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100 sats \ 14 replies \ @grayruby 17 Dec \ on: America is richer than ever. Why is it so unhappy? econ
Since 1996, America’s median household income (adjusted for inflation) has risen by 26 percent, enabling us to afford more flights, smartphones, and Gordita Supremes than ever before. And yet, over that same period, the share of Americans who described themselves as “not too happy” in the General Social Survey rose by 9 percentage points, while the segment calling themselves “very happy” shrank by more than 9.4 points.
Meanwhile, measures of Americans’ economic confidence and consumer sentiment both declined. And in 2025, the percentage of Americans who were “very satisfied” with their personal lives hit an all-time low in Gallup’s polling.
This disconnect between America’s rising prosperity and sagging spirits has grown more conspicuous in recent years. Since the middle of 2023 — when inflation returned to normal levels following the post-pandemic price spike — Americans’ real wages and net worths have ticked up. But the public’s mood has scarcely improved.
Yeah maybe the way wealth and inflation are being measured are total bullshit.
Or maybe wealth doesn't lead to happiness
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Properly defined, it seems like it has to.
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What definition would you propose?
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Something that incorporates the value of non-market things.
Conceptually, something’s monetary value to its possessor is the amount they’d have to be paid to give it up.
So, your level of wealth is what you’d have to be offered to part with everything you value, including relationships and knowledge and such.
The major flaw is that many people are infinitely wealthy by that metric, which makes it pretty useless.
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An issue that I think is foundational is that these things are dynamic. Even w/ a sophisticated mechanism to attribute the wealth from living closely to a bunch of friends who care about you and who you care about -- which is economically illegible but practically about the most important thing there is -- there's still the issue of adaptation, wherein the felt value of this source of wealth dissipates over time. You don't feel it nearly as much when you've had it for a year, vs when you've been starved for it. No seasoning like hunger, etc.
To my mind, this is reason for both optimism and pessimism. Optimism bc most of what ails anyone (or any modestly functioning civilization) is amenable to treatment for zero dollars; pessimism bc the prospect of people introducing these cycles into their lives is negligible.
Put another way, it doesn't matter how "wealthy" we get by the usual way of reckoning such things, nobody will feel better about it, and btc doesn't fix this.
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That last part depends on whether this is an inherent feature of modernity or if it’s a fiat induced high time-preference pathology.
The important part is that what is measurable gets optimized and we’re missing the immeasurable losses. I think there’s a growing awareness of this situation though.
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That last part depends on whether this is an inherent feature of modernity or if it’s a fiat induced high time-preference pathology.
I don't even think the culprit is modernity, except insofar as modernity has made vastly largely swathes of humans prosperous, post-scarcity for the "real" scarcities. But given the prevalence of the anomie throughout history -- of the wealthy, and wealthy civilizations, unhappy in similar ways -- I think the data tells a compelling story.
Hopefully I'm wrong, though.
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changing how we measure wealth could solve the birth rate crisis
everyone complains about how kids are too expensive, but for most people having kids is likely a net increase in lifetime wealth, when measured including non-market valuations
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We just need to elicit true reservation prices from enough parents to be confident in our measure.
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Beyond a certain level it doesn't.
This is well established.
Add in the huge increase in inequality and 'the median' is suddenly not as representative as it once was.
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It’s not really that, i think! I think @Undisciplined nailed it when he talked about prosperity definition.
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Agreed but I don't think I am wrong here. People's largest monthly expenses- housing, healthcare, education, healthy food have all gone up in price much faster than inflation. So while measured in fiat sure your income and paper wealth have increased but your purchasing power for the goods you need and want most has not, which is why people don't feel prosperous.
Even if we talk about people who have assets like real estate and stocks these are not outpacing money supply expansion thus even though you may be making more income, your share of the pie is shrinking.
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Declining product quality is the intensive margin of shrinkflation.
The cost of maintaining the same quality of life is outpacing inflation estimates.
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