But while Mitt Romney doesn’t back the Trump agenda, Robert Costa of The Washington Post reports that his check-in with close Romney advisers produced no evidence the former Massachusetts governor is heeding any of the calls for him to reconsider the race. Not yet, anyway.
“He’s very surprised that Jeb Bush hasn’t got a lot of traction,” said Costa. “He thought Jeb would be better at this point. He also thinks the race doesn’t really start until January and February.”
“In terms of ruling out a run, he’s not running. But he thinks the race begins in January and February, and he’s watching it very closely, and people just kept telling me the same thing — he’s keeping an eye on it.”
Look, I’m not a political expert or a pollster. I got pretty suckered during 2012 by the folks who thought the polls were systematically skewed and Romney had a better chance than he actually did. That experience left me pretty humble, and I’m out of the political prognostication business. I am not making any predictions or even guesses. Here, instead, are some thoughts.
I’ve liked Romney going back to 2008 when, in the presidential primaries, he wanted to talk about serious social security reform. It’s boring, but it’s important. That’s the kind of person I want to run the executive office: someone who has integrity, competence, and a willingness to focus on things that are boring but important. Candidates like Ron Paul or Bernie Sanders are fun, but are they actually good matches for the job description? Ideology has a very important role, but ideologues may do better work outside the Oval Office than from within it.
Romney is a lot more popular now than he was in 2008 or 2012. The question is: how much of that evaporates the moment he becomes a candidate again? As long as he’s on the outside he’s no threat to Democrats or competing Republicans. As soon as he’s a contender again, all his enemies come back to remind us why he’s terrible. I think at least some of the new popularity is permanent. Folks have seen another side of Romney[ref]Examples: the documentary Mitt and his charity boxing match with Evander Holyfield[/ref] and they won’t forget that. As NY Mag notes:
“When people were polling this stuff back in January, what was striking was not his popularity but the breadth of it,” says Stuart Stevens, Romney’s chief 2012 strategist. “Unlike a lot of candidates, his support wasn’t siloed. The non-tea-party folks liked him, and the tea-party folks liked him. It’s unique.”
But how much? I have no idea.
Then there’s the tactical question: you don’t just decide at the last minute to run a serious national campaign. You need a whole apparatus for that. Romney can’t summon one up out of thin air. But then, does he have to? The Romney apparatus is somewhat dismantled and distributed among other campaigns, but not entirely. NY Mag again:
Romney’s vast donor network is a coveted asset, and Romney’s finance wizard, Spencer Zwick, who raised $1 billion for him in 2012, remains unaffiliated with any campaign (Zwick now chairs the super-pac America Rising). “Mitt actually attracted new donor groups,” says the Romney veteran. “They’re in the Mormon community, the Bain Capital community, and the private-equity community. Most of them are not going to jump in for anyone else until they get guidance. Romney delivers them.” This is why six GOP presidential contenders went west to prospect for millions at Romney’s three-day Utah summit in June. “With Romney, it’s just so bizarre,” the veteran said, marveling at Romney’s power to organize a cattle call. “Imagine Bob Dole. He’s out of office and he says, ‘I want all my donors to come to some hard-to-reach place.’ That’s just never going to happen.”
Anybody else talking about getting into the race now would be a very, very long shot at best. But Romney? He might be an exception to that rule.
My dream scenario is that Romney gets more or less drafted to come in and take out Trump. Right now everyone else is either failing to make any headway (like Jeb Bush) or starting to pander to Trump supporters in the hopes of picking them up after someone else takes Trump out[ref]It may always be Trump that takes out Trump, of course, depending on just how high the tolerance of the GOP voter base is for his antics[/ref] (like Ted Cruze). Maybe it takes an outsider to come in an be the grown up. That’s a good role for Mitt. That’s a narrative he can sell. I hope he gets that chance.
