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Two leading economists disagree about the flagging American Dream

30 points by prostoalex 6y ago

spiralganglion 6y ago
What does it mean for an economist to be "leading"? How is that assessment made. On what basis / criteria?
- pzone 6y ago
  How is a leading academic of any kind determined? Perhaps surveys among other economists, or peer evaluations? For a more concrete metric, paper citations within the past 10 years?
  - friendlybus 6y ago
    Among the scientists it's easier to make a clear cut statements about impact.
- jetrink 6y ago
  One indicator is when The Economist declares you a leading economist.
- gumby 6y ago
  The kind of economist whose works is widely read, whose work is likely to be read just based on the author's name, and (sort of as a result of that) whose work has influenced actual action by others. And/or having a Nobel memorial prize as one of the two economists already does. I would say the criteria are no different from those of other fields.
- deleted 6y ago
  [deleted]
AndrewKemendo 6y ago
"The reason they call it the American Dream is because you have to be asleep to believe it." - George Carlin Social Mobility, aka "The American Dream" has been flat since the decoupling of productivity and Labor in 1971. [1] [2] [1]https://www.pewtrusts.org/~/media/legacy/uploadedfiles/wwwpewtrustsorg/reports/economic_mobility/PursuingAmericanDreampdf.pdf https://www.pewtrusts.org/~/media/legacy/uploadedfiles/wwwpe... [2]https://www.bostonfed.org/publications/research-department-working-paper/2011/trends-in-us-family-income-mobility-1969-2006.aspx https://www.bostonfed.org/publications/research-department-w...
- sokoloff 6y ago
  From the first link, there are two critically important, overwhelmingly positive notes IMO: ■ Eighty-four percent of Americans have higher family incomes than their parents had at the same age, and across all levels of the income distribution, this generation is doing better than the one that came before it. ■ Ninety-three percent of Americans whose parents were in the bottom fifth of the income ladder and 88 percent of those whose parents were in the middle quintile exceed their parents’ family income as adults. Not only are the vast majority of people doing better than their parents, this effect is even stronger at the bottom of the distribution. That seems pretty damn good to me. End notes in the study confirm sensible treatment of the comparisons: Measures of family income are adjusted for family size and inflation. Measures of earnings are adjusted for inflation. Measures of wealth are adjusted for inflation and age.
  - cammikebrown 6y ago
    If you look at it by generation, however, millennials are significantly worse off than Boomers: https://www.newamerica.org/millennials/reports/emerging-millennial-wealth-gap/ https://www.newamerica.org/millennials/reports/emerging-mill... Millennials typically are worth twenty percent less than their parents at the same point in life. My parents owned a house, two cars, and had two babies at my age. My dad was a public water maintenance worker with no college degree and my mom was in nursing school. The only people I know right now with a house, two cars and two kids are both accountants.
ineedasername 6y ago
It's no surprise that a couple of economists might disagree about it: The definition of the American Dream isn't one upon which everyone would agree to begin with. However, a common theme is something like social/economic mobility without regard to circumstances of birth. And to that extent, it would be hard to argue that the American Dream has been universally available to all Americans at most points in our history.
- sokoloff 6y ago
  I would argue that perfect social/economic mobility is probably not only unattainable but perhaps even undesirable. It should be high, such that gifted children of any background can flourish, but should almost surely fall short of whatever 100% “everyone draws straws” perfectly uncorrelated would be. I believe that raising the next generation is our most solemn obligation as parents. It seems overwhelmingly likely that this would confer some benefit to the more well-to-do that cannot be entirely eliminated short of universal boarding schools and even that might not be enough. Why do children of professors grow up to be professors, doctors to doctors, plumbers to plumbers, etc? I’m sure there’s some genetic component, but I suspect the overwhelming influence is what they experienced and how they were raised. When I was growing up, both my parents were teachers and at some young age, I just assumed that literally every adult was a teacher. It was the only job I knew and saw daily. I believe that having and even encouraging parents to strive, scrimp, save, and sacrifice for their children is an overall positive force for society. My parents benefited greatly from it, as did I, as will my kids. If you took the actions required to make outcomes totally uncorrelated, I think you’d remove a lot of this sacrifice and effort that society benefits from when parents raise their kids to be “better off” than they were.
  - badrabbit 6y ago
    So being "gifted" should factor in? What if I and many others care about character and empathy much more than any intellectual capacity? It's always been the idea and should be that those who do right,act honest and work hard even if they don't work smart, should have upward mobility, as in regardless of birth you can enter the lower mid-class tier. Obviously your talent and skill should and would determine your mobility to upper and upper-middle class.
flohofwoe 6y ago
Having seen the Iron Curtain from both sides (first from the East, and after 1990 from the West), I sometimes wonder whether the idea of the "American Dream" was ever more than a Cold War propaganda weapon not aimed directly at the US population, but at the people at the other side of the Curtain. Was life in the US ever as great and shiny as depicted in the US TV series like Magnum P.I., A-Team or the 6-Million Dollar Man that those of us with access to Western TV gobbled up with awe and wonder, or was it always a naive myth but the propaganda weapon worked so well that it still even now affects the US population, when both old and young talk about how much better the 70's have been compared to today? (I guess the truth is - as always - somewhere in the middle)
- dragonwriter 6y ago
  > I sometimes wonder whether the idea of the "American Dream" was ever more than a Cold War propaganda The concept, in some approximation of it's modern form, was written about quite a bit in the 19th Century, and particularly heavily (both positively and negatively) in the 1920s-1940s. I mean, once identified it was certainly seized on as capitalist propaganda, but directed at the US working class more than any outside target, and long before there was a Cold War.
  - didgeoridoo 6y ago
    Indeed. De Tocqueville was talking about America as “exceptional” as early as the 1830s.
- rayiner 6y ago
  TV has always been propagandist insofar as it portrays the life of upper middle class people. The father in Leave it to Beaver was a college graduate at a time when when only 5% of his cohort graduated college. But to the extent that big houses and lots of cars are the “American Dream” it’s real. Household consumption spending per capita in the US is more than 7 times higher than in Poland, and 90% higher than in France. If you have not had the chance, go visit the rest of the country outside the coasts (where people suffer under self-inflicted policy choices). Places where college graduates struggle to afford a one bedroom apartment in a city where human feces covers the streets isn’t a good proxy for what life in America is really like. Try Kansas City, Des Moines, Houston, etc. The widespread material prosperity is evident..
paulus_magnus2 6y ago
There is a conflict of interests: -- as a society we should strive for what Warren buffet calls "lottery of birth" [1]. Egalitarian society will better maximize utility of it's gifted population. -- as individuals we try to game the system in order to give our children & filmy, friends a lag up. So we want meritocracy and egalitarianism from everyone while practicing nepotism for our close ones. [1] https://www.getrichslowly.org/warren-buffett-on-the-lottery-of-birth/ https://www.getrichslowly.org/warren-buffett-on-the-lottery-...

