So be it!

At this point, I can picture Tyler Cowen remarking, “You’re a bigger pessimist than I am. According to you, we’re richer than we think, but riches don’t matter much for happiness, so who cares?” The whole point of optimism, though, is to say, “You may not be happy, but you should be.” If you want to meme that as, “Optimism is pessimism about the dangers of pessimism,” so be it.

File under “Bryan Caplan, pessimist.

Comments

Caplan is correct: we are a much richer nation today than when I was a child, something that anyone born after 1970 cannot appreciate. Caplan is also correct that most people don't appreciate that they are richer because they aren't richer compared to others, in particular the top 1%. Caplan doesn't use the term "inequality" to account for today's lack of appreciation for being richer, but that's what he means. Caplan bases his lesson on the miscalculation (i.e., an overstatement) of "inflation", which makes people feel less rich than they actually are. I protest. Anyone facing today's college tuition, housing prices, and health care costs doesn't feel like "inflation" has been overstated or that she is much richer than she thinks she is. On the other hand, back in the dark ages (the 1950s), few houses even in the South had air conditioning (mine did not), I never attended a school with air conditioning until college, we had a clothes dryer but were not allowed to use it because it used too much electricity, our home had a "party line" telephone, we had one car, and so on. Yet, we certainly did not feel "poor". When I went away to college I bought a new Datsun (the former name for Nissan) for $1,900, I had a nice apartment (air conditioned!) that cost $150 per month, my monthly utility bill was about $20, gasoline was $.30 per gallon (students often purchased $1 worth of gas at a time, and this was before self-service), my weekly grocery bill was about $25, I never paid more than $500 per semester in tuition even in law school, my health insurance premium was about $10, you get the idea. I don't understand how today's college students can get by, and don't believe I could have in the 1970s with prices at the level they are today. Caplan was born in 1971, so it's understandable that he has no appreciation for the vast differences in costs today. Sure, he is an economists and is supposed to, but such is life among academics.

We have lower body counts from war today than yesterday.l But higher addiction deaths than the Vietnam war and WW1. Population growth dropping. We have better control of the electron. On what basis do we pick?

The pessimist in the White House hopes to restore America to greatness one day. Until then we must muddle through mediocrity. Such is life in America.

I think that is the communist impersnator.

Not many Americans named 'Hadrian', Thiago. I know it gets hard coming up with aliases but do better,

And no I'm not mistaken, and yes you are Thiago.

In English it's "Adrian," also not very common.

Control + F "healthcare". No hits. Control + F "education". No hits. Control + F "housing". No hits. Caplan is living in his elite bubble which is admittedly cheaper than housing in a city with a functioning job market.

A discussion about CPI that fails to mention the costs essential goods and services that are inflating faster than Trump's ego is not a serious discussion. CPI is rapidly becoming a useless measure when it fails to pick up actual inflation in important parts of the economy. A large number of the voting public continues to feel that their needs are disregarded, dismissed, and entirely ignored and what do they hear in reply? Talk of "hedonic adaptation". Tell me how that cannot be interpreted as either condescending or dangerously out of touch. The elites are forgetting as we near the third year of the Orange Beast why the Beast came.

But more people are going to college than ever, home ownership is fairly stable, and arguably people have better healthcare than ever, even though all of these things cost them more. They are very strange kinds of expenditure. I could afford a house in the town I grew up in, the problem is that I want to live in a more expensive city. The democratizing effect of globalisation and internet changes peoples aspirations.

If you saw a few posts back, college enrollment is dropping. One was GWU, another was a university in Illinois that insured against drops in enrollment from students from China and India. Law and MBA programs across the country are seeing drops. It is not a good sign when there is less demand for some of the most lucrative degrees from both the student and the school's standpoint.

" I could afford a house in the town I grew up in, the problem is that I want to live in a more expensive city. "
Is this because your hometown does not have very many jobs? There is a conundrum relating to where employers are and where housing is most expensive. Or is Caplan correct in calling hedonic adaptation?

"arguably people have better healthcare than ever"
The premiums rise every year while the deductible goes higher and the pricing is as opaque as ever. Since the employer pays these rising costs, they don't feel they need to raise wages. UAW is on strike currently with GM over the very same issue of wages and healthcare.

