I live many multiples of that lifestyle annually, and I only have my investments to fund it. I don't really know how much income that is, but it's plenty. I think the big difference is I don't have kids. Many/most people assume they have to cover their expenses, save for retirement and leave a big inheritance for their kids. Not needing to save for the last part lets you live pretty fast and loose with money.
Dec 21, 2022·edited Dec 21, 2022Liked by Niccolo Soldo
The point was probably that income inequality is obscene today, but the salience is in the unspoken corollary: there is no such thing as "saving" money, in most cases. There is the output of the present period, which [usually] can be saved if it is a physical good, but [usually] not if it's a service. That output is bought using yesterday's dollars.
This means that your investments and dollars represent a claim on future production. Future production appears likely to be less than it is today on a per-capita basis, much of which is being driven by demographics, but with more roots in stagnation in productivity growth, decarbonization, resource exhaustion, and other factors.
Baby Boomers are actually working substantially longer than prior generations, but they are legion and their kids are not. All the people who have found success because of the trivial investing climate of the past 40 years have led to an employment to population ratio that appears to be unsustainably low. Consider Joe Sullivan's recent piece in Barron's.
Because of this confluence of factors, without some burst of productivity or stronger inflation, you are going to be able to outbid almost everyone for goods and services until the cost of labor is driven so high that many workers can outbid you. People are going to resent that.
Although many of them claim to be hard done by (e.g. teachers), it's extraordinary to have an inflation-proofed income for the rest of your life based on the 5 best years of earnings, retiring at around 56 years old.
Guessing Redscare. Also curious to see what conference you’ll be at, though part of me hopes I can someday give you the DC Insider Tour before you become too much of a known quantity.
The 90s and early 2000s were certainly a better time in terms of the affordability of essentials, and above all the cost of rents and homeownership. Some things, like travel and technology, have absolutely gotten more accessible, but that leaves us now in this weird paradox where the average person can afford a flight to Europe (I took one a couple weeks ago) but still struggle to find a housing situation that doesn’t eat up a huge portion of their income. obviously many leftists see this as symptomatic of late stage capitalism but I wonder if it’s a state of affairs they’d actually have predicted.
I remember the price of automobiles jumping significantly in the mid to late 90s, but I think that might have been due to compulsory airbag installation.
Admittedly, some of the increase in vehicle cost may be related to quality--air conditioners and power windows and such being standard now. I worked in the car insurance industry for awhile and can say that more sophisticated sensor and assistance features started pushing up the cost of insurance, and presumably the cars themselves as well, since a bumper that use to be a piece of metal is now a piece of metal with computer chips and electronics in it. But that only started happening a decade or so ago.
Cars often perform better now too, and seem to be a little more reliable, but all the added complexity definitely comes with costs beyond just the price tag (harder to fix your own car, for example, when it's full of proprietary electronics.)
Affordable travel coupled with unaffordable home ownership reveals everything: consumption is a substitute for the acquisition of assets and long-term financial independence. The middle class is becoming a white-collar proletariat.
I think you’ve hit the nail on the head here—the WEF crowd wants a world where the vast majority are some form of lower/working class, and are plied with a relatively high standard of living in terms of consumption but simultaneously lack political power because they have no real ownership of anything. I think some of them may even genuinely believe that this arrangement would maximize efficiency.
The agenda is about normalising scarcity and increasing inequality. This is being done by managing expectations downwards and by redefining prosperity as ephemeral consumption as opposed to long term financial security/independence.
Absolutely. It is all about defining prosperity down or redefining prosperity to manage expectations in an era of declining levels of economic security. The hipster thing was about aestheticising downward social mobility and justifying having to settle for sub-optimal jobs and living conditions.
Venkatesh Rao has written some interesting stuff on the predicament of millennial consumption.
Federal Reserve printed 40%+ of all currency in existence within the first 2 years of the lockdowns. I don’t know what the figure is now but I’d be surprised if it wasn’t at least 50%+ of all money created was within the last 3 years.
