Not as rich as we think

Arnold Kling questions the notion that we aren't (or more specifically that Greece isn't) as rich as we think:

We still have the capacity to produce the output we produced in 2006. Therefore, to a first approximation, we should still be able to consume what we consumed in 2006.

He lists several hypotheses about why we might not be as rich as we were in 2006, but I think that he misses the big one - changing prices. In 2006, things Western countries had - like mortgage-backed securities - were in high demand in China and consequently, they paid us high prices for them. And on the flip side, things China had - like people willing to assemble iPhones - were in high supply and so we paid low prices for that. I think both of those are changing.

The end result is a little like being a producer of Justin Bieber posters - in 2010 you are making lots of money but (I suspect) in 2 years when he's a has-been, you're going to be broke. Someone like Arnold could quip to that poster maker: "you still have the capacity to produce as many Justin Bieber posters today as you did in 2010, so you should be able to consume what you consumed in 2010." Obviously that is not the case.