I Help Paul Krugman Find His Reading Glasses

Playing a variant of "the debate is over", Paul Krugman lauds the new Pikkety book while ignoring and deriding the critics:

The Piketty Panic

“Capital in the Twenty-First Century,” the new book by the French economist Thomas Piketty, is a bona fide phenomenon. Other books on economics have been best sellers, but Mr. Piketty’s contribution is serious, discourse-changing scholarship in a way most best sellers aren’t. And conservatives are terrified. Thus James Pethokoukis of the American Enterprise Institute warns in National Review that Mr. Piketty’s work must be refuted, because otherwise it “will spread among the clerisy and reshape the political economic landscape on which all future policy battles will be waged.”

Well, good luck with that. The really striking thing about the debate so far is that the right seems unable to mount any kind of substantive counterattack to Mr. Piketty’s thesis. Instead, the response has been all about name-calling — in particular, claims that Mr. Piketty is a Marxist, and so is anyone who considers inequality of income and wealth an important issue.

I’ll come back to the name-calling in a moment. 

Let me save you the suspense:

So what’s a conservative, fearing that this diagnosis might be used to justify higher taxes on the wealthy, to do? He could try to refute Mr. Piketty in a substantive way, but, so far, I’ve seen no sign of that happening. Instead, as I said, it has been all about name-calling.

I guess this shouldn’t be surprising. I’ve been involved in debates over inequality for more than two decades, and have yet to see conservative “experts” manage to dispute the numbers without tripping over their own intellectual shoelaces. Why, it’s almost as if the facts are fundamentally not on their side.

Hmm, who is name-calling now? Since I offered help with the reading glasses, let's start with Scott Winship, writing in Forbes. One of his main points - some of Pikkety's charts are upside down:

Whither The Bottom 90 Percent, Thomas Piketty?

While Piketty’s efforts to improve our understanding of income concentration have been invaluable, the tax-return-based estimates that he and others have compiled are not without problems for certain applications. 

Basically, the tax data is more useful for very high incomes but much worse for the 90 percenters:

At the same time, it is no less true that tax return data cannot be used to assess trends in income below the top—at least in the U.S., and I suspect elsewhere. The Piketty and Saez data for the U.S. indicate that between 1979 and 2012, the bottom 90 percent’s income dropped by over $3,000. However, the official Census Bureau estimates indicate that the bottom 80 percent of households saw an increase of nearly $3,500. Median income—the income of the household in the middle of the distribution—rose by $2,500. If you are underwhelmed by these initial differences, stick around.

I need some help here. Mr. Winship is linking to this Census Bureau table. The key line is replicated here:

           Lowest   Second    Third   Fourth  Highest    Top 5    Top 5
    Year    fifth    fifth    fifth    fifth    fifth  percent  percent*
-------- -------- -------- -------- -------- -------- -------- --------
2012 Dollars
   1979    11,808   29,369   48,422   71,060  127,526  194,491  214,767
   2012    11,490   29,696   51,179   82,098  181,905  318,052  433,937

These are in inflation-adjusted 2012 dollars (the nature of the inflation adjustment can be improved, as Mr. Winship explains), but pressing on, I see a decrease for the bottom quintile of ($318), an increase for the next quintile of $327, an increase for the middle quintile of $2,757, and an increase for the fourth quintile of $11,038. That sums to a lot more than the $3,500 cited by Mr. Winship. In fact, if he is describing only the bottom three quintiles the increase is $2,765. Either number buttress his argument, but confusion about his numbers weakens it. [Wow, my bad - obviously, I need to average the four quintiles, not sum them, which gets me back to $3,500. Scary. They say this coffee is half-caf, but I suspect it is half-decaf.]

So why should we favor the Census Bureau numbers?

The Census Bureau figures are superior to the Piketty and Saez estimates when looking below the top ten percent in two ways. First, the measure of income derived from tax returns excludes a significant amount of income, and people below the top are disproportionately recipients of that income. Most importantly, in the United States, most public transfer income is omitted from tax returns. That includes not just means-tested programs for poor families and unemployment benefits, but Social Security. Many retirees in the Piketty-Saez data have tiny incomes because their main source of sustenance is rendered invisible in the data. The Census Bureau figures include some transfers, though even they omit non-cash transfers like food stamps, school lunches, public housing, Medicare, and Medicaid.

You might think that that means the Piketty-Saez data still does a good job capturing “market income”—what people make before the government steps in to redistribute. But their data also excludes non-taxable capital gains (such as those accruing to middle-class households when they sell a home), employer benefits (like health insurance), and other sources of non-taxable income. More subtly, it is impossible to get an accurate read on trends in market income concentration when retirees (with little to no market income) are included in the data (as they always are). The share of retirees has been growing for some time, and that puts downward pressure on the market income trend.

Hmm. There are other wrinkles:

The second reason that tax return data are inferior to Census Bureau estimates for incomes below the top is that tax returns—or “tax units,” which essentially means potential tax returns if everyone filed—are different from households. The Piketty and Saez data include as tax units all returns filed by dependent teenagers with summer jobs and undergraduates with work-study positions. They count roommates and unmarried partners as separate tax units rather than as one household, ignoring all of the shared living expenses that make living with someone cheaper than living alone. As a consequence, incomes are much lower among tax units than among households.

