Then and now (a picture’s worth . . . )

I often do posts ridiculing the idea that living standards have not risen since the 1960s.  I remember the 1960s, and living standards were obviously lower then. Studies show a dramatic decline in poverty level consumption since the 1960s.

 

 

 

 

 

 

 

 

The NYT has a new article that suggests poverty in America hasn’t changed since about 1967.  I almost laughed out loud when I saw the picture they choose to accompany the article:

Screen Shot 2014-06-05 at 1.32.04 PMFinally someone has found a way to make my point.  Today NYC spends $19,770 per pupil, the highest in the country among the top-100 system.  And although New York wastes plenty of money (why not hire people at $80,000 to teach 5 students apiece in their homes?) at least they get something for this money.  Here’s a random picture of a modern NYC school, pulled off the internet:

Screen Shot 2014-06-05 at 1.32.46 PM

That’s more like the 21st century.

Today America’s poor and very rich have far higher living standards than during the 1960s. The middle class is moderately better off.  Inequality is a problem, but it should be far down on our list—well below the arrest of 800,000 people last year for marijuana possession, or mass unemployment, or global warming.

Paul Krugman and I were both young during the 1960s.  Whenever you are young it’s going to seem like a Golden Age.  You have to look past those memories, and think about the reality.  My dad had fond memories of WWII.

PS.  My “teaching in homes” idea was sarcasm, so don’t bother explaining why it wouldn’t work.


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34 Responses to “Then and now (a picture’s worth . . . )”

  1. Gravatar of Morgan Warstler Morgan Warstler
    5. June 2014 at 21:18

    NEITHER PICTURE MEANS ANYTHING.

    DELETE THEM.

    Third world ghettos don’t care about peeled paint or bright shiny colors.

    THEY WANT SMART PHONES. it’s just about smart phones. ONLY about smartphones. Smartphone all the way down.

    Sargent Shriver would molest a pig on live TV (see Channel 4, Black Mirror, for reference) to have a smart phone.

    STOP PRETENDING THE QUALITY OF MEAT SPACE MATTERS.

    Toilets? No thanks. Cars for American teens? no thanks.

    I’m not trying to be hyperbolic, but if my choice was:

    1. No Internet in Scott’s idyllic childhood.

    2. Somalia with 16 hours of smartphone or 8 hours VR rig a day.

    I’d refer to Scott’s childhood the same way we refer to polio, Krugman, and cavemen.

    Scott, get over it, NOTHING invented in your formative years matters. Your grandkids will judge you in ways that are totally unfair compared to the latitude you gave your own grandparents. To secure their love, you need to pioneer the macro of Virtual Reality.

    Also, give them candy, let them drive your scooter, and tell them video proof (smartphones vs memories) of when their parents were bad.

  2. Gravatar of Lorenzo from Oz Lorenzo from Oz
    5. June 2014 at 21:20

    Then there is the interesting logic of: the billions and billions of dollars spent on anti-poverty programs over the past 30 years have not shifted the poverty rate, so clearly we should spend even more!

    It provides a perfect illustration of the principle that liberals think conservatives are evil and conservatives think liberals are stupid. Conservatives are evil because they don’t think spending yet more on poverty is going to work when it “hasn’t” in the past, and liberals are stupid because they just want to have even more of what “hasn’t” worked.

    Except, of course, they are both wrong, because the US has proved to be rather good at poverty reduction. But more via ensuring more money goes directly to low income working folks than by straining expenditure through government action.

  3. Gravatar of Rajat Rajat
    5. June 2014 at 21:22

    This probably sounds extremely naive then, but that series of The Wire set in the Baltimore school system in the mid-2000s made that school system seem much less well resourced than the picture of NYC above.

  4. Gravatar of Vivian Darkbloom Vivian Darkbloom
    5. June 2014 at 22:38

    I wonder if someone could explain this paragraph of Irwin’s blog post on poverty:

    “The researchers at E.P.I. also looked at demographic factors that contribute to poverty, including race, education levels and changes in family structure (such as the number of one-parent versus two-parent households). This look at the data also shows rising inequality as the biggest factor in contributing to the poverty rate, dwarfing those other shifts.”

