The American Dream Is Not Dead

(But Populism Could Kill It)

[Amazon Link]

This short book by (168 print pages, including end matter) was published in late February. It's by economist Michael R. Strain, who works for the American Enterprise Institute. I got the Kindle version for a mere $7.49, link at right. It's a quick read, very accessible.

Consumer note: some of the book's graphs rely on color. If your primary Kindle reading device is monochrome…

Strain's thesis is simple, set out right there in the title; he sets out to debunk the various doomsayers on left and right who claim that the American Dream is … well, if not dead, then seriously unwell. We're simply not doing that badly. Strain is no Pollyanna, setting out various challenges that the US is not meeting well. But he trots out some pretty convincing statistics showing that typical workers have been enjoying modest income gains over the past thirty years or so. He uses the "personal consumption expenditures" price index to account for inflation, as opposed to the more popular Consumer Price Index, arguably a more accurate choice.

Strain also looks at mobility, very relevant to the dream. He looks briefly at "relative" mobility—e.g., how likely is it that a kid growing up in a bottom-income-quintile family will move into a higher quintile? But he makes a good point about relative mobility as judged by income quintiles or some other N percent fraction of the income spectrum: when somebody moves up, someone else has to move down.

So he prefers absolute mobility, and the results are pretty cheery there. Most American men (about 59%) earn more than their fathers did at the same age. And about 80% of sons from the bottom 20% of income out-earn their fathers.

The numbers could be better. But we won't make them better (Strain goes on to argue) by various populist nostrums proposed by left and right: protectionism, industrial policy, punitive taxes on the successful.

Strain's book does something interesting by including rebuttals: one from the left (E. J. Dionne) and one from the right (Henry Olson). And then a final response to these critics—author's privilege—from Strain.

Even though it's a short book, I've left some stuff unmentioned here. It's very accessible and (to my mind) convincing.