Drew Carey helps puts some perspective on the "Middle Class Squeeze."

 

Predictably, the video wasn't cheered in all quarters.  And many would argue that's it's income inequality that should really be addressed by government.

Radley Balko offered this response:   

Seems to be some animosity in the comments section about the Drew Carey video.

Look, the purpose of the video wasn’t to tell middle class people that they’re happy if they aren’t. It was to provide some economical and historical perspective to counter the constant class war message in the media that the middle class is “under attack.” It just isn’t so. Inequality may well be growing, and that may well contribute to the sentiment among many in the middle class that they’re being left behind. But they aren’t suffering, or on the verge of extinction. We’re all much, much better than we were a generation ago. We have more free time. We take more vacations. We have nicer things. We have less to worry about. This was the basis of the great work of Julian Simon

My friend Will Wilkinson’s work on happiness studies factors in to all of this. We’re hard-wired to be competitive, to want more than the next guy. Back on the grassy plains, the guy with the most stuff got to mate with the best-looking women, and had the most children. My reading of happiness scholarship is that generally speaking, the best predictor of happiness and contentment isn’t overall wealth, but being the biggest fish in your particular pond. We’re wired to measure our worth by looking at the people around us. So you’re better off having the nicest house on a middle-income block than the median house in a high-income neighborhood. That the last century of unprecedented prosperity hasn’t made us significantly happier isn’t terribly surprising. We’re constantly measuring ourselves in comparison to those around us, not to our parents or grandparents. And if everyone is getting better off, everyone is going to continue measuring their self-worth against everyone else. Someone is always going to have the best house on the block, someone is always going to have the second-best house, and someone is always going to have the worst house. So long as there are classes, there will always be class envy. That everyone is getting progressively better off can easily escape our notice.

 

...

The point is to get people to put aside class envy for a second, and appreciate that trade, markets, and capitalism are making us all better off, even it is making some “more better off” than others. It’s to counter the Lou Dobbses, Hillary Clintons, and Bill O’Reillys of the world, who want to in various capacities seal off borders, restrict trade, socialize medicine, and generally end the very policies that have made us so prosperous, healthy, and long-living. Yes, those policies may well make everyone marginally more equal, but they also slow overall progress, and stop the tide from rising.

Bubbles, foreclosures and other temporary market corrections notwithstanding, things are generally getting better for everyone. It’s important to recognize that, so we can continue the policies that got us here.

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Brendan....

I suck, apparently, and the internets. Can I get some help with that video? TIA.

…………

I am really bad with embedded videos

you just put a link to reason.tv in the meantime. Great video btw. Watched it when it came out. It's not surprising that many miss the point. Balko makes a great response.

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Not your fault

What ever editor you're using to compose the post thoughtfully translated all the bracket symbols into their html form (e.g., < became &lt;).

Come, my friends. 'Tis not too late to seek a newer world -- Tennyson

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Ahh...

I was switching back between "enable rich text" and "disable." Thanks for the help.

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Excellent video!

I love Drew Cary.  And this video is making the exact point I keep harping on about lowering the cost of living making people's lives better, see MissL I'm not the only one saying it.  You're busted.  :)

I'm the Bugs Bunny of Swords Crossed!
-4 Strongly Disagree - 0 Meh - Strongly Agree +4

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Carey is the man

He has a lot of videos over at reason.tv on a variety of topics. This latest one has been garnering some attention.

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Whatever!

Where's my boat?

Come, my friends. 'Tis not too late to seek a newer world -- Tennyson

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I think part of Carey's point is on that would be

to put your self back in the shoes of someone a generation ago....apples to apples.

Get the average square footage of the home, the average amenities...the whole nine yards....a real equal comparison...along with average income allocation and quanities purchased for such and such amounts.

I think people would be surprised as to what passed for middle class back then. It would seem quite meager by today's standards.

People tend to whitewash and romanticize about history.

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Yes I know, progress is a wonderful thing

But you live by the anecdote, you die by the anecdote -- plenty of people with middle class incomes don't spend lots of money on leisure items, vacations, or entertainment because they're paying off their house and car and college loans.

I was hoping the video would have discussed debt in a bit more detail too. People now are quicker to put stuff on plastic, where in the past they might have just gone without.

Come, my friends. 'Tis not too late to seek a newer world -- Tennyson

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Well ...

plenty of people with middle class incomes don't spend lots of money on
leisure items, vacations, or entertainment because they're paying off
their house and car and college loans.

To be fair, though, their houses are bigger with more amenities, their cars are fancier with tons of safety features, bells, and whistles, and they now have college educations.

