Okay, let me unpack this. On Sunday, Ezra published a really stupid column, Why a Middle-Class Lifestyle Remains Out of Reach for So Many, which, among other things, quoted from a really stupid article in the Atlantic, The Great Affordability Crisis Breaking America: In one of the best decades the American economy has ever recorded, families were bled dry., written by his wife, Annie Lowrey, which gave me a headline to die for (if you’re me). But then, on Monday, Ezra published a really smart interview, Why Housing Is So Expensive—Particularly in Blue States, with senior Brookings fellow Jenny Schuetz. Hence, the modifier.
I’ll start with the good first, because, why not? Jenny is the author of Fixer-Upper
How to Repair America’s Broken Housing Systems. Ezra describes their conversation as follows:
We discuss why the states with the highest homelessness rates are all governed by Democrats, the roots of America’s homelessness crisis, why economists believe the U.S. gross domestic product could be over a third — a third! — higher today if American cities had built more housing, why it’s so hard to build housing where it’s needed most, the actual (and often misunderstood) causes of gentrification, why public housing has such a bad reputation in the U.S.; how progressives’ commitment to local democracy and community voice surprisingly lies at the heart of America’s housing crises, why homeownership is still the primary vehicle of wealth accumulation in America (and the toxic impact that has on our politics), what the U.S. can learn from the housing policies of countries like Germany and France, what it would take to build a better politics of housing and much more.
Though neither Ezra nor Jenny acknowledge it, her analysis of our housing problems is shockingly libertarian, though Jenny is shrewdly lowkey in her discussions, never blustering about “liberal idiocy”, or “liberal hypocrisy”, which I have blustered about on a number of occasions, perhaps most relevantly in the “Afterwords” to this post. Jenny is particularly, and accurately, critical of the whole NIMBY thing, though she doesn’t use that specific term, jumping off, I suspect, from the influential work of Chang-Tai Hsieh and Enrico Moretti, Housing Constraints and Spatial Misallocation, a study updated and made even more trenchant by Bryan Caplan, the whole thing nicely treated by Ilya Somin, Exclusionary Zoning Is Even Worse Than Previously Thought.
So that’s all good. So why is “Why a Middle-Class Lifestyle Remains Out of Reach for So Many” such a stinker? Because the whole article is an exercise in “outrage” cherry picking—the whole notion, often entirely unconscious, that the more “outrageous” a statistic is, the truer it is, and the more meaningful it is—at least when you’re trying to show your populist “passion”, as both Ezra and wife Annie most clearly were. Ezra quotes from the piece Annie wrote for the Atlantic a few years back:
“In one of the best decades the American economy has ever recorded, families were bled dry by landlords, hospital administrators, university bursars and child-care centers,” Annie Lowrey wrote. “For millions, a roaring economy felt precarious or downright terrible.”
“[O]ne of the best decades”? Uh, really? In 2010, the unemployment rate averaged 9.63%, the highest since the Ronnie Reagan recession in 1982, and it didn’t drop into “healthy economy” territory (5.28%) until 2015. Millions had been “bled dry”, not by greedy landlords but by collapsing home prices, collapsing stock prices, and collapsing employment rates, all dating from the economic collapse that started in the summer of 2008. The unemployment rate averaged 5.78% in 2008 and 9.25% in 2009. The national wealth of the U.S. declined by $15 trillion in those two years. In 2010 people couldn’t pay off their underwater mortgages (if they still had them) or their credit card debt or their student loans not because of “greed”, but because they’d exhausted their savings and couldn’t find jobs! It’s true that things picked up until the COVID came, but the first five years of Annie’s “roaring” decade were brutal—as were the last two years that preceded them—while 2020 was in a class all its own.
Ezra jumps off Annie’s outrage with his own list of “did you know” shockers like “The median home price in 1950 was 2.2 times the average annual income; by 2020, it was six times average annual income.”
Yeah, okay. Well Ezra, did you know that the percentage of Americans owning homes has increased from 55% in 1950 to about 65% in 2020, an increase of about 20%? That the median family income has risen from $35,000 1955 to $67,000 in 2020, down $2,000 from 2019 thanks to COVID (all numbers adjusted for inflation)? That the average American home in 1950 had about 1,000 feet, as compared to about 2,500 feet today? That today’s homes are packed with “necessities” that didn’t even exist in 1950? (And, to be fair, “good Ezra” discusses other reasons why housing costs are so high and why they shouldn’t be in his conversation with Jenny, which you should read.)
Ezra also tells us that “Child care costs grew by about 2,000 percent — yes, you read that right — between 1972 and 2007.” Maybe because so many more women are in the workplace and thus aren’t staying home with the kids? Is that relevant?
The simple fact is that any comparison over more than 20 years or so becomes very iffy unless you’re very careful, because the country has changed so much. Trying to make “apples to apples” comparisons, which people assume you can do whenever you want—whenever you need a “shocking” statistic—becomes almost impossible. In 1960, 60% of Americans 25 years or older had less than a high school diploma. Today the percentage is about 10%. In 1960, state governments did not spend a dime on Medicaid, which, of course, did not exist until 1965. Today, they spend more than $600 billion a year on Medicaid and CHIP (Children’s Health Insurance Program), which might explain why they spend less than they used to subsidizing middle-class college students.
I recently read an excellent book, The Genetic Lottery Why DNA Matters for Social Equality, by Dr. Kathryn Paige Harden, professor of psychology at the University of Texas at Austin. Dr. Harden surely knows more about statistics (and, probably, everything else) than I do, but even she comes a cropper thanks to the dreaded effect of the “shocking statistic”. On page 5 of her book she tells us, in suitably shocked tones, “men without a college degree haven’t seen any increase in real wages since the 1960s.”
She thinks that’s stunning, but actually it’s not surprising. If she had done a little research, she would have found that in 1970 less than 10% of the male population had a college degree—which means that, obviously, more than 90% did not. Lots of smart men did not have college degrees. Today, close to 30% of men have college degrees.
But that’s only the tip of the iceberg. The American labor force in 1960s was largely the product of the “birth dearth” generation of the 1930s and 40s. Yet both the population and economy were expanding greatly, creating a real labor shortage and thus driving up wages. Once the baby boomers hit the job market, obviously, things would change radically. To cite a few numbers, from 1950 to 1970 the size of the labor force rose from 62 to 82 million, but then rose to 126 million in 1990.
But that still isn’t the whole story. Throughout the sixties there was a military draft, for men only, pulling millions of young men out of the labor force, and, from 1965 on, sending them off to war. And there is nothing like a war to make an economy boom.
But that still isn’t the whole story, by a long shot. In 1970, there were relatively few women in the workplace. Men had virtually all the “good jobs” all to themselves. This would change radically over the next 20 years, as millions of women moved into the labor force, which, among other things, pulled earnings down for everyone. Again, to cite a few numbers, the labor force participation rate for women increased from 34% to 43% from 1950 to 1970, but by 1990 it had reached 58%. Said the Bureau of Labor Statistics, in suitably awed tones, “Between 1970 and 1980, the labor force participation rates of women in the 25–34 and 35–44 age groups increased by 20.5 percentage points and 14.4 percentage points, respectively. No other labor force group has ever experienced an increase in participation rates of this magnitude in one decade.”
Levels of educational attainment, workforce participation, population growth, population composition, economic growth, and many other factors can change radically over time. If you don’t watch out, those apples can turn into oranges very quickly. Shockingly enough, the more shocking a statistic is, the less likely it is to mean a damn thing.