So when my seventeen year old got a summer job and filed a tax return he was contributing to the gloomy income inequality statistics in America? I did not know that. Nor, based on the lack of changes in his lifestyle, did he.

More grist:

It’s also worth reiterating that there are ways of improving on income measurement that none of the above figures incorporate. Income trend estimates should account for declines in household size—fewer mouths to feed for a given income—and they should use a better cost-of-living adjustment. When I raised these issues with Saez recently on a conference panel in which we both participated, he agreed that in principle, incomes should be size-adjusted, though he favored adjusting them according to the number of adults rather than the convention of adjusting by the number of adults and children. He also agreed that the inflation measure favored by the Congressional Budget Office and targeted by the Federal Reserve Board (the “Personal Consumption Expenditures deflator”) is more appropriate than the adjustment used by the Census Bureau and by himself and Piketty.

Another improvement to the above income estimates would incorporate non-cash public benefits and employer-provided health insurance. Finally, particularly if we are concerned about inequality, income measures should account for the redistribution that occurs through progressive taxation (as Piketty and Saez have done in less-cited work).

And some bottom-lining:

When I incorporate these improvements using the Census Bureau data, I find that median post-tax and -transfer income rose by nearly $26,000 for a household of four ($13,000 for a household of one) between 1979 and 2012. If you don’t like the household-size adjustment, the non-adjusted increase was over $20,000 at the median.  If you think that valuing health care as income is problematic, that figure drops to $10,400 under the implausible assumption that third-party health care benefits have no value to households. The income of the bottom 90 percent rose nearly $12,000 under that assumption instead of dropping by $3,000 as in the Piketty and Saez data, and it rose by nearly $21,000 if health benefits are included. For a household of four, median market income for non-elderly households (not counting employer-provided health care as income) rose $9,400.

That suggests the Pikkety effort may be disoriented:

In short, Piketty seems to draw too strong a conclusion (“terrifying,” in his words) about what continued rising inequality would entail for the bottom 90 percent (at least in the U.S.). Rising income concentration has not been accompanied by stagnation below the top, and there is no reason to think that it will be in the future. (In fact, there are reasons to think that income concentration might level off in the future and incomes lower down might rise more robustly, a point to which I will return in a future post. Those of you who heard my question at Piketty’s Tax Policy Center event already can anticipate it.)

The Winship effort lacks the snark we had expected from Krugman's typically thoughtfully commentary. However, back in 2011 I penned a snark-filled blast at Ezra Klein noting the many problems with the "rising inequality" figures, so maybe that will do. The Times (eventually) mentioned the similar result of a Burkhauser paper from June 2011. From the Times:

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.

Mr. Winship takes another bite of the apple here, explaining the many and subtle problems with tax data and capital gains. This passage inspires a mini-rant:

Since top income tax rates have fallen since the 1970s, the concern is that the incentives for tax avoidance and evasion have fallen. That would cause more income to show up on tax returns rather than being hidden in tax-exempt or tax-deferred forms, or otherwise sheltered from the view of the IRS. In other words, it is possible that part of the apparent increase in income concentration is simply the result of a more transparent picture of incomes at the top. Combine that with the capital gains issue, and it is easy to imagine that Piketty’s view of income concentration trends may be distorted by shortcomings of the data.

Back when income tax rates were much higher executives had country club memberships paid for (for entertaing, natch), a generous expense account that was only lightly monitored, company cars, and all sorts of perks that amounted to untaxed compensation. Malcolm Forbes was famous for his "business" entertaining on sumptuous yachts operated as a business expense; the executives at RJR were bought off by corporate jets, and I like this mini-review of Barbarians At The Gates, about the RJR takeover:

It is incredible to hear about the shear amount of corporate excess that Russ Johnson (CEO of RJR Nabisco) created at the firm with the company covering his golf club memberships at 12 different clubs (one of which including the famous DeepDale course), 8 corporate jets that he allowed any of his friends and directors to use, corporate apartments he had the company pay for him, and trips to NYC that he would have the company pay for to foot his expensive food and drink bill.

Hmm, "shear" like in sheep? Maybe! But none of that compensation showed up on his taxes, so go puzzle on that, Mr. Pikkety. [Mickey Kaus wrote on actual receipts versus high marginal tax rates back in 2012; Tyler Cowen comments on Pikkety here and at Foreign Affairs.]

Clive Crook at Bloomberg takes aim at the premise that capital concentrations can only increase, and delivers the most amusing line I have seen in this debate. He quotes Pikkety:

The inequality r>g [the rate of return on capital is greater than the rate of economic growth] implies that wealth accumulated in the past grows more rapidly than output and wages. This inequality expresses a fundamental logical contradiction. The entrepreneur inevitably tends to become a rentier, more and more dominant over those who own nothing but their labor. Once constituted, capital reproduces itself faster than output increases. The past devours the future. The consequences for the long-term dynamics of the wealth distribution are potentially terrifying ...

However, says Mr. Crook:

[C]apital will outpace the economy only if owners of capital save a sufficiently large part of the income they derive from it. (Suppose they save none of it: Their wealth won't grow at all.)

History is oddly reassuring:

Wolf offers this clarification: Piketty "argues that the ratio of capital to income will rise without limit so long as the rate of return is significantly higher than the economy’s rate of growth. This, he holds, has normally been the case." That's better: The gap between r and g has to be "significant." The bigger the gap, the more likely it is that saving will build capital faster than output rises -- and Piketty does show that the gap usually has been big.