30 points by prostoalex 6y ago

spiralganglion 6y ago

What does it mean for an economist to be "leading"? How is that assessment made. On what basis / criteria?

pzone 6y ago
How is a leading academic of any kind determined? Perhaps surveys among other economists, or peer evaluations? For a more concrete metric, paper citations within the past 10 years?
- friendlybus 6y ago
  Among the scientists it's easier to make a clear cut statements about impact.
jetrink 6y ago
One indicator is when The Economist declares you a leading economist.
gumby 6y ago
The kind of economist whose works is widely read, whose work is likely to be read just based on the author's name, and (sort of as a result of that) whose work has influenced actual action by others. And/or having a Nobel memorial prize as one of the two economists already does. I would say the criteria are no different from those of other fields.
deleted 6y ago
[deleted]

AndrewKemendo 6y ago

"The reason they call it the American Dream is because you have to be asleep to believe it." - George Carlin Social Mobility, aka "The American Dream" has been flat since the decoupling of productivity and Labor in 1971. [1] [2] [1]https://www.pewtrusts.org/~/media/legacy/uploadedfiles/wwwpewtrustsorg/reports/economic_mobility/PursuingAmericanDreampdf.pdf https://www.pewtrusts.org/~/media/legacy/uploadedfiles/wwwpe... [2]https://www.bostonfed.org/publications/research-department-working-paper/2011/trends-in-us-family-income-mobility-1969-2006.aspx https://www.bostonfed.org/publications/research-department-w...

sokoloff 6y ago
From the first link, there are two critically important, overwhelmingly positive notes IMO: ■ Eighty-four percent of Americans have higher family incomes than their parents had at the same age, and across all levels of the income distribution, this generation is doing better than the one that came before it. ■ Ninety-three percent of Americans whose parents were in the bottom fifth of the income ladder and 88 percent of those whose parents were in the middle quintile exceed their parents’ family income as adults. Not only are the vast majority of people doing better than their parents, this effect is even stronger at the bottom of the distribution. That seems pretty damn good to me. End notes in the study confirm sensible treatment of the comparisons: Measures of family income are adjusted for family size and inflation. Measures of earnings are adjusted for inflation. Measures of wealth are adjusted for inflation and age.
- cammikebrown 6y ago
  If you look at it by generation, however, millennials are significantly worse off than Boomers: https://www.newamerica.org/millennials/reports/emerging-millennial-wealth-gap/ https://www.newamerica.org/millennials/reports/emerging-mill... Millennials typically are worth twenty percent less than their parents at the same point in life. My parents owned a house, two cars, and had two babies at my age. My dad was a public water maintenance worker with no college degree and my mom was in nursing school. The only people I know right now with a house, two cars and two kids are both accountants.