People make their own choices on where to spend their money.  Some people pick these things.  Others scale back in these areas and buy boats.  The point is that 50 years ago you didn't even have these options. 

I'm the Bugs Bunny of Swords Crossed!
-4 Strongly Disagree - 0 Meh - Strongly Agree +4

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Yep.

ditto...as I pretty much said below here :)

A lot of people have a built in cynicism to always undervalue where they are in terms of quality of life compared to the past and even to the present.

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Yes, that's true

The better cars bit is good, but I don't know how I feel about the bigger houses bit. I guess that's what people want now. Purpleface had a nice post a while back with "futuristic" houses, small and very cost-efficient, and they actually looked nice. I'll see if I can find it...

Come, my friends. 'Tis not too late to seek a newer world -- Tennyson

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Here's the link

in case you're interested... look out though, the context is reducing our carbon footprint! Link .

Come, my friends. 'Tis not too late to seek a newer world -- Tennyson

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I'm not really sure what you're getting at

plenty of people with middle class incomes don't spend lots of money on leisure items, vacations, or entertainment because they're paying off their house and car and college loans.

That's because, as was said, people are competitive and don't want to feel left behind. They overconsume to keep up with the Jones'.

But more people do go to college now and it generally pays off over life. That is true. Its all relative.

People can generally have a lot more and do more today than a generation ago. Now, if people are trying to go beyond their means to have "EVEN MORE THAN MORE", then they make that choice.

Bottom line, we can all have more for the same effort today...especially the poorest...more so than the middle class.

The equivalent income gets you more...but it also has its limits.

If a generation ago, X current dollars worth of income got a family Y amount of goods and services....and today that same amount of income gets you Y+10 and people are living at Y+20, there's not a lot we can do other than learn to live within our means...which are still better than a generation ago.

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Capitalism lowers cost of living ...

Bottom line, we can all have more for the same effort today...especially the poorest...more so than the middle class.

upper and middle class hardest hit! :)

I'm the Bugs Bunny of Swords Crossed!
-4 Strongly Disagree - 0 Meh - Strongly Agree +4

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I generally accept that progress is a net gain

to any social class, I'm just saying that the way it is presented with everyone in boats and stuff is a bit simplistic. I thought Balko's response was reasonable.

There *are* items that have increased in cost when measured in terms of hours of work needed to purchase. I have to check but I would guess that a college education is one such item, for example.

Come, my friends. 'Tis not too late to seek a newer world -- Tennyson

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keep this in mind Brendan

It may just seem like a meaningless corollary but consider that the products and services that have the greatest influence and hand print from government are the ones with the highest cost increases: Education and Health Care are two biggies and always at the heart of contention (how convenient?)

A lot of food products are starting to rise now too because of ethanol....not that much wasn't already over priced because of subsidies.

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Not just over priced

Meat. Way under priced because of subsidies.

We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki

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???

Meat costs more because of subsidies of all kinds....including ethanol.

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Cheap corn = cheap beef

Subsidies encourage farmers to grow corn rather than, say lettuce or strawberries. Lots of corn means cow feed is cheaper.

In addition to making grains cheap, subsidies have led to an artificially
low cost of meat (corn and soy are the central constituents of animal feed) Link

 

We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki

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No, no, no...Doesn't sound current.

No. I'm in he food business and I can tell you that this stuff has been shooting up the last few years.

Corn is sky high. The price of bushel has more than tripled in the last 4 years. Also by growing more corn, farmers forgo growing other crops which shrinks supply and raises prices.

Corn supply/demand was already tight before pushing ethanol use and now it's even higher which also makes anything that uses corn more expensive to produce:

Milk, feed, beef, chicken, corn flakes, corn syrup and on and on.

Demand from China and India has also been increasing.

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Ethanol v. Beef

Yes, ethanol subsidies have pushed up the price of corn. I don't dispute that. But corn subsidies push the price down. You made the claim that, even before ethanol, food products were overpriced because of subsidies. But in fact some food products, beef among them, were underpriced because of the subsidies already in place. 

We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki

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Economic equality is an intrinsic good

You either don't get or don't accept the premise that income equality is an intrinsic good. I suspect it's the latter.

I'd gladly, gladly have 10% less purchasing power if the upper .01% had half as much. I happen to believe that income equality benefits everyone in terms of utility, but even if it didn't I think it's something that is simply good for everyone.

The consumerism and conspicuous consumption...I agree with 100%. But if incomes were more equal, the problem would solve itself.

I never broke the law; I am the law! -- George W. Bush Judge Dredd
I'm listening to...