The trouble is, he also shows that capital-to-output ratios in Britain and France in the 18th and 19th centuries, when r exceeded g by very wide margins, were stable, not rising inexorably. The same was true of the share of national income paid to owners of capital. In Britain, the capitalists' share of income was about the same in 1910 as it had been in 1770, according to Piketty's numbers. In France, it was less in 1900 than it had been in 1820.

What about the 21st century? Perhaps the capitalists' share will rise inexorably in future -- and that's what matters.

Perhaps it will, but Piketty advances reasons to doubt this too. He expects r to be a bit lower and g a bit higher than their respective historical averages. There are many other factors to consider, as he says, but on his own analysis the chances are good that the future gap between return on capital and growth will be smaller than the gap that failed to produce an inexorably rising capital share in the two centuries before 1914.

And a punchline:

This book wants you to worry about low growth in the coming decades not because that would mean a slower rise in living standards, but because it might cause the ratio of capital to output to rise, which would worsen inequality. In the frame of this book, the two world wars struck blows for social justice because they interrupted the aggrandizement of capital. We can't expect to be so lucky again. 

Maybe global warming can provide the devastation of a world war or two. Here's hoping!

Kevin Hasset of the AEI delivers many snark-free thoughts. My takeaway - the growth in the capital-to-income ratio in the rich countries has been primarily in the housing stock; concentrations of productive capital are not dramatic.

That is a bit of a reading list for the prof. I assume Krugman will want to find some foolish comment from some unknown Congressman (or shock jock!) and claim that it exemplifies the entire conservative reaction.

I CAN QUIT ANYTIME: This from Krugman's column is a burr under my saddle:

For the past couple of decades, the conservative response to attempts to make soaring incomes at the top into a political issue has involved two lines of defense: first, denial that the rich are actually doing as well and the rest as badly as they are, but when denial fails, claims that those soaring incomes at the top are a justified reward for services rendered. Don’t call them the 1 percent, or the wealthy; call them “job creators.”

I'd feel a lot better about adopting the socialism of Pikkety's proposed global wealth tax if its advocates could point to a system anywhere that was advancing the human condition as successfully as the quasi-market capitalism that is moving the ball today.

SOCIAL CAPITAL TRANSFERS: David Brooks thinks this is a scuffle between the holders of financial and cultural capital:

If you are a young professional in a major city, you experience inequality firsthand. But the inequality you experience most acutely is not inequality down, toward the poor; it’s inequality up, toward the rich.

You go to fund-raisers or school functions and there are always hedge fund managers and private equity people around. You get more attention than them at parties, but your whole apartment could fit in their dining room. You struggle with tuition, but their kids go off on ski weekends. You wait in line at the post office, but they have staff to do it for them.

You see firsthand the explosion of wealth at the tippy-top. It really doesn’t help that you have to spend your days kissing up to the oligarchs and their foundations to finance your research, exhibition or favorite cause.

Think of Bill Clinton before he made his hundred million and had to rely on the kindness of rich strangers to enjoy a summer getaway. Where's the justice - do we know who he is?!?

However, Mr. Brooks goes awry here:

This is a moment when progressives have found their worldview and their agenda. This move opens up a huge opportunity for the rest of us in the center and on the right. First, acknowledge that the concentration of wealth is a concern with a beefed up inheritance tax.

The inheritance tax prompts the super-rich to put their money in a foundation with their heirs in charge. In the longer term progressives can capture these pots of money, since spending other people's money is what they do. But in the short run, the heirs will enjoy the power associated with controlling the distribution of great wealth even though they don't formally "own" it. Does anyone think that the heirs of Bill and Melinda Gates will lack for Davos invitations, White House dinners, or lovely vacations just because they no longer "own" a big chunk of Microsoft but merely sit on the board of the Gates Foundation? Please. 

Or try this - suppose the Dreaded Koch Brothers did a NY Times like reorganization of their hodlings so that they retained voting control of their enterprises but the bulk of the (newly-created, non-voting) dividend-paying shares were tossed into the various Koch family foundations directed by the same evil brothers and their spawn. Would liberals cheer this dissipation of wealth? Why not - per the Pikkety numbers it would be a blow for income equality. 

Comments

[Jane]

OT: Who do you think Hillary would name as her VP?

[Captain Hate]

Frau, I can't even look at a bottle of that without feeling queasy. Sickeningly sweet imo.

Yes, why does Saint Gabby get something more than a garbage scow and the late Judge John Roll, among others, gets not a thing?

[Frau das Gesetz ist das Gesetz]

Wasn't meant for you, jimmyk. It's what is heard daily and in the case of Issa, it was used to attack him.

[rich@gmu]

fdcol63-

>>>Then they reversed themselves and claimed it WAS a tax before the USSC.<<<

I think the confusion was the administration in part of oral arguments argued it was a tax and later in oral arguments argued it was not a tax. Why it wasn't 9-0 to strike it down in whole is beyond me?

[rich@gmu]

Frau-

some so co, ginger ale (works better if you can find some Blenheim), and lime is ok but I avoid so co.

[narciso]

because they didn't want to be 'on the wrong side of history,' or something,

[sbw]

What is the best mixer, if any, for Southern Comfort?

Janice Joplin.

[rich@gmu]

>>>Posted by: Clarice Feldman | April 25, 2014 at 06:16 PM <<<

I love you Clarice. You're my favorite.

