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> I support United States policies that move in the direction of east Asian rather than western European patterns of government spending and social welfare, putting more of the investment in future generations back in the hands of families and less in the hands of bureaucrats.

Just curious what you mean by this. East Asian and West European nations do have very different models of political economy compared to each other and the US, but both of them involve a much greater degree of state direction than even very liberal Americans would tolerate.

Also not sure how your ideas on educational policy fit there. Every East Asian nation I know of regulates education with extreme top-down strictness from the national level, even where they do allow/subsidize non-state schools.

You've picked on the worst-off countries in western Europe, but tell me about the best-off like Germany or Scandinavian countries. As far as I can tell, they have pretty generous social welfare schemes but are pretty sound economically. How does that factor into your model? Could it be that other cultural factors are at play?

I think that may be a hint that he's blaming the wrong things: it's pretty strange to blame the U.S.'s social-welfare system for the country's disparities, when the U.S.'s social-welfare system is so stingy. Social Security is not why the older generation has so much more money, because it's pretty impossible to get rich off a social-security check in the first place (I know elderly who live off social security, and they live at a subsistence level). The well-off older people with huge retirement accounts got them from the private sector and the stock market.

What's changed is that the '60s-'90s economic/employment situation is probably not going to repeat itself. My dad had basically a guaranteed-for-life job once he got a college degree, and a generous defined-benefit corporate pension, neither of which really exist anymore. And if you didn't go that route, you could apprentice in a skilled trade and also have a good middle-class job.

The most ossified countries are the ones with the most expensive real-estate (places like urban italy, japan) where the birth rate collapses because the young cant afford to raise/support urban families. The US is now entereing that phase. The older generations are grandfathered (excuse the pun) into cheaper asset bases (10x incrrease in housing pricing in 40 years, etc) so even if they are not making $$ income they are controlling the much of the critial assets. Gen Yxz etx are just increaing their asset values (through externalities) by being young and hip and beautiful and in the neighborhood. That kind of think.

On the other hand, the income streams of the younger generatonis look much more like annuity than perpetuity. Iven if you make nice earning for a couple of years, housing/college debt is predicated on 30-50 years of consistent earnings. The consistency of any person X earnings today is pretty unlikely to persist. Even a successful person can be made obsolete in a 5 yrs timespan (say--company is sold, market changes, etc). This is thus leading to entirely odd outcomes as there is a mis-match of earnings/liabilities for personal balance sheets for teh yound. ie, moving jobs/et vs massive debt it takes to run housefold/pay for future kids school, etc.

Its also an equity problem for texes. one or two good years get taxed and two or three lean years later, you lost a bit chunk of earnings to takes. if you had smooth earnings, you would pay lower taxs, etc. whereas the older generation is sitting on tax-free capital gain on housing, so low income/low taxed, yet they are conrolling massive asset value.

This system is what killed japan culturally. zero percent interest rates will do that to you. so the future looks bright if you think the lottery style outcome is a good one to play, but on average it is losing bet except for those selling tickets.

Just look at the US tax code to figure out why most of the money in the hands of old white people. The tax benefits of IRA/401K accounts really favor people who have the guts to cut back on consumption and save over the years.That is all money that didn't get spent. Some say it increased the savings rate but did the increased savings really help the country?

Based on talking with Norwegians, who are quite numerous in my part of the UK, the relative health of their social welfare schemes compared with the UK's mostly due to a much, much higher level of taxation, and a huge cultural difference regarding levels of entitlement.

The `professional' unemployed, for example, don't appear to exist in anything like the same numbers in Norway, which removes a significant source of drain. Early retirement, which was fashionable here for a good number of years, is almost unheard of there. The expected level of pensions in Norway is lower too; here, people employed in the public sector routinely expect their pension to be ~50% of their final salary.

Taxation on nearly everything makes it much more expensive than it is over here. One notable example was the sports car of a man I know: here, it cost him about £30k; in Norway, the exact same model would have cost him more than three times as much. (That's an apples-to-apples comparison -- I'm not erroneously comparing a Kroner amount to a Sterling amount.) Another thing he was amazed about was how `cheap' cigarettes and alcohol are in the UK; somewhere between one-half and one-third the price they are in Norway.