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You're right :)

It's the latter. I'm glad you're honest about it. You'd lessen your purchasing power 10% if the top .01% had theirs cut by 50%...just because it makes you feel good.

As for your "reasons" for this, my friend, it's all in your head.

I'm not going to say its envy...though it may be. :)

Personally I find consumer equality to much more even in the sense that whether rich or poor, most people (and I say MOST) are generally able to buy same things and generally do. The wealthier just tend to buy more expensive versions and perhaps spend more on entertainment.

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One thing I don't get

Does the "economic growth is always good" equation assume unlimited resources? Because I for one can think of at least one reason that I'd be willing to lessen my purchasing power 10% if the top .01% had theirs cut by 50%, and it has nothing to do with envy.

We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki

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no

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Care to elaborate?

Because I honestly don't get how production can increase without increased use of resources.

We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki

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Resources change, methods change, needs change

products change and productive capacities increase<<....and this last one has unimaginable, incomprehensible effects on the previous factors.

Remember our previous talks about change, the unknown and the like.

Things are not static. All is in motion and evolving.

It is always hard for to understand where change is going and what it will give us. Every era sees doom and faces challenges. We are no different. But History shows us that things evolve as we become more productive and evolve faster as more brains are churning out ideas.

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And if you buy that

I have some lovely land to sell you...

The best part is that there is no limit to the amount of land I can sell you because needs change... and productivity... and something or other means more land always and ever.

For reals!

I came. I saw. I posted.
Veni, Vidi, Bitchy.

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I'm sorry you didn't understand at all.

but I'm not surprised either.

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So it's a matter of faith

I guess I can respect that point of view, but I don't see any compelling reason to believe in it. It seems pretty obvious to me that increased production can result in increased resource use, and that historically, that is the result. You seem to think that future increased production will buck that trend - I see that as a possibility, but far from inevitable. I do see it as something to strive for however - sustainability is a fantastic goal. But I don't see it as an inevitable result of capitalism.

We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki

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It's not really faith.

I grant you, it's a little hazy and counterintuitive.

Resources are always limited at any given time. But we need and how much of it and how we can go about obtaining it and at what cost do change.

Growth and innovation (they go hand in hand), while using resources, open doors to others.

But I don't think I explained my self very well before.

Keep in mind that the answer I gave to the original question was "No". Perhaps not defining terms the same way.

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What resources do we not use anymore?

You are claiming that as we develop technologically we use different resources, which is half true: we use new resources, but we also continue to use the old ones with rare exceptions.

We still use coal. We still use copper. We still use wool. Cotton. Wheat. Iron. Wax. Wood. Alcohol. Oil. Lard. Mercury. Stone. And so on.

Those are all ancient resources used for hundreds, and in most cases thousands, of years. So where are the resources we no longer use because our technology has outgrown them?

We may change emphasis, certainly. We use far more silicon these days and less stone, but we do still use stone. And there is a finite amount of it. Changing our productivity in no way changes that fact.

The problem is you are basing your entire view on a time when our needs were far outstripped by the planet's resources, and so you assume that will always be the case. Looking at the matter from a logical instead of historical view shows the opposite to be true.

I came. I saw. I posted.
Veni, Vidi, Bitchy.

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It's quite a murky point

Yes, you are essentially claiming the same things that I am.

But my point was a little more slippery and harder to discuss than you are presenting it. Keep in mind, my answer to the original question that started this thread was "No". Economic Growth does not imply unlimited resources. But as we grow, our production possibilities frontier increases exponentially. We are able to make use of more resources in more efficient ways.

I guess in the end, I'm not only looking at extraction of coal and oil and all that. Actually, I'm taking SOOO much into account that I'm simply making an acknowledgment that our capacities to innovate, adapt and make use resources advance at the same time as use more resources in exponentially different way.

By judging the future on current uses...both in terms of levels of use as well as technological abilities and also cost effective methods, we miss the gray area, which once taken into account, makes it hard to predict where growth will take us and what realties will produce what changes.

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Pond ice!

Before the age of refrigeration people used to harvest pond ice in winter and store it in big "ice houses" for delivery to homes for use in "ice boxes" to keep foods cold. Unless I am mistaken, this particular resource is no longer used because the technological innovation of refrigeration has made it obsolete. :)

And to quote you from some other post, how many examples do you need before it is real? At that time you asserted that the answer was ... one!

And to further dilute your point let us consider the concept of recycling. Recycling takes a finite resource and turns it into an infinite resource as long as your requirements do not exceed the total supply at any point in time (which no system can solve). Aluminum and steel are excellent examples of this principle in action. They can be recycled and reused indefinitely so as the old uses die off, they can be transformed into the new uses without consuming more raw material.