>>>Posted by: narciso | April 25, 2014 at 07:44 PM<<<

I'd like to find this history character and punch him in the nose.

[narciso]

he's likely to have body guards with brass knuckles,

[BB Key]

Jane , VP choices:
Barney Frank
Susan Rice
Michelle Obama
The Sanchez Sisters from California

[Danube on iPad]

"NW football reportedly voted down union today by large margin"

Just saw a clip of some NW Exec stressing that the votes wouldn't even be counted until the NLRB haring takes place and a ruling is issued.

[narciso]

'history is a stern schoolmarm;

http://www.thegatewaypundit.com/2014/04/breaking-us-officials-say-russian-fighter-jets-have-flown-into-ukrainian-airspace/

[Danube on iPad]

I don't understand anyone to be apologizing for not being a lawyer. To me, IANAL is a polite way of acknowleging a lack of professional education or expertise while nevertheless expressing an opinion. Leo G. Donofrio, for example, INAL. Orly Raitz IAL.

[Frau das Gesetz ist das Gesetz]

BBK - It's a three dog ticket. Run the Sanchez sisters as a brace with Hillary!

[Janet - the districts lie fallow, while the Capitol gorges itself]

Yeah...look & see who spoke at the 2012 DNC convention.

maybe him -
"...the keynote speech was delivered by 37-year old San Antonio Mayor Julian Castro."

or him -
"Convention chairman Antonio Villaraigosa, mayor of Los Angeles,..."

Villaraigosa was the guy that had to pretend the Dems voted to put God & Jerusalem back in the Dem platform while the entire place booed...so he is a team player for sure.

[daddy]

John Brown's Body lies a-mouldering in the grave
All you kuala's and you Kangaroo's behave...

An OT on music.

I am taking this with grains of Salt but I find it worth mentioning.

Just in from The Happy Mexican saloon in memphis where I was reading Lefty Aussie Tim Flannery's book on early explorers of Australia, "The Explorers."

He says this:

In February 1869, G. W. Goyder, surveyor-general of South Australia and martinet, was dispatched to survey and found the settlement of Darwin. He was watched by the Larrakia people who, when they decided it was safe to contact the strangers, held a corroboree, giving pitch and word perfect renditions of "John Brown's Body', "The Glory Hallelujah', and "The Old Virgina Shore'. This 'white fella corroboree' had been traded from the Woolna people, who memorized the tunes while lying prone in the wet grass at night, spying on surveyors who were working near the Adelaide River."

That surprised me as the Adelaide River is 1,900 miles (as the crow flies) south across that desert continent from the settlement that became Darwin, and according to WiKi, "John Brown's Body" was only popularized in the States in 1861, and overlaid BY "Battle Hymn Of the Republic" in 1862. Yet somehow it's popular amongst the Abo's in pre-Darwin territory in 1869, via Adelaide.

I find it interesting to learn how that tune and lyrics could have migrated within just a few years all the way down to Adelaide from the States, then have been listened to by some Aborigines at nighttime, and transported up to Darwin 1900 miles north by the Abo's and taught to the local tribes as a sort of communal dance tune.

I'm skeptical, but I suppose it's possible. Flannery does not link to the source but says it is in some unpublished work in some Sydney Library archives.

Perhaps I'll see if I can dig it up in the NSW Library's next Sydney Trip.

BTW, I am unable to find out who and when was the first visit of an Australian Aborigine to visit America. The Internet is full of sites saying Aussie Abo's colonized America just like the Atlanteans did and the Egyptians supposedly did and the Mormon's supposedly did, but as for the actual real guy who came over and got his name recorded for doinf so, I can't find it.

[narciso]

transparency, it should be tried sometime:

http://www.miamiherald.com/2014/04/25/4080747/judge-philly-newspapers-to-be.html

btw, NBC News stands 1000% behind Gregory, you know what that means?

[Beasts of England]

'...but the forgotten six who died didn't even get a t-shirt.'

Some animals are more equal than others.

[Strawman Cometh]

Overworked recently, don't have anything to add to this dsicussion. But Mark Levin's sub hostess has mentioned that the TP challenger to McConnell has taken up, or gotten swept up in, Cock Fighting Decriminalization. I am disappointed that she conflated dog and cock fighting. Calling in

[narciso]

Didn't see what the BluGov chocolate rations turned out to be;

http://weaselzippers.us/184047-aetna-ceo-obamacares-on-the-fly-changes-responsible-for-half-of-2015-double-digit-premium-jump/

[daddy]

Who do you think Hillary would name as her VP?

Corey Booker.

and the late Judge John Roll, among others, gets not a thing?

Looks like just yesterday they named a new Federal Courthouse in Yuma after him: New courthouse named for judge slain in Tucson attack

[Frau das Gesetz ist das Gesetz]

Exactly, Beasts. The rest of us will have to assemble in the far off First Amendment assembly pen.

narciso, unfortunately that means Gregory will *not* be fired to spend more time with his family or practice his French skills.

[narciso]

Didn't recall that, but back when there were book clubs, one of the first I got was a copy of Robert Hughes 'the Fatal Shore' his history of Australia.

[daddy]

Here are the larrakia from the 1920's.

