The End of the American Dream?

Recently the FT's Ed Luce spent some time with families in Minnesota and Virginia and concluded that we're pretty much done for. The American Dream, Luce says, has become "America's Fitful Reverie." His article is worth reading in full; in fact, it's the best summary of the decline argument that I've read.

Of course, whether or not Luce is right is another question entirely.

Certainly median incomes stagnated over the 2000s, and inequality has become more pronounced. The shift to the information / service economy was producing winners and losers, and changing American society, long before the financial crisis and the Great Recession began. And those developments have made social anxiety particularly acute. Home prices have plunged, unemployment is at rates not seen in close to 30 years, America and Americans are too deeply in debt, and because of the peculiarities of American health care, losing a job means losing health insurance and maybe a pension too.

All that said, it's worth pointing out that, looking at the grand scheme of things, there has never been a better time in human history to be alive, or a richer country in which to be born. And as big as America's problems may be, she is still pretty well off. Read Stephen J. Rose's Rebound or Gregg Easterbrook's Sonic Boom if you don't believe me. Or read Scott Winship, who takes Luce's article apart piece by piece. Here's Winship demolishing Luce's claim that "a growing majority of Americans have been telling pollsters that they expect their children to be worse off than they are."

Totally wrong.  The key here is to only look at polling questions that ask people about their own kids, not kids in general.  Here are the relevant survey results I could find:

General Social Survey (1994)—45% said their children’s standard of living will be better (vs. 20% worse)
General Social Survey (1996)—47%
General Social Survey (1998)—55%
General Social Survey (2000)—59%
General Social Survey (2002)—61% said their children’s standard of living will be better (vs. 10% worse)
General Social Survey (2004)—53%
General Social Survey (2006)—57%
General Social Survey (2008)—53%
Economic Mobility Project (2009)—62% said their children’s standard of living will be better (vs. 10% worse)    (unlike GSS and PRC, asked only of those with kids under 18)
Pew Research Center (2010)—45% said their children’s standard of living will be better (vs. 26% worse)

BusinessWeek (1989)—59% said their children will have a better life than they had (and 25% said about as good)
BusinessWeek (1992)—34% said their children will have a better life than they had (and 33% said about as good)
BusinessWeek (1995)—46% said their children will have a better life than they have had (and 27% said about as good)
BusinessWeek (1996)—50% expected their children would have a better life than they have had (and 26% said about as good)
Harris Poll (2002)—41% expected children will have a better life than they have had (and 29% said about as good)