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Evidence that We’re Better Off Than in the 1960s, #2976

Summary:
Those of you who read Don Boudreaux over at CafeHayek know that he often gives evidence that the average American is way better off than his/her counterpart in the 1960s, 1970s, and 1980s. This is my story comparing now to the 1960s. I was talking to a California friend recently and we were both belly-aching about state and local governments’ assaults on Californians’ freedom. The biggest ones right now are the lockdowns. (Parenthetical note: Governor Newsom’s new purple standard is absurd. It treats the whole of a county the same even though there’s incredible heterogeneity within a county. Monterey County’s average number of cases over the last 7 days is 15.6 per 100,000 residents, putting us in the purple zone. But Monterey Peninsula’s 7-day average is 3.6,

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Evidence that We’re Better Off Than in the 1960s,  #2976

Those of you who read Don Boudreaux over at CafeHayek know that he often gives evidence that the average American is way better off than his/her counterpart in the 1960s, 1970s, and 1980s.

This is my story comparing now to the 1960s.

I was talking to a California friend recently and we were both belly-aching about state and local governments’ assaults on Californians’ freedom. The biggest ones right now are the lockdowns. (Parenthetical note: Governor Newsom’s new purple standard is absurd. It treats the whole of a county the same even though there’s incredible heterogeneity within a county. Monterey County’s average number of cases over the last 7 days is 15.6 per 100,000 residents, putting us in the purple zone. But Monterey Peninsula’s 7-day average is 3.6, which would allow us to jump up 2 zones to orange.) But even when the lockdowns end, California is one of the least economically free states in the union.

Back to our conversation. My friend was saying that he wants to move to a freer state and is considering New Hampshire. New Hampshire has no income tax and no sales tax and much less regulation. My immediate reaction, though, was to remind him how cold it is and how long the winter lasts. I grew up in rural Manitoba, where, I pointed out, it sometimes hit 40 below and at that temperature it didn’t matter whether you were talking Fahrenheit or Centigrade. I told him that in 20+ years of living in Manitoba I never got used to the cold. I was ready for winter weather to end by mid-February but it usually went to late March and occasionally early April.

Then I caught myself. I pointed out that people in Canada have it so much better than their counterparts of 50+ years ago: they can fly to Florida or Mexico for a week or even 2 weeks in late January or early February and that gives them a much-needed break from the winter. And many of them do. By contrast, when I was growing up, if someone suggested flying down south for even a week, it seemed no more plausible than flying to the moon. Maybe our family could have afforded it, but then we would have had to give up Christmas and about 2 years of my father’s saving for his 3 kids to go to college. (2 of us did.) My Uncle Fred and Aunt Jamie, however, typically went to Nassau for a week or two in the winter. He was a doctor and could easily afford it.

The world has changed.

A big part of the reason is that real incomes have gone up a lot. Another reason is that real air fares have plummeted, due both to improved technology and to massive deregulation. I pointed out to my friend how lower air fares have affected stag parties for guys getting married. I remember going to one for a friend in 1982 or 1983. Everyone there lived within 20 miles of the groom. There were drinks and food and a stripper. (That was actually the only stag party I ever went to and even though I found the stripper attractive, that’s not my idea of a good time. When she was getting dressed I asked her about the economics of her business and how she dealt with personal security.)

Today, guys will have a stag party in Vegas and people will fly in from other states.

Maybe stag parties for you, as for me, aren’t your thing. Then consider this. I taught at the University of Rochester Graduate School of Management from 1975 to 1975. I became friends with one of my students, who started dating, after she graduated, one of my colleagues. In the fall of 1980, Jeff, my colleague, called me to tell me that Laurie had died of cancer. I called an airline to price going back fro the funeral. I still remember the stunning air fare: $800 round trip. I could do it, but I was spending more each month than I was earning at Santa Clara University. So I would need to take $800 out of my low and diminishing savings. I decided not to. Do I regret the decision? No. But I regret that air fares weren’t lower. To put that $800 in perspective, it would be $2,450 today. Now I realize that the CPI overstates inflation by about one percentage point a year. But that would still make it about $1,400 today.

The world has changed and, economically, much for the better.

Back to the weather. If my wife would go for it, I could live in many states in the union and do fine by flying out for a few weeks here and there during the bad-weather parts. I would even consider South Dakota.

David Henderson
David Henderson is a British economist. He was the Head of the Economics and Statistics Department at the OECD in 1984–1992. Before that he worked as an academic economist in Britain, first at Oxford (Fellow of Lincoln College) and later at University College London (Professor of Economics, 1975–1983); as a British civil servant (first as an Economic Advisor in HM Treasury, and later as Chief Economist in the Ministry of Aviation); and as a staff member of the World Bank (1969–1975). In 1985 he gave the BBC Reith Lectures, which were published in the book Innocence and Design: The Influence of Economic Ideas on Policy (Blackwell, 1986).

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