[H]ere’s Obama this week: “What drags our entire economy down is when the benefits of economic growth and productivity go only to the few, which is what’s been happening for over a decade now, and gap between those at the very, very top and everybody else keeps growing wider and wider and wider and wider.”
Underlying Obama’s entire thesis is the work of two economists, Thomas Piketty and Emmanuel Saez. According to them, median American incomes rose just 3.2% from 1979 through 2007. (All figures are inflation adjusted.)
So what happened to the rest of the dough? The top 10%, 1% and 0.1% grabbed all the money. Or pretty much most of it. Time to crank up taxes on the rich and spend more on the middle class. It’s not overstating things to say that the findings of Piketty and Saez form the very heart of Obamanomics, giving a powerful economic rationale for Obama policies such as ending the upper-end Bush tax cuts to Obamacare to the Buffett Rule.
But it’s just not true, according to a new study in National Tax Journal from researchers at Cornell University. (Here’s an earlier, working-paper version.) The academics, led by economist Richard Burkhauser, don’t say the findings of Piketty and Saez are wrong — just incredibly, massively incomplete. According to the Cornell study, median household income – properly measured – rose 36.7%, not 3.2% like Piketty and Saez argue. That’s a big miss.
[…]
And all income levels got richer. Yes, the very rich did exceptionally well, mostly due to technology and globalization. Incomes rose 63% for the top 5%, 56% for the top 10% and 52.6% for the top 20%. But everyone else made out pretty well, too. Incomes rose 40.4% for households between the 60th and 80th percentiles, 36.9% for the next quintile, 25.0% for the next, and 26.4% for the bottom 20%. There’s the “shared prosperity” Obama says he wants, right in front of his eyes. (Indeed, the study finds, income inequality has actually been shrinking since 1989, with the Gini index falling to 0.362 from 0.372.)
As the Cornell study concludes:
Income inequality increased in the United States not because the rich got richer, the poor got poorer and the middle class stagnated, but because the rich got richer at a faster rate than the middle and poorer quintiles and this mostly occurred in the 1980s. .. the apparent failure of the median American to benefit from economic growth can largely be explained by the use of an income measure for this purpose which does not fully capture what is actually happening to the resources available to middle class individuals.
See, Piketty and Saez made lots of odd choices about what to measure and how to measure it. They chose to measure something called “tax units” rather than households, a move which ignores the statistical impact — including economies of scale — of couples who cohabitate, kids who move back in with their parents after college, and senior parents who live with their adult children.
They chose to ignore the value of all government transfers — including welfare, Social Security, and other government provided cash assistance — received by the household.
They chose to ignore the role of taxes and tax credits.
They chose to ignore the value of healthcare benefits. In short, Piketty and Saez ignored a lot of stuff. […]
[…]
[T]he tax and regulatory polices of the past three decades did not lead to stagnation for the middle class at the hands of the rapacious rich. Claims to the contrary — such as those made by Obama, the Occupy movement, and many liberal economists — never really passed the sniff test of anyone who lived through the past few decades. And now we know why: The inequality and stagnation alarmists were wrong. And so, therefore, is the economic rationale of the president’s class-warfare economic policies. Not that economics ever had much to do with them anyway.
Of course, studies are only numbers and in many ways they deal with theoreticals or probabilities. Which are only, like, probable. And made up of numbers. Which can sometimes disguise more important truths. Like, for instance, not numbers. Meaning there’s a good chance the study is racist.
All you fucking deniers are seriously bringing me down, man.
I feel crimethink. Yawn. Sleepy time.
Of course. Science is only useful as it advances the desires of the collective.
It’s worth remembering, as Thomas Sowell has been trying to tell anyone willing to listen for god knows how long now, that quintiles aren’t people.
That MC Hammer dude* he’s been in all five of ’em, at one time or another.
Unlike teh Donald, who’s probably moved between the top and bottom, without passing through the middle. But only for as long as it took to be discharged from bankruptcy.
*yeah, that dates me, but it was the first “celebrity” bankrupty to come to mind.
A fucking “tax unit”.
I just can’t…
Besides, the rationale for ending the Bush tax cuts isn’t economic, it’s social.
Jay Carney’s already said as much.
The monetary system in the US is intensely, utterly corrupt*. This is a fact.
What you are told about the economy it interferes with is a giant, serial lie. This is a fact.
There is no free market. There is no sound currency. There is no free trade. There is no accountability. There is no truth.
There is only The Game.
So. Why play? You can better state with certainty that the Earth is the Moon and somehow force these fuckers, by dint of the stranglehold on reality known as progressivism, together with its press and academy, to counter the claim.
(I see Romney is in a dead heat with probably the most dishonest, most manufactured, most damaging tool of a President in American history.)
Meaning: These be pathological liars and pathological thieves. The system is fraudulent and attempts to equalize it fail by way of the covetousness and envy of Socialism one tenth of one percent as badly as they fail by way of The Game.
Of course that rich get richer. Look at who most of them are and what strings they pull. It’s called a Client State. A command economy.