I don't know enough about Germany to explain their success, but my impression is that it's partially a cultural thing, and partially that they still have a strong, manufacturing-based economy.

This doesn't counter your main point (taxation in Scandinavia is much higher, as part of their social-democratic system), but your specific examples are "sin taxes" and not really intended to raise significant revenue. The Nordic countries all have very high alcohol taxes due to problems with alcoholism, and all of them except Denmark restrict alcohol sales to the state liquor monopoly, which has high prices, and purposely restricted hours to attempt to discourage binge drinking (e.g. the Swedish stores close at 3pm on Fridays, and don't open at all on weekends). There was a strong prohibition movement in the early 20th century, around the same time that the U.S. had one, but in the Nordic countries the tax/monopoly model narrowly won out over outright prohibition. Automobile and cigarette taxes are also there primarily to discourage greater use of those products.

The main taxes intended to actually raise revenue are corporate/personal income taxes, and the VAT.

I'm from the UK, recently moved to work in Germany. The tax is high by the standards I'm used to but the infrastructure and quality of life is much better and things are much cheaper to buy (food, rent & many household goods). There are major cultural differences though. Personal debt is frowned up - good luck in trying to use a credit card there and they don't have the culture of borrowing to buy (invest in) real estate in the same way.

There is also a subtle sense that sharing resources and participating to make them as good as possible is the logical approach to things, and it feels 'socialist' in a modern sense. I'm struggling to describe it but there is definitely something there when they prioritise what, where and how to spend money that is difficult for Brits to get their head around.

Also, I know a fair few Swedes and they all comment that they like our country but it's where they come to slum it and have fun. We were described as 'charmingly rough.'

> I support United States policies that move in the direction of east Asian rather than western European patterns of government spending and social welfare

This is going to be very difficult to pull off without a massive cultural change. The Confucian influence on East Asian culture has resulted in a much higher degree of filial piety (孝) than in the West, which makes it possible for people to live in old age without social welfare. I just can't see Americans taking care of their retired parents, nor can I see the parents being OK with depending on their children.

> I'm also in favor of greatly expanded parental choice in education so that families with children have the power to shop to help children gain good primary and secondary educations that launch the children into adulthood with a reasonable chance of employment.

This is also untenable in most of America due to the lack of good public transportation and the low population density. In fact, such a system already exists (to a degree) in NYC, the one place where population density and public transportation infrastructure is quite similar to Asia. But in most American cities, the good schools are in the suburbs, which are usually in separate counties from the city.

And the minute that you try to make the schools children attend unrelated to where they live, the wealthy parents will simply pull their children out of public schools and send them to private schools instead (we saw this before with forced busing). And without the well-off students as their peers in the public schools, the poorer students won't improve, no matter how much money you throw at the situation.

In fact, I saw this problem in the (good) public suburban school system I was in. Despite it having a desegregation program that brought poor black students from the city (by way of a 45-minutes-each-way bus ride) to my school, I almost never interacted with them in the classroom because of separate tiers of education for gifted students starting in the 7th grade.

And don't forget that once the wealthy have pulled their children out of the public schools, they'll vote for ballot initiatives and candidates that reduce funding for public schools. The poor, who care less about the quality of education their children are receiving, won't bother to fight back.

> the parade of horribles that some people claim will happen if parents gain more choice has NOT happened in Minnesota over the last quarter century

You're ignoring the fact that Minnesota has one of the whitest populations of any state in the country. I can assure you that an undercurrent of socioeconomically-associated racism still exists in large swathes of the US where there are significant black and Hispanic populations. While most people don't mind if their children associate with middle class black and Hispanic children, they certainly don't want them associating with minority children from the ghetto. And for the most part, the kids follow their parents' lead. At my school, there were some children of African and Hispanic immigrants, whose parents were highly educated and had jobs in engineering, medicine and science and kept their children on the straight and narrow (usually much more so than the white parents did). They were treated exactly like any of the white children, and often used as examples of how racism had been "eradicated" from the school system. But in reality, people wanted nothing to do with the students from the ghetto.

