeeded in this nearly as well.

  • While attempts at centralized/planned economies have generally not succeeded in this nearly as well.

    Well, sure – but the choices aren’t either pure Laissez Fair or pure state-ownership-of-everything. There is a continuum – Europe is fractionally less laissez fair than the US, and reaps rewards in terms of more equitable distribution of wealth and availability of social services.

  • Matt,

    Does Europe .. really “reap[] rewards in terms of more equitable distribution of wealth and availability of social services?” I’d be interested to see studies that demonstrate this. Do you know of any?

  • blackadderiv

    Most of the things on your charts are luxury items like color TVs, air conditioners, etc.

    What is considered a luxury tends to vary over time. I would imagine that most people do not consider a color TV to be a luxury item, let alone things like a refrigerator, stove, or air conditioning. Yet all of them would have been considered luxuries only a short time ago.

    So then how does a country of lower class americans struggling with debt accrued for their air conditioners, digital cameras, etc. while struggling to put food on the table fit into your la-la land claim that “things are getting better”? Is debt a sign that things are getting better?

    It depends. When a person takes out student loans to pay for schooling, his debt increases. Yet it would be foolish to assume that this person’s future must be bleak on account of that fact. Likewise, when a person takes out a mortgage in order to be able to buy a home, they will almost certainly be more indebted than they would have been absent the loan. But they will likewise almost certainly also be better off than they would have been without it.

    Loans typically will not take place unless both parties believe they will be made better off by the loan. Given that I know far less about a person’s particular circumstances, needs, and wants than they do themselves, I would generally defer to their judgments about whether or not borrowing money is or is not worth the benefits having that money in the short term brings.

    [Consumption is not a good measure of material well being] if the measurements don’t include food. Not if the measurements don’t include health.

    Here is a chart on spending on food as a percentage of income since 1929. Here is one on life expectancy. As you can see, both have improved significantly over time.

    The study also looks at “households.” What about the homeless?

    Homelessness has decreased by around 30% over the last couple of years.

    If anything, looking at households rather than individuals tends to make the situation seem worse than it actually is, since the average number of people living in poor households is a lot smaller than for rich and middle class households.

  • blackadderiv

    As for how my faith informs my economic views, I would say a couple of things. First, to the extent one wishes to improve people’s material well being, and particularly the material well being of the poor, it is important to have a clear eyed perspective both as to what the current situation is, and as to what the likely consequences will be of various attempts to improve people’s condition. If one starts out with a faulty premise (say, that things are bad by historical standards and getting worse), then this may very well lead one to advocate policies that would harm the poor, or at least impede their progress.

    Second, as a Catholic I view truth and honesty as being of the utmost importance. Even if one could advance a desirable goal via lies and falsehoods, it would still be wrong to do so.

    Of course, Catholicism does not have a monopoly either on the value of truth or on concern for the poor and for improving people’s material well being, and there are many people out there who share my concern both for the truth and for the poor and yet reject many of the economic views that I hold. All I can say is that since becoming Catholic, my thinking on such issues has changed in a way that led me first to embrace various “leftwing” economic views, and then later to become even more radical in my embrace of the free market.

  • For myself, I’m not clear to what extent our Catholic faith informs our economics per se, because it seems to me that economics is primarily descriptive rather than prescriptive. Economics can tell you what the results of your actions will be, but not what you should do.

    No values or underlying philosophies are embedded in economic claims? Are you kidding?

    Loans typically will not take place unless both parties believe they will be made better off by the loan.

    Credit card companies want what’s best for me? Really?

    Of course, Catholicism does not have a monopoly either on the value of truth or on concern for the poor and for improving people’s material well being…

    Indeed. Pretty much every political and/or economic system claims to be interested in “the truth” and “concern for the poor,” right? So I’m asking what you draw specifically from Catholic social teaching that informs your economic views.

    …hen later to become even more radical in my embrace of the free market.

