Author: Kevin Drum

I happened to click today on a post about the (still) massive power of the Baby Boomer generation, something about which I'm fairly agnostic. However, before I even got to the main argument I ran across this throwaway line:

The American Dream is no longer true in the way it was for more than a hundred years: the average Millennial will earn less money than their parents.

This is yet another example of conventional wisdom that gets repeated forever even when recent evidence tells us it's no longer true. Here is household income at age 35-44 for Boomers, Gen X, and Millennials:

Millennials at age ~40 earn quite a bit more than Boomers did at age 40. This is median income adjusted for inflation, so it doesn't include zillionaires and it's real dollars.

But wait. Household income may have gone up because there are more two-earner families than in the past. That's true, so let's look at individual income:

Averaged together, Millennial income at age 40 is about 25% higher than Boomers at the same age, but the earnings of men have been basically flat while the earnings of women have gone up 75%. In other words, individual earnings of Millennials at age 40 are quite a bit higher than Boomers at age 40, but the distribution of those earnings is quite different.

There are technical details here about age distribution within the 35-44 band and a few other things, but nothing that makes more than a small difference. And you can always cherry pick the data to show anything you want. But if you just look at straightforward income figures, Millennials earn more than comparable Gen X and Boomer workers.

So what accounts for the ongoing myth of Millennials being worse off than Boomers? My guess is that lots of people simply refuse to acknowledge what's happened in recent years. In 2012 you could make a case that Millennials were indeed a lost generation, and it quickly became received wisdom that this was true. But starting in 2015 incomes began a powerful run, increasing by nearly a quarter before dropping a bit during the pandemic year of 2020.

In other words, the Great Recession hit Millennials hard, but it was a temporary hit and Millennials enjoyed strong income gains during the recovery. They are now the highest paid generation in American history, but only if you look at data going all the way to the present instead of just chopping things off at 2012 and never looking again.

Every year I take a picture of a local rabbit. Usually it's a rabbit hopping around my neighborhood, but this year it's a rabbit in the far wilds of Laguna Beach. So here it is: the 2021 Rabbit of the Year.

Here's some raw data for the "COVID-19 changed everything forever" file:

I was inspired to retrieve this data by a short piece in the Atlantic that points out just how badly we smart people have estimated the impact of the pandemic:

Last week, The Atlantic commissioned a poll from Leger, asking Americans to estimate how many people had worked from home during the pandemic....About 90 percent of surveyed respondents who worked from home in August because of the pandemic guessed that at least 40 percent of Americans did too. In reality, only 13.4 percent worked from home in the final month of summer.

There are two fundamental disconnects here. First, white-collar folks routinely forget that the vast majority of jobs—nurses, truck drivers, retail clerks, etc.—can't be done from home in the first place. Only about a third of all jobs are even open to telecommuting.

Second, white-collar folks sort of assume that everyone is like them. If they've been telecommuting, or if they know others who have been telecommuting, then it seems natural that loads of people are telecommuting. But it's not so.

Anyway, we're already down to a pandemic-related telecommuting rate of 13% and the trend is still going down. This isn't proof of anything, but it's certainly suggestive that a year from now the overall rate of working from home will be a little higher than it used to be, but will hardly represent a massive upheaval in the workplace.

Always remember Kevin's Law of the Pandemic: When it's over, everything will go back to normal. People claiming that it will spur a permanent change in _________ are pretty much all wrong.

Ezra Klein reminds me today of a report from the Niskanen Center that got some attention a week ago. Here is its core claim:

We are in an era of spiraling costs for core social goods — health care, housing, education, child care — which has made proposals to socialize those costs enormously compelling for many on the progressive left.

This is something that seems so obvious the authors barely even felt like they needed to back it up. But costs aren't spiraling for these things. In fact, costs in these four categories range from basically flat to "it's complicated." Here they are one by one.

