Lion of the Blogosphere

GMU libertarian economist type in the WSJ

One of the George Mason University (bogus third-tier commuter state school supported by tax dollars) libertarian economist types somehow managed to bag a Wall Street Journal editorial in which he says that the middle class has it great because they have so much awesome technology that the middle class didn’t have fifty years ago, and they should stop whining about how the top X% is so many times wealthier than them.

Written by Lion of the Blogosphere

January 25, 2013 at 7:31 AM

Posted in Economics

36 Responses

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  1. Apparently, they didn’t see this post by Razib Khan:

    What does this mean? Globally it means great gains in median wealth. In the United States though it may mean the shift away from the ideal and reality of a broad middle class society. Because of economic productivity driven by technology the bottom 75-90% of the American population will feel minimal material want. There will be food on the table and consumer gadgets galore. But they will lack the markers of relative affluence. For example, I see no prospect that air travel will become cheaper in the near future. So fewer and fewer Americans may have the means or inclination to travel abroad. In some ways this is a back to the past scenario, where the few controlled the levers of society, and the many were powerless. On the other hand there is a contrast, insofar as absolute deprivation will not be the norm.

    JayMan

    January 25, 2013 at 9:45 AM

  2. GMU is an example of a school that offers fine “bang for the buck” if you pay in-state tuition and don’t care about prestige. You can do a lot worse in the DC area – especially in DC itself, where there are third-tier schools that are also hugely expensive, like American and George Washington.

    As for the article itself, I am still scratching my head over the argument that the influx of immigrants is somehow not a bad thing even though it has driven down wages. Ah well, it is the WSJ after all.

    Tarl

    January 25, 2013 at 10:00 AM

    • GWU and American are not considered third tier by hiring managers in DC. They definitely rank well above MAson, unless you’re trying to work at Cato but who on earth would want to do that? GWU’s plan to rebrand itself as an almost-ivy by massively raising tuition actually worked kind of well.

      Source: prestigious dc suburb resident and one time Cato worker

      Gap year

      January 26, 2013 at 7:27 AM

  3. Wasn’t Francis Fukuyama a GMU professor during some of his peak-celebrity years?

    Fiddlesticks

    January 25, 2013 at 10:18 AM

  4. Is this some sort of veiled dig at Tyler Cowen?

    Also, the fact that most of GMU’s students aren’t too bright doesn’t necessarily mean that all of its professors are sub-par.

    Ian

    January 25, 2013 at 10:22 AM

  5. Economists (and libertarians to some extent) seem completely blind to status signaling. Maybe because so many of them are on the autistic spectrum. Relative wealth is more important to most people than objective measures of wealth. This is especially true of the last 50 years, when technological improvement has been fairly marginal and mostly focused on improvements in how we are entertained rather than anything of substance. Middle class people ate just fine, had perfectly good houses, had decent transportation and enjoyed long life expectancies in 1955.

    Peter the Shark

    January 25, 2013 at 11:40 AM

    • It’s not that economists are blind to relative wealth, it’s that the import placed on relative wealth has nothing to do with economics. It’s a psychological reaction to knowing someone somewhere has more toys than you. Measuring the jealousy of the unthinking masses because the top %1 are even more rich than before is irrelevant and subjective. What isn’t subjective is that those same mouth-breathers have access to technology and toys unheard of a generation ago. The standard of living continues to improve, and it doesn’t matter (except to women and other status seekers) how wide the gap is between the very wealthy and the merely wealthy.

      There’s only one solution to wealth inequality, and it would look like North Korea.

      Harry Suit

      January 25, 2013 at 1:28 PM

      • “Standard of living” is extremely subjective and hard to prove one way or the other. If what people WANT is status and not technology and toys, and they have less status, and if you evaluate “standard of living” based on people getting what they want…well you get the picture.

        Lion of the Blogosphere

        January 25, 2013 at 1:38 PM

      • “There’s only one solution to wealth inequality, and it would look like North Korea.”