    Of course, the “radical embrace” of the free market is precisely what the Catholic Church opposes.

  • Zach: How many Europeans declare bankruptcy as a result of ruinous medical bills? What’s the number in the US?

  • blackadderiv

    Credit card companies want what’s best for me? Really?

    Of course not. Did you really think that’s what I meant? I find that somewhat hard to believe.

    Credit card companies want what’s best for themselves. You, on the other hand, presumably do want what’s best for yourself and for your family. If you didn’t think that owning a credit card and/or using it on a particular occasion would make yourself or your family better off, you wouldn’t do so. The same goes for everyone else.

  • Zak

    I find the information blackadder presents disquieting, though it’s hard for me to pinpoint exactly why. Surely there is nothing bad about material prosperity. Talking to my wife’s family, who came from Poland in the late ’80s and who describe there being next to nothing for consumers to buy (including food beyond your low quota for meat, dairy, etc.) and much lower technology (no phone, indoor plumbing a recent development, not found yet at my wife’s school), surely we should be grateful for the prosperity we have and we should be hesitent about objecting to its cause.

    At the same time, it seems to me that a large part of the cause of this prosperity is a the post WWII division of work and life. I go to a job for a faceless corporation early in the morning, I get home in the evening, and the two are entirely separate, except insofar as I can’t break the crackberry addiction. For most people involved in both manufacturing (without the blackberry here, admittedly) and services, this seems to be the kind of work in which they are engaged to get their prosperity. In a largely agricultural society, families spend more time together. Social bonds matter more.

    It seems the social breakdown conservatives dislike coincided with this rise in prosperity. I don’t think it’s a coincidence. I know blackadder and DarwinCatholic have attributed this breakdown partly to the social safety net created by the new deal, which diminished the importance of family and social bonds, but I think a good case can be made that workplace structures had at least as important an effect.

    Also, seeking fulfillment through consuming more seems to be one of the chief flaws of the West criticized by John Paul II. The data presented here celebrate that consumerism – by saying we are better off because we are able to buy more things, they do that. But if being able to consume more means weaker connections within families, lower levels of social solidarity, and a greater likeliness to see happiness in the possession of goods than in the Christian life, then I think a very credible case can be made that no, we are not better off.

  • Matt,

    I’m sorry – I don’t know. I was hoping to see some studies that would substantiate your claim about the economic condition of Europe versus the US.

    I don’t think a single statistic will suffice to demonstrate the differences.

  • Millions of people are, as I write, without health insurance in the US, Zach. Millions of people in the EU aren’t without health insurance. Isn’t that demonstration enough?

  • The data presented here celebrate that consumerism – by saying we are better off because we are able to buy more things, they do that. But if being able to consume more means weaker connections within families, lower levels of social solidarity, and a greater likeliness to see happiness in the possession of goods than in the Christian life, then I think a very credible case can be made that no, we are not better off.

    Yes.

  • RR

    Yes, we live better than cavemen did. Is that really the standard we want to measure our progress by?

  • Millions choose to be without it, millions are only temporarily without it. Europe also doesn’t have nearly as many off-the-boat or hopped-across-the-border immigrants, nor is there a problematic population quite comparable to the ‘ghetto’ in most places. An exception, to some degree, is France with its banlieues.

    A great book on ‘the poor’ is “Life at the Bottom – The Worldview That Makes the Underclass” by Theodore Dalrymple.

    …what blame to credit card companies bear ? I guess in a nanny state worldview they do…

  • There seems to be a contradiction between sneering at consumer goods and complaining that some are worse off, no ?

    Another observation about all these lefty jeremiads is that there is quite a disconnect from reality. Not all women who have abortions are poor, some are just stupid, lazy or fell into the margin of error. Not all poor people are victims of someone else, some just are stupid, lazy or had bad luck. The possibility to succeed necessitates the possibility to fail.

  • Matt,

    No – lots of people in the United States choose not to have health insurance, even though they could afford it.

    And health insurance does not health care make.