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May 25, 2022
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The American Dream Isn't Dead

The Biden campaign deserves praise for introducing, at the Democratic National Convention, something we've not seen a lot of lately-smiles. They've showcased grins and joyful, dancing eyes on the faces of all sorts of Americans. Sure, it's corny. Yes, it is a little manipulative. I don't care. I almost want to shout, \”That! I'll vote for that.\” Enough of snarls, insults, denigration, and lies. Please just lift this pall of poisonous hatred. That's 80 percent of what I want.

Of course, we didn't arrive at this moment of bitter polarization overnight, and that we won't be able to transcend it with one election. But the Biden team seems to be betting that many of us are yearning for a giant step toward decency.

As much as I really miss national reconciliation and the pacification in our politics, I'm worried about something else-the flip side of polarization. As shrill and vicious as the discourse has become in recent years, we are seeing a curious consensus emerging. And this new consensus is neither accurate nor healthy.

On both left and the right, you discover striking agreement that the past several decades happen to be a time of economic decline. Our economy, they are saying, is broken. \”The American Dream,\” says Tucker Carlson of Fox News, \”is dead.\” We've been told by Senators Elizabeth Warren and Bernie Sanders on the left, and by Donald Trump and Sen. Josh Hawley around the right, that the middle class is being \”hollowed out,\” that the wealth gains of recent years have gone entirely to the peak one percent of earners, that real wages for that middle class have stagnated, which the \”game is rigged.\”

Warren blames Washington, D.C., for that \”plight\” of the middle class. Sanders rails against millionaires and billionaires, constantly asserting that all of the gains of the past several decades have accrued simply to them, leaving everyone else behind. Hawley often sounds as if he's cribbing from both of them. \”Elites,\” he charged, have conspired with \”multinational corporations\” to \”hollow out the middle class.\” Using a phrase redolent of communist propagandists during the Cold War, Hawley thundered that it was \”no coincidence\” that we were experiencing \”the breakdown of community\” and the \”rise of oligarchy.\” It was a plan by \”internationalists\” who've \”embroiled America in one foreign war after another- sent American production overseas, compromised American supply chains, and price American jobs, all while enriching Communist China.\” Sen. Marco Rubio has been sounding similar notes, suggesting that capitalism isn't all it's cracked as much as be. \”What the markets determine,\” he said, \”may not be best for America.\”

Is the center class in trouble? Only if you think it's bad news that since 1967, more Americans have joined the upper middle class. In a study published by the Brookings Institution, Stephen Rose found that the number of Americans in the upper middle-class increased from 6 percent in 1967 to 33 percent in 2021. Among African-Americans, the share jumped from 1 percent to 14 percent over the same period.

Michael Strain's new book, The American Dream isn't Dead is chock full of myth-busting statistics. Has the American middle class seen its wages stagnate for 30 years? No. Since 1990, the wages of typical workers have increased by 33 percent. Maybe that isn't enough, but it's not stagnation. And wages are only one form of compensation. As Strain notes, should you include taxes and government transfers to inflation-adjusted income, the median household saw its income increase by 44 percent since 1990.

What about rising inequality? Income numbers alone don't give the whole picture. Strain shows, again, that whenever you add taxes and transfers to income data, you find that inequality has actually decreased by 7 percent between 2007 and 2021.

Besides, there's something that cannot be captured by statistics. How can you measure the improvement in standard of living that drugs like Prilosec have delivered? People accustomed to undergo surgery and be sidelined for months with stomach ulcers. Now, most may be treatable with a 14-day dose available over-the-counter. Single and working mothers today hang out with their children than stay-at-home mothers were able to in 1965. And more than 90 percent of homes have ac today compared with 60 percent in 1980.

There's another fabulous resource for information on these matters: It's PolicyEd.org. There you can find a series of easy-to-follow videos by economist Russ Roberts. He addresses the tricks numbers can enjoy. Over time, the share of households containing adults over 65 has steadily risen. Naturally, should you compare a sample of middle-class households from 1980 having a sample from 2021 and fail to account for the larger number of retirees, it's going to look like the middle class is losing ground. Even more critical is the fact that marriage and family patterns have changed dramatically over the past several decades. There are many more single adult households compared to times past. So \”household income\” can appear lower, when the income of individuals has actually increased. And echoing the point that Strain made, Roberts notes the issue of taking snapshots of \”quintiles\” in time rather than following actual individuals during the period of their careers. When you examine actual individuals, you discover that the poor and the middle class have seen respectable gains over the past several decades.

There's lots more where that came from. The children of people in the bottom quintile turn out to make twice as much, on average, his or her parents, while those born to oldsters in the highest quintile wound up with the same income as their parents. Upward mobility is real.

The populists of left and right have agreed on something that is just not so. The death of the American Dream has been vastly exaggerated. And also to the extent that they've persuaded large numbers of Americans that our problems are those of foreigners taking our jobs or greedy one percenters hoarding all the gains for themselves, we are diverted from addressing our true challenges. Male labor force participation has been dropping for many years. The nature of middle class jobs is changing, from industrial to service sector, posing retraining challenges for some. The way we price health care is opaque and frankly, borderline insane. Business startups have been in decline. Child poverty is booming, in part due to the rise of single-parent families. Our schools are inadequate, deaths of despair are on the rise, racial discrimination remains a problem, and our national debts are out of control.

And all of that antedates the spiraling health, governance, cultural, and racial challenges we must confront. We have enough on our national plate without talking ourselves right into a false belief in a broken economy that benefits just the rich.

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