        Thats a really breathtakingly ignorant comment. There are plenty of societies with less inequality and higher mean (but especially median) standards of living than the United States.

        “It’s not that economists are blind to relative wealth, it’s that the import placed on relative wealth has nothing to do with economics. ”

        How wealth is distributed and used is a big part of macroeconomics. Supply side economics is all about telling us that the best thing for the economy is putting money into the hands of the wealthy and incentivising them to invest it. Real economics is all about supply and demand and the distribution of wealth matters there too.

        None

        January 25, 2013 at 3:29 PM

      • It appears I cannot directly reply to Lion’s comments, but this is what I intend (I’m not talking to myself).

        Yes, you can define ‘standard of living’ to be completely subjective and based on a internal states (my perceived status), but then you are intentionally making it a non-scientific metric. So why should economists worry about it?

        Better to use something that can be actually measured, like level of technology, life expectancy and other things that fit on a chart and can be tracked. Not “how do you feel knowing that Bill Gates can buy your house with the interest his money makes in 1 hour?”. Jealousy isn’t really a productive foundation for advocating an economic or political system.

        Harry Suit

        January 25, 2013 at 4:36 PM

      • “Better to use something that can be actually measured,”

        But of the the things that can be measured you are SUBJECTIVELY selecting them and assigning weights to them. And I hate to break it to you but asking someone how they feel and recording their response is a form of measurement that fits on a chart and can be tracked. It does have more subjectivity than something like life expectancy, but even statistics like that rest on disputed assumptions such as whether to collect data in a way that reflects miscarriages and abortions.

        “Jealousy isn’t really a productive foundation for advocating an economic or political system.”

        Says who? If we let people argue that greed is a foundation for a system then it can’t be dismissed out of hand that jealousy is.

        Bill Gates is a monopolist who by way of luck and his own ruthlessness effectively captured as much wealth as possible generated by a computer revolution that would have happened with or without him. Hes hardly an example of why it is necessary to let people accrue such gigantic fortunes.

        None

        January 25, 2013 at 6:33 PM

      • “Jealousy isn’t really a productive foundation for advocating an economic or political system.”

        I completely agree. If I feel bad that Bill Gates has more money than me, than I have some growing up to do. I don’t have any business pointing a gun at him and telling him to hand over half his money, or voting for a politician who will do that for me.

        John

        January 25, 2013 at 8:38 PM

      • “There’s only one solution to wealth inequality, and it would look like North Korea.”

        To erase inequality you’d have to go further. N Korea is a very unequal society. Maybe you’d have to end up with Norway. What a f****** dump!

        Tupor Mundi

        January 25, 2013 at 9:47 PM

      • That’s ridiculous. Flat out stupid. Wealth inequality in and of itself is not a problem But there are problems that come from it and those are easily solvable without looking like North Korea. And it does matter how wide he gap is between the rich and he middle class, else they stop being a middle

        Gap year

        January 26, 2013 at 7:33 AM

  6. Economists are one of the few groups of people to whom the wisdom of crowds phenomenon doesn’t apply.

    ASF

    January 25, 2013 at 12:29 PM

  7. Thanks for calling out GMU. I tried to transfer there from community college, but they got all uppity and made up some excuse to not let me transfer. Of course, now I go to what was formerly a catholic girls school but thanks to government largesse (student loans) has become a commuter school full of non-Asian minorities and proles.

    Monroe Ficus

    January 25, 2013 at 2:11 PM

  8. The arguments he makes stand. Putting it more succinctly, the wages of whites are increasing, the wages of blacks are increasing, and the wages of Hispanics are increasing. But because blacks and hispanics make less than whites, the change in demographics from whites to blacks and hispanics makes it appear that wages are stagnant.

    Buzzcut

    January 25, 2013 at 2:27 PM

    • True. If everyone’s wages double, so will the gaps between classes.

      steve

      January 25, 2013 at 5:45 PM

    • But because blacks and hispanics make less than whites, the change in demographics from whites to blacks and hispanics makes it appear that wages are stagnant.