Tack on the annual 3-8% increase whatever the actual increase was in terms of actual money supply and I’m not surprised that what was once easily achievable with a $100k total family income 30 years ago now requires 4x as much income.
Granted the number varies across the country but what’s being described here is at the very least a $175k-$250k per annum life for a single person and if it’s for a family then $300k-$400k is absolutely in the ballpark.
Basic goods have literally become that much more expensive. Housing, energy, food, those costs have skyrocketed at least 50%-300%+ in the last 3 years.
The last 30 years? Expect that to have skyrocketed 400%-600% for just the base level stuff apartment to rent, gas for the car, food to eat groceries.
Many people cry about inflation now forgetting that housing more than tripled in a short decade or two. But hey people think it's good cause "investment". Never mind that when you sell, you have to buy another overpriced property... Crapitalism
He's describing The Simpsons, a boomer family (initially) - and a fairly close description of what was possible for them.
(early) GenX like me got their housing start in Toronto in the late 90s and it was a condo. The house was plausible in Toronto until around 2003, 2004 or so; after that, if you missed out (as a middle classer) you missed out forever.
If you take out "living in a cool place" implicit in the equation, it's still possible, but who wants to live in Kenora.
I grew up in the 80s and early 90s. What you say describes the 80s part--one parent worked for phone company as installer; the other was part time in sales for a candy co. Middle of the middle class; went to Disney often.
Left for college in 94; dad was bought out of pension and left for odd jobs it turned out, mom got injured on the job. By graduation 98 it was totally downhill.
Fracking brought some prosperity back to Ohio but not the same or as much.
I benefitted from being born at tail end of US unipolarity in industrial / lower skill labor. Shine was off that by my sophomore year of HS. The lifestyle of that unipolarity was ahistoric, I think.
Totally--there were some hiccups (like labor strikes) but everything seemed managed and the future wide open if you were willing to work hard. I went to a great private university for about 25k a year total; 80% on grants. I really haven’t been back, but I doubt whether that much optimism and opportunity still abounds.
The divergence is driven by the Fed and financialization. The real wages of labor have not gone up much over the last twenty years. But the equity markets are up huge, and interest rates are lower, which has driven up the value of real estate and almost all assets. So CEOs, private equity, VC, bankers have taken almost all the gains, and the elite absolutely know that - in every field.
Also, energy prices have gone up, and the P/E world has made many things much more expensive. Healthcare, education, concert tickets, high end vacations, etc. while the Fed claims that there is no inflation because you can buy a much larger TV.
A good microcosm of that is skiing. Vail Resorts went bust, Apollo bought it, took it public in the early 2000s. Vail has bought out other ski places, and jacked up prices. The cost of a ski ticket is much higher than it was 10 years ago. Vail Resorts makes a lot of money in real estate development, so they drive prices up for hotel rooms, restaurants, and all the stores in the ski village. What P/E did to skiing, people do in many other industries, and that's why without financial assets pumped by the Fed, everyone is poorer.
Great post, thank you. My cousin has a place in Breckenridge, Colorado where he takes his family skiing twice a year. He tells me that it's gotten insanely pricey out that way.
I don't have the numbers totally but Vail is now $10 bn market cap. My guess is that when it IPOed it was $1 bn or less. It is hard to tell because they issue shares for acquisitions, and buy back them as well, but it is a big winner.
Why is it worth 10X? It used leverage to buy more resorts, the Vail Pass is one of two multi resort passes, and the prices are jacked up. The lift ticket is much more expensive. They screw local guys who want to ski and cater to the elite from New York and LA and Silicon Valley. We all know this somewhat, but the P/E and bankers get away with ripping people off a bit more every year.
I used Vail Resorts as an example because it is ski season and the example is very clear with Apollo.
But it happens in many industries. Education. Healthcare. Cable. Software. Concerts. I am sure Live Nation Ticketmaster has a graph of the trend in ticket prices. As industries consolidate, pricing power goes up. Look at railroads - everything went to capital, nothing went to labor.
