Today the NY Times Business Section delivers a twofer on politicized academic efforts. First, The Evil One Percenters Are Back!
Incomes Flat in Recovery, but Not for the 1%
By ANNIE LOWREY
WASHINGTON — Incomes rose more than 11 percent for the top 1 percent of earners during the economic recovery, but not at all for everybody else, according to new data.
The numbers, produced by Emmanuel Saez, an economist at the University of California, Berkeley, show overall income growing by just 1.7 percent over the period. But there was a wide gap between the top 1 percent, whose earnings rose by 11.2 percent, and the other 99 percent, whose earnings declined by 0.4 percent.
As a great thinker with a grasp of statistics nearly said, the one percent will always be with us. But is it really the same group taking more money year after year, or are new faces arriving to exploit the rest of us? Ms. Lowrey and her editors maintain the pretense that the same evil-doers are continually oppressing the rest of us, for example here:
The data analyzed by Mr. Piketty and Mr. Saez shows that income inequality — as measured by the proportion of income taken by the top 1 percent of earners — reached a modern high just before the recession hit in 2009. The financial crisis and its aftermath hit wealthy families hard. But since then, their earnings have snapped back, if not to their 2007 peak.
A retiring CEO who made it into the one-percent in 2007 by cashing in his stock options, or a homeowner who made it into the one-percent in 2007 by selling her home, have not seen their earnings snap back. This transience of onepercenterdom has been documented, but not in the Times.
And a harsher reality - the Pikkety-Saez numbers overlook important pieces of the compensation puzzle - is introduced only very late, and with a carefully palmed card:
Measures of inequality differ depending on whether they are measured after or before taxes, and whether or not they include government transfers like Social Security payments, food stamps and other credits.
Research led by the Cornell economist Richard V. Burkhauser, for instance, sought to measure the economic health of middle-class households including income, taxes, transfer programs and benefits like health insurance. It found that from 1979 to 2007, median income grew by about 18.2 percent over all rather than by 3.2 percent counting income alone.
Wait - do they mean that when looking at an employee's compensation we should consider the value of the employer-sponsored health insurance? Why yes they do and yes we should, but Ms. Lowrey prompty buries that:
In an interview, Mr. Burkhauser said his numbers measured “how are the resources that person has to live on changing over time,” whereas Mr. Piketty and Mr. Saez’s numbers measure “how are different people being rewarded in the marketplace.”
Well, no, not since employer-sponsored health plans are an important part of most people's compensation.
The promotion of politicized 'science' continued with this laugher:
The Myth of the Rich Who Flee From Taxes
We learn that it is a myth because many, many non-rich move for entirely different reasons, such as better real estate values or nicer weather. Gee, later I expect to see a report debunking the 'myth' that eagles are threatened by wind towers with the explanation that most of the dead birds piled up under the turbines are ducks.
We also learn that it is tough for high-earning Silcon Valley hotshots or Wall Street arbs to maintain their income stream elsewhere. Breakthrough stuff. Does the researcher actually have anything to say about the behavior of "the rich" who are not tied by geography to their jobs and might be free to relocate? Yes he does!
Of course, some people do move for tax reasons, especially wealthy retirees, athletes and other celebrities without strong ties to high-tax locations, like jobs and families.
A star like Mr. Depardieu “can go to Paris whenever he wants,” Mr. Shure noted. Professor Tannenwald agreed. “People who are very rich, who are retired or who aren’t tied to a particular location, do change their residency at a high rate based on tax differentials.”
Boy, that shoots down that myth, doesn't it? The Times can be a great resource but Google is even more valuable.