I'm the Bugs Bunny of Swords Crossed!
-4 Strongly Disagree - 0 Meh - Strongly Agree +4

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Indeed,

All we have to do is imagine the prognostications at any point in the past that fail to grasp future realities.....which basically means: at any time in the past.

Scarcity with respect to current needs is a constant at any point in time. I classify needs as end results and uses of final products....the means to get there is another story. Besides, many uses and desired end results go out of practice in future contexts.

As materials become less cost effective we adapt to others or as new ideas become more cost effective, we lessen our use of others.....and none of this can possibly take into account the innovations that totally alter our realties throughout history.

Nobody would deny that we have less, in some absolute sense, of many "resources" now than we need 100 years ago, for example. But that really doesn't shed an light on our evolving capacity to make use of resources.

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While this theory may have

abstract usefullness.

It would be pretty hard to explain these theories to people who were suffering during the depression. Just wait...... new ideas will come along, innovations are on the way.

One could actually look at nomadic tent cities of unemployed folks as 'resources' that were going unused.

Such resources if left neglected can be distracting and cause others to feel uncomfortable if they ignore the unused resources who kept knocking on their doors and looking to be innovatively used to benefit the overall GDP growth during the 1930's.

I think FDR came up with a darn good and innovative solution for these unused resources.

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FDR didn't end the Great Depression ...

World War II did. Note the trend in the unemployment rates prior to 1941 vs. after.

 

 

I'm the Bugs Bunny of Swords Crossed!
-4 Strongly Disagree - 0 Meh - Strongly Agree +4

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???

Not to sound mean, but sometimes saying nothing is better than saying something which amounts to absolutely nothing.

Sorry. But you could have talked about your pets and it would have been just as relevant.

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Future realities

All we have to do is imagine the prognostications at any point in the past that fail to grasp future realities...

Yes, I can fully imagine everyone saying, "Wow! Look at all these passenger pigeons. Let's shoot 'em all and eat 'em." They certainly failed to grasp future realities. 

While the free market may be able to find a solution when a resource is completely annihilated, it doesn't change the fact that it is gone. 

We've already lost about half of our tropical forests, and that loss is continuing today. Perhaps there are some future realities there that are not being grasped as well?

We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki

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Well, I understand your concern for the environment, SL

and that is an important issue. But it really doesn't speak to what I'm talking about.

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More on resource depletion

Perhaps I still don't understand what you are talking about then. Let me paraphrase what I think you are saying, and you tell me where I am going wrong:

Resource depletion as a result of economic growth is not an issue we need to be concerned with, because that economic growth will lead to innovation and the discovery of new resources.

Personally, I still think that is a matter of faith, but I am not going to push the issue. My examples point to instances where resource depletion has caused and is causing problems that we should not ignore. They may not in all cases be economic problems, but economics doesn't exist in a bubble. I have no doubt that the people who were eating passenger pigeons found a new food source. I can imagine that there might be innovative solutions to fix the problems caused by the loss of our forests. But the fact remains that these problems exist in the first place because of the attitude that we don't need to worry about resource depletion.

And I guess I don't see anything in the purely capitalist, completely free market system that takes this concern into account. It seems to me the exact opposite. By it's very nature, this system encourages an attitude of "use it up, spit it out, move on." One hope I had is that eventually we would begin to realize that there isn't always going to be a place to move on to, but now you seem to be telling me that, inherent in the capitalist philosophy is that there is always a place to move on to. That is discouraging, and to my mind, dangerously optimistic.

We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki

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whoah, back up... :)

First, to me, resource usage and environmental damage are two different things. I have no problem with resource usage but I think potentially hazardous conditions in terms of air and water and over-deforestation are other matters. The previous post I responded to seemed to take the discussion in that direction. Hence, my previous response.

Your characterization of my position is OK...sort of. But also that economic growth and growth in general fuel innovation. But my biggest point is that we should never over-judge the future based on our knowledge of the present. At some point, use of many current resources becomes less cost effective for any number of reasons and innovation spurs change and new possibilities.

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Isn't that

quite a broad generalization.

"We should never over-judge the future based on our knowledge of the present".

Separating resource usage and environmental damage as two different things....., when current resource usage seeks every opportunity to ignore, lambast and defile the thought that profits should always trump environmental concerns.

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At some point

At some point, use of many current resources becomes less cost effective for any number of reasons

I have no doubt that this is true. My point, however, is that in some cases, "at some point" is way too late. There are just too many factors that you can't put a dollar value on to rely on cost effectiveness as a guide to doing what is best.