      Blacks have their income inflated by government jobs and EEOC affirmative action mandates imposed on the private sector. The black middle class would implode without those policies propping them up because the blacks are, on average, unemployable due to low IQ and behavioral problems. Hispanics may more room for income growth because many of them are illegal immigrants or unskilled legal immigrants. But they’re income potential will be restrained because of low intelligence.

      Beyond income constraints, the Hispanic and black population’s have lower standards of living because they make their neighborhoods unlivable because of genetic dispositions that make them incompatible with Western civilization, traits such as propensity to violence, crime, low future time orientation, drug usage, early sexual activity, family breakdown, dropping out of high school, and low civic mindedness.

      The Undiscovered Jew

      January 25, 2013 at 10:12 PM

  9. There’s another libertarian economist/blogger who has made this argument for years (drawing a blank on his name right now). They focus on gadgets but forget that increases in health care, housing, and education costs (direct and through taxes) have dwarfed savings from cheaper gadgets for the typical worker. Which is worth thinking about.

    Stagnating median wages wouldn’t be so bad if housing, medical, and education costs weren’t continually inflated by government policies.

    DaveinHackensack

    January 25, 2013 at 6:23 PM

    • Remembered that economist’s name: Mark Perry. Prof at a school in Michigan, I think.

      DaveinHackensack

      January 26, 2013 at 8:25 PM

  10. Which is more sick-making, libertarian economics professors or professors of literary criticism? Both are out of touch reality, but the libertarian profs are bottoms for businessmens tops.

    Tupor Mundi

    January 25, 2013 at 9:36 PM

  11. “third tier commuter state school”. Harsh, and with respect to GMU, untrue. First off, in today’s U.S., there are no first-tier non-technical schools (in the last 40 years, as far as I know, exactly zero first-rate classicists, exactly zero first rate novelists, and exactly zero first rate composers have come from the “top tier” of HYPS). My guess is a really talented nonmathophile kid would just as likely go to GMU as to any other school. Unless he or she is a fearful and status mongering individual who obsesses over meeting and greeting with the “elite”. In which case you should sympathize with him or her, without being so critical. Also, you are totally right that the “gadgets are better now” schtick is ridiculous. It is amoral , judgmentally and absurdly hierarchical , unartistic ,
    ahistorical , non-empathetic , and misinformed , and for all these reasons the “gadgets are better now” schtick is perfect for the prochoice, proprofit. pro-elite, where is the check for my think tank, maximizers at WSJ on its worst days. On the other hand, WSJ does have some good days ….

    stephen c

    January 25, 2013 at 10:46 PM

    • You’ve discovered that the elite and their butt boys aren’t the smartest. But they encourage the idea that they are.

      Tupor Mundi

      January 26, 2013 at 12:08 AM

  12. What sucks about the present era is the abundance of ugly cheap crap. Yeah, many people afford a bunch of crap from Wal Mart and the like, but this doesn’t take away from the fact that income quartiles have been diverging exponentially for decades now. The level of prosperity the top quartile can experience versus the bottom quartile is much greater. Yes, poor folks can buy tons of cheap foods laden with all sorts of toxic chemicals that will make them sick, but they can scarcely afford organic and healthier foods. Poor folks can furnish their homes cheaply with Ikea crap, but they can’t afford long lasting quality furniture.

    bobo

    January 26, 2013 at 6:39 AM

  13. I think it’s highly debatable that health care quality for the average worker has improved since 1955. And especially debatable relative to the price increase. One hugely important factor in health care that gets totally overlooked now is the patient experience, which now involves a ton of nonwhites at every level including the physicians. My ER doc in China spoke better English than many doctors I’ve been treated by here in the states. From the patient pov receiving healthcare has become much more bureaucratic, and the bureaucrats, doctors assistants, staff, etc are mostly nonwhite, which makes for a miserable experience. This plus the massive increase in cost cancels out a lot of the “improvements” which are themselves dubious. I’m not an expert and I may well be wrong on this, but a lot other improvements seem like gadgetry that makes things more cost efficient for the provider, not necessarily better for the actual patient. That and improvements in treating diseases like cancer which were for some reason (GMO foods? ???) weren’t nearly as widespread in 1955.