IMHO, what you are focused on is a sideshow: if we didn't not have out of control printing of fiat currency, the rampant inflation you describe would not occur. And make no mistake, where the "extra" money created in this way ends up is disproportional to those who already own assets. And I don't just mean big corporates, funds, etc., I mean individual people too.
The people who own those assets are the private equity investors, corporate executives and consultants that feed this machine.
The Fed certainly shares the blame for inequality. But the Private Equity Assets are somewhere around 7 trillion, up from 1 trillion or so in 2000. That is a seven fold increase. Further, the private equity world exerts great influence on public US companies, another 50 trillion or so. There is also a huge increase in the loan and credit markets and that is driven by low rates and financialization - more leverage to pay dividends to the equity holders. In contrast, the Fed balance sheet is 8 or 9 trillion. So, the Fed is only one piece of the pie and there are other vultures.
Trying to argue the P/E and bankers don't pig out and bribe the Fed, Yellen, and our elected officials is BS. They all know the game.
You should try to go on From the New World if you want to do an interesting podcast. Yarvin and many other of the more intellectual right have been on such as Tinkzorg and Hanania.
I wasnt a home-owning family man in the 90s but instead I was a postcollegiate downtown NYC slacker.
My first rents (if I recall properly) were:
in 1990 a 2-bedroom apt on Ave A across from Tompkins Sq Park was around $1100 or so (watched the first Wigstock from my window! woohoo);
then same year: a 2-bedroom on the much-nicer Bank St in the West Village was maybe around the same price;
then in 1992 I rented a 1-bedroom on 1st Ave and 4th St for $800.
(All these would be a major steal now, even inflation-adjusted.)
Up till the late 90s I lived a pretty nice life in Manhattan on a $25k salary, with enough loot for rent, grungy clothes food & girls, plus super-cheap drugs readily available on a stroll to Alphabet City.
NYC was a paradise for the young & louche but then came Guiliani and his "crack skulls first, gentrify next" clean-up strategy, and then the true death knell arrived with Sex and the City, when an army of suburban girls colonized NYC to live out their TV fantasies.
All I have left is nostalgia, a few scars (physical and mental), and a glorious schadenfreude knowing how lucky I am to have grown up before the onset of the dismal 21st century.
sometimes i think: you had a nice apartment on Bank St @ Greenwich that was quiet and faced the back in a rent-controlled building...why'd you ever leave?
but the city has changed so much, whenever i go back all I see (besides ghosts and memories) are glass condos and their human equivalent.
No doubt re: places like Youngstown, or Allentown further east. My father was a steelworker, so I know all about it.
First.
1.1st 😝 Lemonade is always an option if one bothers to look closely.
That's cheating! Insider knowledge!
You’re going to be on Lex Fridman?
Anything less popular than that doesn't deserve 2x "very"
Ooo that would be brilliant!
Let me guess:
Conference in Europe: somewhere in Hungary, France or Italy
Very popular podcast: Redscare pod
We have this lifestyle. My parents combined make about ~100k. Though I did pay for my college(scholarships and loans).
It's attainable, but generally we are frugal. Eating outside rarely, no latest electronics etc.
But is that turn the same as the 90s for a solidly middle class family?
Its college that’s the killer in the past, now it’s necessities like food and gas.
I live many multiples of that lifestyle annually, and I only have my investments to fund it. I don't really know how much income that is, but it's plenty. I think the big difference is I don't have kids. Many/most people assume they have to cover their expenses, save for retirement and leave a big inheritance for their kids. Not needing to save for the last part lets you live pretty fast and loose with money.
Sounds like a recipe for human extinction.
Every one of your investments that go up in price comes from somewhere else
.. profits don't grow on trees
How could anybody possibly not know this? (although it's not even true if you're talking about fixed income). I also don't see its relevance.