ineedasername 6y ago

It's no surprise that a couple of economists might disagree about it: The definition of the American Dream isn't one upon which everyone would agree to begin with. However, a common theme is something like social/economic mobility without regard to circumstances of birth. And to that extent, it would be hard to argue that the American Dream has been universally available to all Americans at most points in our history.

sokoloff 6y ago
I would argue that perfect social/economic mobility is probably not only unattainable but perhaps even undesirable. It should be high, such that gifted children of any background can flourish, but should almost surely fall short of whatever 100% “everyone draws straws” perfectly uncorrelated would be. I believe that raising the next generation is our most solemn obligation as parents. It seems overwhelmingly likely that this would confer some benefit to the more well-to-do that cannot be entirely eliminated short of universal boarding schools and even that might not be enough. Why do children of professors grow up to be professors, doctors to doctors, plumbers to plumbers, etc? I’m sure there’s some genetic component, but I suspect the overwhelming influence is what they experienced and how they were raised. When I was growing up, both my parents were teachers and at some young age, I just assumed that literally every adult was a teacher. It was the only job I knew and saw daily. I believe that having and even encouraging parents to strive, scrimp, save, and sacrifice for their children is an overall positive force for society. My parents benefited greatly from it, as did I, as will my kids. If you took the actions required to make outcomes totally uncorrelated, I think you’d remove a lot of this sacrifice and effort that society benefits from when parents raise their kids to be “better off” than they were.
- badrabbit 6y ago
  So being "gifted" should factor in? What if I and many others care about character and empathy much more than any intellectual capacity? It's always been the idea and should be that those who do right,act honest and work hard even if they don't work smart, should have upward mobility, as in regardless of birth you can enter the lower mid-class tier. Obviously your talent and skill should and would determine your mobility to upper and upper-middle class.

flohofwoe 6y ago

Having seen the Iron Curtain from both sides (first from the East, and after 1990 from the West), I sometimes wonder whether the idea of the "American Dream" was ever more than a Cold War propaganda weapon not aimed directly at the US population, but at the people at the other side of the Curtain. Was life in the US ever as great and shiny as depicted in the US TV series like Magnum P.I., A-Team or the 6-Million Dollar Man that those of us with access to Western TV gobbled up with awe and wonder, or was it always a naive myth but the propaganda weapon worked so well that it still even now affects the US population, when both old and young talk about how much better the 70's have been compared to today? (I guess the truth is - as always - somewhere in the middle)

dragonwriter 6y ago
> I sometimes wonder whether the idea of the "American Dream" was ever more than a Cold War propaganda The concept, in some approximation of it's modern form, was written about quite a bit in the 19th Century, and particularly heavily (both positively and negatively) in the 1920s-1940s. I mean, once identified it was certainly seized on as capitalist propaganda, but directed at the US working class more than any outside target, and long before there was a Cold War.
- didgeoridoo 6y ago
  Indeed. De Tocqueville was talking about America as “exceptional” as early as the 1830s.
rayiner 6y ago
TV has always been propagandist insofar as it portrays the life of upper middle class people. The father in Leave it to Beaver was a college graduate at a time when when only 5% of his cohort graduated college. But to the extent that big houses and lots of cars are the “American Dream” it’s real. Household consumption spending per capita in the US is more than 7 times higher than in Poland, and 90% higher than in France. If you have not had the chance, go visit the rest of the country outside the coasts (where people suffer under self-inflicted policy choices). Places where college graduates struggle to afford a one bedroom apartment in a city where human feces covers the streets isn’t a good proxy for what life in America is really like. Try Kansas City, Des Moines, Houston, etc. The widespread material prosperity is evident..

paulus_magnus2 6y ago

There is a conflict of interests: -- as a society we should strive for what Warren buffet calls "lottery of birth" [1]. Egalitarian society will better maximize utility of it's gifted population. -- as individuals we try to game the system in order to give our children & filmy, friends a lag up. So we want meritocracy and egalitarianism from everyone while practicing nepotism for our close ones. [1] https://www.getrichslowly.org/warren-buffett-on-the-lottery-of-birth/ https://www.getrichslowly.org/warren-buffett-on-the-lottery-...