  5. Gravatar of Saturos Saturos
    6. June 2014 at 01:46

    Morgan is exaggerating, of course, but not that much.

  6. Gravatar of Luis Pedro Coelho Luis Pedro Coelho
    6. June 2014 at 02:04

    Why was it sarcasm?

    *

    The Eurostat reports after-tax poverty numbers as their headline numbers. I don’t know why the US insists on the less useful pre-tax values (structural leftism must be part of it, but the stats office should be a bit better than that).

    On the other hand, the Eurostat use a per-state relative definition of poverty, so that Luxembourg has poor people who would make more than the median almost everywhere else [the threshold there for "at risk of poverty" is over 1400euros/month!]. They also avoid reporting EU-wide inequality statistics (I think The Economist did the math and reported it would be an African-dictatorship level of inequality).

  7. Gravatar of Mike Sax Mike Sax
    6. June 2014 at 02:41

    “Inequality is a problem, but it should be far down on our list—well below the arrest of 800,000 people last year for marijuana possession, or mass unemployment, or global warming.”

    So because you say it’s way down on the list but still a problem that means what exactly? We can talk about about once a year but not do anything about it?

    As for these other things that allegedly make it unimportant, thanks to your GOP nothing will be done about them either.

  8. Gravatar of Mike Sax Mike Sax
    6. June 2014 at 02:43

    Hey Morgan you do know you can’t eat smartphones right? Is it that you don’t think there are kids in America who don’t get enough to eat?

  9. Gravatar of Mike Sax Mike Sax
    6. June 2014 at 02:44

    I guess I’d find Scott’s claim that inequality is way down on the list more convincing if it came from one of these people who are still living in poverty today in American, smart phones or no.

  10. Gravatar of Brian Donohue Brian Donohue
    6. June 2014 at 04:04

    I’m with Luis: why is that sarcasm? At some price like $20,000 per pupil, someone is gonna come along with a better way.

  11. Gravatar of ssumner ssumner
    6. June 2014 at 04:53

    Morgan, I should have had a picture of a phone booth for 1965.

    Lorenzo, Good point.

    Rajat, I never saw that series.

    Vivian, The problem there is that they use income to measure poverty, not consumption.

    Luis, Yes, I’ve often made that point about EU-wide inequality. Compare the Roma living in Hungary or Slovakia to the people in Luxembourg. Europe has plenty of inequality. When I travel to Europe I see more beggars than in the US.

    Luis and Brian, I’m all for vouchers–let the market decide. I’d say $15,000/pupil would be plenty high for NYC. Take the rest of the money and rebuild the subways and airports.

    Mike, Don’t you mean “your GOP”? It’s not my party.

  12. Gravatar of benjamin cole benjamin cole
    6. June 2014 at 05:48

    Well…I think residents in desirable cities have seen changes in their living standards…but maybe not clearly higher. House prices in a L.A., NYC or SF have risen so much, and other costs, that I think the two-income couple is the stereotype, working 100 hours a week, to replace the dad at 40 hours of the 1960s. FICA taxes are way up, the sales tax has gone from under 4 percent to more than 8.
    Is that a “higher” standard of living?
    Smog is a lot better…

  13. Gravatar of benjamin cole benjamin cole
    6. June 2014 at 05:54

    Lorenzo—
    Agreed…but do not forget, we spend $1 trillion a year on national defense in the USA (DoD, VA, DHS, black budget) and we are never safe…or that what they say…

  14. Gravatar of Floccina Floccina
    6. June 2014 at 06:19

    I my observation what we call poverty in the USA today is not so much a lack of things but sloppiness and having to live in close proximity to people who tend to violence and theft (often associated with too much use of alcohol and recreational drugs and the illegality of drugs). It might be that best things we can do for the lowest earners in the USA is to post more and better police where they live.