Childcare

The Bureau of Labor Statistics has always tracked childcare inflation as a separate category—though for some reason this seems to be a closely guarded secret or something since you hardly ever see it. Here it is using 2000 as a starting point:

Childcare costs have risen about 11% more than average earnings. That is an increase, but it's hardly "spiraling."

Housing

We've been though this before, but here it is again:

The cost of housing has gone up less than average earnings. If you were to account for lower interest rates, you'd find that mortgage payments have risen even less.

As always, however, there are exceptions. There are always trendy markets that skyrocket for a while before giving way to the newest trendy market. For example, here is Denver:

On average, the cost of housing has been pretty stable over the past 20 years. But it's a bell curve, and there are always going to be cities on both the high and low side.

Healthcare

Now we're getting into "it's complicated" territory. The basic story of healthcare costs is that they skyrocketed in the 80s and 90s, but have flattened out over the past couple of decades:

This is a very well known trend among people who actually follow healthcare costs. Medical inflation is still a bit higher than overall inflation, but not by a lot. It turns out that the 80s and 90s were an aberration, and we've since returned to the lower healthcare cost growth of earlier years.

But that's not the whole story. Here are actual consumer expenditures on healthcare:

What's going on here? If medical inflation is restrained, why are we paying way more for healthcare than we used to?

The answer is that consumers are paying an increasing share of healthcare costs. Employer healthcare programs are charging bigger and bigger premiums for policies that have larger deductibles and higher out-of-pocket maximums.

There's no question that this trend is driving public sentiment toward subsidized and/or national healthcare. However, it's important to understand the underlying cause. It's not that medical care costs are spiraling, and if that's your target you're missing what's really going on.

Higher Education

Finally we get to something where costs really are spiraling:

Even here, though, "it's complicated" rears its head. For starters, universities are the original masters of price discrimination: in the same way that the person sitting next to you on a plane may have paid double—or half—what you paid, averages mean nothing in higher education. Everyone pays a different price.

In particular, the net cost of tuition and fees for most public universities is basically zero for anyone with a working class income or less, and fairly modest for those with middle-class incomes.

On the other hand, this doesn't include housing, which is high for some but zero for kids who live at home and attend a commuter college.

On the other other hand, costs have spiraled for those with higher family incomes, and that's contributed to the explosion of student debt.

On the other other other hand, the most outrageous stories of student debt come from for-profit trade schools and graduate students (mostly law and MBA students). Student debt is truly a problem even for ordinary 4-year undergrads, but it's mostly a problem for those with decent family incomes and fairly good career expectations.

These are all details, and they're important, but of the four things mentioned by the Niskanen report this is the one that truly does fit their premise. Higher education costs really are spiraling, and that really does push public sentiment in the direction of ever higher subsidies. That's not a sustainable dynamic in the long run.

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That's that. But why do I bother with stuff like this? It's because I look around and I see endless evidence of conventional wisdom that never gets questioned even though it's fundamentally wrong. It seems like I and others spend a lot of time pointing out things like this but it just never sinks in.

Don't take any of this as gospel. I may have some things wrong myself. However, I'm pretty sure I have the big picture mostly right, though it never seems to make much of a dent in public discourse.

Want more examples? A lot more? There's always this.

The Senate parliamentarian has once again handed down a ruling that irks progressives, and as usual progressive Twitter is outraged. Why does an unelected bureaucrat get to make these decisions? Chuck Schumer should fire her. The president of the Senate should overrule her.

This is so stupid and so tedious. Every legislative body has a parliamentarian. Her job is not to make the rules, only to enforce them. In this case it's the Byrd Rule that's up for interpretation, and the Byrd Rule says that you can pass legislation in the Senate with 51 votes only if it directly affects the budget. The legislation at hand concerns a path to citizenship for illegal immigrants, and the parliamentary ruling on it was a no-brainer: Its effect on the budget is plainly incidental to its primary purpose. This means Republicans can filibuster it, which in turn means it needs 60 votes to pass.

