Well, that time never existed. Check out these stats from Gallup surveys. In 1957, not even a quarter of Americans were reading a book or novel. By 2005, that number had shot up to 47 percent. I couldn't find a more recent number, but I think it's fair to say that reading probably hasn't declined to the horrific levels of the 1950s.
All this to say: our collective memory of past is astoundingly inaccurate. Not only has the number of people reading not declined precipitously, it's actually gone up since the perceived golden age of American letters.
So, then why is there this widespread perception that we are a fallen literary people? I think, as Marshall Kirkpatrick says, that social media acts as a kind of truth serum. Before, only the literary people had platforms. Now, all the people have platforms. And so we see that not everyone shares our love for Dos Passos. Or any books at all. Or reading in general.
After I posted this chart, Twitter friends made some good points: 1) This chart does not establish that high-quality literature readers have increased. That is true. 2) There are a lot of factors that go into these numbers and variables that are unaccounted for. 3) The big spike is partially driven by higher levels of higher education attainment. 4) Perhaps the quality of books has fallen, even as the number of readers has grown.
Point four comes with an embedded assumption that the books of the past were, on average, better than the ones today. But we tend to judge the past by the very best books (Nabokov!) and the present day by the worst books (Snooki!). The bad ones of yesteryear have gone out of print while the bad ones of today are alive and being sold in supermarkets.
To be honest, I'm not sure whether there is a larger or smaller market for great fiction and nonfiction than there used to be. But I think the onus is on those who think we have experienced a decline to prove it.