Unless you’re living under a rock, you’ve heard of Kim Davis. She’s the county clerk in Kentucky who is still refusing to give out marriage licenses to same sex couples, despite losing various court battles and having her case rejected by the Supreme Court. She is currently facing contempt charges, but what you really know about Kim Davis from the news media is that she’s been married four times. The hypocrisy is delicious, and reporters cannot get enough of it. Here are a variety of tweets from professional journalists about the story:
Here’s the thing: it’s not unusual to have Christians guilty of hypocrisy. Christians are guilty of lots of things. They are, as a general rule, no better or worse than anybody else from any other faith tradition or none at all. And I don’t think it’s even necessarily out of bounds to comment on it. The glee with which the journalists are relishing in it is a little unseemly, but the fact itself is fair game, in my mind.[ref]And, while I’m at it, I don’t support Kim Davis’s position. I’ve seen someone make the analogy that you can cite religious pacifism as a reason to be exempt from the draft, but you can’t expect to join the military, become an officer, and then refuse to fight based on your religious beliefs. I’m not sure it’s quite as clear-cut in this case–giving out licenses to same-sex marriages wasn’t in the job description when Davis took her job–but all things considered I think the logic is that she isn’t actually marrying anyone, she is merely certifying that these people meet the legal requirements. Which, they do. So she should give out the licenses, even though I am also opposed to same-sex marriage.[/ref]
However, this is the one thing that these journalists aren’t telling you: Davis converted to Christianity about 4 years ago and all of the behavior they are ridiculing her for–all of the divorces and affairs–happened before that point. Since becoming a Christian, Davis has been married to one and only one person. Isn’t that fact also relevant? And yet it tends to get buried in these stories about her, if it is mentioned at all.
The article also makes the point that, in general, journalists don’t really have a clue about religion. And they don’t. It’s just another aspect of life in 21st century America. All the folks making the movies, deciding what news to cover (and how), and writing the books we read tend to come from a small class of people who don’t know the first thing about religion and yet–at the same time–have a visceral antipathy towards it and especially towards any forms of religion that bear even a passing resemblance to historical traditions. Perspectives like this one, therefore, are all too rare:
There is plenty of Christian hypocrisy out there, folks. And I don’t have a problem with fouls being called when they occur, even if I know the refs like one team more than the other. All I ask–and I don’t think it’s too much to ask–is to actually wait for a foul to occur before dishing out the penalties.
I came across a Real Clear Politics post the other day by Cathy Young: Mutiny at the Hugo Awards. It’s surprisingly fair coverage from a mainstream outlet, but I guess that makes sense since Young also writes for Reason.com. In any case, I was particularly interested when I got to these paragraphs:
Perhaps the real issue isn’t the quality of any specific work, or even the prevalence of “message fiction” in the genre; it’s that, as cautiously Puppy-sympathetic nonfiction writer and data scientist Nathaniel Givens has argued on his blog, “the message has never been so dogmatically uniform.” What’s more, Givens argues, the current crop of pro-“social justice” authors who dominate the field not only use their fiction as a vehicle for ideology but seek to enforce conformity throughout the fandom, posing a genuine threat to intellectual diversity. He points out that, by contrast, the Sad Puppies “went out of their way to put some authors on the slate who are liberal rather than conservative.”
Givens’s observations are echoed by Hoyt, who has written on her blog about the “state of fear” that has existed for a while in the speculative fiction community—the fear of being blacklisted for having the wrong politics. While Hoyt says that this fear has lost much of its grip now that independent publishing has allowed writers to make a living outside the “establishment” sci-fi presses, the elites still control recognition and legitimacy within the fandom. Hence, the Hugos rebellion.
So, that’s a cite in Real Clear Politics to go with the one in The New Republic on this issue. Pretty neat.[ref]The TNR reference was not quite as neat, since the article cherry picked from my analysis while rejecting most of my conclusions. Oh well. Still pretty neat.[/ref]
The whole post is definitely worth reading. It’s a good perspective, and she has some original–and very interesting–quotes from some of the main participants.
Image of the 9-11 attacks from space, taken by NASA. (Available from the Wikipedia entry on the 9-11 attacks.)
In the wake of another shooting of unarmed American servicemen, the Navy (according to NBC) “plans to station armed guards at all of its reserve centers across the country.” That might be a good idea, but it falls far short of what most Americans have been calling for as an apparently common-sense reaction to attacks on servicemen and women on their bases: let them carry guns. I mean, these guys are trained to handle firearms, right? What could be more obvious than giving a gun to a soldier or marine?
