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Why Prosperity Has Increased but Happiness Has Not

nytimes.com

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Re: Why Prosperity Has Increased but Happiness Has Not

#111

Post by orangecat »

panopticon wrote: post #46
jandrewrogers wrote: post #27

Earlier quoted context omitted.

This has largely been debunked -- the questions asked were not about their access to sufficient funds. For example, the median American household has $1000 per month in disposable income ("beer money") after all typical living expenses. This fact alone should immediately raise questions about the assertion that the majority of households can't afford $500 in one-time cost, emergency or not. The major source for this…

A Bankrate[1] survey found that only 37% of respondents could cover a Given that, I'd say a large percentage of Americans do not have plenty of emergency cash. That's not to say most of America is "one paycheck away from the street" like the parent comment quoted... [1]: https://www.bankrate.com/banking/savings/survey-how-american...

A Bankrate[1] survey found that only 37% of respondents could cover a

The exact wording of the question is going to have a significant impact on the results and what they mean. In the real world, if I incur an unexpected $500 expense I'd put it on my credit card, which would get automatically paid from my checking account at the next billing cycle. It's not clear if that would incorrectly categorize me as not being able to afford it.

Re: Why Prosperity Has Increased but Happiness Has Not

#112

Post by anoncoward111 »

_ptgt wrote: post #93
slv77 wrote: post #63

Earlier quoted context omitted.

Households today spend more on cell phones and communication but also spend less on fine china, dress clothes and food. When you net out all the pluses and minuses households today spend much more on housing, healthcare, daycare, transportation (two cars, for two jobs) and education. When you look closely the two bed, two bath detached home it’s likely in a school district that is underperforming and while the home m…

Actually, I think the housing price expectations discrepancy is probably a function of where you live vs where the GP lives. Inflation-adjusted housing prices haven't actually risen all that much outside top-tier cities. http://www.realestatedecoded.com/case-shiller/ Given that a relatively small percentage of people live in these places, I get the feeling the perception of a housing price crisis is larger than the r…

Millions of people live in top tier cities and millions of people live in Nowhere, USA where housing is still ludicrously expensive in proportion to job prospects

Re: Why Prosperity Has Increased but Happiness Has Not

#113

Post by war1025 »

ams6110 wrote: post #28
coldtea wrote: post #14

The title is a little out of date. Prosperity has been increasing in the 20th century, but has not increased for a few decades. Sure, crap like gadgets is now cheaper, but buying a house, giving your kids an education, and so on have increased. In the 40s and 50s a middle class household could get by just fine (and the house be bought) by a single income earner. Such a house now would be on the verge of bankruptcy. A…

Ever compare a 1940s middle-class house to a middle-class house of today? They're tiny. They probably have one bathroom. The bedrooms will be small. The garage, if there is one, is probably not attached to the house. The household probably had one car. Maybe had a phone, maybe not. Such a lifestyle could still be afforded buy a single income earner if they would really live the way a 1940s family lived.

My dad (born 1957) grew up in a tiny farmhouse, 6th of 8 kids, and had an outhouse until I believe 8th grade. Meaning my oldest couple aunts and uncles moved out before they had indoor plumbing.

Admittedly, they were pretty poor, but most people couldn't even imagine living in those conditions anymore. At the time it wasn't unusual.

Re: Why Prosperity Has Increased but Happiness Has Not

#114

Post by ryukafalz »

randomdata wrote: post #83
michaelmrose wrote: post #75

Earlier quoted context omitted.

If we are to compare eras and discover what's different I would suggest we ought to compare broad numbers not anecdotes. Even your example is suspect. The real median income at present in the US is 31k meaning half make less. 45k puts you at the 59th percentile better than almost 2/3 of people. Clearly not everyone who wants to is earning 45k. A median earner with a spouse and 2 kids is liable to take home less than…

> The real median income at present in the US is 31k meaning half make less. You will find that the full-time median income is much closer to $50,000 though. > Clearly not everyone who wants to is earning 45k. But, in fact, as this is a full-time job, you are actually below the median. When you add in high school students working part time, then you're right, but that's not particularly meaningful. > Median rent is a…

>Maybe the person paying for the house needs one car to get to work. Why do you need two cars?