[narciso]

I'm sure he's dying to comment;

http://www.thegatewaypundit.com/2014/04/three-occupy-domestic-terrorists-get-prison-terms-for-5-8-years/

[Clarice Feldman]

Looks like the fall Milan runway preview.

[daddy]

:)

[Miss Marple]

Well, that settles it.

O'Reilly says Pope John Paul II's sainthood should have been held up, because he didn't have Cardinal La arrested.

Father Morris pointed out that the Pope doesn't have the power of arrest, but that was in the hands of the Boston authorities, who didn't do anything.

Never mind, O'Reilly's opinion is the canonization should be postponed.

I think I am going to turn the TV off.

[Miss Marple]

Early bedtime for me; I have an early auction to go to tomorrow.

Good night, everyone!

[pagar]

War on !

http://www.thegatewaypundit.com/2014/04/women-in-mini-skirts-drove-islamists-to-plot-bomb-blast-at-holy-mosque/

You cannot make this BS up.

[Jane on Ipad]

A gay, a black or sisters. Yikes!

Obama is about to issue an executive order allowing all illegals to stay (and provably vote). When the hell will we impeach?

[narciso]

Ask Garfield, or McTurtle, they're working on some cunning cunning plan, and can't be bothered.

[Danube on iPad]

He continues to think that if he's nice to them they'll return the favor:

"Since leaving the State Department last year, Hillary Rodham Clinton has racked up scores of accolades and appeared on many a big stage. Still, it might come as a surprise that a past Republican presidential nominee -- specifically, the one who is among the loudest critics of Clinton's handling of the Benghazi terrorist attacks -- would invite her to his desert retreat for a lofty conversation about leadership values.

"This is precisely what Sen. John McCain (R-Ariz.) has done."

[Beasts of England]

…for a lofty conversation about leadership values.

Have they announced who will be providing the knowledge of leadership values? Must be a third party involved in that conversation.

[narciso]

Who knows what Grimmatongue is speaking into Theoden's ear,

[Clarice Feldman]

Gosh, DoT--it's hard to even picture anyone stupid enough to write such drivel.

[Threadkiller]

"This is precisely what Sen. John McCain (R-Ariz.) has done."

http://theobamafile.com/_conspiracy/TheSenators.htm

He is in her debt.

[narciso]

Ah, Phil Rucker, they have no shame, and Vizzini would slap right into the river,

[narciso]

the four dimensional chess move, to basically shutter the space program, then sanction the Russian boor, who is our liason to the few launches that do occur, genius,

[Skoot]

"the votes wouldn't even be counted until the NLRB haring"

That's what I thought odd. Any reporter with a relationship with the players could ask off the record. What's to stop them from answering? Reportedly 60 out of 75 no's. The official tally hardly matters. The full board will eventually overrule the local board, I believe.

[narciso]

Just 'turtles all way down' skoot,

[Beasts of England]

David Fontana at New Republic swoons for the Wize Latina and the style of her recent dissent, calling her a national treasure. Thankfully, he eschews hyperbole.

Both the author and the lady justice are being skewered in the comments. One leftist water boy tried to come to their defense and was slattered. So many well-reasoned and eloquent rebuttal comments that it is refreshing.

http://www.newrepublic.com/article/117501/sonia-sotomayor-schuette-dissent-national-treasure

[narciso]

there is a method to his madness;

http://www.huffingtonpost.com/david-fontana/

note his CV,

[narciso]

Oh, he has her on his trapper keeper;

http://www.law.gwu.edu/Faculty/profile.aspx?id=9950

[Frau das Gesetz ist das Gesetz]

I know women in northern GA and AL I would identify as truly wise over our braggartly Latina--who needs a gigantic portion of humble pie for her birthday.

[narciso]

this is what I was referring to earlier;

http://www.foxnews.com/politics/2014/04/25/russian-official-under-us-sanction-plays-key-role-in-pentagon-space-program/

[Danube on iPad]

As I understand the W. Latina's dissent, which I have only read about but have not read, it goes like this:

(1) Race matters;

(2) Affirmative Action has helped me personally; and therefore

(3). The U.S. Constitution forbids the people of Michigan from preventing its use in admissions to Michigan public universities.

Wotks for me.

[boatbuilder]

The "inequality" debate assumes that there is something wrong with unequal economic outcomes. Those who attempt to argue that there is less inequality than the lefties claim have already conceded the point, and therefore lost the debate.
The question should be asked--what is wrong with inequality?
It is bad that many people are poor. Why is it bad that some people are wealthy?
The assumption is that the wealthy are wealthy because they have unfairly taken from the poor. While there are instances of this happening (particularly but not exclusively in socialist dictatorships) it is demonstrably untrue that a deserving person becoming wealthy deprives anyone else of anything.
LeBron James makes a lot of money. Would anyone--anyone--be better off if he were hanging out on street corners in Akron?
Bill Gates is incredibly wealthy. Would anyone--anyone--be better off if Bill Gates made $100K a year and the PC didn't exist?
Try this intellectual exercise--Would you be happier or better off if either of those guys were worth 10% of what they are and you were worth 75% of what you are? Would anyone? Inequality would be substantially reduced--why is that good?

[narciso]

Meanwhile the real world cruelly intervenes;

http://www.dailystar.com.lb/News/Middle-East/2014/Apr-25/254470-as-iraq-violence-grows-us-sends-more-intelligence-officers.ashx#axzz2zx4SwEXw

[boatbuilder]

It occurs to me that Kevin Durant might be better off if LeBron were hanging out on a street corner in Akron. But that would exacerbate inequality because Durant is filthy rich already. Which is apparently wrong but I'm at a loss as to why. Until this is explained to me the people pounding the inequality drum are simply playing on envy, a base instinct.

