Economic U-Turn?

One thing I like about the WSJ is that they publish some opinions with a distinctly non-WSJ tone. Consider this column bemoaning the plight of the middle class, a popular theme these days. Are things really so bad?

If you torture the numbers enough, you can make them say anything, particularly if the meaning of the numbers is doubtful. There is only one way to meaningfully measure economic well-being: purchasing power. So, on the basis of purchasing power, how are we doing?

We know, for example, that middle class households spend a smaller percentage of their income on food and fuel than they did 35 years ago. Anecdotally, I know that many things (color TV, for example), which were once affordable only by the well-heeled, are now nearly ubiquitous. If you count all the things that were simply unavailable at any price 35 years ago (airbags, cell phones,  e-mail) and the things that have vastly improved (medical care), there is no question that people in the same relative positions are far better off than their predecessors 35 years ago. They can afford more and better stuff.

We haven’t had an economic U-turn: it’s been more like an economic blast off!


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