Sure, assuming the family doesn't have kids, the other person will never need to leave the house for errands, etc. (Or, you know, they don't want to be cooped up in the house all day.)

Re: Why Prosperity Has Increased but Happiness Has Not

#115

Post by war1025 »

opportune wrote: post #4

One usually-not-mentioned premise is that even though goods’ costs have typically been going down over time as physical product technology improves, many services (the majority of developed economies) are relatively unaffected by improvements in technology because they rely almost exclusively on labor. Rising inequality will make services more expensive to those on the poorer end. Poor people don’t struggle to get sm…

There was an interview I listened to once by a lady that grew up in the early 20th century. One of the things she said was, "I never dreamed I would be rich enough to own a car, or poor enough that I couldn't afford a servant"

Labor has become vastly more expensive than it traditionally was, while physical goods have gotten much cheaper. (Housing excluded, obviously)

Re: Why Prosperity Has Increased but Happiness Has Not

#116

Post by antidesitter »

lordnacho wrote: post #26

It would be weird for happiness to increase with prosperity. Think how much more stuff we have than people in the stone age. We should all be delirious with joy, all the time, if we expected happiness to increase with material wealth. Any description of happiness that makes sense would have to say that it's some sort of local comparison, across various axes: how am I doing compared to previously/expectations/other pe…

> Think how much more stuff we have than people in the stone age. We should all be delirious with joy, all the time, if we expected happiness to increase with material wealth.

I don’t see how the second sentence follows from the first. Can you explain? What rate of increase are you assuming?

Re: Why Prosperity Has Increased but Happiness Has Not

#117

Post by mikekchar »

roenxi wrote: post #98
rossdavidh wrote: post #95

Earlier quoted context omitted.

Timely support of your point: http://peterturchin.com/cliodynamica/population-immiseration... Prosperity stopped increasing in the late 70's, by a variety of measures (some of them even biological/medical).

If we peg the 1970s as when things changed, that is about the time that Bretton Woods/the gold standard ended and growth in GDP growth stopped being a proxy for per capita growth of energy use. Hard to know if that was cause or effect though, it seems unlikely that the monetary system changed because everything was going well. It does suggest the modern monetary system is a bit of a lemon. EDIT scratch that, it is ma…

I'm hardly an expert so I'll welcome someone who is to correct my mistakes. However, the main problem with the gold standard was that it's too easy to corner the market in gold. As new economies gain traction, they have to purchase gold to back up their currencies. However, at the time the liquidity in gold was very, very low because everybody was hording it. This caused the price to spike. Occasionally large amounts of gold would be sold, causing huge dips in the price. Because the currencies were bound to the price of gold, this caused instability in the currencies.

Something like the gold standard works well if you have a zero sum game. As one economy does well, another suffers. Wealth is transferred from one economy to another. However, it doesn't work like that. Especially as Japan was starting to kick into high gear, overall wealth increased.

Lots more interesting reading if you care to dig into what both the US and the USSR were doing with gold reserves at that time. My own impression is that the gold standard was unsustainable and would have resulted in catastrophe if they had persisted. Others clearly disagree. ;-)

Bretton Woods comes with its own problems, though. Making capital available in order to bootstrap growth is kind of an obvious solution from an economic perspective, but I think that making capital too available allows bad actors to play a lot of funny games. (Bad actors being those who optimise for their own gain while intentionally or unintentionally screwing everybody else over). In the west there was a lot of deregulation in the late 90s and early 2000s as well, which has made the problem worse.

Even now, I think that the economic policies of most countries are positively loopy. You've got most of the western world hovering on a knife's edge of personal bankruptcy and most of the growth tied up in extracting even more money from the common people. In Japan (where I live), we've got Abenomics, which is just Reganomics in disguise -- we'll give rich people a lot of money and they will disperse it to the poor people (really, they will... I promise). There is a massive national debt, which isn't actually that bad because taxes are low, but now they've loosened the rules on personal debt and... will normal people actually be able to pay the bills?

