Asymmetrical Information

From the desk of Mindles H. Dreck:

A Superb Plutocracy Rebuttal in the Blogosphere

I have often praised John Weidner (and his invisible "Truth Squad") for his well-argued comebacks to the partisan hysteria of Paul Krugman. Weidner et. al. have outdone themselves with a lengthy rebuttal to Paul Krugman's "For Richer". This is definitely worth a read -

First, the pretext for writing it was the study cited above by P & S [Piketty and Saez, upon whose work Krugman claims to have based his article] purporting to buttress Krugman's case that we are backsliding into inequality. As we have noted before, when Krugman cites research it's a good idea to actually read the citation. It usually turns out that he either misstates or distorts his sources to promote his political agenda. Indeed, in is the case, he does both.

Let’s begin with the "return of the Great Gatsby" and Krugman's hysterical claim that people in the top 1/10th of 1 percent of income share ("plutocrats" as he calls them) are almost back to their 1913 share levels. This is patently false. We invite readers to look a Figure XII (page 46) of the linked P & S study where they the will see that the top share, despite recent increases, is just over half of the 1913 level. Furthermore, as P & S point out, the character of the people in this top tier has changed. The Gatsby types were coupon clippers or "rentiers" as P & S calls them. They spent most of their days planning the evenings' social events. By contrast, the current top tier are what P & S call the "working rich." These are people who go to their offices everyday, put in long hours and, in most cases, did not inherit their wealth. Of course, a few of them break the law occasionally and must be punished, but, in general, the working rich are a more sympathetic bunch than the idle rich of the early 20th century. Indeed they are testaments to the upward mobility in American society.

Weidner refers to Krugman as a "'glass half empty' kind of guy." I like to think of him as a "glass is only as empty as I say it is" kind of guy, myself.

Could someone send this to all the letter writers cheering Krugman for finally revealing what they already "knew"?

Posted by Mindles H. Dreck at November 9, 2002 12:05 PM | TrackBack | Technorati inbound links