Yeah, it’s not actually that obvious. And it’s not just politics that are stopping that from happening:
Here’s an amazing number that I had never seen before: Since the beginning of the U.S. operation in Iraq [through May 2011], more than 90 U.S. military personnel have been killed there by negligent weapons discharges.
In the past 18 months, troops in Afghanistan have accidentally killed themselves or others at least six times and wounded nearly two dozen more troops through unsafe weapons handling, according to Army statistics released to Stars and Stripes.
There are other reasons for not issuing weapons to on-base personnel (the logistical headache is immense, especially when considering that bases have to get locked down whenever a weapon is misplaced), but the big one is the simple one: handing out guns is liable to end up killing more folks than the terrorist could accomplish.
Terrorist attacks are scary, but in many cases the irrational reaction of people to scary things is more dangerous than the thing that they are afraid of. Fear might not be the only thing we have to fear, but it’s definitely near the top of the list. Another example: more folks probably died in car crashes they took to avoid flying after 9-11 then actually died in the 9-11 attacks.
In the months after the 2001 terror attacks, passenger miles on the main US airlines fell by between 12% and 20%, while road use jumped. The change is widely believed to have been caused by concerned passengers opting to drive rather than fly. Travelling long distances by car is more dangerous than travelling the same distance by plane. Measuring the exact effect is complex because there is no way of knowing for sure what the trends in road travel would have been had 9/11 not happened. However, Professor Gerd Gigerenzer, a German academic specialising in risk, has estimated that an extra 1,595 Americans died in car accidents in the year after the attacks – indirect victims of the tragedy.
That was just the first 12 months after the attack. If the trend continued for another few years–even at a reduced rate–it could easily be the case that the number surpassed the 9/11 death toll.
As human beings we like to pretend that we don’t put a price tag on human life, but that’s not true. We do. All the time. We just don’t actually look at it. In my systems engineering courses, for example, we learned various ways to extrapolate a price value for a human life based on indirect decisions. Simplistic example: suppose there’s a dangerous portion of a highway with no physical barrier between opposing lanes, and every year 5 people die in accidents there. Installing a concrete barrier would lower that to 4 lives, and would cost $100,000. If the barrier doesn’t get installed then, willingly or not, we’re saying that a human life is worth less than $100,000 in this case.
Of course you can’t actually derive a “real” value of human life that way, but that’s actually one of the most interesting things: if you apply this kind of analysis across a wide range of examples–from road safety to asbestos removal–you will easily see that when the threat isn’t scary (as with traffic deaths) the value of human life is very low. But when it is scary–as with asbestos–we will often as a society decide to spend millions of dollars or more per life saved.
It’s not just about money, of course. I’m only using that as an example of the fact that–even when we don’t like to admit it–we have to make these kinds of trade-offs. They are unavoidable. This is why, every time I hear someone say something, “We have to do whatever it takes to save even one life,” I have to stifle an urge to smack them. Anyone saying that is a fool or a liar. In either case, the last person that should be in charge of deciding what we’re willing to spend to save a life is the kind of person who pretends we don’t have to make the decision at all.
It’s not just about money, by the way. There are other things at stake. How many of our civil liberties and our culture of openness have we already sacrificed in the name of preventing terrorist attacks? What are we getting for those sacrifices? Not much, most estimates seem to say, but the real answer is: no one knows. No one knows ’cause we’re not even supposed to ask the question. We’re not supposed to admit that there’s a tradeoff. That there’s a cost.
This kind of emotional decision-making is double-edged disaster. We spend billions on scary things that aren’t that dangerous, and then refuse to spend smaller sums of money on things that could save large numbers of lives. I was in Hungary for the last two weeks and, in trying to explain why most of America doesn’t have effective public transportation networks–I got to explaining our culture of cars. I pointed out that, because transportation to school and sporting events and other activities is so complicated and (time) expensive, we continue to let kids start driving at 16 in large part as a way to offload the burden on their parents. My Hungarian friend–where the minimum driving age is 18 and lots of people don’t get licenses until much later (if at all)–asked if the 16-year old drivers were good drivers. Of course they are not, I said. They have very little training, very little experience, and are dangerously immature. Doesn’t that result in danger? Well, yes it does. Off the top of my head, there are about 30,000 fatalities related to driving in the US every year. Of course, a lot of those don’t have anything to do with teenage drivers (drunk driving is a pretty huge portion of it), but there’s no doubt that thousands of kids are killed or seriously injured every single year. What would it cost to save them? Who knows. Where’s the rhetoric about, “If we can save even one life…”? Nowhere. Because it’s not scary.