So I wouldn't say that Bretton Woods is really at fault, but I'll agree that the subsequent economic policies that Bretton Woods enabled are making it pretty easy to ignore the underlying problems that appear to be getting worse. Whether it all blows up on us in the near future?... No idea.

Re: Why Prosperity Has Increased but Happiness Has Not

#118

Post by randomdata »

ryukafalz wrote: post #114
randomdata wrote: post #83

Earlier quoted context omitted.

> The real median income at present in the US is 31k meaning half make less. You will find that the full-time median income is much closer to $50,000 though. > Clearly not everyone who wants to is earning 45k. But, in fact, as this is a full-time job, you are actually below the median. When you add in high school students working part time, then you're right, but that's not particularly meaningful. > Median rent is a…

>Maybe the person paying for the house needs one car to get to work. Why do you need two cars? Sure, assuming the family doesn't have kids, the other person will never need to leave the house for errands, etc. (Or, you know, they don't want to be cooped up in the house all day.)

During the 40s and 50s the use of a car, even in rural areas, was normally reserved for a special trip once a week to run errands and get out of the house, if you were able to afford a car at all. The average family at the time wouldn't dream of wasting money on a second car, let alone the first one, to 'frivolously' get out of the house on a daily basis for pleasure. That money was needed to pay for the house.

It is entirely understandable that expectations have changed. I certainly don't think twice about hopping in my car any day of the week, and own two of them at that. But if expectations have changed, why would we want to even try to to apply 40s and 50s housing logic to modern times?

Re: Why Prosperity Has Increased but Happiness Has Not

#119

Post by shanghaiaway »

phil21 wrote: post #90
ams6110 wrote: post #28

Earlier quoted context omitted.

Ever compare a 1940s middle-class house to a middle-class house of today? They're tiny. They probably have one bathroom. The bedrooms will be small. The garage, if there is one, is probably not attached to the house. The household probably had one car. Maybe had a phone, maybe not. Such a lifestyle could still be afforded buy a single income earner if they would really live the way a 1940s family lived.

My father's house was built in the 1940's and is as you described. It's now going for over $225k in a flyover state. He bought the place in the 80's for $72k on a $40k/yr salary - and the job he held to pay for it pays $44k/yr today. The exact same house is out of each for the exact same job today. Housing has skyrocketed by all available metrics. The one that matters most of course is % of after tax income spent, an…

I suppose the way you finance the purchase of said house is different today and as a result the price is different too.

Re: Why Prosperity Has Increased but Happiness Has Not

#120

Post by TangoTrotFox »

It's easy to understand why people may not believe that prosperity has increased across the board. I also used to believe this, but after looking at the data I'm not entirely sure what it is that drives our perception. This [1] paper from the urban institute is something I found precisely when looking to put specific numbers to the hollowing out of the middle class and the overall decline, or at least stagnation, of prosperity.

The paper does describe that hollowing out in clear detail. In 1979 the middle class controlled 46% of all income and the upper/rich classes controlled 30%. Today (as of 2014) the rich and upper class control 63% and the middle class's share of society has been reduced to 26%. There's even been a chiseling out in the size of the middle class declining from 38.8% to 32%. And that's pretty much where most articles tend to leave off the state of economic change. It's all true and it sounds pretty grim.

But context, as always is, is everything. This is the change in the size of each economic group from 1979 to 2014 as a percent of the total population:

- Rich: 0.1% -> 1.8%

- Upper Middle Class: 12.9% -> 29.4%

- Middle Class: 38.8% -> 32%

- Lower Middle Class: 23.9% -> 17.1%

- Poor or Near-Poor: 24.3% -> 19.8%

The reason the top's share of income has increased is because people are moving, at an incredibly rapid pace, from the lower classes the upper classes. Statistics like this are certainly subject to biased interpretation and 'massaging' - though I think the paper is extremely transparent in their methodology. But if one is curious about the source, wiki has a section on the political stance of the Urban Institute [2]. I found this all eye opening to the point that it actually changed my worldview. Economically we are doing something very right.

[1] - https://www.urban.org/research/publication/growing-size-and-...

[2] - https://en.wikipedia.org/wiki/Urban_Institute#Political_stan...

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