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Sunday, March 23, 2008

The Bare Necessities: A Generation

A few weeks ago I gave a talk on the state of the economy to a group of college students -- almost all Barack Obama enthusiasts -- who were griping about how downright awful things are in America today. As they sipped their Starbucks lattes and adjusted their designer sunglasses, they recited their grievances: The country is awash in debt "that we will have to pay off"; the middle class in shrinking; the polar ice caps are melting; and college is too expensive.

I've been speaking to groups like this one for more than 20 years, but I have never confronted such universal pessimism from a young audience. Its members acted as if the hardships of modern life are making it nearly impossible for them to get out of bed in the morning. So I conducted a survey of these grim youngsters. How many of you, I asked, own a laptop? A cellphone? An iPod, a DVD player, a flat-screen digital TV? To every question somewhere between two-thirds and all of the hands in the room rose. But they didn't even get my point. "Well, duh," one of them scoffed, "who doesn't have an iPod these days?" I was way too embarrassed to tell them that I, for one, don't. They thought that living without these products would be like going back to prehistoric times.

They seemed clueless that as recently as the early 1980s only the richest people in the world had cellphones and the quality of these products left much to be desired. Watch a movie from 20 years ago and you will laugh out loud seeing big clunky black machines that weighed as much as a brick, gave crackly service and cost $4,200. Now cellphones are practically free -- even disposable. And the cost of making calls has dropped dramatically too.

So why the long faces? Sen. Obama reminds them every day of how dreary things are. Here's what Mr. "Audacity of Hope" told workers in Ohio last week: "Everywhere I go . . . you see people who have worked in a plant for 20 years, put their heart and soul into building profits for shareholders. Suddenly, the rug's pulled out from under them; the job's shipped overseas." Not only that, he explains: "They don't have health care. They don't have a pension. They're trying to compete with their teenage kids for a job paying $7 an hour at the local fast food joint."

Times are tough in many old industrial areas of the country. And middle-class anxiety about the costs of health care and higher education is real. But new data from the Census Bureau reveal that Americans of all income groups have made enormous gains in their standard of living in recent decades. As late as 1970, air conditioning, color TVs, washing machines, dryers and microwaves were considered luxuries. Today the vast majority of even poor families have these things in their homes. Almost one in three "poor" families has not one but at least two cars.

Consumption in real per-capita terms has nearly doubled since 1970. The single largest increase in expenditures for low-income households over the past 20 years was for audio and visual entertainment systems -- up 119%. In 2007 Americans spent an estimated $1 billion to change the tune of the ringer on their cellphones. Eating in restaurants used to be something the rich did regularly and the middle class did on special occasions. The average family now spends $2,700 a year dining out.

There's a wonderful new video on Reason.tv called "Living Large." In it, comedian Drew Carey goes to a lake in California where people are relaxing on $80,000 27-foot boats and goofing around on $25,000 jet skis that they have hitched to their $40,000 SUVs. Mr. Carey asks these boat owners what they do for a living. As it turns out, they aren't hedge-fund managers. One is a gardener, another a truck driver, another an auto mechanic and another a cop.

When I was young my parents used to drill in me the moral imperative of eating everything on my plate, and they recited the (tall?) tale of how they even ate what would now be considered dog food during the darkest days of the Great Depression. The American Pet Products Manufacturers Association reports that Americans now spend $36 billion a year on their dogs, cats, turtles and so on, and one of the hottest-selling consumer items is "diet pet food." We have become a nation of fat cats -- literally. I have a friend whose daughter insisted that he spend $200 on eye surgery for their hamster. (I want to see that hamster read the eye chart!)

After my lecture, one young woman walked up to me on her way out and huffed: "What I favor is a radical redistribution of wealth in America." I tried to tell her that America's greatness is a result of our focus on creating wealth, not redistributing it. But it was too late -- she was already tuning in to her iPod.

Original here

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