Why Americans aren't happy

As Gary Becker writes

Adam Smith argued in The Wealth of Nations that people fooled themselves in thinking they would be happier with more money

It's an interest piece which tries to explain why although the United States has the highest per capita income of any large country,it ranks low on the highest per capita happiness index.

The reason that happiness has not increased even though per capita income has increased may be that in comparing happiness at year t and at year t + 40, one is asking the inhabitants of two very different societies (whether it is the same person asked at both times or different people). The people at year t didn’t know what conditions would be 40 years hence, and so couldn’t feel unhappy because they couldn’t experience those conditions. If happiness is relative to existing opportunities, a change in those opportunities needn’t affect it.

Is this going to be the forthcoming economic battle

Across cities, there is a strong connection between an abundance of small firms and local growth. The last thing that the government should be doing is propping up big declining firms. Real innovations are far more likely to come from someone’s garage, which is where Chester Carlson came up with the Xerox machine during the Great Depression.

So writes Edward Glaeser,economics professor at Harvard.

He is refering to Barack Obama's economic stimulus plan and in particular the rescue packages for the car industry.

Ht-Andrew Sullivan