The point was probably that income inequality is obscene today, but the salience is in the unspoken corollary: there is no such thing as "saving" money, in most cases. There is the output of the present period, which [usually] can be saved if it is a physical good, but [usually] not if it's a service. That output is bought using yesterday's dollars.
This means that your investments and dollars represent a claim on future production. Future production appears likely to be less than it is today on a per-capita basis, much of which is being driven by demographics, but with more roots in stagnation in productivity growth, decarbonization, resource exhaustion, and other factors.
Baby Boomers are actually working substantially longer than prior generations, but they are legion and their kids are not. All the people who have found success because of the trivial investing climate of the past 40 years have led to an employment to population ratio that appears to be unsustainably low. Consider Joe Sullivan's recent piece in Barron's.
Because of this confluence of factors, without some burst of productivity or stronger inflation, you are going to be able to outbid almost everyone for goods and services until the cost of labor is driven so high that many workers can outbid you. People are going to resent that.
You got an extraordinary amount out of his one sentence.
I've made a career out of interpreting modest comments into total incoherence.
Living off investments rather than work isn’t middle class. It’s rich.
Or being a bureaucrat of almost any sort.
Although many of them claim to be hard done by (e.g. teachers), it's extraordinary to have an inflation-proofed income for the rest of your life based on the 5 best years of earnings, retiring at around 56 years old.
I had this lifestyle growing up starting in 1998. My parents did not have a combined income of 400k
I'm from the same region/area as Jacob too
Guessing Redscare. Also curious to see what conference you’ll be at, though part of me hopes I can someday give you the DC Insider Tour before you become too much of a known quantity.
The 90s and early 2000s were certainly a better time in terms of the affordability of essentials, and above all the cost of rents and homeownership. Some things, like travel and technology, have absolutely gotten more accessible, but that leaves us now in this weird paradox where the average person can afford a flight to Europe (I took one a couple weeks ago) but still struggle to find a housing situation that doesn’t eat up a huge portion of their income. obviously many leftists see this as symptomatic of late stage capitalism but I wonder if it’s a state of affairs they’d actually have predicted.
I remember the price of automobiles jumping significantly in the mid to late 90s, but I think that might have been due to compulsory airbag installation.
Admittedly, some of the increase in vehicle cost may be related to quality--air conditioners and power windows and such being standard now. I worked in the car insurance industry for awhile and can say that more sophisticated sensor and assistance features started pushing up the cost of insurance, and presumably the cars themselves as well, since a bumper that use to be a piece of metal is now a piece of metal with computer chips and electronics in it. But that only started happening a decade or so ago.
Cars often perform better now too, and seem to be a little more reliable, but all the added complexity definitely comes with costs beyond just the price tag (harder to fix your own car, for example, when it's full of proprietary electronics.)
Affordable travel coupled with unaffordable home ownership reveals everything: consumption is a substitute for the acquisition of assets and long-term financial independence. The middle class is becoming a white-collar proletariat.
I think you’ve hit the nail on the head here—the WEF crowd wants a world where the vast majority are some form of lower/working class, and are plied with a relatively high standard of living in terms of consumption but simultaneously lack political power because they have no real ownership of anything. I think some of them may even genuinely believe that this arrangement would maximize efficiency.
The agenda is about normalising scarcity and increasing inequality. This is being done by managing expectations downwards and by redefining prosperity as ephemeral consumption as opposed to long term financial security/independence.
I remember someone once saying to me that early to mid 2000s Hipsterism was a big indicator of downward mobility.
Absolutely. It is all about defining prosperity down or redefining prosperity to manage expectations in an era of declining levels of economic security. The hipster thing was about aestheticising downward social mobility and justifying having to settle for sub-optimal jobs and living conditions.
Venkatesh Rao has written some interesting stuff on the predicament of millennial consumption.
https://www.ribbonfarm.com/2017/08/17/the-premium-mediocre-life-of-maya-millennial/
Here is a link to a great article by Mary Harrington which may interest you. https://unherd.com/2019/11/young-urban-graduates-the-real-left-behinds/
Thank you for sharing those!