This is the reason why charter schools have become so popular in Minnesota, but remain politically untenable in so many other parts of the country. And I don't know how it is for those students in your school district from the 41 other districts, but the poor students in the ghettos where I grew up don't even have 1 car in the family, let alone gas money for the long daily trip to a good school.

> I'm in favor of a big boost in the minimum age for all kinds retirement benefits (Social Security, Medicare, etc.) as the only possible way to keep taxation for those programs from crippling the opportunities of my children.

I'm pretty sure this is a foregone conclusion. There's simply no way around the math other than increasing the retirement age. If you go back 50 or 100 years, people didn't sit around for 20 or 30 years after retiring doing nothing - they simply died earlier. So if you're going to live until 80 or 90, you'd better work until at least 75.

Not mention, considering the imitations of this article, I don't see young Americans being able to support their aging parents.

This is actually a problem in modern China as well. Called the four-two-one problem[0], China's one-child policy has resulted in many adults having to care for 2 parents and 4 grandparents, since they have no siblings.

This may not be as big of a problem in America, since it has a slightly higher fertility rate than China (2.05 children per female, versus 1.79 in China). But given stagnating wages and skyrocketing healthcare costs, it could very well turn out to be worse on the whole.

0: http://en.wikipedia.org/wiki/One-child_policy#The_.22four-tw...

And without the well-off students as their peers in the public schools, the poorer students won't improve, no matter how much money you throw at the situation.

I'm curious - are you postulating that the only way to cause poorer students to improve their educational outcomes is via peer effects with richer students?

I'd love to see data on this one way or the other.

While most people don't mind if their children associate with middle class black and Hispanic children, they certainly don't want them associating with minority children from the ghetto.

If the peer effects you seem to postulate above go both ways, there is a very good non-racist reason for this: while their children might improve the ghetto children's outcomes, the ghetto children might harm the richer children's outcomes.

> I'm curious - are you postulating that the only way to cause poorer students to improve their educational outcomes is via peer effects with richer students?

What I'm really postulating that the only way to improve the educational outcomes of students that come from families who don't emphasize education is to surround them with students who come from families that do emphasize education.

So my initial statement assumes that poor students come from families that don't emphasize education, while rich students come from families that do. That is a generalization that applies primarily to black and Hispanic students, as there are many poor Asian immigrant families who emphasize education - their children have gone on to be quite successful. But as we all know, the educational problem is with black and Hispanic students. When you eliminate them from the picture, American students do quite well in comparison to European and Asian students[0].

> there is a very good non-racist reason for this: while their children might improve the ghetto children's outcomes, the ghetto children might harm the richer children's outcomes.

Yes, this is certainly possible, and is the most common argument utilized by the rich parents when faced with charges of racism towards poor blacks and Latinos.

0: http://super-economy.blogspot.com/2010/12/amazing-truth-abou...

>What I'm really postulating that the only way to improve the educational outcomes of students that come from families who don't emphasize education is to surround them with students who come from families that do emphasize education.

I was the product of one of these experiments. The school district I lived in was the result of a redistricting to pull in us white students into a large neighboring nonwhite school.

I can guarantee I didn't improve the educational outcomes for any of my classmates. And all I received from it was random beatings, violent attacks against me, and a subpar education. I did learn something though... Once out, I studied my ass off and work as hard as possible so that neither I nor my children will live through such an experiment again.

> The school district I lived in was the result of a redistricting to pull in us white students into a large neighboring nonwhite school.

Sounds like this was done the wrong way around. What percentage of the students at your school were white?

You got your ass beat because you were in the minority, and you were in their school. The best way to change behavior is to intimidate the students through intense peer pressure. If the minority students are going to a school where they are the minority (and properly integrated into the student body), the results will be very different from what you experienced.

Normal people feel uncomfortable betting their children to prove somebody's else theories...

