THE GOOD NEWS IS THE BAD NEWS IS WRONG.

Four years ago, we cited a Mark J. Perry essay to the effect that the shrinkage of the middle class didn't imply more widespread immiserization.

Mr. Perry is back, and he's more positive.  "Yes, the US middle class is shrinking, but it’s because Americans are moving up. And no, Americans are not struggling to afford a home."

His essay is an exercise in understanding what numbers mean.  For instance, the share of households with a household income of $35,000 or less in 2016 dollars has fallen from 38.7 percent of households in 1967 to 30.2 percent of households as of 2016.  The figure touts fewer such households as a share of all households: it's up to the reader to calculate whether that means an increase in total lowest-income households, or an increase in total people residing in such households since 1967.  Over the same interval, the share of households reporting an income exceeding $100,000 in 2016 dollars has increased from 8.1 percent in 1967 to 27.7 percent in 2016.  That's a clear increase in the number of households, and the number of people residing therein: and perhaps a suggestion that the advantages of participating in the sectors of the economy accounting for the U.S. comparative advantage have not been limited to fewer people.  As Mr Perry has it, "The fact that nearly 28% of US households annually earn $100,000 or more runs counter to the widespread narrative of an American middle-class in decline and deserves much greater attention as evidence of a dynamic and prosperous America with significant income mobility." Thus, perhaps, the people who are suggesting the United States do not have to be made great again have a point.  "For now, I’d conclude that the Building Museum is presenting two false narratives to the public: a) that a shrinking middle class, while statistically true, represents an ongoing economic decline for the typical American, and b) that a shrinking middle class has resulted in housing becoming less affordable for the typical American family. As I hope I’ve shown above, both of those narratives are false." That assertion cannot be taken without further qualification, however, as that national average conceals both inexpensive housing in the heartland, and extremely expensive housing on the coasts, particularly the west coast.