“The Coming Collapse of the Middle Class”

I’ve started watching more scholarly talks on YouTube lately. I never used to do this, because talks are sooo slow and take sooo much time out of my day, and I could go read three or four articles of the same length in the same time. But somebody recently showed me the “Playback Speed” button on YouTube, which allows you to make the video go faster (or slower, if you’re weird). Now I can finish an hour-long talk in 30 minutes — less, if I skip the throat-clearing at the start and the beginning!

If you want a great place to start doing this, and you like law (and isn’t that kind of a prerequisite for enjoying my blog?), go check out the talk “Assorted Canards of Contemporary Analysis Redux” by Amy Coney Barrett and learn why you, too, should hope that she becomes America’s next Supreme Court justice.

But Judge Barrett is not the subject of this blog post. A different woman is:

This is a really good talk. It’s engaging, it tells a good story, the story is important, it’s not a story conservatives have been listening to (until “Tucker Carlson conservatism” suddenly became A Thing a couple years ago)… and, from what I have been able to gather, the story is true.

In the interest of fairness, Matt Bruenig (who is also on the Left) offers a critique of the book this talk is based on here. I have not read Warren’s book, and maybe Bruenig’s critique holds up better there. However, I don’t think Bruenig’s critique holds up against this talk.

Even after adjusting CPI-U to CPI-U-RS (as Bruenig recommends), the degree to which male-earner wages and two-income-household discretionary income have been held down over the past several decades, against the backdrop of skyrocketing productivity gains, is astonishing. He appears to be correct that using CPI-U-RS is more accurate, and that doing so means families today have slightly more discretionary income rather than slightly less. That does wreck one of the bigger headlines from the talk. But the introduction of an entire second income should have resulted in much larger discretionary income, not a virtual wash. We lose the headline, but the dire news for the middle class persists.

Bruenig also suggests that Warren should have adjusted for CPI by category rather than CPI overall. Well, Bruenig and Warren are both more trained than I am, but it seems to me that Warren has the better of the argument here. What we’re interested in here is how the overall family budget has been impacted after factoring out overall changes in nominal price. The fact that nominal home prices grew more slowly relative to other items in the basket of goods is not of interest; we aren’t ultimately trying to find out how much more expensive one square foot of housing is today (which is where the categorized CPI would be the right measurement), but how much cost pressure housing imposes on the average middle-class family, which requires a holistic view of the entire basket of goods.

I dunno, maybe I have that wrong–economists, let me know in the comments–but I’m finding Warren’s analysis in this talk more credible than Bruenig’s critique.

I would never vote for Elizabeth Warren; too many of her views are abhorrent, especially as she has moved left to pick up progressive base voters, and many of her most recent policy solutions to these problems would be a calamity. But, if I were President and could make her my financial regulations, antitrust, and bankruptcy czar, I’d probably do just that In conclusion, this is a good talk. Especially if you watch it at x2 speed.

(Next time on De Civitate: why I’m furious with my friends over on the left side of the aisle, and why I think Congress should impeach and convict President Trump anyway.)

This entry was posted in Reads & Reactions and tagged , , , , . Bookmark the permalink.

Comments are closed.