"In perhaps the biggest surprise, Armor's studies found that black elementary students who go to magnet schools (which have the highest percentages of whites) score no better on standardized tests than do blacks who go to all-black nonmagnet schools.(97) In short, Armor found that, contrary to the notion on which the whole desegregation plan was founded--that going to school with middle-class whites would increase blacks' achievement--the Kansas City experiment showed that "integration has no effect."(98)"

http://www.cato.org/pubs/pas/pa-298.html

First of all, one person's opinion does not make a truth. Second, and more importantly, many of these desegregation programs do not achieve true integration. Sure the black students are in the same school as the white students, but they're not in the same classrooms as the white students who are doing well in their studies. This is exactly what I experienced.

You also have to ask questions like "Are these students receiving extra help to make up for what they aren't getting at home? Do they feel isolated because they're the only poor black student in the class, or do they feel motivated to find a way to fit in with the high-achieving white students?" That is the difference between desegregation and integration.

Yeah, I'm in a similar camp. I'm white, and a product of the LAUSD (Los Angeles) magnet program, which attempted to integrate schools well. Problem is, you're mostly integrating white kids with the minority kids who have parents motivated enough to put them in the magnet program.

My schools had both magnet and non magnet kids in them. What this wound up accomplishing was pretty obvious, there was segregation between the two populations. Walking out at lunch one could see the school was divided by a stark line, a line that was about 70% white where the magnet kids hung out, and mixed elsewhere.

It probably helped some people from minorities in the magnet, but I'm sure the dividing line just reinforced race and class barriers in the minds of those on both sides.

This idea also brings up a moral question - how do you justify forcing children of the rich to suffer in order to counteract the bad parenting habits of the poor?

The same way you justify progressive taxation, I suppose. Moreover, the government already does many (other) blatantly immoral things in the name of the (expected) results.

But I am less concerned with the morality of it and more concerned with the practicality. If the children of the rich do start suffering, they will simply pull their children out of the public schools, putting you back at square one.

It's not justifiable, but more than that, it's not even tenable.

Rich "enough" parents (for some value of enough) will invest to send their kids to boarding school in London or Zurich rather than let them be the "beneficiaries" of a social engineering experiment.

The poor are poor because they have an average IQ in the 80s, barely above mental retardation. Their children are the same way because it is genetic. The school busing amd integration programs are about political subjugation of the high class, not assistance to the lower class.

Demonstrably untrue and profoundly disturbed.

Demonstrate it then.

Look at the reply on the sibling comment. Your position is debunked and your willingness to believe it speaks volumes of your personal failings.

You're shitting me, right? Please show me the studies you draw upon.

The standard work is The Bell Curve. They studied many thousands of Americans of every race and subculture. They found that the only significant predictor of earned income was IQ. Race, location, parental income, and so forth did not matter (on average). College attendance in particular had little affect on income, it just determined whether the career was in an intellectual-style field.

The school bussing and integration programs were tried starting in the 1960s. No benefits ever materialized, such as improved test scores, imprisonment rates, cumulative earned income by age 30, or any other standard psychology metric.

Yet the programs were continued. Clearly the purpose in continuing them had nothing to do with "disadvantaged" students, because nothing changed for them. The only explanation remaining is that the real purpose was what was being done to the non-disadvantaged students. Their schools were being filled with yahoos to knock down their potential for achievement.

You could dismiss my claim as raving racism except for one thing: you know that at the same time they also introduced word-shape memorization reading instead of phonetics, New Math, eliminated practice drills, and so forth. They really did want to knock down intellectual achievement. School integration fits very nicely into those plans.

You wrote "The standard work is The Bell Curve" and that tells us that you haven't been reading on the subject since 1994, because The Bell Curve has long since been supplanted as a source on the subject. (It was decried as stupid by anyone who knew genetics from the moment it was published.) More recent sources on the issues of income, race, IQ, and related issues can be found in the publications of Eric Turkheimer, recent president of the Behavior Genetics Association, most of which he kindly shares as free full text on his faculty website.

http://people.virginia.edu/~ent3c/vita1_turkheimer.htm

Note particularly his recent co-authored publication

Nisbett, R. E., Aronson, J., Blair, C., Dickens, W., Flynn, J., Halpern, D. F., & Turkheimer, E. (2012). Group differences in IQ are best understood as environmental in origin. American Psychologist, 67, 503-504.

http://people.virginia.edu/~ent3c/papers2/nisbett2012groupdi...

that directly disagrees with The Bell Curve on several points and yet was published in a leading journal for professional psychologists.