Total college enrollment in the US declined from a high of about 21 million in 2011 to about 20 million in 2017. However, in 1965 it was under 6 million. As recently as 1997 it was 14.5 million. The bigger picture is still many more students attending college now than in the past.

Re housing costs, we can't ignore the fact that the average square footage per person in the household roughly doubled between 1975 and 2015.

Rising healthcare costs are a huge problem. However, US life expectancy at birth is more than 2 years higher than it was 20 years ago.

"However, US life expectancy at birth is more than 2 years higher than it was 20 years ago."

However, that probably has no effect on happiness levels. Oh, it should, but people don't think that way. No one is noticeably happier everyday when they wake up because their life span has increased by 4%.

When they are young, it's so far off in the future that it's not real to them. When they are middle aged, they are concentrating on getting the kids raised and money socked away for retirement. And they keep hearing about all of the bad issues with SS (which ironically are the result of rising life spans). Finally when they retire, they are coming to grips with their mortality and seeing everyone their age inundated with health issues and doctors visits. Which have gone up, because we're living longer. ;)

Caplan goes on about CPI overstating inflation, but provides literally no backup for that. His links go to others trapped in his cognitive echo chamber, and seem similarly destitute of facts.

Sort of the antithesis of science. But then again, they are economists.

Caplan is overstating his case: his own link to Wolfers shows that happiness does indeed increase with income, just not as much as he (Caplan) would like, according to the arbitrary yardstick of one standard deviation that he pulled out of nowhere.

Yes, the one standard deviation was an odd metric.

I crunched the numbers and the equation implies a 5% increase in happiness for every doubling of income.

As the comments illustrate, the human intuition that people are somehow getting the short end of the stick is alive and well among denizens of the richest society in the history of the world. Small wonder that politicians of all stripes endlessly pander to this intuition. The judgment of history will be less indulgent.

I'm not sure Bryan Caplan is correct in his analysis.

"The overwhelming factor, in my view, is hedonic adaptation. Materially, Americans are far better off than they were during my childhood in the 1980s. Yet hardly anyone appreciates the wonderful new and improved products they’ve received. ... U.S. real income from 1969-2012 plausibly rose not by 16% (the standard estimate) but 45%. Yet our happiness still barely budged."

I suspect that happiness is correlated with wealth that buys you freedom to do what you want. However, most Americans work just as many hours as they did in the 1980s. And when we're not working are chores at home take nearly as long. We've had some gains. Not as much time spent traveling back and forth to the store because of Amazon and the ability to see online if a store has what you want before driving there. Much better entertainment selections.

Furthermore, our increased wealth has bought very little changes to our health over the last 40 years. And those small gains account for a large chunk of the extra income gains for the middle class. Most of the rest is eaten up in housing and education which have continuously risen faster than inflation.

So, Caplan how much of the 45% real income increase has been sunk into housing, healthcare and education costs. I suspect that those areas haven't generated much in the way of happiness gains but have soaked up most of the net gain.

Related, but I'm really dropping the link because the FT paywall is suspended for the day. Read it quick:

"Martin Wolf: why rigged capitalism is damaging liberal democracy"

https://amp.ft.com/content/5a8ab27e-d470-11e9-8367-807ebd53ab77

I think the key to understanding America, is understanding the unhappy millionaire, or even unhappy billionaire, scenario.

The bulk of Americans are trying to pay bills, and college for the kids, and have something left for happy golden years. That's normal. That's properly placed fear and ambition.

But seriously, why can't we have a wealth tax on people with 50 million dollars or more, to help the strugglers?

It is because most of the people with nine houses and six yachts, or six houses and nine yachts, are not happy, think they are struggling, and need every penny.

Remarkably few are comfortable in their own skin and, like Bill Gates, open to higher taxes.

God bless you. It must be a real struggle for you and your comrades to see these people suffer daily and be totally unwilling to help them in any way. I feel your pain. I don’t know how you manage.

I only dropped the $50M because it is a number thrown around to represent people who (a) should be happy and (b) have plenty.

I'd be fine with a progressive wealth tax starting at a lower number and covering me.

Because I'm happy, and I have enough.

Amazingly enough, you admit that you’re only willing to help the downtrodden as long as you can force others to do as well. Sounds like your happiness stems from your relative status. Don’t worry. You’re not the first hypocrite to share that opinion. There’s an entire political party based on that very notion. Vote Blue!!

