Michael W. Green is a Wall Street portfolio manager who basically just lobbed a grenade into the larger discourse about the health of the US economy. While some experts think his math doesn’t check out, he seems to have captured a larger, accurate-ish sense of the US economy’s current vibe, according to The Washington Post.
Last week, as we were all busy brining our turkeys, Green used his Substack to argue that a family of four needs $136,500 a year just to cover modern American basics.
That’s more than four times the federal poverty line of $32,150, and well above the median household income in most states. According to Green’s math, much of the country is living in what he calls the “valley of death”: earning too much for benefits, too little for stability.
Some were quick to hail the essay as a pitch-perfect encapsulation of America’s economic hardships, how our nation has turned its eyes toward the megarich and away from the common worker as its political and corporate leaders wage a class war against the rest of us.
Other economists, like those at the American Enterprise Institute, the famously conservative think tank founded by executives from several gigantic multinational corporations like Bristol-Myers, Chrysler, Eli Lilly, and General Mills, among several others, found the claim that a family of four making low six figures was still living in poverty “laughable,” arguing that you can’t declare the majority of Americans impoverished because the suburbs they choose to live in are expensive, which is what Green did when he used the middle class suburb of Caldwell, New Jersey, as his median.
Call me biased, but I don’t think we should be listening to the American Enterprise Institute on this one.
Regardless of whether anybody agrees on the specifics, Green seems to have captured a larger truth that exists in the all-important, though hard-to-pin-down realm of vibes.
The current vibes in the United States, particularly in the financial and economic worlds, are rancid to say the least. The US has undoubtedly become more unaffordable, especially for families. Healthcare is wildly expensive, and childcare can easily rival the cost of rent. The housing market is a horror show perpetuated by low availability and competition with Airbnb owners snatching up single-family homes, as well as corporations getting in on it by converting family homes into rentals.
There’s also the matter of the federal poverty line in itself. Green says that he “felt sick” when he learned that the Department of Health and Human Services defines the poverty line as whatever it was in 1963, but tripled and then inflation-adjusted. That seems more like a rule of thumb than a thorough, nuanced understanding of today’s economy.
Critics have pointed out several other issues with Green’s calculations, like how he priced items at average cost instead of minimum cost, and weighted it all heavily within childcare years, which are incredibly expensive but temporary.
Yeah, yeah, sure. Whatever. None of that really matters. People are nitpicking minute details that seem to ignore the larger picture, which is all vibes-based: it doesn’t matter how much you weigh the statistics or which ones you focus on when families are feeling the squeeze regardless.
You don’t need a lot of fancy calculations. All you have to do is look at some pretty basic facts to know things are screwed, like how Americans are delaying marriage, not having kids, and opting out of traditional family life. It’s not some kind of moral failure on America’s part. It’s more likely just simple math.
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