Many, many other researchers have gone beyond the amateur level of research published in the popular book The Bell Curve to grapple with the issues that book brought up and refute it. A good bibliopraphy on the general subject can be found in Wikipedia userspace at

http://en.wikipedia.org/wiki/User:WeijiBaikeBianji/Intellige...

with plenty of recommendations for current reading in reliable sources.

What I'm really postulating that the only way to improve the educational outcomes of students that come from families who don't emphasize education is to surround them with students who come from families that do emphasize education.

The other way is to turn the family that doesn't emphasize education into one that does.

Example: Harlem Children's Zone. http://www.hcz.org/

>What I'm really postulating that the only way to improve the educational outcomes of students that come from families who don't emphasize education is to surround them with students who come from families that do emphasize education.

I think this works to some degree, but could depend on ratio. One can't ship underperformers into PaloAlto High or Cupertino and overwhelm the student body --it's not as if the influence is one-way.

>Yes, this is certainly possible, and is the most common argument utilized by the rich parents when faced with charges of racism towards poor blacks and Latinos.

I think looking at homogenous societies (or even states) and looking at achievers vs performers attitudes in those societies. How do parents there deal with these issues? If this argument is used, and those societies are homogenous, then it can't be racist but classist (or even pedagogical).

>There's simply no way around the math other than increasing the retirement age. If you go back 50 or 100 years, people didn't sit around for 20 or 30 years after retiring doing nothing - they simply died earlier. So if you're going to live until 80 or 90, you'd better work until at least 75.

That works out mathematically, but it's not going to work in practice. Just because you don't die before you're 90 doesn't mean you can work any longer than your grandparents did, even assuming somebody still wants to employ you.

> Just because you don't die before you're 90 doesn't mean you can work any longer than your grandparents did

Why not? People are healthier than ever before, and are working jobs that require much less physical endurance.

> even assuming somebody still wants to employ you

Again, if you're living longer, your usefulness is decaying at a slower rate.

I would suspect that there is quite a high variability in capability and survival prospects at age 70. The ones least able to be likely to afford to retire might be those that need to the most.

I don't have a particular solution to offer but looking at averages oversimplifies issues like this.

>Why not? People are healthier than ever before...

There's no evidence this is true. You realize in the US 30% of the population is obese and almost 10% of us have diabetes, right?

>...and are working jobs that require much less physical endurance.

Right, because sitting at a desk for forty years is the key to good health.

>Again, if you're living longer, your usefulness is decaying at a slower rate.

And again, there's no reason to believe this is true. Modern medicine isn't the panacea you seem to think it is, and the fact that your heart doesn't stop beating doesn't mean you're still in shape to work.

Even aside from physical maladies (which is a big aside), it's normal to be a bit forgetful when you're seventy purely through age-related cognitive decline. It doesn't matter much if you spend your days puttering around the house, but if someone is paying you to do a job the situation is different.

Maybe before the money runs out we'll see enough medical advances to make working to 75 doable for the average person, but without those advances that's just not going to happen.

> You realize in the US 30% of the population is obese and almost 10% of us have diabetes, right?

Those people are probably going to die at 60-70 y/o anyway.

And besides, that's self-inflicted. Once people realize that it's preventing them from reaching their full lifespan, they'll change if they want to. And if they don't, well, I'm not gonna complain if I get better retirement benefits as a result.

> Right, because sitting at a desk for forty years is the key to good health.

Once again, this is largely self-inflicted. You can stay relatively healthy while working a desk job. Stop buying junk food and get a gym membership. Try getting up and walking a bit during your workday - take a stroll outside during lunch. You can certainly be healthier than people were 50 years ago working at a car factory.

> And again, there's no reason to believe this is true.

There's no reason to believe it isn't true. Society has just accepted that people have to stop working at 65. Why not try increasing the retirement age gradually and see what happens? People don't suddenly lose the ability to work when they turn 65.

