👎 Mistelling the story of the American Dream

I have issues with David Leonhardt's new book, 'Ours Was the Shining Future'

Quote of the Issue

“Once you start thinking about growth, it's hard to think about anything else.” - Nobel laureate economist Robert Lucas

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The Essay

👎 Mistelling the story of the American Dream

Does a book about the supposed withering of the American Dream make sense if, you know, a robust case can be made that the American Dream isn’t actually withering?

This is one of several questions I have about the recently published Ours Was the Shining Future: The Story of the American Dream by New York Times columnist David Leonhardt. It’s a 513-page book filled with gloomy economic statistics that suggest, as Leonhardt writes, “the United States entered a dark new economic era starting around the mid-1970s.”

But there’s no doubt that Leonhardt sees the following statistic as encapsulating the book’s premise (especially given the book’s title): Just 50 percent of people born in the early 1980s went on to have higher incomes than their parents as adults (when they reached age 30), down from more than 90 percent for children born in the early 1940s. There you have it. If the American Dream has any meaning, it means the promise of absolute upward mobility. As Leonhardt writes: “Achieving the American dream was a virtual guarantee for this generation. It was true whether they graduated from college or never enrolled. It was true in every region and for Americans of every race. Even most people who had to overcome a hardship, like a divorce, an illness, or a layoff, earned more money than their parents had.”

Those depressing mobility stats come from a team of researchers led by Harvard University economist Raj Chetty. And, as Leonhardt notes, “the data has received national attention. Politicians continue to cite the findings, as do journalists and other academics.” But there’s good reason to think the findings from Team Chetty greatly overstate the mobility decline, as put foward in their paper, “The fading American dream: Trends in absolute income mobility since 1940.” Therefore, Leonhardt overstates the decline, too.