THERE IS FEAR AND TREMBLING ON WALL STREET as the ugly phenomenon of class warfare is increasingly fostered by liberals and union bosses! Crippling taxation threatens!
Or so one would surely believe if following the latest bulletins from the right-wing front. For a brief connection with reality, however, consider the following as reported in The Huffington Post by Mark Gongloff on Jan. 2.
From the Wall Street Journal editorial page column by Bret Stephens: “Stephens on Monday declared that the United States does not have an income inequality problem, but rather an ‘envy’ problem.
“To prove his point, Stephens accused President Obama of misleading the public in a big speech last month about economic mobility and inequality. ‘The top 10 percent no longer takes in one-third of our income — it now takes half,’ Obama said in the speech.
Stephens declared this statement incorrect in several ways:
“Here is a factual error, marred by an analytical error, compounded by a moral error. (Moral! … Wow, that’ll shake em up!) It’s the top 20 percent that take in just over half of aggregate income, according to the Census Bureau, not the top 10 percent. That figure is essentially unchanged since the mid-1990s, when Bill Clinton was president. And it isn’t dramatically different from 1979, when the top fifth took in 44 percent of aggregate income.”
Besides which, according to Stephens, so what!?
“In 1979 the mean household income of the bottom 20 percent was $4,006. By 2012, it was $11,490. That’s an increase of 186 percent. For the middle class, the increase was 211 percent. For the top fifth it’s 320 percent. The richer have outpaced the poorer in growing their incomes, just as runners will outpace joggers who will, in turn, outpace walkers. But, as James Taylor might say, the walking man walks.”
A rejoinder from Paul Krugman, Nobel Prize-winning economist: “As James Taylor might also say, ‘The bulls…ing man bulls…s!’” Original in Krugman’s down-home terms!
Unfortunately, if reality is of the slightest concern, Stephens was not adjusting that income for inflation. As noted by Krugman, when adjusted for inflation “the average income of the bottom 20 percent of households has actually fallen by nearly 3 percent since 1979, according to Census Bureau data. The average income of the top 20 percent is up nearly 43 percent during that same period. The income of the top 5 percent is up nearly 64 percent.”
On Tuesday, University of Michigan economist Miles Kimball wrote, “It is hard to read the 186 percent figure in this passage in any way that is not egregiously misleading. Even on the editorial page, a major newspaper such as the Wall Street Journal has the responsibility to screen out clear analytical errors.” (Even Rupert Murdoch’s WSJ?!)
Krugman on Thursday noted another big error in Stephens’ column: “Stephens relied on Census data to declare that it is the top 20 percent, not the top 10 percent, that takes home half of all U.S. income. But more precise data on inequality have been compiled from tax returns by the respected economists Thomas Piketty of the Paris School of Economics and Emmanuel Saez of the University of California-Berkeley. And those numbers do indeed show that the top 10 percent now has half of all U.S. income.
“In his piece Stephens trashes Obama, accusing him of making a factual error when he did no such thing; then proceeds to commit just about every statistical sin you can imagine in an attempt to minimize the rise in inequality,” Krugman added. “In the process he leaves his readers more ignorant than they were before.”
I draw further from two relevant pieces in the Jan. 20 edition of Nation magazine. First, from “Welcome to the New America: Low-Wage Nation,” by Saket Soni:
“In addition, while we are working longer and harder, wages are stagnant. Between 2000 and 2011, the U.S. economy grew by more than 18 percent, while the median income for working families declined by 12.4 percent. Once upon a time, workers shared the economic prosperity of their employers: until 1975, wages accounted for more than 50 percent of America’s GDP. But by 2013, wages had fallen to a record low of just 43.5 percent of GDP. Overall compensation, which factors in health care and other benefits, has also hit bottom.”
Next, from the same Nation issue, from “Our Impoverished Poverty Debate”:
“January will mark the fiftieth anniversary of the War on Poverty, but what is most notable today is how impoverished our discussion of poverty is. Political leaders in both parties pledge to save the ‘middle class,’ because polls show that most Americans consider themselves part of the broad middle.
“… poverty scars this rich nation. A recent report by the United Nations Children’s Fund (UNICEF) reveals that among thirty-five developed nations, the United States ranks thirty-fourth, with only Romania having a higher child poverty rate. We are also next to last in what UNICEF calls the ‘child poverty gap,’ the gap between the poverty line and the median income of all families below it. (Italics mine.)
“Childhood poverty translates into poor health, poor education and poor prospects. It’s no accident that the top country in international education rankings — Finland — also has the lowest levels of childhood poverty. So you’d think Washington would be focused on reducing childhood poverty, mass unemployment, family distress. Instead, Washington has decided to administer a little ‘tough love.’ Congress cut food stamps by 7 percent in November, and in January 1.3 million jobless Americans will lose their unemployment benefits.” (That should shape up the slackers!)
Finally, I noted with interest a quote from the surprising new Catholic pope. In his recent apostolic exhortation, Pope Francis wrote starkly about the moral challenge of poverty: “Just as the commandment ‘Thou shalt not kill’ sets a clear limit in order to safeguard the value of human life, today we also have to say ‘Thou shalt not’ to an economy of exclusion and inequality. Such an economy kills.”
To the pope’s interesting excursion into this political thicket, American conservatives responded with hysteria. Rush Limbaugh accused him of peddling “pure Marxism.” Louis Woodhill in Forbes scorned him for “Papal Bull” that seemed “copied and pasted out of The Nation or Mother Jones.”
What in the world is one to do with a pope who expresses concern for the poor?!
Jerome Page is a Benicia resident.