>Those people are probably going to die at 60-70 y/o anyway.

Maybe, though doctors are getting pretty good at treating obesity-related problems. In any event they're going retire in their fifties (or earlier), so from a social services standpoint we're not coming out ahead.

> You can stay relatively healthy while working a desk job.

The key word being relatively. Taking a walk at lunch and spending an hour at the gym isn't going to make you as healthy as someone who does physical activity all day.

>There's no reason to believe it isn't true. Society has just accepted that people have to stop working at 65.

Actually, yes, there is a reason to believe it isn't true. We have made effectively zero progress in arresting age-related cognitive decline. Until we do you can raise the retirement age to whatever you want - even people who are still pretty sharp aren't going to be able to find jobs because employers won't want to chance hiring a madogiwa.

It's not illegal to work after age 65, and Social Security is barely a pittance so it's even encouraged.

You realize in the US 30% of the population is obese and almost 10% of us have diabetes, right?

A couple of points worth making:

1) 10% of people have diabetes because the definition of "diabetes" has been tinkered with extensively over the last couple of generations. Blood sugar levels that wouldn't have resulted in a diagnosis in the 1950s are now grounds for panic in your doctor's office. I'm not qualified to judge this as a good thing or a bad thing, overall, but it's obvious that it renders basic statistical comparisons impossible. We've seen similar abuse of statistics with other conditions such as autism.

2) If people are heavier now than we were in the past, it could be for the same reason that we're taller than our ancestors: better nutrition (as opposed to the usual claim of worse nutrition.)

In support of that idea, there was an amusing link on Fark earlier: http://www.dailymail.co.uk/femail/article-2251920/171-pounds... (May be considered NSFW if you work in a church.)

I'm pretty sure this is a foregone conclusion. There's simply no way around the math other than increasing the retirement age. If you go back 50 or 100 years, people didn't sit around for 20 or 30 years after retiring doing nothing - they simply died earlier. So if you're going to live until 80 or 90, you'd better work until at least 75.

If you go back 50 or 100 years, productivity-per-hour was a tiny fraction of what it is today. Why do we decree by fiat that everyone has a moral obligation which we will enforce via the economic system to spend at least half their waking hours working for most of their lifespan?

If you go back a 100 years, people shat in outhouses and died of TB. Only the rich retired.

Why do we decree by fiat that everyone has a moral obligation which we will enforce via the economic system to spend at least half their waking hours working for most of their lifespan?

We don't.

If you're going to finance your own retirement, feel free to stop working whenever you have enough money saved up. However, if you're going to demand that future generations of workers finance your retirement through taxation (which is how the U.S. Social Security system works), then what you're saying is that future generations have a "moral obligation" to spend ever-increasing fractions of their salaries to fund prior generations as life expectancy increases. Keeping the retirement age the same while life expectancy goes up results in an increasing transfer of wealth from younger generations to older generations, with older people having an increased standard of living at the expense of younger ones.

By the way, higher productivity per hour doesn't necessarily mean that people can afford to pay higher taxes to fund your longer retirement. In many cases, it means that employees are expected to work more hours (e.g., work 50 hours a week and answer e-mails from home) for the same salary. Also, productivity per hour is only likely to have increased in jobs that are based on technology. It's not likely that the productivity per hour of a mail carrier or a teacher or a waiter is much higher than it was decades ago.

> There's simply no way around the math other than increasing the retirement age

Sure there is- ease immigration quotas for young people. You could solve the problem in five years. It's politically nightmarish, but the math is great.

>The Confucian influence on East Asian culture has resulted in a much higher degree of filial piety (孝) than in the West, which makes it possible for people to live in old age without social welfare.

Kind of an aside, but filial piety tends to break down when there are no children around. With the birthrate in Japan and China this system will break down. It has begun breaking down in Japan (and Taiwan to some extant). For example, all age groups but the one above seniority show declining crime statistics; the older age group shows an increase in crime, mostly petty crime such as food theft, bikes, etc. There is a school of thought which blames elder alienation from society (i.e. no descendants who care for them --or in some cases live just too far)[1]

>the wealthy parents will simply pull their children out of public schools and send them to private schools instead

This is also the case in Japan. On the other hand, in Taiwan, public schools are the better schools. I'm at a loss for the divergence, but would be interested in some insight into that.