[Beasts of England]

@boatbuilder: Agreed. The zero sum fallacy is the foundation for most of their arguments. It's impossible to discuss the subject with those who use that as their point of departure.

[Danube on iPad]

Beats and Boatbuilder, I think you guys are talking about what is sometimes called Pareto Efficiency (after an Italian economist named Pareto). His elegantly simple thesis was that if the distribution of assets can be changed in such a way that at least one person becomes better off, and none worse off, that change is to be desired. Krugman, Obama and the whole host of these vermin disagree strongly: if someone at the high end can be made worse of, evenf with no one becoming better off, that is desirable because it reduces envy and resentment.

[Danube on iPad]

"Democrats have attacked a trio of Republican Senate candidates for not being born in the states they seek to represent. While the issue could matter in a close race, there are four dozen senators who prove that birthplace isn’t necessarily a stumbling block to getting elected.

"Just more than half of current senators, 52 percent, were born in the state they now represent. The other 48 senators were born in another state, or even another country. For example, Colorado Sen. Michael Bennet, the chairman of the Democratic Senatorial Campaign Committee, was born in India and Texas Republican Ted Cruz was born in Canada."

This is an outrage. Sen. Bennet's allegiance is--permanently--to India, so he cannot be trusted to represent the people of Ohio. And of course Cruz should be arrested as a Canadian spy. Allegiance is allegiance.

[daddy]

This afternoon the 2014 Nenana Ice Classic contest was finished.

Thats the contest, started in 1917, where locals set a tripod on a frozen Alaskan River and bet on when the Ice will melt/break-up, and the Tripod will have moved down the river and crossed a finish line.

Today it crossed just after 3 PM.

Only 6 times has it crossed the line earlier, and twice before it has gone out on this data.

Last year it went out on May 20th, tied with the latest it has ever gone out. $363,000 prize money will be doled out to the winners who bet most correctly on when it would cross the finish line.

Going out today does not surprise me, as you guys took so much of our snow and ice with that Polar Vortex business, but I suppose this will be touted by AGW folks as new proof of something.

[Threadkiller]

Good thing India has since abolished jus soli to avoid such scenarios.

[Danube on iPad]

"Good thing India has since abolished jus soli to avoid such scenarios."

And poof! - Sen. Bennet's allegiance vanished with the stroke of an Indian pen. Funny thing, this allegiance. (It helps if you know some Latin. Better to comprehend those magic spells.)

[Gus]

Danube, we as Conservatives spend FAR too much time, trying to refute, fight or battle LIES, tossed at us by the LIBTARD DISGUSTING TRASH, such as it is. We are constantly back pedaling and trying to proclaim our innocence vis a vis THEIR CLAIMS. The LEFT knows this. The left is NOT HONEST. There is no reason to debate them. If they have decided that they CANNOT LOSE, then debating them is futile.
If someone is hell bent on DESTROYING ME for whatever reason. I will fight them with everything I've got. I see ZERO reason to play by their rules, Alynski's rules or to even think that I have to be held to my own decency.

[anonamom]

Boatbuilder, thanks for your post on inequality.

A bit more nuanced than my fallbacks--"there will always be a 1%"
and "Jesus said 'the poor will always be with you.' "

But really, there will always be that top 1%--and a bottom 10%--and I want the market (people) to determine the 1%, not the (almost always corrupt in some way, shape or form) government.

Jane, any inside dope on Justina? There is no way I can catch up.
This working full time over the school breaks is extremely disruptive to my JOM reading.

[Threadkiller]

And poof! - Sen. Bennet's allegiance vanished with the stroke of an Indian pen. 

The real poof was when you made "since" disappear.

[anonamom]

TK, before anybody else wakes up--a few of your favorite Ada Boni recipes?

[Dublindave 2016]

" I, you know, I drive by the government housing in Las Vegas and I see the negros sitting on a porch doing nothing and I wonder would they be better off as slaves picking cotton"

--Ronald Reagan

[Miss Marple]

Morning, all!

Just a quick hello before I head out to an auction. Beautiful day here in Indiana. Hope you all have a great day!

[Janet - the districts lie fallow, while the Capitol gorges itself]

this is funny (I was looking through old FB posts last night)-

"5000 years ago, Moses said to Israel, "Pick up your shovels, mount your asses and camels, and I will lead you to the Promised Land." When Welfare was introduced, Roosevelt said, "Lay down your shovels, sit on your asses, and light up a Camel, this is the Promised Land." Today, the government has stolen your shovel, taxed your asses, raised the price of Camels and mortgaged the Promised Land to China."

[James D.]

Bill Gates is incredibly wealthy. Would anyone--anyone--be better off if Bill Gates made $100K a year and the PC didn't exist?
Try this intellectual exercise--Would you be happier or better off if either of those guys were worth 10% of what they are and you were worth 75% of what you are? Would anyone? Inequality would be substantially reduced--why is that good?

Here's another intellectual exercise.

Krugman is worth (let's be really conservative here) $2 million in net worth. And he has $500,000 per year in income (surely it's higher, but let's pretend).