    Gap year

    January 26, 2013 at 7:50 AM

    • Health care technology has certainly improved since 1955. But service everywhere is indeed poorer because of rude non-white service workers. Hispanic women service workers are unfriendly and surprisingly openly contemptuous of their customers. Whites are inherently more pleasant to socially interact with and more non-whites means worse social interactions.

      However I thought it was easier to avoid non-white medical personnel if you don’t have Medicaid and can choose your doctor?

      The Undiscovered Jew

      January 26, 2013 at 11:48 AM

      • There is “choosing your doctor” and then there is choosing your doctor. Most of us regular white people with crappy employer health insurance plans that cost way too much are very limited in our “choices”.

        Gap year

        January 26, 2013 at 1:55 PM

      • Health care technology has seemingly improved a lot, but oddly we don’t seem to have much to show for it. Average life expectancy has increased by about 9 years since 1955 from 69 to 78. Considering the increased costs, bureaucracy and reduced service that doesn’t seem like a huge improvemen. And Almost all of the improvement is probably not due to medical care per se, but to other factors such as far fewer smokers, cleaner air, fewer men working in hazardous occupations, polio vaccines, less lead, and other environmental factors. It is not clear to me doctors are doing a significantly better job in treating sick people. Or maybe the real truth is that the average young/middle aged person really just doesn’t need that much health care. Most of the improvement in health care is being enjoyed by the over 65 crowd, but the rest of us are paying for it.

        Peter the Shark

        January 26, 2013 at 5:26 PM

      • And the techno advances of medicine aren’t its cost driver. 75% of health care expense is in labor. But that includes all the insurance people, hospital administrators, and the people doctors hire to deal with the insurance people. US healthcare is a clear example of the market sucking, but this is impossible as far as conservatives are concerned.

        Nicolai Yezhov

        January 26, 2013 at 8:04 PM

      • And the even bigger scandal is that even if you’ve got “good” private insurance in the US healthcare expenses can bankrupt you.

        Nicolai Yezhov

        January 26, 2013 at 8:08 PM

      • And even Asians are rude in comparison to whites. And E Europeans and the French are rude in comparison to white Americans. My guess: polite servitors is a white Angloshpere thing. It’s culture.

        Nicolai Yezhov

        January 26, 2013 at 8:37 PM

  14. This talk about relative wealth not being the proper measure of economic wealth is nonsense.

    Consider arguably the most important measure of all: what does it cost you to duplicate the lifestyle of your parents? Presumably, you had a mother and father who lived together in an intact household. Said mother and father lived in a regular three or more bedroom house with you and any number of siblings. What did it cost them to have this lifestyle? What would it cost you to have a wife, one or more kids, in a three bedroom house in a decent neighborhood that is not a training ground for the state or federal penitentiary?

    I think the answer i clear. There is a massive drop in the standard of living that technical increases in gadgetry does not compensate.

    map

    January 26, 2013 at 1:41 PM

    • My mother grew up “poor” she said, but she ate better than middle class people can afford today. Real food was cheaper and her mother cooked. But her parents never owned a house or car.

      Nicolai Yezhov

      January 26, 2013 at 8:07 PM

  15. “Research Says: Studying Economics Turns You Into a Liar”

    “So there you have it: Given a harmless chance to make a quick euro by telling a white lie, budding economists and corporate executives were much more likely to do it than their peers. Classics and biology lovers, on the other hand, seemed more likely to tell the truth for its own sake. ”

    http://www.theatlantic.com/business/archive/2012/12/research-says-studying-economics-turns-you-into-a-liar/266423/

    bobo

    January 27, 2013 at 9:07 AM


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