We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki

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Perhaps...

:)

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Why?

I'd gladly, gladly have 10% less purchasing power if the upper
.01% had half as much. I happen to believe that income equality
benefits everyone in terms of utility, but even if it didn't I think
it's something that is simply good for everyone.

How does punishing that .01% by cutting their purchasing power help you or anyone else?

Cutting the purchasing power, assuming it is used, would create drastic cuts in jobs and livelyhhoods for many less fortunate, right?

This make no economic or even societal sense to me. 

I'm the Bugs Bunny of Swords Crossed!
-4 Strongly Disagree - 0 Meh - Strongly Agree +4

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I've already said

It makes us more equal, which, as I explained, is an intrinsic good.

At a point, it isn't workable. If everyone can't afford to live, then we have a problem.

I never broke the law; I am the law! -- George W. Bush Judge Dredd
I'm listening to...

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And why is it an intrinsic good?

It makes us more equal, which, as I explained, is an intrinsic good.

Doesn't your following statement:

At a point, it isn't workable. If everyone can't afford to live, then we have a problem.

Sort of refute that position right out of the gates?

I have been thinking about this and I ask the following in all seriousness. I am not just being pointy here.

You seem happy to lower the income levels of those above you down to your level. Would you be equally happy to have your income level lowered down to that of say the homeless? Because that is the most viable means of achieving income equity, right? Just eliminate all income.

But no, you say, we don't have to lower things that far. Let everyone enjoy the average income. Well, ok, let's consider that option. We take from the high producers and subsidize the low producers. Doesn't this amount to having the producers paying the non-producers for doing nothing? In other words, having the middle and upper class paying the homeless (those that can work anyway) to simply exist? Allowing them to live on the backs of everyone else? Given your claim of income equity being intrinsically good, would you truly consider this to be a fair outcome?

I'm the Bugs Bunny of Swords Crossed!
-4 Strongly Disagree - 0 Meh - Strongly Agree +4

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It's about stability

I'd take a stable, predictable lifestyle over what we have now.

That is why the middle class feels "under attack". In the 50s and 60s, changing jobs as often as we do today was unheard of. You could be relatively sure you'd be working at the same place you were working last year. Your savings account got 5% interest by law. Life was predictable.

Now we might have better paying jobs, more creature comforts, etc., but I don't know where or if I'll be employed next year, where I'll be living, etc. etc.

People value stability more than you think.

I never broke the law; I am the law! -- George W. Bush Judge Dredd
I'm listening to...

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stability is a choice for most people

many choose to push envelope. Who says we have to buy the $275,000 house when the $165,000 one will do? Why do we need to have $800 in car payments and leases in the driveway when 2 used cars with a total 350 in car payments does the job? We could go on but you get my point.

And I think you overstate the ability to count on the same job year after year. Most people change jobs willingly as they advance. Many jobs are stable for a long time like teaching and nursing and so on.

When you look at the size of the work force, the amount that actually lose jobs are is quite small.

I have an employee at my business who's been their 28 years...obviously he came with the place :)...another has been their for 10 years. They choose stability.

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More free time?

Really? I was under the distinct impression that Americans had less free time than in the past. At least one study agrees:

Those who think they have a lot more leisure time than previous
generations are mistaken, according to a report from the National
Bureau of Economic Research.

Writing for NBER Digest, David R. Francis says research shows that
while leisure time per capita has varied over the last 105 years, it is
currently the same as it was that long ago.

He said NBER research by Valerie Ramey and Neville Francis
concludes that about 70 percent of the decline in work hours during the
20th century has been offset by increased hours spent in school. They
also determined that the average number of hours spent cooking,
cleaning, care for children and related work is actually higher now
than in the early part of the last century.

 So what's the real story?

We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki

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Interesting.

though it strikes me as a little misleading in some ways.

For one thing, the stat about people working over the age of 65 strikes me as a little funny for a couple of reasons:

First, more were dead or near death by age 65 in 1910. Another is that there are now easier jobs for those age 65 if they choose to or need to continue to work. I'll bet more lived with their children back then too and just stayed home.

On some other matters, I'd be curious to see how they get their stats. We spend more time cooking and cleaning etc.? Really? Sounds strange. I wonder why that would "true". Depends on their methodology.

On yet others, there's certain silliness about it. People spend more time in school now. No duh. More people go to college and graduation high school.

In the end, what's the point here? That the quality of life was better? No. It wasn't....not by any qualitative or quantitative measure any way.

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