    More Police, Less Crime by Alex Tabarrok

    As for the homeless many are mentally ill and the most popular major in college is psychology but we make the graduates useless by not allowing them to prescribe meds. (Of course if I had my way only antibiotics would require a prescription).

    We could also ease up on zoning and slow growth policies. After all people have to live somewhere.

    Government is crazy because it is run by voters who are rationally ignorant of what it should really do.

  15. Gravatar of Floccina Floccina
    6. June 2014 at 06:28

    BTW I think that almost everyone would agree that the 1st job of Government is to suppress violence (from within and from outside the nation). The Governments of the USA (fed state and local) do a very bad job of this poor neighborhoods. IMHO they should focus on that before they move on to tackling all of the other stuff!

  16. Gravatar of Floccina Floccina
    6. June 2014 at 06:30

    Proverbs 21:9 Better to live on a corner of the roof than share a house with a quarrelsome wife.

    Modified for todays conversation:

    Better to live on a corner of the roof than in constant danger.

  17. Gravatar of Major-Freedom Major-Freedom
    6. June 2014 at 07:26

    Morgan is right about the pictures.

    It is also easy to cherry pick a picture of a nicer school from the 1960s and a worse picture from the today.

    Look at the state of this New Jersey school from 2013:

    http://www.huffingtonpost.com/2013/10/31/new-jersey-schools-disrepair_n_4178348.html

    Now Google “nice school classroom 1960s”.

    This post is a good example of how not to do research.

  18. Gravatar of Vivian Darkbloom Vivian Darkbloom
    6. June 2014 at 07:40

    “Vivian, The problem there is that they use income to measure poverty, not consumption.”

    I understand that, but even assuming that income is a proper measure of poverty, this doesn’t make a lot of sense to me.

    The idea that is being expressed here is that inequality is the biggest factor contributing to poverty rates. As I understand it, even poverty as measured by income it is not a relative measure. It is not inconsistent to find that inequality has increased and poverty has decreased, even by an income standard. The unstated assumption here seems to be that inequality *causes* poverty, but the case has not been made. I could more plausibly turn causation around and state that “poverty causes inequality” but that doesn’t help us understand the phenomenon of poverty very much.

    Once again, the concept of causation seems little understood here.

  19. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    6. June 2014 at 07:54

    I loved that line accompanying the Times phote, ‘After initial gains….’

    What actually happened was that the reduction in poverty was the continuation of a trend from the end of WWII through the 60s. The War on Poverty, announced in 1964, had nothing to do with those ‘initial gains’.

    In fact, the positive trend ends about the time the WoP would have been implemented.

  20. Gravatar of Chun Chun
    6. June 2014 at 07:59

    The other day, Thomas Piketty said in an interview with CNBC that low growth of the economy has worsened inequality. I got confused. Is he actually blaming inequality or slow economic growth? I think inequality can be worse and more challenging in the future if the economy keeps growing slowly. Probably not the other way. I guess policy makers better focus on growth so that they will be more capable of solving inequality problem if the society chooses to do so. I have no gut to say we should leave everything to market although I believe market has done better job in distributing wealth and income than government by and large.

  21. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    6. June 2014 at 08:14

    ‘Hey Morgan you do know you can’t eat smartphones right?’

    Two words; opportunity cost.

  22. Gravatar of mikef mikef
    6. June 2014 at 09:03

    Pick your favorite George Orwell quote….

    “He who controls the past controls the future. He who controls the present controls the past.”

    “In a time of deceit telling the truth is a revolutionary act.”

    “The most effective way to destroy people is to deny and obliterate their own understanding of their history.”

    Krugman wants to rewrite history…the country was on the road to Nirvana until the Reagan came along….you just need to convince people too young to know otherwise..

