Yeah, things might be a bit testy lately in the credit markets, but Brad DeLong does a magnificent job of reminding us just how much better we have it than folks who lived not all that long ago:

. . . in 1905 an anonymous American college professor–“G.H.M.”–wrote a four-page article for the Atlantic Monthly in which he pleaded for more money for college professor salaries, and claimed to be vastly underpaid. The first thing to note is his salary: he claimed that the “average college professorís salary”–the salary that he saw as clearly inadequate and unfairly low–“is about $2,000” in the dollars of that day, 1900. Yet Stan Lebergott’s estimates in the Historical Statistics of the United States are that the average annual earnings of an employee in America in 1905 were $490 dollars if employed for the entire year (or $451 taking account of the hazards of unemployment): $2,000 was four times average of GDP per worker at the turn of the century. In order to match turn-of-the-century professors in terms of income relative to the national average, a professor today would have to make an academic salary of $300,000ña height rarely attained, and far above any average.

There is much more, so don’t miss it. DeLong’s chapter is a vivid reflection of the power of compounding economic growth. Sort of makes you wonder about those folks who advocate shaving a bit of economic growth here and there to promote some special interest. Over a century, compounding that small loss of economic growth can have a huge impact.