In 2016, here’s some of what I wrote about the economic outlook in Illinois. And I shared the same observation when writing about California in 2018.

There’s a somewhat famous quote from Adam Smith (“there is a great deal of ruin in a nation“) about the ability of a country to survive and withstand lots of bad public policy. I’ve tried to get across the same point by explaining that you don’t need perfect policy, or even good policy. A nation can enjoy a bit of growth so long as policy is merely adequate. Just give the private sector some “breathing room,” I’ve argued.

Today, I’m again sharing Smith’s observation and applying it to the United States because I’m going to make a Goldilocks-type observation about American prosperity.

Simply stated, the United States could be growing much faster if we had better policy. That’s why I spend so much time complaining when politicians (from both parties) do foolish things to increase the size and scope of government.

But I also recognize that there’s still a decent amount of economic freedom in America. Especially when compared to the rest of the world.

So the United States is not Germany or Japan, with weak growth. Or Italy or Finland, with no growth. And we’re definitely not Venezuela or Iran, with absolute economic decline.

Though the Goldilocks analogy is inadequate because she wanted to be in the middle, with the porridge not too hot or too cold, and the bed not too hard or too soft. By contrast, I want fast growth. Not in the middle with weak growth or no growth (and I obviously don’t want economic decline).

I apologize for the long introduction to today’s column, but I want readers to understand I’m not a Pollyanna/optimist or a Cassandra/pessimist.

And those caveats are important when looking at some new research from Stephen Rose and Scott Winship at the American Enterprise Institute, which debunks the claim that the average household in America has lost ground in recent decades.

Here’s he most important chart from their study, which shows a clear upward trajectory in inflation-adjusted family incomes.

Here’s some of what they wrote.

Populists on both the political left and right routinely claim that the middle class has been hollowed out. …Using an absolute definition of the middle class, we find that the “core” middle class has shrunk, but only because more families have become upper-middle class over time. The upper-middle class boomed from 10 percent of families in 1979 to 31 percent in 2024, and its share of income doubled. The share of families whose income left them short of the core middle class fell from 54 percent to 35 percent. Claims of a hollowed-out middle class wrongly reinterpret widespread (if unequal) gains across the income distribution as rising insecurity and declining living standards. …Decrying a shrinking or hollowed-out middle class is just a gloomy way of saying the upper-middle class has boomed and fewer families are in hardship.

To augment the last portion of the above excerpt, here’s their chart showing the the biggest change in recent decades is that there are a few more rich people and a lot more upper-middle class people.

The bottom line is that there is mobility in the United States, and it’s mostly upward mobility, as I’ve argued in the past. And John Stossel and Russ Roberts (twice) have also weighed in on this issue. The U.S. is doing okay, but we could be doing better.

P.S. I invite readers to peruse the earlier columns in this series (2021, 2024, and 2025).