September 1, 2006


Got to Admit It's Getting Better... (David R. Henderson, 01 Sep 2006, Tech Central Station)

The basic message Greenhouse and Leonhardt deliver is that "wages and salaries now make up the lowest share of the nation's gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960's." That is literally correct, according to the federal government's measures. But it's also misleading, for two main reasons, in order of importance.

First, as marginal tax rates have increased for most people except the highest-income people, due mainly to rising Medicare and Social Security tax rates over the last 40 years, employers have paid a higher and higher percent of compensation in the form of untaxed benefits. So a more-relevant measure is not wages and salaries but total employee compensation. Second, national income is a better base to use for considering each group's -- employees, corporations, proprietors, landlords, and lenders -- share of income. [...]

The Washington Post's "Devaluing Labor" by Harold Meyerson, credulously quotes the New York Times piece to buttress his case. And what is Meyerson's case? He hearkens back an America from 1947 to 1973 when "More Americans bought homes and new cars and sent their kids to college than ever before" and writes, "That America is as dead as a dodo." He doesn't present data to make his case, which is understandable because the America of today is even in better economic shape than the America of his golden era. Let's take his own criteria -- home ownership, car ownership, and the percent of the population with college degrees. In focusing on these data, I'm assuming that Meyerson cares about whether Americans own homes, own cars, and have college degrees, not whether they bought houses, bought cars, and went to college last year.

Take home ownership. In the first quarter of 1965, the first date I could find quickly, 62.9 percent of American households owned their homes. That was during Meyerson's golden era. In the second quarter of this year, the "dead middle-class era," it was 68.7 percent, an all-time high. Cars? What's relevant, as with homeownership, is the percent of the population that owns cars. And this has boomed. In 1970, presumably near the peak of Meyerson's golden era, there were 108.4 million vehicles registered in the United States; by 2003, this had soared to 231.4 million, an increase of 113.5 percent, while the population had risen by only 42.4 percent. And note that Meyerson doesn't even mention air travel, which, due to deregulation and technological improvement, has become so much cheaper that even poor Americans, let alone middle-class ones, can now afford to fly. How about college? In 1970, only 10.7 percent of the population 25 years old or more had a college degree; by 2004, this was up to an all-time high of 27.7 percent.

The bottom line is that the vast majority of us are doing well by the standard measures. Finally, (like Don Boudreaux) ask yourself this: Would you rather be in the middle 20 percent of the income distribution today or in the top 20 percent 50 years ago? How much do you value cell phones, cars that last 10 years, airline travel to Europe, iPods, and being able to fight cancer and win?

Perhaps the only things to prefer about the 60s and 70s are the fewer college degrees and cars and less frequent air travel.

Posted by Orrin Judd at September 1, 2006 11:34 AM

Of course, only the elite could afford it then.

Posted by: Sandy P at September 1, 2006 1:02 PM

Better baseball.

Posted by: Jim in Chicago at September 1, 2006 7:30 PM

in the 70s that is.

Posted by: Jim in Chicago at September 1, 2006 7:32 PM

The baseball was horrible.

Posted by: oj at September 1, 2006 7:46 PM

Not in Pittsburgh, Cincinnati, Baltimore, and Oakland.

Posted by: jim hamlen at September 2, 2006 1:01 AM

Their parks were dumps, the lack of Latinos meant they fielded inferior players, and other than Earl Weaver they didn't understand the game.

Posted by: oj at September 2, 2006 8:27 AM

..."the lack of Latinos"...

Roberto Clemente, Manny Sanguillen, Rennie Stennett, Omar Moreno, Tony Perez, Pedro Borbon, Bobby Tolan, Mike Torrez, Ramon Hernandez, Jose Pagan, Matty Alou.

I'm sure there are more - that's just after 5 minutes of thought.

Earl Weaver - he couldn't manage his way out of a paper bag. He kicked a lot of dust, made a lot of noise, and ticked off a lot of players (to little effect). Sparky was his equal (at least), and Dick Williams ran circles around him.

All parks were dumps in the 1970s - what does that have to do with anything?

Posted by: jim hamlen at September 2, 2006 10:06 AM

Bad parks, bad game.

Weaver understood the value of baserunners.

The ability to name them all demonstrates the point.

Posted by: oj at September 2, 2006 10:22 AM

Weaver was a man ahead of his time. OJ's dead right on that one.

However, he's confusing the parks with the game itself.

Brilliant baseball in NY (Mets at the start of the decade, Yanks at the end), Cincy, Baltimore, Pittsburgh, Oakland, L.A., Kansas City.

The key was that the pitchers still had a chance. The game was better when pitchers could throw inside, and 30 homers was a great season.

And 1978 was the best season of my lifetime at least. The Sawx epic collapse and then comeback to force the one-gamer, Bucky bleepin Dent, and Pete Rose's 44 game hit streak.

Posted by: Jim in Chicago at September 2, 2006 12:53 PM

The early 70s Mets had three good starters and nothing else and played in a mausoleum.

Posted by: oj at September 2, 2006 1:13 PM

"inferior players"

Between them, Pittsburgh, Baltimore, Cincinnati, and Oakland won every Series in the 70s except for 77-78. There were plenty of other Latino stars then, too - I just stuck to those teams. In the NL East alone, you had Clemente, Stargell, Carlton, Schmidt, Jenkins, Billy Williams, Seaver, Koosman, Matlack, Staub, Torre, Gibson, Brock, etc.

"inferior" - no wonder you only got 36 on that baseball quiz a couple of months ago.

And the Phillies weren't so bad the second half of the decade, and won it all in 1980. KC started their run as a good team, too.

1978 was a good year - but 1973 had the wildest finish, with 4 teams fighting it out in the NL East, the Mets beating the Reds in the playoff, and almost beating the A's in the Series. And of course, the Series in 1975.

Earl Weaver over-managed, and lost at least 1 Series and 1 playoff because of it. His disdain for opposing teams hurt him in a lot of close gamse and close series. Had the O's not beaten Cincy in 1970, he would have been the Bobby Cox of the AL.

Posted by: jim hamlen at September 2, 2006 6:46 PM

The '73 Mets were less talented than the Devil Rays.

Posted by: oj at September 2, 2006 8:54 PM

The who? Are they in the minors?

Posted by: jim hamlen at September 2, 2006 11:47 PM

Those Mets would be:

Seaver and Matlack are the only guys clearly superior to their comparables if we call Koosman and Kazimir a wash. Of course, in the bad old days that's all it took to be competitive.

Posted by: oj at September 2, 2006 11:53 PM