I put a lot of emphasis–I’ve done it in this post and we do it in many of our blogs at Difficult Run–on the kind of quantitative analysis that you get from economics (my background) or engineering (Bryan’s) or business (Walker’s) or computer science (Ro’s). Sometimes I even go out of my way to take a swipe at the humanities–especially modern art and academia. But I understand very well that these are not fundamentally quantitative questions. Neither economics, nor engineering, nor business, nor computer science can answer questions about the tradeoffs we have to make between dollars or hours or civil liberties on the one hand and lives on the other. These are fundamentally philosophical and moral questions, and we have to seek philosophical and moral answers. And, like all philosophical and moral questions, they will probably never have a clear, objective, final answer.
But seeking those answers is worth it. It’s worth it from a practical standpoint because the kind of emotionally-driven policy that arises in the absence of clear-eyed analysis is Pareto inefficient. Sorry for the econ jargon, but it’s an important term. If a situation is Pareto efficient, it means that you can’t make one person better without taking from someone else. So Pareto efficiency isn’t necessarily a good place to be. It could be very unfair, for example. If you give $10 to Tom and $90 to Sue, that’s Pareto efficient, but it’s not fair. But the one thing that Pareto efficiency gets you is no waste. If you give $10 to Tom and $10 to Sue and then light the other $80 on fire, that’s Pareto inefficient. So Pareto efficiency shouldn’t be a final goal but it should be a bare minimum. And right now, there’s no doubt that our patchwork response to security is far, far from Pareto efficiency.
Simple example of Pareto efficiency from the Wikipedia page. All the red dots are Pareto efficient because there’s no waste: you’re getting all you can out of Item 1 and Item 2. The only way to get more of Item 1 in that case is to give up some of Item 2 (or vice versa). The gray dots are Pareto inefficient. You can get more if Item 1 without sacrificing Item 2 (or vice versa). If you imagine the two items are “Safety” and “Civil Liberties” you can see that picking which of the red points is difficult, but picking *ANY* of the gray points is insanity.
Seeking the answers is also worthwhile from a philosophical standpoint. Socrates said the unexamined life is not worth living. I believe that’s because if you don’t examine your life it’s not really your life. You’re just acting out the social conditioning you’ve been raised with. You’re not an independent agent in that case. You’re just a conduit through which cause and effect flow. Once you examine your life–once you adopt certain principles and attitudes and goals based on your own deliberation and values–you start to truly live. And this is true even if you don’t actually change very many of your decisions or actions. You might take a hard look and decide that the values and goals you ended up with from your parents and society are actually fairly reasonable and keep things more or less as-is, but–even in that case–there’s been a tremendously important shift because now they are your values and your goals.
So, when I write posts expressing cynicism about modern art or academic philosophy[ref]Like: Why I Don’t Trust Modern Art or Professional Philosophers[/ref], it’s not because I think that art or philosophy are dispensable. It’s because I think that they are indispensable, but that (1) the modern incarnations have often lost their way and become empty shells and (2) they become monstrous in the absence of a commitment to including hard data where applicable.
From my perspective, it doesn’t take a lot to remind an economist that art isn’t accounted for in the GDP figures. Physicists ignore air resistance in an awful lot of their models, but it’s not like they actually get confused and forget that it exists. Economists ignore lots of human foibles in their models for the same reason, and they are just as unlikely to somehow become confused and mistake the simplified models for the real thing. In fact, I would argue that very few people are more aware of human foibles than economists precisely because they are so routinely reminded of the incredible gap between their simple models and messy reality. Thus, we get books like Nudge or The Myth of the Rational Voter or Predictably Irrational: all investigations into how economic models of human nature fail written by economists.
