I mean, their dollars buy less than the middle class of yesteryear though, right? (Someone pissed in my cheerios, ignore me.)
In what sense? Do you know what the price of, say, a VCR was when they were new? Say it was $1400 in 1975 dollars (according to the gov't that over $6000 in 2016 dollars). Now you can buy a 70" LED monitor with internet capability plus a Blu-Ray player and a Bose sound system for a fraction of that. This is one trivial example. There are plenty of others. Cars, for example. It is difficult to make an apples-to-apples comparison, because the quality and efficiency or cars these days are light years beyond what they were 30-40 years ago, but it's easy to see that we're getting a better deal now.
This is one of my biggest externality talking points. That $1400 VCR was made in the USA, could be serviced in the USA, and was built to last a number of years. The $40 VCR that presided over the sunset of the video cassette recorder was made in Puna, couldn't be serviced by anyone, and was built to almost but not quite live out its 90 day warranty. Yeah - it's great that more Americans could buy more VCRs but they also have to buy more VCRs, which in the end benefits the shipping companies and the overseas manufacturers. 'cuz the inequality where the workers live is off the chain and the VCRs, while they're improving it a little, aren't causing as much global wealth increase as they're causing local wealth decrease. Cars reflect a super-accelerated increase in standards but they also reflect a massive globalization and dilution of local markets. We might be getting a better deal... but a Yaris right now is a Cadillac in 1967. Shit be spendy. Adjusted for inflation a '66 mustang convertible was like $14k.
Yeah and your '66 Mustang might have died on the way home from the lot! Quality in manufacturing (planned obsolescence aside) is so many light-years beyond what it was even 30 years ago that it's hard to compare. A Yaris may cost what a Cadillac did in '67, but the Yaris is going to last 200k miles without blinking, and with the most minimal care possible. Value is difficult to judge, because we all want different things, but I think cars are objectively better value now than then (subjectively speaking, of course).
To be fair, the Beetle is priced for those same hippies that now have more cash. Here are some cheap cars in 2016: Nissan Versa: $11,990; 66' adjusted: $1,617 Mitsubishi Mirage: $12,995; 66' adjusted: $1,752 At $1,352 the entry Beetle was indeed about $10k adjusted in 66'. But the car that bears the name is not targeting the same market now. Even so, if you got the squareback with a sunroof, your 66' Wolfsburg Beetle set you back the equivalent of $14,658. The price of cars is up some, but I don't think the affordability has changed too much. Especially when you consider that the quality of today's cars leads to a used car market with more cars that have life in them. Chevy Spark: $12,660; 66' adjusted: $1,707
Housing has pretty much tracked inflation since the beginning on time (housing is one of the largest costs that is calculated into inflation, so that's kind of a tautology). Some cities have experienced rapid growth in housing costs, but those are mainly cities where people get paid well. Taking loans for college is still a good deal for most students, but of course there are experts who come down on both sides of that one, e.g. Neil Irwin and David Leonhardt.
My point on the student debt thing is that 40 years ago 'student debt' was a laughable concept, now it's taking huge chunks of the economy down with it. Like, 'costs of college' was a summer of flipping burgers for a semester, right? or approximating that? Now a full time job isn't sufficient to pay for tuition in a lot of cases. I also don't really know enough about money or the past 30-40 years of economic history to comment in an intelligent manner.
I think the cost of college has more negative consequences than just debt overhang, which obviously sucks on its own. Namely, the quality of education declines every time the price goes up, which is an oddly counter-intuitive result. This happens because no one will accept failing at $600/credit for a state school or whatever. We're non-educating a lot of people, and I think that will have far more negative consequences for long term economic health than just a $300-500/mo debt payment. Maybe. Or maybe I'm just an old back-in-my-day type, just like my dad was when I was in college.
I think it's a bifurcation of the economy as the price of professional services has risen (education, healthcare), and the price of labor and manufacturing has fallen. This article about the cost of raising a kid these days seems to support that view.Mr. Rose adjusts these thresholds for inflation back to 1979 and finds the population earning this much money has never been so large. One could quibble with his exact thresholds or with the adjustment that he uses for inflation. But using different measures of inflation, or using higher income thresholds for the upper-middle class, produces the same result: substantial growth among this group since the 1970s.