Former US President Jimmy Carter offered a curious bit of economic analysis recently at a Habitat for Humanity construction site in Oakland:
The middle class has become more like poor people than they were 30 years ago. So I don’t think it’s getting any better. … The richest people in America would be better off if everybody lived in a decent home and had a chance to pay for it, and if everyone had enough income even if they had a daily job to be good buyers for the products that are produced.
I am not sure Jimmy Carter uttered a single correct sentence. In fact, I am pretty sure he didn’t.
1. While the portion of American households that are middle-income has declined since the late 1960s, that drop was more than offset by share gains in the upper income levels. “America’s middle class did start largely disappearing in the 1970s — but it was because they were moving up to a higher-income category,” writes AEI economist Mark Perry at his Carpe Diem blog.
2. Research from economists such as Cornell’s Richard Burkhauser and the University of Chicago’s Bruce Meyer finds total median household income, adjusted for inflation, up roughly 40 to 50% since the late 1970s.
3. AEI’s Aparna Mathur finds “that people at all income levels now have access to many more material possessions than they did in the 1980s.” For instance:
The percentage of low-income households with a computer rose from 19.8 percent to 47.7 percent in 2001. The percentage of low-income homes with six or more rooms (excluding bathrooms) rose from 21.9 percent to 30 percent over the same period.
In terms of appliances, the percentage of low-income homes with air-conditioning equipment rose from 65.8 percent to 83.5 percent; with dishwashers from 17.6 percent to 30.8 percent; with a washing machine from 57.2 percent to 62.4 percent; and with a clothes dryer from 44.9 percent to 56.5 percent.
The percentage of low-income households with microwave ovens grew from 74.9 percent to 92.4 percent between 2001 and 2009. Fully 75.5 percent of low-income Americans now have a cell phone, and over a quarter of those have access to the Internet through their phones.
4. I’m sorry, is Carter suggesting government do more so lower-income people can own their own homes? Did he not notice how America’s 70-year experiment with consumption-driven “mortgage Keynesianism” just ended? Did he miss the housing collapse?
We can deal with today’s economic challenges for the poor and middle-class without distorting the past. But for some, fudging the historical record makes a particular economic agenda more salable and fumigates their own legacy.