>While most people don't mind if their children associate with middle class black and Hispanic children, they certainly don't want them associating with minority children from the ghetto.

Agree with the general statement. That's also evident in Japan and Taiwan, from what I know. It's all socio-economic than racial, in TW and JP, as there are negligible a mounts of "other" in both countries. The Zainichi problems not withstanding.

[1[http://www.telegraph.co.uk/news/worldnews/asia/japan/3213349...

Argh. A link to the AEI as a point of authority. And some unsubstantiated opinion as fact. Some stuff about homeschooling. Wanting to be like "east Asia" (there are a lot of countries in Asia). Let me know how 3-4 generations under one roof works out for you.

Well done, sir/madam. Well done.

Official inflation statistics have also badly overstated increases in "cost of living" throughout my adult life, failing to take into account changed consumption patterns and changing (improving) quality of many goods and services, thus making people think they are poorer than they actually are. By observation of actual consumption patterns, young people today are better off in general than young people a generation ago, which is the consistent expectation of American culture.

It is an unending source of frustration to myself that smart people lump "consumption", "real income" or "GDP" into one amalgamated mass. Then we get in this endless arguments over whether "income" is going up or down, when in reality purchasing power consists of the ability to purchase all sorts of goods, some of which might be getting cheaper relative to income and some more expensive.

It is undeniable that the median purchasing power of luxury and entertainment goods - movies, books, music, computing power, video games, sushi, gourmet coffee, cars with AC, etc, has massively increased in the past forty years. (However, from a hedonics standpoint it's not clear that there has been much improvement - the bowling leagues, poker nights, and bridge clubs of the 1960's seem plenty enough to maximize happiness, video games are not necessarily any better from that standpoint).

It is also true that the median purchasing power of the necessities of life - transportation and fuel to get to work, a home in a neighborhood with low crime and friendly schools, health insurance that covers the basics care, nutritious food - has gone down. Try building a basket of goods consisting of the cheapest automobile that can you get an average person to work every day, the gasoline to power that car, natural gas to heat the home, the median home amortized with a mortgage at the contemporary interest rate, the cheapest healthcare plan on the market, and balanced food diet of grains, meat, and vegetables. Then compare the price of that basket compared to the median wage of a full time, 30 something, male worker in 1970 to that in 2010. I have done that math, and found that the purchasing power of the median worker has decreased substanitially ( by about 23%). Most of this decline in purchasing power came from the rapid rise in the cost of housing, oil, and healthcare.

The normal reubttal is that the quality of the cheapest car in 2010 has nicer amenities than the cheapest car in 1970. The median home is much larger than the median home in 1970. This is true. But there is no existing option in 2010 to buy the 1970 car or 1970 home at a cheaper price. And from a hedonics standpoint, trading financial stress for a bigger home is not a good trade.

Because the decrease in median purchasing power is concentrated in the basic cost of living, many young adults have made a decision to defer or forgoe raising families. This gives a surplus income which can then be spent on all manners of luxuries unknown to the typical worker in 1970. So from outside appearance, it can appear that the standard of living has improved greatly.

So from my opinion it is great that we have the internt and kindles and such.

But real life is not GDP statistics - the growth in one area does not necessarily negate the decline in other.

The existence of kindles does not negate the problem of declining purchasing power of the base necessities of living. This decline is still a huge problem that must be addressed.

I've heard many gen Y'ers talking about how baby boomers screwed it up for them but I had never heard baby boomers saying the same about their parent's generation. It doesn't make that much sense to me since boomers are retiring better off than their parents while gen Y is the first generation that will be worst off.

You know, there is a generation that's between boomers and Y, right? Are you saying that X will be better off than the boomers, before it tailspins to the Ys? Shouldn't the blame lie on the X's then?

Wait, what doesn't make sense about that?