This was never seriously in question and has nothing to do with the parliamentarian. Anyone would have handed down the same ruling.

So what about just firing her or overruling her? Sure, you could do this, but it's effectively the same as eliminating the filibuster. You'd be giving the Senate majority leader the ability to block a filibuster anytime he feels like it.

So forget about the parliamentarian. The underlying key to every problem in the Senate is unanimous consent in general and the filibuster in particular. If you want to fix the Senate, getting rid of those things is the only way. But you need 51 votes to do it, and right now Democrats don't have 'em. Until they do, nothing else matters.

It looks like our mortality rate from COVID-19 is starting to reach its peak. Maybe. I guess that's good news, though this chart is frankly too depressing to think that anything in it represents good news.

Here's the latest on l'affaire submarine:

Australia’s Prime Minister Scott Morrison said Sunday it had “deep and grave” concerns about the diesel-powered submarines it planned to buy from France — and that Paris knew this well before Canberra abruptly cancelled that deal in favor of sharing nuclear submarine technology with the United States and Britain.

Maybe so. But something that's gotten oddly little attention is that the French submarine fleet is entirely nuclear powered. The Australian project was indeed going poorly, but that was largely because the Aussies wanted diesel-powered subs and converting the French Attack-class boats to diesel engines turned out to be more fraught than anyone had predicted. If nuclear propulsion and a faster schedule had really been at the bottom of Australian concerns there was a pretty easy solution at hand: ditch the reconfiguration and buy off-the-shelf nuke-powered Attack-class subs.

It's true that US Virginia-class subs are technologically more advanced than anything France can offer, but not by enough to really be the driver of the Australian decision. This is why France is so put off by the abrupt switch: they know perfectly well that problems with construction weren't a big factor. The whole thing is largely symbolic, demonstrating that the US, UK, and Australia want to form a close alliance in the western Pacific that very publicly excludes France. Especially since it came without warning, it's hard to think of anything that could have been more insulting.

All three AUKUS members were surely well aware of this. So either they decided the strategic benefits were worth the cost or else they actively wanted to insult the French. But which was it?

Immigration, illegal and otherwise, is not one of my hot buttons. However, I do believe that countries have an obligation to control their borders, and I also recognize that immigration is a hot button for lots of people. That said, here are the latest figures for encounters along the border with Mexico:

Even those of us who don't feel strongly about immigration can surely understand that a spike of this magnitude requires a response of some kind, something that the Biden administration doesn't seem much interested in providing. I find this a bit of a mystery. Is Biden simply assuming that the spike will be old news by the time midterms roll around next year? Does he not care much about the border? Or does he simply not have any idea what to do about the current ayslum-driven spike?

UPDATE: The original version of the chart showed the wrong dates. Sorry about that. It's correct now.

As long as poor Hopper has to stay in her cone, she gets special treatment. That includes her own food dish, her own water dish, and Friday catblogging every week.

Hilbert is not happy with this since he thinks he's the one who's truly suffering. He remains bizarrely nervous around Hopper, as if the cone has transformed her into something very strange and possibly dangerous. I really have no idea what's going on. She can't smell all that much different, can she?

Anyway, here she is sitting on my lap and demanding that I pet her and scratch her tummy. Which I did.

Tyler Cowen links to the course description for "Foundations of Blockchains" by Columbia's Tim Roughgarden:

Perhaps this course will also serve as a partial corrective to the misguided coverage and discussion of blockchains in a typical mainstream media article or water cooler conversation, which seems bizarrely stuck in 2013 (focused almost entirely on Bitcoin, its environmental impact, the use case of payments, Silk Road, etc.). An enormous number of people, including a majority of computer science researchers and academics, have yet to grok the modern vision of blockchains: a new computing paradigm that will enable the next incarnation of the Internet and the Web, along with an entirely new generation of applications.

I would be delighted to read the layman's version of this, free of hype and full of serious applications for the future. So I'll open this to the hive mind: has anybody written such a thing?