Federal Reserve printed 40%+ of all currency in existence within the first 2 years of the lockdowns. I don’t know what the figure is now but I’d be surprised if it wasn’t at least 50%+ of all money created was within the last 3 years.
Tack on the annual 3-8% increase whatever the actual increase was in terms of actual money supply and I’m not surprised that what was once easily achievable with a $100k total family income 30 years ago now requires 4x as much income.
Granted the number varies across the country but what’s being described here is at the very least a $175k-$250k per annum life for a single person and if it’s for a family then $300k-$400k is absolutely in the ballpark.
Basic goods have literally become that much more expensive. Housing, energy, food, those costs have skyrocketed at least 50%-300%+ in the last 3 years.
The last 30 years? Expect that to have skyrocketed 400%-600% for just the base level stuff apartment to rent, gas for the car, food to eat groceries.
Many people cry about inflation now forgetting that housing more than tripled in a short decade or two. But hey people think it's good cause "investment". Never mind that when you sell, you have to buy another overpriced property... Crapitalism
He's describing The Simpsons, a boomer family (initially) - and a fairly close description of what was possible for them.
(early) GenX like me got their housing start in Toronto in the late 90s and it was a condo. The house was plausible in Toronto until around 2003, 2004 or so; after that, if you missed out (as a middle classer) you missed out forever.
If you take out "living in a cool place" implicit in the equation, it's still possible, but who wants to live in Kenora.
Kenora Dinner Jacket
Always classy in context: e.g. Bryan Adams concert, listening to the Hip in the shed, or whatnot.
It's tragic that it's the only thing I can think of when I hear "Kenora" mentioned.
I grew up in the 80s and early 90s. What you say describes the 80s part--one parent worked for phone company as installer; the other was part time in sales for a candy co. Middle of the middle class; went to Disney often.
Left for college in 94; dad was bought out of pension and left for odd jobs it turned out, mom got injured on the job. By graduation 98 it was totally downhill.
Fracking brought some prosperity back to Ohio but not the same or as much.
I benefitted from being born at tail end of US unipolarity in industrial / lower skill labor. Shine was off that by my sophomore year of HS. The lifestyle of that unipolarity was ahistoric, I think.
So you remember how good the 80s were in the Midwest.
Totally--there were some hiccups (like labor strikes) but everything seemed managed and the future wide open if you were willing to work hard. I went to a great private university for about 25k a year total; 80% on grants. I really haven’t been back, but I doubt whether that much optimism and opportunity still abounds.

The divergence is driven by the Fed and financialization. The real wages of labor have not gone up much over the last twenty years. But the equity markets are up huge, and interest rates are lower, which has driven up the value of real estate and almost all assets. So CEOs, private equity, VC, bankers have taken almost all the gains, and the elite absolutely know that - in every field.
Also, energy prices have gone up, and the P/E world has made many things much more expensive. Healthcare, education, concert tickets, high end vacations, etc. while the Fed claims that there is no inflation because you can buy a much larger TV.
A good microcosm of that is skiing. Vail Resorts went bust, Apollo bought it, took it public in the early 2000s. Vail has bought out other ski places, and jacked up prices. The cost of a ski ticket is much higher than it was 10 years ago. Vail Resorts makes a lot of money in real estate development, so they drive prices up for hotel rooms, restaurants, and all the stores in the ski village. What P/E did to skiing, people do in many other industries, and that's why without financial assets pumped by the Fed, everyone is poorer.
Great post, thank you. My cousin has a place in Breckenridge, Colorado where he takes his family skiing twice a year. He tells me that it's gotten insanely pricey out that way.
I don't have the numbers totally but Vail is now $10 bn market cap. My guess is that when it IPOed it was $1 bn or less. It is hard to tell because they issue shares for acquisitions, and buy back them as well, but it is a big winner.
Why is it worth 10X? It used leverage to buy more resorts, the Vail Pass is one of two multi resort passes, and the prices are jacked up. The lift ticket is much more expensive. They screw local guys who want to ski and cater to the elite from New York and LA and Silicon Valley. We all know this somewhat, but the P/E and bankers get away with ripping people off a bit more every year.