The fifty homeless people he walks past on his way into his infrequent visits to the NYT offices have a net worth of, say $100 (whatever possessions they have on their person), and $10,000 per year in income (let's assume $30/day in panhandling money).

So his net worth is 20,000 times higher than each of those homeless people. And his income is 50 times higher.

By his logic, his wealth ought to be taxed at, say, a 95% rate. That would leave him with $100,000 in net worth, and, if we redistributed it equally to those 50 homeless people, they'd each suddenly have a net worth of $38,000. Instead of having 20,000X their wealth, Krugman would now only have 2.61 X their wealth. That's MUCH more equal, and fair!

And we could tax Krugman's income at 90%. He'd have $50,000 of income left over. And the homeless people would each get $9,000, so they'd be at $19,000 per year income. Krugman would then only have 2.63 X their income.

Wouldn't everyone be better off this way? Inequality would be reduced! The 1% would have less concentrated wealth to pass on to their undeserving heirs! The poor would be uplifted!

I will eagerly await Mr. Krugman's response to my proposal...

[narciso]

Well more significantly they are attacking veterans in Alaska, Arkansas, Maryland, what does that tell you,

[Janet - the districts lie fallow, while the Capitol gorges itself]

and that's the rub, isn't it? Why don't all the rich leftists just start giving away their money. Nobody is stopping them.
They should give the check-out clerk an extra $20 like a tip...just to even out life.
Send their savings to the federal government. They can DO IT now....no need to write any new tax laws.

http://www.fms.treas.gov/faq/moretopics_gifts.html

"Money deposited into this account is for general use by the federal government and can be available for budget needs. These contributions are considered an unconditional gift to the government. Financial gifts can be made by check or money order payable to the United States Treasury and mailed to the address below.

Gifts to the United States
U.S. Department of the Treasury
Credit Accounting Branch
3700 East-West Highway, Room 622D
Hyattsville, MD 20782

You DO IT, Paul.

[Janet - the districts lie fallow, while the Capitol gorges itself]

‘Patriotic millionaires’ demand higher taxes, but unwilling to pay up [VIDEO]

Read more: http://dailycaller.com/2011/11/17/patriotic-millionaires-demand-higher-taxes-but-unwilling-to-pay-up-video/#ixzz2zznlE7DJ

The video is wonderful. Michelle Fields does a great job.

[pagar]

I second the proposal by Janet. All the rich people who desire to be poor could accomplish that in a matter of minutes. Just give it all away.
--------------------------------------------
It is apparent that reading glasses don't help if no one reads what is written.

http://freebeacon.com/issues/administration-has-missed-more-than-half-of-obamacare-deadlines/

I have listed all the politicians that give the impression that they care below.

[narciso]

Surprise, surprise;

http://freebeacon.com/national-security/report-obama-admin-never-defined-al-qaeda/

[Jane]

Anonamom,

All I know is the legislature met this week for 2 votes, one on Justina the other on naming the state sandwich the fluffernutter. They only had time to vote on the second.

Deval keeps saying there is a report showing the father's neglect. Since they DHS never visited him that's impossible and the CT people said there was no neglect.

Protests continue.

[James D.]

I truly hope that, come Judgment Day, Deval Patrick and everyone involved in this evil kidnappings and imprisonment of a sick child, receive exactly as much compassion and fairness from their Judge as they have shown to Justina and her family.

[jimmyk]

Bill Gates is incredibly wealthy. Would anyone--anyone--be better off if Bill Gates made $100K a year and the PC didn't exist?

This is a tougher question than you might think. My hatred of Windows knows no bounds.

[jimmyk]

I second the proposal by Janet. All the rich people who desire to be poor could accomplish that in a matter of minutes. Just give it all away.

They will argue, disingenuously, that what they care about is the distribution of income, and that any individual effort by themselves to give money away will have no overall impact. That argument rings hollow, as any dollar given to a poorer person should still be a good thing according to that way of thinking.

[Happy, happy, joy, joy Ignatz]

--And poof! - Sen. Bennet's allegiance vanished with the stroke of an Indian pen. Funny thing, this allegiance. (It helps if you know some Latin. Better to comprehend those magic spells.)

Posted by: Danube on iPad | April 26, 2014 at 02:11 AM --

Did I miss someone else jumping into this issue first?

[Happy, happy, joy, joy Ignatz]

--They will argue, disingenuously, that what they care about is the distribution of income, and that any individual effort by themselves to give money away will have no overall impact. That argument rings hollow, as any dollar given to a poorer person should still be a good thing according to that way of thinking.

Posted by: jimmyk | April 26, 2014 at 09:33 AM --

If it is a virtue to collectively compel the diminution of income inequality through the forcible confiscation of wealth from those who disagree with that notion then it is an even greater virtue for each individual who agrees with that notion to do everything they can voluntarily to reduce the inequality.

The idea that the millions of wealthy 1%er leftists couldn't significantly reduce income inequality through their voluntary private efforts is absurd.

The fact they refuse to and instead seek to compel people who disagree with their notions to do as they say indicates 1%er leftists are greedy scum who would confiscate their neighbors' wealth for their pet cause in order that they could keep more of their own rather than give all they have for what they consider a virtuous cause.

[narciso]

You will note that Carlos Slim's chimps, Blow and Collins, competed to misunderstand the Bundy matter.

