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Is this not the same trickle down mantra that has been pushed across developed countries for decades and has only widened the gap between rich and poor? In the

Is this not the same trickle down mantra that has been pushed across developed countries for decades and has only widened the gap between rich and poor? In the US, where this line was pursued since the 80s, real wages for most Americans have stagnated while the top 20% have seen their wealth increase astronomically. Merely improving the regulatory and investment climate for a country does not magically benefit most citizens in a society -- thoughtful taxation is one to correct that.

deleted 1y ago
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twoodfin 1y ago
The median American household has a >30% higher real income today than in 1985. https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N Personal income is up more than 50%. https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N And that doesn’t account for demographic changes: Households are smaller on average than 40 years ago and there’s been a significant surge in the foreign-born population, mostly from much poorer origins. Further, while the inflation calculation includes some hedonic adjustments, it’s really hard to capture the aggregate of the thousands of diffuse lifestyle benefits of living in 2025 v. 1985. Personally, I’d miss burritos.
- myrmidon 1y ago
  Sure, but a median house cost 3.5 years of (median) income in 1985, nowadays its 6. It sure is nice being able to afford tons of foreign-built electronic trash, but affording a home seems more relevant and important to me and by that metric things got worse.
  - qeternity 1y ago
    This is not a result of income inequality. This is a result of measures intended to reduce income inequality, which of course almost universally make things worse. The other lending that the US (and Western governments in general) massively subsidize is education. And look at what has happened to the cost of housing and education. They have both massively exceeded general rates of inflation. The cure is worse than the disease.
  - twoodfin 1y ago
    Now we’re moving from broad income & wealth to a very specific good in housing. Yes, housing supply should be much more abundant. The constraint on supply has not been the 1%, but government regulation through zoning and environmental restrictions. This is belatedly being recognized and addressed in a shockingly bipartisan manner for now. But also worth noting that the median home today is much larger and nicer than in 1985. Interest rates have (even today) been low enough—and incomes high enough—that ownership rates for these bigger, better homes are a few ticks higher than 40 years ago, as well.
    - myrmidon 1y ago
      Don't get me wrong, I'm not even disputing your main point-- I do agree that things have gotten better for the average American over the last decades. Though I still think that longer-term inflation adjustment (CPI based comparisons even more so) always warrant a critical look. > Yes, housing supply should be much more abundant. The constraint on supply has not been the 1%, but government regulation through zoning and environmental restrictions. I'm not buying the whole "regulation is to blame for rising housing costs" at all. If it was, I would expect countless "housing havens": states/nations in the US/Europe with "correct regulation" and housing costs at least staying stable over the last decades: But I don't see those. My take on this is that this is mainly a consequence of the Baumol effect; local-labor intensive products like houses, childcare, education suffer from strongly rising costs because wages increased generally; regulation cant/wont magically solve this. But if you just compare wage development itself, things look much better over time than they actually are for the average person, because you omit this effect from your consideration by design. So things actually improved much less for the average American than a first glance at your numbers suggests.
      - twoodfin 1y ago
        This chart I stumbled across yesterday at least matches my anecdotal understanding that, yes, there are places like Houston and Minneapolis where in fact what you’re looking for has happened, because supply has been allowed to rise to meet growing demand: https://x.com/mattyglesias/status/1940111174722326580 https://x.com/mattyglesias/status/1940111174722326580

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twoodfin 1y ago

The median American household has a >30% higher real income today than in 1985. https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N Personal income is up more than 50%. https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N And that doesn’t account for demographic changes: Households are smaller on average than 40 years ago and there’s been a significant surge in the foreign-born population, mostly from much poorer origins. Further, while the inflation calculation includes some hedonic adjustments, it’s really hard to capture the aggregate of the thousands of diffuse lifestyle benefits of living in 2025 v. 1985. Personally, I’d miss burritos.

myrmidon 1y ago
Sure, but a median house cost 3.5 years of (median) income in 1985, nowadays its 6. It sure is nice being able to afford tons of foreign-built electronic trash, but affording a home seems more relevant and important to me and by that metric things got worse.
- qeternity 1y ago
  This is not a result of income inequality. This is a result of measures intended to reduce income inequality, which of course almost universally make things worse. The other lending that the US (and Western governments in general) massively subsidize is education. And look at what has happened to the cost of housing and education. They have both massively exceeded general rates of inflation. The cure is worse than the disease.
- twoodfin 1y ago
  Now we’re moving from broad income & wealth to a very specific good in housing. Yes, housing supply should be much more abundant. The constraint on supply has not been the 1%, but government regulation through zoning and environmental restrictions. This is belatedly being recognized and addressed in a shockingly bipartisan manner for now. But also worth noting that the median home today is much larger and nicer than in 1985. Interest rates have (even today) been low enough—and incomes high enough—that ownership rates for these bigger, better homes are a few ticks higher than 40 years ago, as well.
  - myrmidon 1y ago
    Don't get me wrong, I'm not even disputing your main point-- I do agree that things have gotten better for the average American over the last decades. Though I still think that longer-term inflation adjustment (CPI based comparisons even more so) always warrant a critical look. > Yes, housing supply should be much more abundant. The constraint on supply has not been the 1%, but government regulation through zoning and environmental restrictions. I'm not buying the whole "regulation is to blame for rising housing costs" at all. If it was, I would expect countless "housing havens": states/nations in the US/Europe with "correct regulation" and housing costs at least staying stable over the last decades: But I don't see those. My take on this is that this is mainly a consequence of the Baumol effect; local-labor intensive products like houses, childcare, education suffer from strongly rising costs because wages increased generally; regulation cant/wont magically solve this. But if you just compare wage development itself, things look much better over time than they actually are for the average person, because you omit this effect from your consideration by design. So things actually improved much less for the average American than a first glance at your numbers suggests.
    - twoodfin 1y ago
      This chart I stumbled across yesterday at least matches my anecdotal understanding that, yes, there are places like Houston and Minneapolis where in fact what you’re looking for has happened, because supply has been allowed to rise to meet growing demand: https://x.com/mattyglesias/status/1940111174722326580 https://x.com/mattyglesias/status/1940111174722326580