New York Times columnist David Brooks writes:
"Reaganism was the right response to the stagflation of the 1970s, but Bidenism is a sensible response to a very different set of economic problems. Let one set of statistics stand in for hundreds: According to a team of researchers led by Raj Chetty, in 1970, 90 percent of 30-year-olds were making more than their parents had at that age. By 2010, only 50 percent were."
What the Chetty team actually wrote in the April 28, 2017 issue of Science magazine ("The Fading American Dream") may make it easier to understand what actually happened.
That 2017 article estimated that "the fraction of children earning more than their parents fell from 92% in the 1940 birth cohort to 50% in the 1984 birth cohort." That comparison is a meaningless mismeasurement of generational progress.
The reason for the change is painfully obvious to those of us born around 1940 (in my case 1942): Our parents were married during The Great Depression and most of our fathers later had no choice but to earn minimal incomes in military service for years.
Having a higher income by the late 1960s than our parents did in the 1930s was scarcely a sign that life became more difficult for us than it was for our parents. On the contrary, It meant the exact opposite -- namely, that our parents had been sadly poor at age 30 and we were not. Doing better than our parents had during the Great Depression was an easy target for my generation to beat.
Parents of those born in 1984, by contrast, grew up in the booming postwar rebound. Unsurprisingly, they typically earned much more by age 30 than those who were struggling through the Depression and World War II at the same age. Yet that is the supposedly impressive "one statistic" on which Mr. Brooks' whole story hangs.
Unlike their parents, children born in 1984 reached age 24 during the Great Recession and 36 during COVID-19. Many also remained in school years longer than their parents.
Unsurprisingly, a deep recession and pandemic delayed the economic opportunities of those just starting their careers. Such unique crises are not, however, evidence of some systemic failure of the American economy requiring massive new federal spending and taxes. The fact that 2008 and 2020 were tough times tells us nothing about what to do about the future.
The Chetty team totally misinterpreted their unsurprising statistics, as does Mr. Brooks and his secondary source, the Niskanen Center.