A lot of emotion in this thread.

It’s pretty clear what Warren would do with the money from a wealth tax. And it directly addresses the major concerns of the middle class.

Student loan relief
Medicare for All
Sectoral bargaining
Allow for government manufacturing of overpriced drugs
Green Jobs to revamp our infrastructure for the 21st century

Seems fine from where I’m sitting.

I have left unsaid my charitable giving, but I pretty much tried to tithe. Not that it really matters. The tax law is not that you tithe (or otherwise fulfill your personal commitments) and you are done.

Charity is just a deduction, am I right?

This has never been a clever attack. The whole "if you care, you fix it." The tax law and government spending are full of things that we democratically agree we collectively care about.

Will Wilkinson with some related thoughts on democracy and modern conservatism:

"This piece is primarily about democracy, not gun control. My claim is that a minority can't simply declare certain questions off the table of democratic deliberation, and try to enforce that declaration with threats."

https://twitter.com/willwilkinson/status/1174360008080941056?s=19

You don't get to talk about a wealth tax because there's a good case that it's unconstitutional. So I declare that question off the table of democratic deliberation until after the Constitution is amended to make it unambiguous that the federal government has such power (as happened with the income tax).

Ever since Merrick Garland anyway.

There is no constitutional requirement for the Senate to vote on a presidential nominee. It's called the separation of powers, which I presume you support now that the shoe is on the other foot.

I support the Senate voting to confirm or reject a SC nominee submitted by the president, as laid out in the Constitution.

If the Dems did the same thing to the Reps, you would be crying treason and 2nd Amendment remedies.

I should say fine conceptually. There are pragmatic complexities to a real, straight up, wealth tax.

But as Gates says, a restored inheritance tax would be an improvement.

>why can't we have a wealth tax on people with 50 million dollars or more, to help the strugglers?

Better question: why do dopes like you unfailingly believe that cutting a check to people like Nancy Pelosi, Donald Trump and Chuck Schumer is a terrific way to help the strugglers?

That's a very slow pitch.

It's because American government has higher honesty and efficiency than that. The money doesn't actually go into Nancy or Chuck's pockets. While I admit Donald has set a bit of a standard for chiseling, he's not a looter on the Robert Mugabe scale.

No, the big line items on the Federal budget are reliable and published. They could even be improved or refined by a less distracted Congress and administration.

The 19-year existence of the Bill and Melinda Gates Foundation suggests Bill Gates has taken his sweet time surrendering control and arriving at this position of purely ego-less magnanimity.

Are you under the impression Gates controls Microsoft through his foundation? He most definitely surrendered control of Microsoft when he left. He's still a major shareholder of course, but he is less of one each year.

I am under the impression Bill Gates has donated much or nearly all of his stake in Microsoft to the foundation that bears his name.

So what was your point about Gates taking his time? He built up a company, became the richest man in the world, then gave up control of the company to others to focus on giving away his fortune. Very Carnegie of him.

Oh, just that he might have paid a chunk of it in wealth tax anytime. The mechanism was there, perhaps the will was not.

Much rather Bill spend it. He may literally cure malaria worldwide and same millions of lives (for just one example).

If I understand correctly, you are looking for a contradiction between Gates managing his fortune, doing charity, and supporting higher taxes?

Maybe there is none.

https://www.cnbc.com/2019/09/18/bill-gates-on-wealth-tax-and-higher-estate-tax.html

Whatever he does will attract notice, but he could have been associated with a rather novel idea: that he sell his stock, so that the government might take a portion to use in its usual efficient fashion. He could still have endowed a sizeable foundation.

If not exactly in Rockefeller league, he has at least done much less harm with his money than many another might have.

Still, I was in a national park this past weekend, without a park ranger in sight, the visitors center closed; and a whole lot of habitat degradation thanks to tamarisk and giant cane. I'd be awfully glad if Bill Gates, not himself having an interest in nature, had entrusted more, rather than less, of his fortune, to the US government, on the humble assumption that his own wishes for the best use of his gains might not be infallible.

Bill Gates avoided capital gains tax on his stocks by donating it to his charity. Clearly he would rather the US government not have that money.

...who thinks it'd be better for the government to spend that money rather than the Gates Foundation?

Of course, everybody can go home a winner because some of it he chose to pour down the maw of the public education industrial complex.