On the other hand, I have routinely had to sit through painfully ignorant scientific or economic diatribes by humanities scholars who literally don’t have the first clue about what they are talking about. There’s a reason Marx is not taken seriously as an economist by economists and yet you will still find plenty of Marxists in English departments who either don’t know or don’t care to separate from his philosophical stances (which continue to be relevant and interesting) and his economic theories (which are about as relevant for modern economic policymaking as Copernicus’ model of the solar system is to getting an astronaut to the moon[ref]In case anyone is confused: Copernicus gets credit for putting the sun at the center of his model, which is good, but he also assumed the planetary orbits were circular. They are elliptical. So actually trying to plot out a trajectory based on his model would be extremely silly, even though he’s hugely important historically.[/ref].)
In simple terms: I know lots of economists and engineers and scientists who are conversant with, for example, pragmatism, but I don’t know of any humanities professors who could give you a cogent explanation of, say, marginalism.
Maybe that assessment is off base. It could be.
But the point–and this is true regardless of my perception of whether the humanites or the sciences are in deeper trouble today–is that we need an approach that embraces both and rejects fear-based decision making. We need folks to be conversant in the elementary basics of statistics and math and have an intuitive desire to base their analysis on hard data and then be willing to use that as the foundation for moral and philosophical arguments about how to set policy based on open-eyed analysis rather than emotionally-driven instinct.
Is that asking a lot? Maybe. But come on, people. How much time do we spend watching cat videos or reflexively sharing political memes that assume the other side is all composed of evil morons?
Today is the 10th anniversary of Hurricane Katrina‘s destructive collision with the Gulf Coast. “The surge and battering waves smashed into levees, which collapsed, causing extensive flooding throughout the New Orleans region. Ultimately, 80 percent of New Orleans and large portions of nearby parishes became flooded, and the floodwaters did not recede for weeks. The National Guard was called in to help with evacuations. Thousands sought refuge in the New Orleans Convention Center and the Superdome, which were overwhelmed. It was one of the largest displacements of a population since the Great Depression, according to the NOAA.” The federal government’s response became highly politicized due to its multiple day response and lack of preparation. What is often overlooked is the response from the private sector. A case in point is Walmart. Though often maligned as nothing more than a greedy corporation, the incentives and preparation of Walmart allowed it to respond quickly and effectively to the Katrina disaster. As we reflect on the lessons learned from that day 10 years ago, we should attempt to learn the right lessons. Economist Steven Horwitz provides some of those below.
There’s an oft-expressed view that getting all those people covered could actually save the health system money. The argument goes something like this: Once people have insurance, they’ll go to the doctor instead of an expensive emergency room. Or: Prevention costs far less than a serious illness down the road.
…This argument for the cost savings from universal health coverage makes some intuitive sense, but it’s wrong. There’s strong evidence from a variety of sources that people who have health insurance spend more on medical care than people who don’t. It also turns out that almost all preventive health care costs more than it saves.
So begins an informative New York Times article by Margot Sanger-Katz. She points out that the actuaries in 2014 “estimated that health spending that year jumped by 5.5 percent, a bigger rise than the country had experienced in five years. That’s actually not a huge increase by historical standards…But it still marks the end of an era of record-low spending growth in the system.”[ref]The author is careful to note, “Those facts don’t mean that giving people health insurance is a waste of money, since those dollars spent may improve their health and financial security. But there are only a few situations in which giving someone more health care will actually end up saving money.” People of good faith can argue over whether the increased costs are worth it.[/ref] There were three main reasons for this increase:
Aging of the population and the sickness that comes with age.
“[T]he improving economy, which will enable more people to afford medical care — or the time off from work it might take to attend to their health needs.”
Obamacare’s expansive coverage.
It’s the third point that Sanger-Katz spends the article explaining:
There’s evidence about the link between insurance status and health spending from many sources. A famous randomized study of health insurance, started in the 1970s by the RAND Corporation, was designed to answer this exact question. It found that the less expensive you made it for people to obtain medical care, the more of it they used. That follows the pattern for nearly every other good in the economy, including food, clothing and electronics. The cheaper they are for people, the more they are likely to buy.