Did we really expect some other treatment than that? This is their Game, not ours.
*An exclusive monopoly of a relatively few very, very powerful thieves.
And, in one comment…JHo spoils the next three seasons of Game of Thrones.
Back on topic:
Hey I just had someone use my Discover card fraudulently in Nashville, Tennesee. They paid a $1000 hospital bill and then tried to buy $400 of crap from a fragrance store , a jewelry store, and overstock.com
I’m not sure but I think that Murfreesboro is in Nashville isn’t it? Kind of a coincidence eh?
I wonder if some doughy little anti-semitic space titty artist might be involved somehow?
Mmmmm mmmmm mmmmm, statists out on a limb:
http://weaselzippers.us/2012/04/12/dershowitz-i-think-what-you-have-here-is-an-elected-public-official-who-made-a-campaign-speech-last-night-for-reelection-when-she-gave-her-presentation-and-overcharged/#comment-634118
StrangernFiction, I’m going to put your link in the Zimmerman thread.
How would he have gotten your card # palaemerus? (By the way, the doughy little anti-semitic space titty artist in question who may or may not be the one who used your card is Marc Elliott L’Hommedieu.
(He goes by Elf, Elfradiowave, elfradio, sinister, and RyanBacon, too. But really they’re all just that same fat piece of pork round who likes to bang off to heavily-armed space kittens, Marc Elliott L’Hommedieu.)
I’m thinking he might have been able to guess my e-mail password or get the e-mail provider to give it to him through customer support. Then he could have pieced together enough from receipts and emails to do online charges and such.
But I’m by no means sure that it’s him. It’s quite possibly just a coincidence. Discover has blocked the card and credited me.
Since it’s a credit card it could have been someone at a convenience store when I bought gas and coffee, or a restaurant or almost anything. I ran a scan for keyloggers and other malware but it didn’t find anything but a few cookies.
Speaking of the sewer-plant troll, has been annoying/threatening you any more? I’d like to think he had enough brain cells to give that up, but people continuously underwhelm my expectations.
Not “in,” but not far away either. About a 45-minute drive.
Interesting piece, Jeff, but while we play whack-a-mole with the lies of these muck suckers, it’s necessary to not lose sight of the bigger picture: namely, to control the narrative. These lying liars lie, but they’ll always be able to come up with new ones quicker than it takes to knock them down. If we’re always chasing after the last lie, we’ll never catch up.
Indeed. Sad but likely true is the fact that the loathsome Hilary Rosen’s slip about Ann Romney will do more to hurt the One than serious work undermining the rationale of his economic program.
True, but he sells his bullshit a lot better than he sells his math, so it’s good to blow that crap up.
$100T in unfunded liabilities JHo, or as we will be saying soon, 100 Obamas.
You got me catching up at ZeroHedge, which discusses another piece of fabulist scholarship on the cause of the flash crash, which reminds me of the overall high quality of academic research, not just in vagina scholarship or Obamanomics, but cancer research too.
I blame Nixon, fucking loser.
For the wholesale self-induced collapse that swept the Left to power everywhere in 73-74, not for The Vagina Monologues.
About $120T plus the official $15.5T in recognized debt and soon you’re talking real money. Then add in unfunded pensions across the fruited plain and we start pushing that magical quarter quadrillion – 250 Obamas.
Which is so large a number it doesn’t really exist!
What can you say about the lip-lock between the USSA and the printing press that puts us all another quarter million upside down about every second of every day? I say nothing can be done, meaning we’re probably boned.
And they made such a nice couple. Best to not talk about them anymore.
And of course, Old Europe’s PIIGS finally go parabolic. Yay Socialism.
I thought an Obama was equal to zero. 250 of them…?
Quick usage question: is the economic study racist, or raaaaacist? I thought it was the latter, but now I’m wondering if perhaps the study itself is simply racist, while the researchers who wrote the study are raaaaacist. Is true raaaaacism limited to humans?
You broke my spreadsheet, McGehee. No matter.
That study is doubleplusungood.
OT: Don’t let this happen to you! Dumbbell shot when he drops weight on bullet proving once again that guns and weightlifting don’t mix. I think I’ll just stick to gunz.
And have a Happy Friday the 13th!
Here‘s some more on the corporate blackmail campaign against APEC members; this may even be one of the key ulterior motives in the Left’s choosing to push the Trayvon shooting.
Still waiting for Sharpton and the rest of the Indignity for Cash Coalition to protest this shooting of an unarmed black man in front of his two children. Wait, a Marine on his way to a prayer walk? No way to make that fit the narrative, so down the memory hole it goes.
How ’bout instead of seeking to control the narrative, we all agree to pretend that there’s something called “objective truth,” a thing which bears more than passing resemblence to reality, and therefore we refuse to be controlled by “the narrative,” irrespective of who’s in control of it?
Ernst, I’m with you. Okay, that’s two of us. Think any Dems will climb aboard?
At least we weren’t dividing by Obama…
Rimshot! Thud! Sound of body being dragged off-stage..