“As the U.S. population crossed the 300 million mark sometime around 7:46 a.m. Tuesday (according to the U.S. Census Bureau), the typical family…” By the way, we have found out the last name of the person that was the 300th. It’s “Clinton.” In fact, the 300th million, the 301st million or 302nd million, all named Clinton. I’m just kidding. Bad joke. Never mind. Back to the Forbes story: The typical family, as the US population crosses 300 million “is doing a whole lot better than their grandparents were in 1967, the year the population first surpassed 200 million. Mr. and Mrs. Median’s $46,326 in annual income is 32% more than their mid-’60s counterparts, even when adjusted for inflation, and 13% more than those at the median in the economic boom year of 1985.
“And thanks to ballooning real estate values, average household net worth has increased even faster. The typical American household has a net worth [This is just the median.] of $465,970, up 83% from 1965, 60% from 1985 and 35% from 1995. Throw in the low inflation of the past 20 years, a deregulated airline industry that’s made travel much cheaper, plus technological progress that’s provided the middle class with not only better cars and televisions, but every gadget from DVD players to iPods, all at lower and lower prices, and it’s obvious that Mr. and Mrs. Median are living the Life of Riley compared to their parents and grandparents. So why are they so unhappy?”
Forbes’ answer when we come back.
BREAK TRANSCRIPT
RUSH: So why are people in the midst of such robust economic times so unhappy?
“Yes, despite their material prosperity, the Medians are a grumpy lot. A Parade Magazine survey … performed by Mark Clements Research in April showed that 48% of Americans believe they’re worse off than their parents were.” Well, the Forbes article indicates, it just ain’t true in terms of median income. Even adjusting for inflation, people are way ahead of their parents and grandparents at this point in life. Net household worth, family worth, is skyrocketing, much higher than it’s ever been in history — and yet, “48% of Americans believe they’re worse off than their parents were. A June 2006 study by GFK-Roper group showed that 66% of Americans said that their personal situations in the ‘Good Old Days’ — defined by the bulk of respondents as anywhere between the 1950s and the 1980s — were better than they are today.
“And in May, a Pew Research Center poll showed that half of U.S. adults believe the current trends point toward their children’s future being worse than their own present.” None of it’s true. It’s the exact opposite. There is more prosperity and opportunity. The pie in this country has never been bigger than it is today, and yet people think we’re going to hell in a handbasket. Their lives are not nearly as filled with riches and quality and opportunity as their parents and grandparents. Now, you can: “Attribute some of the dissatisfaction to what economist Milton Friedman dubbed ‘Permanent Income Theory,’ which assumes that people measure where they are relative to where they expected to be a few years ago. They don’t care a bit what the average income,” when their parents were around and their grandparents.
“‘If you expect a 3% rise in income and you get 2.5%, you’re disappointed,’ says Ken Goldstein, an economist at the Conference Board, a private research group in New York. And because people generally judge their fortunes not in absolute terms, but by comparing themselves to others…” That, folks… A brief departure from the story for a moment for an editorial comment by me. Whether it is money or anything else, if you end up comparing yourself to others, you are always going to be miserable because you’re always going to assume somebody else’s grass is greener, naturally. It’s human nature to do this.
Everybody thinks that everybody else has it better than they do. “[B]ecause people generally judge their fortunes not in absolute terms, but by comparing themselves to others the super-success of the top 1% can make Mr. and Mrs. Median feel relatively poorer. Take CEOs — the $19 million that Wal-Mart Chief Lee Scott raked in last year was 410 times what Mr. and Mrs. Median made, as opposed to the $469,000 a year earned by Exxon’s Ken Jamieson in 1975, which was a mere 40 times more. It’s the same with celebrity athletes. Those who worshipped Joe Namath in the 1960s could at least identify with the $142,000 a year he made ($848,000 in today’s dollars). But how many can identify with the $87 million Tiger Woods took in last year? And not only are the elite making much more today, relatively, than the Medians, the rise of cable television and the Internet assures that they know all about it.
“‘It’s now easy for us to see how other people around the world live, not just how our neighbors live,’ says Barry Schwartz, a professor of psychology at Swarthmore College. Schwartz also argues that the plethora of consumer choices today, while generally a good thing, can be a catalyst for bringing people down. Not everyone can have a new flat-screen television with both a 60-inch screen…” Maybe they have to get a forty-inch, so they envy the bigger one. (Size envy has always been with us, as you know.) “‘The more options you look at, the more you have to give up,’ he says. It’s true that the wealthy have grabbed up a larger share of the growing economic pie over the past 40 years. Census Bureau stats show that the percentage of pay collected by the middle 60% of wage earners dipped to 46% in 2005 from 52% in both 1965 and 1975…. But the overall pie is much larger too. A near quadrupling of the Gross Domestic Product since 1967 means that today’s Americans share $12.5 trillion in wealth, or $41,579 per capita, compared to the $3.8 trillion, or $18,951 per capita, enjoyed by 200 million people back then.
“Of course, the super-rich have done even better…. But what does the pay of celebrities and CEOs have to do with the average American, other than provide fodder for jealousy? It would be one thing if growing incomes at the top stretched prices of goods and services so much as to dramatically push inflation ahead for everyone else. But inflation has been tame for over two decades.” I would add that these super-rich go out and they’re the first ones that buy newly introduced products at these exorbitantly high prices, get the ball rolling and that makes the 60-inch and 40-inch plasmas reduce in price over time so as to become affordable! The point is that all the money these people are making is not resulting in inflation or hire prices for everybody else. It’s just the opposite. “The fact is that in real terms, the Medians are doing great. Mr. Median makes 25% more than his father did 30 years ago, even after holding for inflation. Mrs. Median is a lot more likely to work in the professional ranks than her mom was, and to be paid about three times as much doing so. And though she still makes only 77% of what her male counterparts earn,” I would dispute that, “this is up from 33% in 1965.
“They dote on the same number of children (two) but waited longer to have them until both careers are well underway. They also pay less tax to the federal government and have 8% more purchasing power than they did 20 years ago… But, if despite their prosperity, the Medians need some cheering up, there is one powerful person whose wage growth they have outpaced nicely over the last two generations. When Lyndon Johnson occupied the White House,” pulling the ears of his pet beagles, “in 1965, he earned $100,000 a year, or 14 times what the Medians earned. This year, George W. Bush will earn $400,000, or just eight times the Medians.”
So Mr. and Mrs. Median Income are catching up with the Most Powerful Man in the World and his salary. This was posted yesterday at Forbes.com. “The Average American, ’67 and Today” by Tom Van Riper, and we will link to it on RushLimbaugh.com. (interruption) I think this covers the psychological reasons. Obviously he didn’t give political reasons why people are unhappy, but you have to factor in a constant negative drumbeat from the Drive-By Media on how rotten things are. For crying out loud, folks, up until the past year — you may have forgotten, but — the economy in this country was portrayed as having lost two, three million jobs, whatever, soup lines. Your dad, yourself, were one paycheck away from being homeless. It was a constant, apocalyptic never-ending drumbeat, and then when the gas price went up, “Whoa!” It was really going to be over. There’s no question that that is still a factor. It still is interesting. With economic times and job security, as relatively solid as it is, why it doesn’t overcome the constant drumbeat of negativity from the Drive-By Media and the Democrats who are constantly in campaign mode.
END TRANSCRIPT