  23. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    6. June 2014 at 10:25

    Looks like Scott has another fan;

    http://www.edwardconard.com/scott-sumner-makes-a-noteworthy-point-about-taxes/

    Here’s Conard (and Megan McArdle) discussing Piketty;

    http://www.edwardconard.com/ed-conard-reviews-pikettys-capital-in-the-21st-century-and-its-critics-on-bloomberg-tvs-in-the-loop-with-betty-liu/

  24. Gravatar of Don Don
    6. June 2014 at 10:53

    The poverty chart is great. Three cheers for capitalism that creates productivity that allows for all that poverty improvement.

    I have not read the Piketty book either. But from what I’ve seen his data ignores taxes and uses inflation measures that exaggerate inequality. Same as the blue line makes things look worse than they really are.

  25. Gravatar of Morgan Warstler Morgan Warstler
    6. June 2014 at 12:52

    A smartphone is $40 retail. It will soon be $10.

    With it, everyone in Somolia / Chicago / China can use GICYB app to earn their GI, and then buy food to eat.

    And Sax, we don’t have starving people here. We might have hungry people, but if you are hungry on a 4K calorie a day diet, it’s not hunger.

  26. Gravatar of Jim Glass Jim Glass
    6. June 2014 at 13:19

    Life expectancy for the average American is up 8 years in the last 40 (one year for every five)… and up 11 years for African Americans (one year for every four!).

    And healthy-quality life expectancy is up more than that.

    What is a year of life worth? Should that amount be counted when measuring changes in welfare?

    I don’t see this mentioned very often.

  27. Gravatar of Carl Carl
    6. June 2014 at 13:43

    Scott, why do you consider wealth inequality to be a problem? You seem to suggest it is a problem in and of itself, which confuses me. At any given point in human history there has been wealth inequality of a greater or lesser extent. The idea that everyone could have a precisely equal share of wealth is ridiculous. Within 24 hours of an equal distribution (presumably by an egalitarian total state) there would be winners and losers – the return of inequality.

    So, it’s not actually inequality which you oppose but an unspecified degree of inequality. Can this be expressed in a number, or do we have to guess? Why is inequality o.k until it reaches an arbitrary point? When do other people obtain so much wealth that it turns out they don’t actually own their wealth but it belongs to the USGOV?

    I could understand criticism of inequality based on say, ill-gotten gains of the relatively wealthy, but that’s not an argument you offer.

    This is the problem with looking at the world through the lens of “social problems”. They are always self-fulfilling. If enough people say they are psychologically affected by other people’s wealth, then hey! it’s a “social problem” needing urgent fixing.

  28. Gravatar of Steve Steve
    6. June 2014 at 15:54

    “well below the arrest of 800,000 people last year for marijuana possession, or mass unemployment, or global warming.”

    I want to know where the “science denier” catcalls are now that Barack Obama is claiming the CO2 causes asthma, and Gina McCarthy is claiming that global warming causes cold winters.

    These are both Six Pinocchio assertions. So when is the media going to call out the “science denial”?

  29. Gravatar of andy weintraub andy weintraub
    6. June 2014 at 17:00

    $80,000 for teaching five kids at home may be sarcastic,
    But a $19,000 per year voucher would be fantastic!

  30. Gravatar of ssumner ssumner
    6. June 2014 at 18:23

    Patrick, Yikes, my spelling is bad in that paragraph he quoted.

  31. Gravatar of TallDave TallDave
    6. June 2014 at 20:21

    Obvious and yet so often overlooked.

    BTW I think this says interesting things about minimum wage comparisons.

  32. Gravatar of Jim Ancona Jim Ancona
    7. June 2014 at 16:11

    Philip Greenspun has a great post on this topic: http://blogs.law.harvard.edu/philg/2014/06/07/keynes-predicted-everything-except-how-greedy-people-are/

  33. Gravatar of Lorenzo from Oz Lorenzo from Oz
    7. June 2014 at 16:21

    Ben: possibly national security is more about dynamic interactions than poverty reduction is. Or possibly not. :)

  34. Gravatar of ssumner ssumner
    8. June 2014 at 05:11

    Jim, Great post.

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