That finding was echoed recently by researchers who conducted another randomized controlled trial — this one of uninsured low-income people in Oregon. Low-income Oregonians who wanted to sign up for the state’s Medicaid program were placed in a lottery. Only some got the insurance, but the researchers tracked both groups. In the first year, they found that the lottery entrants who were given Medicaid spent more on health care than those who remained uninsured.
This is virtually what Nathaniel laid out over two years ago in his comparison of health insurance to a hypothetical food insurance. This is because the situation is, as noted above, basic economics:
One of the reasons for the political popularity of price controls in general is that part of their costs are concealed…Price controls are therefore particularly appealing to those who do not think beyond stage one…Artificially lower prices, created by government order rather than by supply and demand, encourage more use of goods or services, while discouraging the production of those same goods and services. Increased consumption and reduced production means a shortage…Quality deterioration often accompanies reduced production…Quality declines because the incentives to maintaining quality are lessened by price control. Sellers in general maintain the quality of their products or services for fear of losing customers otherwise. But, when price controls create a…shortage-fear of losing customers is no longer a strong incentive.[ref]Thomas Sowell, Applied Economics: Thinking Beyond Stage One, Revised and Enlarged Edition (New York: Basic Books, 2009), 54-55.[/ref]
Here at Difficult Run, we just can’t get enough of the minimum wage. Yet, that seems to be because there is so much good stuff to post about it. The Economist, for example, has a recent article that looks at three different studies regarding the long-term effects of the minimum wage:
In the first Isaac Sorkin of the University of Michigan argues that firms may well substitute machines for people in response to minimum wages, but slowly…Mr Sorkin crunches the numbers, using a model of the American restaurant industry in which companies choose between employees and machines. He investigates the effect of a permanent (ie, inflation-linked) increase in the minimum wage and shows that the tiny short-run effects on employment normally seen are fully consistent with a long-run response over 100 times larger. The lack of evidence for a big impact on employment in the short term does not rule out a much larger long-term effect.
In a second paper, written with Daniel Aaronson of the Federal Reserve Bank of Chicago and Eric French of University College London, Mr Sorkin goes further, offering empirical evidence that higher minimum wages nudge firms away from people and towards machines. The authors look at the type of restaurants that close down and start up after a minimum-wage rise. An increase in the minimum wage seems to push some restaurants out of business. The eateries that replace them are more likely to be chains, which are more reliant on machines (and therefore offer fewer jobs) than the independent outlets they replace. This effect has not been picked up before because the restaurants which continue to operate do not change their employment levels, so the jobs total does not shift much in the short run.
The third cautionary paper is from Jonathan Meer of Texas A&M University and Jeremy West of the Massachusetts Institute of Technology…Their results suggest that a 10% increase in the minimum wage, made permanent by linking it to inflation, could cut job growth by 0.3 percentage points a year. Over a long period, this could amount to a very large difference indeed, though the authors stress that such long-run extrapolations are difficult given the limited experience of such permanent changes. Worryingly, the effects on jobs growth they see are concentrated among people under 25, and those without a degree. These are vulnerable groups who risk being locked out of the labour force for good.
I’ve never identified as a pacifist. However, I think this is due to my view of pacifism being tainted by the American expression of it. As economist Bryan Caplan explains,
I’m a pacifist, but I’ve never been intellectually impressed with the U.S. peace movement. The sound argument against war, in my view, combines (a) the common-sense moral view that, “You shouldn’t kill innocent people unless you know with high certainty that the long-run benefits heavily outweigh the short-run costs” with (b) the empirical factthat predictions about war’s long-run benefits are extremely inaccurate. U.S. peace activists’ typical arguments against war are both too weak and too strong: Too weak because they focus on the badness of particular leaders and regimes rather than the murderous essence of modern war, too strong because they make overconfident, overblown predictions about the long-run effects of wars they oppose. Worse still, U.S. peace activists have a ghastly tendency to side with despicable totalitariansand bloodthirsty nationalists.
