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Weren't the 70s a time of extremely high fuel prices and high interest rates?

Fuel prices definitely jumped. To nearly a dollar a gallon for regular gas. Fuel costs more now than it did then, but not 6 times more (the change in the purchasing power of a dollar from then to now). Mortgage interest rates peaked at around 18% (4.5x higher than today), but home prices were much, much lower than they are now, so even with high interest rates, the cost of home ownership was lower relative to today. I couldn't find a source that related prices in 1970 to prices within the last few years, but this one says the US median cost of a home in 1970 was $24,640, compared to $450,990 in 2004 (18x).

When you look at inflation, you have to account for what's inflated in cost. If fuel costs less but food costs more, that's a lot worse than fuel costing more and food costing less.

The comparison of 1970 to 2014 in terms of "dollar purchasing power" is, of course, some sort of average that is difficult to apply to individuals. If you have a lot of mouths to feed, then food prices are dominant. If you're single and have a long commute and drive a gas hog, then fuel prices are significant. If you're trying to buy a house in the middle of a housing bubble, then home prices are a big deal. If you're a hermit living in the middle of nowhere and raise your own food, then nothing matters much.

I live on the Gulf coast. If I were offered a job on the West coast they would need to nearly double my current salary for me to maintain my current standard of living.
And they didn't just say no we can't offer that much...they fired the guy's boss for even suggesting he be paid that much!

That's great, I bank at a credit union too (although in Canada credit unions are usually mandated to make a profit in order to provide services to customers). I would never advise anyone to play the stock market, but your numbers are way off. About 50% of households in the US own stocks.

A better indicator of houses vs family wealth is to look at it by regions, especially since there is such a disparity in America.
Houses: http://www.realestateabc.com/outlook/overall.htm
Median household income: http://www.census.gov/newsroom/releases/archives/income_wealth/cb10-144.html#tablea
Note that the disparity in housing prices is much greater than the disparity in income. The average home price is greater than the average household's income - but if you SAVE carefully and don't make unnecessary purchases like LCD TVs and new cars, you can pay off your mortgage quickly, own your house and then save more of your money. You do know why home prices have gone down right?

I might not know anything, but I'm not in debt, and that apparently pisses you off. Sorry about that. I know that while my family doesn't get to have vacations right now, we don't want for much, and we live within our means - not on credit. I'll take you up on any economics question you want to throw my way.

http://www.realestateabc.com/graphs/calmedian.htm

I don't see how you can say that an acre or two and a big house for $200k is representative of California with median home prices what they are. I certainly don't think it's representative of the people in California.

But even if you sell the house within a year or two its still not a bad thing. You might have gotten some appreciation (average ~6%, or at least stability, so you can sell the house and get that money back.

It sounds like another possibility you are suggestion is the assumption that you might lose your job and have no income for a substantial period. But I've never considered that as a realistic concern. I've always ensured I have 3-6 months living expenses saved up, and I assumed I could either find a new job or sell my house within 6 months. Maybe that's a bad assumption. But I've never been out of work for more than 3 months, and I've been in my career for over 10 years.

Just to back up housing value info with some data this shows the most significant decrease in housing in California was 11.67% over five years. The most significant increase was in 1977 which was an increase of 28.1% in one year. Even after the increase though, a house cost $250k in inflation adjusted dollars, which is far short of the $450k median seen today in California.

There are different aspects here though. One is the usage of so many houses as short term investments. I've heard 3/4ths of new housing developments bought up by investors hoping for a quick 20% payoff. The second is the usage of new loan types, such as 40-year, and interest only loans. In California, interest only loans for housing has reached 30%. Adding to that, only 14% of households can afford a median priced home this year, which is the lowest since records started being taken. Since california housing is overvalued by 45% the correction could take prices down by that much.

Economies can get truly richer only through increased productivity growth, either from technological advances or from more efficient production thanks to international trade. Thus China's integration into the world economy genuinely creates wealth. The same cannot be said of all the "wealth" produced by stockmarket or housing bubbles.

I do not have the figures available, but for your argument to be correct, you must claim that we have had 0% (or .5% or whatever you're trying to say) productivity increase. Everybody knows that we have dramatically increased our productivity over the last fifty years and especially the last fifteen years, which is why America is the richest country (has the highest purchasing power) in the world. Oh and by the way, the price of the average home is about 10% higher than it was last year. But that doesn't take into account inflation or America's increased purchasing power during the last year.

A 100-level college economics class would have saved you the embarrassment of your post, and me the time to correct it.