this is a libertarian fantasy and nothing more. Wages for most people have been stagnant or declining while energy prices are steadily rising. This is a huge problem
Wage growth has been slower than you'd expect because healthcare is getting much more expensive, so the increase is hidden in a worker's benefits, rather than being revealed in higher wages. Overall compensation is increasing: http://www.marginalrevolution.com/marginalrevolution/2007/10...
Unfortunately, most workers don't realize that their healthcare costs have a zero-sum relationship to their wages. This graph shows that point very well: http://voices.washingtonpost.com/ezra-klein/2009/10/will_low...)
It's a trifecta that is going to hurt.
Also, most people I know live in smaller houses than their parents, but that's purely anecdotal and based on the obvious fact that there are more people living on the same amount of earth. I happen to live in a major city.
http://www.realtor.org/RMODaily.nsf/pages/News2007032701?Ope...
In spite of the purported declining income and increasing energy prices, people in 2007 have more and better material goods and services than in 1967, far more than the mere $10k increase in real incomes would predict. You could be right, the next 40 years may be different from the last 40 - I'll leave predicting the future to you and Ray Kurzweil.
Real income analysis would require more time than I'm willing to commit right now.
Except that you did try to predict the future earlier. Energy prices haven't risen much yet. You have an odd pattern of dodging my main point, and picking at tangential details.
Btw, I put a caveat on the house thing, I live in a major city and I'm sure it's different in most parts of the country. I'll bet this changes when driving long distances to work becomes much more expensive.
As for dodging your main point, let me address it more carefully now. You seem to believe that incomes (by which I assume you mean income adjusted for CPI) is decreasing. And yet, over a period in which CPI adjusted incomes remained flat, quality of life dramatically increased. So why do you believe that decreasing CPI-adjusted incomes are worth worrying about?
I've said it at least three times already. Because it is highly probable that energy prices are going to increase significantly.
Btw, how do you measure quality of life. I always find it funny when people throw around that term relating to economics.
http://www.marketoracle.co.uk/Article1375.html
In any case, I'm not sure what this has to do with CPI-adjusted incomes.
By quality of life, I'm only estimating the direction of change rather than the magnitude. I'm assuming that having more stuff is better - I'm happier with flush toilets/a washing machine/Bioshock than without.
But do they live in smaller houses than their parents lived when they were your friends' age?
When I compare my current living space with the house I grew up in, it's significantly smaller. However, my parents were over 40 years old by the time I have my first memories. They'd been saving for close to 20 years to afford that place, while I've been saving for maybe 5 years.
When my mom was my age, she lived in a 4th floor walk-up with one of her friends from college. And yes, it was smaller than my current apartment. If you compare my mom's childhood with my childhood, she lived in a small apartment almost her whole life, until about 3 years before I was born, while I grew up in a house in the suburbs.
I wonder if this is behind a lot of the 20-something angst. We compare our current living standards to our living standards as children, and realize (correctly) that it's not as good. However, that childhood living standard is based on parents that were already at the peak of their careers, and had scrimped for years to get there. Of course we're not going to live as well.
I actually don't care that my place is smaller, and a bigger place wouldn't increase my quality of life much.
For example, those larger houses may be on cheaper land (further from cities), or people may be spending more of their income on housing (at the cost of, say, food quality, or education). There are a million ways for an individual statistic to be misleading. This is the whole reason that we use aggregated statistics like real median wage.
Fun fact: the bottom 11% in 1970 didn't have flush toilets.
http://www.digitalhistory.uh.edu/database/article_display.cf...
In 2001, the bottom 7-8% don't have dishwashers, which were generally considered a luxury item in the 1970's. Go read this article, describing the material conditions of the poor (circa 2001):
http://www.heritage.org/research/reports/2004/01/understandi...
Tell me, what items did the middle class of 1970 have that the poor of 2001 lack?
They're not items, but I'd say hope, stability, confidence, status, etc.
Really? In the US? In the 70's? This was at the end of the Vietnam War, during the oil crisis, remember?
As a random example consumer confidence at the lowest point during the financial crisis was still higher than it was in 1973 (during the Oil Crisis): http://useconomy.about.com/b/2008/04/01/consumer-pessimism-s...