Even more frustrating is the fact that “Democrats’ war policies were very similar so those of their Republican predecessors, but the antiwar movement…durably dissolved once the Democrats gained power.” All one has to look at is the data (drawn from a recent book by political scientist Michael Heaney and sociologist Fabio Rojas) on antiwar protest size, media coverage, and partisan breakdown:
The sad fact is “Democrats energized the antiwar movement, then dropped it as soon as their side regained power. “We observe demobilization not in response to a policy victory, but in response to a party victory.” Why? Because Democrats’ real target was not war, but Republicans…Though they’re too polite to come out and say it, Heaney and Rojas’ book shows that the good cause of peace was not merely ineptly defended, but insincerely defended. While the peace movement no doubt includes some honest-to-goodness pacifists, they’re honorable outliers. The peace movement was not about peace.”
Last month, I posted a few links on why today’s middle-class salary may actually be better than we often think. Harvard professor and president emeritus of the National Bureau of Economic Research Martin Feldstein adds more food-for-thought on the subject:
…[I]t is frequently said that the average household income has risen only slightly, or not at all, for the past few decades. Some US Census figures seem to support that conclusion. But more accurate government statistics imply that the real incomes of those at the middle of the income distribution have increased about 50% since 1980. And a more appropriate adjustment for changes in the cost of living implies a substantially greater gain.
The US Census Bureau estimates the money income that households receive from all sources and identifies the income level that divides the top and bottom halves of the distribution. This is the median household income. To compare median household incomes over time, the authorities divide these annual dollar values by the consumer price index to create annual real median household incomes. The resulting numbers imply that the cumulative increase from 1984 through 2013 was less than 10%, equivalent to less than 0.3% per year.
Any adult who was alive in the US during these three decades realizes that this number grossly understates the gains of the typical household. One indication that something is wrong with this figure is that the government also estimates that real hourly compensation of employees in the non-farm business sector rose 39% from 1985 to 2015.
The official Census estimate suffers from three important problems. For starters, it fails to recognize the changing composition of the population; the household of today is quite different from the household of 30 years ago. Moreover, the Census Bureau’s estimate of income is too narrow, given that middle-income families have received increasing government transfers while benefiting from lower income-tax rates. Finally, the price index used by the Census Bureau fails to capture the important contributions of new products and product improvements to Americans’ standard of living.
Greek states competed fiercely with one another, and with their imperial neighbors, notably Persia. Wars were frequent and bloody. But in the midst of conflict came new forms of social cooperation and a sustained era of rapid economic growth.
The total population of Greek speakers rose from some 330,000 persons in 1000 BCE to 8-10 million bythe fourth century BCE. In the same period, average per capita consumption appears to have roughly doubled across the Greek world, and it probably tripled in Athens, the most advanced and among the most democratic of the city-states. The aggregate growth rate was low compared to high-performing modern states, but the rate was blistering compared to other pre-modern civilizations…Trade in commodities (including slaves), manufactured goods, and luxury goods boomed within the Greek world and between the Greeks and their neighbors. Among the remarkable features of the ancient economy of democratic Athens was the relatively low level of income inequality. Athens was home to many foreign “guest workers” and Athenians employed large numbers of slaves. But even taking slaves and foreigners into account, the distribution of Athenian income was much less unequal than in most premodern societies. Athenian wages for non-skilled laborers were high—comparable to the wages being paid in the most advanced economy of early modern Europe, Holland during its seventeenth century Golden Age…As…economists have long pointed out, there is a strong correlation between relatively low inequality and robust and sustained economic growth.
The mounting evidence for the remarkably strong performance of the ancient Greek economy helps to explain what is sometimes called the “Greek Miracle”—the cultural explosion of Greek literature, visual and performing arts, and science that laid the foundations for Rome, the Renaissance, and the Enlightenment.
…So what made the impressive growth of the ancient Greek economy possible? The basic answer is good institutions.[ref]This notion of open institutions in ancient Greece reminds me of the work of economists Daron Acemoglu and James Robinson.[/ref] Greek city-states were governed by a range of regimes, but, by the fourth century BCE, the typical Greek city-state was, by world historical standards, very democratic. In Athens, and hundreds of other Greek states, most native adult males were participatory citizens, who set policy in citizen councils and assemblies, judged legal cases as jurors on people’s courts, and were elected or chosen by lot to serve as public officials.
Last month, I posted a few links on why today’s middle-class salary may actually be 