High class problems, for sure.
I used Vail Resorts as an example because it is ski season and the example is very clear with Apollo.
But it happens in many industries. Education. Healthcare. Cable. Software. Concerts. I am sure Live Nation Ticketmaster has a graph of the trend in ticket prices. As industries consolidate, pricing power goes up. Look at railroads - everything went to capital, nothing went to labor.
IMHO, what you are focused on is a sideshow: if we didn't not have out of control printing of fiat currency, the rampant inflation you describe would not occur. And make no mistake, where the "extra" money created in this way ends up is disproportional to those who already own assets. And I don't just mean big corporates, funds, etc., I mean individual people too.
The people who own those assets are the private equity investors, corporate executives and consultants that feed this machine.
The Fed certainly shares the blame for inequality. But the Private Equity Assets are somewhere around 7 trillion, up from 1 trillion or so in 2000. That is a seven fold increase. Further, the private equity world exerts great influence on public US companies, another 50 trillion or so. There is also a huge increase in the loan and credit markets and that is driven by low rates and financialization - more leverage to pay dividends to the equity holders. In contrast, the Fed balance sheet is 8 or 9 trillion. So, the Fed is only one piece of the pie and there are other vultures.
Trying to argue the P/E and bankers don't pig out and bribe the Fed, Yellen, and our elected officials is BS. They all know the game.
Dont forget the best part: they get college kids and leverage their love of skiing to pay the workforce almost nothing...what a business!
...many of whom are subsidized by their parents.
You should try to go on From the New World if you want to do an interesting podcast. Yarvin and many other of the more intellectual right have been on such as Tinkzorg and Hanania.
Who runs that one?
It's Brian Chau of https://cactus.substack.com/about. He has written an interesting piece for Tablet while back about the Rule of Midwits as well as more recently gone somewhat viral for his testing of ChatGPT including a piece he wrote for unherd https://unherd.com/thepost/chatgpts-score-system-shows-political-bias-is-no-accident/. Twitter with a lot more content https://twitter.com/psychosort
merci
I wasnt a home-owning family man in the 90s but instead I was a postcollegiate downtown NYC slacker.
My first rents (if I recall properly) were:
in 1990 a 2-bedroom apt on Ave A across from Tompkins Sq Park was around $1100 or so (watched the first Wigstock from my window! woohoo);
then same year: a 2-bedroom on the much-nicer Bank St in the West Village was maybe around the same price;
then in 1992 I rented a 1-bedroom on 1st Ave and 4th St for $800.
(All these would be a major steal now, even inflation-adjusted.)
Up till the late 90s I lived a pretty nice life in Manhattan on a $25k salary, with enough loot for rent, grungy clothes food & girls, plus super-cheap drugs readily available on a stroll to Alphabet City.
NYC was a paradise for the young & louche but then came Guiliani and his "crack skulls first, gentrify next" clean-up strategy, and then the true death knell arrived with Sex and the City, when an army of suburban girls colonized NYC to live out their TV fantasies.
All I have left is nostalgia, a few scars (physical and mental), and a glorious schadenfreude knowing how lucky I am to have grown up before the onset of the dismal 21st century.
sorry bout the coffee!
sometimes i think: you had a nice apartment on Bank St @ Greenwich that was quiet and faced the back in a rent-controlled building...why'd you ever leave?
but the city has changed so much, whenever i go back all I see (besides ghosts and memories) are glass condos and their human equivalent.
Stop, you're making me jealous! i love smokin crack on the subway!
A little more danger & chaos, a crime wave plus maybe a global recession and a collapse in the real estate market, and I just might have to move back.
Have fun @ Carnegie Hall!
He's wrong
Yes your productivity is through the roof, I was wondering if it was some post flu energy burst.
Work slowing down over holidays.
I don’t know where he gets his energy. He must be German really.