Rich In Discontent

Robert J. Samuelson has an interesting piece in the Washington Post about rising affluence and rising discontent. It's quite thought-provoking.

You hear the refrain all the time: The economy looks good statistically (4.7 percent unemployment), but it doesn't feel good. Although the United States is the wealthiest nation in history, our quarrels and quibbles with our prosperity are unending. Why doesn't ever-greater wealth promote ever-greater happiness?

Blogosphere pundits have noted for some time that even though this economy is positively roaring along (much more than just low unemployment) but the economic news reporting has been uniformly negative. That media coverage has a lot to do with the negative views people have about the economy, I believe. Samuelson has some fascinating statistics:

Galbraith also underestimated the spontaneous demand for government services. Even without his preaching, people believed that their prosperity entitled them to public programs for common needs. In 1956, two years before he complained about neglected roads, Congress created the interstate highway system, the biggest road-building project in U.S. history. Social spending and regulation (for education, anti-poverty programs, health care, the environment) have consistently expanded. In 1954 defense accounted for 69.5 percent of federal spending and "human resources" (programs such as Social Security, Medicare, job training and food stamps) only 18.5 percent. In 2005 defense was 20 percent and human resources 64.2 percent.

That reversal is startling laid out like that. 64% of the federal budget goes for human services. Think about that. Democrats routinely charge that we do not spend enough on our own people. How much is enough? How much is too much? How much is wasted by badly run programs?

It's often said that only the rich are getting ahead; everyone else is standing still or falling behind. Well, there are many undeserving rich — overpaid chief executives, for instance. But over any meaningful period, most people's incomes are increasing. From 1995 to 2004, inflation-adjusted median family income — for families precisely in the middle — rose 14.3 percent, to $43,200, the Federal Reserve says. People feel "squeezed" because their rising incomes often don't satisfy their rising wants — for bigger homes, more health care, more education, faster Internet connections.

I think that pretty well nails what is wrong. Rising incomes don't match rising wants – not rising needs. The needs are already pretty well covered. Anyone who's been to a real third world country knows our "poor" in this country would be considered very wealthy indeed in those parts. Are there people in need in this country? Of course. Nothing is perfect. But we simply don't have the kind of devastating poverty that is all too common in many places. The overpaid CEO's are another sore point that make people feel like they are not getting ahead. If you're making the median income and hear that some guy in a big corporation is making 100 times or more what you're making, it makes your salary feel smaller. That would be human nature.