Paul Krugman: The American Dream Is Dying

"The American dream is not totally dead, but it’s being pretty, it’s dying pretty fast...Horatio Alger would move to Europe these days."

So said New York Times columnist Paul Krugman Friday.

Appearing with disgraced former New York governor Eliot Spitzer on HBO's "Real Time with Bill Maher," Krugman demonstrated perfectly why his perpertually pessimistic view of America is so revered by perpetually pessimistic liberals (video available here, partial transcript below the fold):

PAUL KRUGMAN, NEW YORK TIMES: On bad mornings I wake up and think that we are turning into a Latin American country. I mean, and there's some of that there. But on good mornings I think, well this is America, we have always in the past managed to, you know, to turn ourselves around, and there is an FDR just around the corner if we could only find him. I was kind of hoping Obama might be FDR, but maybe not. [...]

BILL MAHER, HOST: People with normal jobs, you know, a shop girl, they can't live on, in the America that this country has become. Like look at sitcoms, like the apartments that people have. You know, when, the people on "Friends." People would always look at that show and go, "They could never really afford that apartment."

KRUGMAN: I don't watch many sitcoms, but I actually watched "The King of Queens" on some airplane...and I immediately being who I am, I immediately said, "Can a guy who works at obviously UPS actually afford that, and I could find, so I checked where the neighborhood, no way. No way. Couldn't afford a third of that house. [...]

The American dream is not totally dead, but it's being pretty, it's dying pretty fast. You look at the numbers on social mobility, on the ability of people to move from modest or poor background up, the United States is way down the list. I mean, Horatio Alger would move to Europe these days. Much better chance of getting up in the scale in, in, in Finland or Sweden or France than the United States.

The stupidity on display here was staggering, even for Krugman.

Let's start with his assessment of what kind of a house the fictional couple on the sitcom "The King of Queens" might have been able to afford.

Showing how little he knows about what workers make in America, Krugman first misjudged how much UPS drivers earn. According to a February 2006 Reuters article, "The average UPS driver's annual salary of $55,000 can rise to $70,000 with overtime."

Because this fictional character resided in a high cost of living part of the country, maybe he made more than UPS's national average.

Beyond this, the fictional character's wife was a legal secretary for a Manhattan law firm. According to Indeed.com, that salary today would be $58,000.

And, according to Sterling's BestPlaces, the median home value in Queens is currently $431,000.

With this in mind, as "The King of Queens" first aired in 1998 well before real estate prices in America exploded, it doesn't seem at all incomprehensible that this fictional couple could have afforded that house more than eleven years ago.

But this wasn't the only inanity by Krugman, for his social mobility statement offered to support his view that the American dream is dying also lacked merit.

For those not familiar, social mobility in its simplest form is one generation's ability to move up the income ladder from that of the previous generation's. America doesn't rank very high in this regard as the offspring of the well-off typically do better financially than children of lower income brackets.

Sociologists and economists have numerous explanations for this, most notably the differing caliber of primary and secondary educations afforded different wage earners.

However, the question is what this mobility in different countries gets the residents.

For instance, regardless of the lack of such mobility, per capita income in America is far greater than in Finland, Sweden, and France.

In fact, using the purchasing power parity model -- meaning income adjusted for a nation's cost of living -- America ranks eleventh in the world at $46,970/year.

By contrast, Sweden is 22nd at $38,180, Finland is 31st at $35,660, and France is 34th at $34,400.

As such, these three nations might have more social mobility, but their average citizen earns far less cost of living-adjusted money than the average American does.

With this in mind, where would you rather live and dream?