...than the government pours down that maw. I prefer Gates.

I think the Gates Foundation is doing good, and I think complaints about it are really odd.

The Gates Foundation and its priorities are *legal*.

Really bizarre to think that this canard would work: "sure he's doing what he wants, and it's legal, but if he really believed in higher taxes he'd just give it to the government."

Those things are not actually equivalent. Duh. Giving to the government is just another donation.

Being okay with higher tax is not that, it's a flip view that you are okay with your entire demographic having a higher legal tax burden.

Oh, well, if you think it is doing good, then there's an end of it.

Of course it is legal. Not shielding the fortune from taxation would have been legal as well. But if he needs a wealth tax to be compulsory - everyone else in his small cohort doing it too - then perhaps he is less "comfortable in his skin" than you suppose.

This is not a great argument.

Basically you demand of Gates something (a donation) based on what he believes (higher taxes are ok), while you do not demand the same of others the (because they do not support higher tax).

You demand that people who support taxes make donations.

This is not understanding the theories of democracy, taxation, or equality under the law.

It's just a desire to punish opponents.

That was then - $45 billion ago? - and this is now, when words have never before spoken louder than actions.

We are focusing on the odd man out. As I say, it is rare to find someone like Gates who is so comfortable in his own skin, and doing so much good with his own money.

What about the billionaires who think their main purpose in life should be to lobby Congress to make sure that billionaires like them don't have higher taxes?

Is that really the best thing they can do with their lives?

Have they no more creativity?

Floating on a yacht, sipping iced tea, and watching the seagulls has to be better than that.

Is it rare? I would have said the preponderance of the visible good in the world is or has historically been done by people with money.

His own posts indicate that Caplan is relatively indifferent to social norms and thinks it's all about living in a bubble. Moreoever, he is a freerider on public goods like order and national defense. He believes in unilateral pacifism and doesn't condone any compromises politicians make in order to find common solutions. He dismisses those harmed by high levels of immigration and chooses to live in a secure community. He dislike patriotism of all kinds. He is indifferent to the effects of multi-culturalism on cultural cohesion and doesn't care a fig about shared values and he is a militant atheist. No wonder he is contemptuous of those who worry about cultural decline and the loss of things like religion and family values. To him it's all private and libertarians should exploit the benefits given to him by our society while doing their best to avoid shared responsibilities.

Maybe we just need a little more distance from the past. My mother, as I was growing up, would from time to time recur to a theme of hers, that when she was a child, her family had comparatively little but they were happy. Happy in a way she never again experienced. [We all know people who are happiest being peevish, making happiness difficult to gauge, I would think; but whatever her faults my mother is not one of these.] I remember marveling over her remembered joy at getting an orange in her Christmas stocking. Oddly enough given that this was long before "screens," another component was her occasional sighing that her family used to talk at the table, at meals, in contrast to us, who were all totally absorbed in the newspaper.

As people die off, and material comfort is all that current generations have known or contemplated, hopefully more people will report their happiness in a way that satisfies Caplan/Cowen.

One memory from the 50s and 60s is the number of middle aged men, aged 40 to 60, who died after a first heart attack. Take a glance at the numbers from one study.

"Results
The percentage change in death rates for heart disease declined among men (68.4%) and women (67.6%) ( Table 1). By race and sex, the percentage decline was 68.8% among white men, 67.6% among white women, 59.4% among black men, and 63.8% among black women."

Heart Disease and Cancer Deaths — Trends and Projections in the United States, 1969–2020

https://www.cdc.gov/pcd/issues/2016/16_0211.htm

>Hezbollah, the Shiite militant group and political party

There is actually a very well-known, widely recognized term that is nearly always used to describe this group... but for some reason the NYT decided to leave it out. I wonder why that is.

Just to troll you, actually

The US is a considerably richer nation than Australia but our minimum wage in nominal terms is about $14 US. This is what seems odd to us when we look at the US. The common folk aren't being trickled on enough.

Also, now that we've had the internet for over a year, every business here seems to have a bunch of people overseas working for them, so we're not exactly not exposed to low average cost of international labor.

I wonder if happiness correlates more with (or is tempered by) yard size. Real estate is getting more expensive, newly built houses have smaller lots, and urbanization is continuing. We know green spaces have an effect on happiness, and seeing it right out your window ensures maximum exposure.

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