[narciso]

special warfare strikes again

http://hotair.com/archives/2014/04/26/latvia-defense-minister-accuses-russia-of-destabilizing-through-professional-provocateurs/

meanwhile European firms are unwilling to break the hug of Sochi Bear,

[Janet - the districts lie fallow, while the Capitol gorges itself]

Here's that Michelle Fields video on YouTube. I couldn't get it at the Daily Caller link - https://www.youtube.com/watch?v=gh9dfaSOn5o

[narciso]

Matt Ridley, provides an interesting insight;

http://online.wsj.com/news/articles/SB10001424052702304279904579517862612287156?mod=WSJ_hp_RightTopStories&mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304279904579517862612287156.html%3Fmod%3DWSJ_hp_RightTopStories

[narciso]

Well it would get in the way of the narrative;

http://legalinsurrection.com/2014/04/cnn-analyst-welches-on-bet-after-andrew-branca-wins-stand-your-ground-debate/

[AliceH]

From my US Congressman:

"Recently the EPA proposed expanding the definition of "waters of the U.S." in the Clean Water Act to include all man-made bodies of water, ponds, ditches, flood plains and even standing water in potholes."

Whoa. That is some insane fascistic stuff right there. So far, appears there is a bi-partisan response in form of writing letters of concern. That'll do it, surely.

[Danube on iPad]

Utah ranked nerdiest state:

http://www.dailymail.co.uk/news/article-2613568/Welcome-nerd-heaven-Utah-nerdiest-place-US-study-finds.html

[narciso]

shirley, these people are insane;

http://www.dailymail.co.uk/news/article-2613708/FBI-investigates-animal-rights-group-linked-Mayor-Bill-Blasios-campaign-EXTORTED-opponent-carriage-horse-ban.html

[Porchlight]

Has anyone mentioned re: Piketty that the millions of zero-income people crossing our southern border tend to widen the income gap just a tad?

[narciso]

Well then we would have to bring up his own country's ban lieus, and that gets in the way of the triumphalism,

[rich@gmu]

Porchlight-

that isn't mentioned or how that reduces wages at the bottom of the income scale explored (more supply of labor reducing the price of labor).

savings is bad? or maybe not quite that strong ... The Paradox of Thrift.

[snark] or all that money could be better spent by angels bring the good news and good works to the darkies of the world [/snark]... all managed by tenured, pastured California professors and NYTs columnists.

Is this about the longest post that our host has produced?

[Captain Hate]

Did anybody watch Hawaii 50 last night? I'm surprised CAIR hasn't whined 24/7 over the depiction of radical Islam and its recruitment of a cute dumbass. The difference between shows like that and CBS news is like AoS and Kos.

[narciso]

Yes, I did, Captain, yes it was refreshingly correct, meanwhile on our putative side, they have to conced the lie;

http://hotair.com/headlines/archives/2014/04/26/george-zimmerman-cliven-bundy-and-the-importance-of-separating-principles-from-people/

[narciso]

On balance, CBS is less prone to BDS written scripts, CSI did the only piece about the photoshop jihadist, even the Intelligence show, is fairly down the line, whereas NBC will have a piece where some nere'do well, will be put in a pic with Ted Cruz,

[Captain Hate]

All David French needed was a few uses of "in fairness" to be straight Poppin'.

[rich@gmu]

>>> Piketty et al. have, however, found ways to merge tax data with other sources to produce information that crucially complements survey evidence.<<<

>>>But by using all the tricks of the trade, plus some educated guesswork, Piketty is able to produce a summary of the fall and rise of extreme inequality over the course of the past century.<<<

why am I thinking tree rings, temperatures, and hockey sticks?

[narciso]

Well that was the point, Crook was tip toeing
around that point, one can also add Bellesiles special archives.

[boatbuilder]

I do not know enough about Bill Gates or PC's or the internet to say whether he actually "earned" any more credit for the PC and the internet or the computer revolution than Al Gore (OK I do know that much) or anybody else. What I do know is that essentially all of the enormous wealth (not individual wealth but economic growth) generated by the computer revolution is something new--it was added to the economy without taking away money or income or benefit from anyone (other than industries made obsolete by the new technology). This is a good thing--and it conclusively refutes the zero-sum theory on which the "inequality" argument is premised. Lots and lots of people became fabulously wealthy, many many more became merely well-off, many, many, many more are gainfully employed, and it is hard to think of any person or group in the even moderately developed world which hasn't experienced a net benefit from this new technology. Why is it bad that a side effect of this--or any other innovation generated by the capitalist profit motive--is that some people get rich?

[boatbuilder]

[apostrophe misuse--mea culpa]

[rich@gmu]

K/O Paper Products (HI 5.0 producers) seems to like profitable entertainment ventures ... but have had a few stinkers (Cowboys and Aliens).

[rich@gmu]

maybe i ought to go to Hollywood and get into the movie business ...

[rich@gmu]

>>>Why is it bad that a side effect of this--or any other innovation generated by the capitalist profit motive--is that some people get rich?

Posted by: boatbuilder<<<

ATMs cause unemployment!!!

[kidding, well stated]

[rich@gmu]

tap, tap, tap ... is this thing on?

[henry]

Rich, it's on. Beautiful day, things starting to get green. Far too much to do outdoors. Occasional need for next beer.

[rich@gmu]

that is what I'm doing wrong!!!

I need to be outside [it is overcast here but not bad] with a cold beer.