The Average American: 1967 And Today

I found this article in Forbes and didn’t like it. In it I’ll tell you why.

“As the U.S. population crosses the 300 million mark sometime around 7:40 a.m. Tuesday (according to the U.S. Census Bureau), the typical family 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.”

I think that the men and women in workforce make up for this. How many more couples now run on two incomes just to keep up.

“And thanks to ballooning real estate values, median household net worth has increased even faster.”

and thanks to falling Real Estate prices a household’s net worth will decrease by the same amount.

“The typical American household has a net worth of $465,970, up 83% from 1965, 60% from 1985 and 35% from 1995.”

If typical means the “average” than that includes all incomes including the highest 1% of earners which earn the most, by far. And don’t forget inflation and a surge in M3.

“Throw in the low inflation of the past 20 years,”

Lower inflation over the past 20 years. That’s the exact length of the recent Bull market that started in stocks and is finishing now in Real Estate.

“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,”

Sounds strikingly similar to the 1920s with all the Railroads in trouble and after the advent of new technologies such as Radio and in telecommunication.

“all at lower and lower prices,”

At lower prices that has been suffered for by countries of harsh wages (China, India) who are now in a state of an economic revival.

“and it’s obvious that Mr. and Mrs. Median are living the life of Riley compared to their parents and grandparents.”

Now throw in the fact that the Average Family Savings Rate is in the red due to Personal Debt which is at an all-time high, liquidity has been literally pumped out of exotic mortgages taken out of rising housing prices and for Gods sake we’ve been in a bull market for just about the second half of those 40 years!

In 1985 the Stock Market was below its record high of 1500 and my parents bought a nice house for $80,000.

Yes life at the top is good. Thank goodness this generation has absolutely no clue what a “World War”, “Depression” or “Bear Market” even is. Sometimes a “Recession” is the worst that can come to mind. Even a Market crash has been pretty much played down to a scare possibility.

The fact is Life corrects, markets correct and no one is swearing that the “American Way” we have all come to know will always be taken for granted.

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