So Paul Krugman goes on TV and gets snarled at by the Fox News guy, Cavuto. So far, so fun. Now, there’s a little wriggle room in what’s actually being alleged. I tend to think that Krugman’s right in that there has been a widening of income inequality in the US. Part of that is because there actually has been, part of it because of the slightly odd way that US poverty statistics are compiled (they still tend to use pre tax pre benefit numbers).
However, Krugman uses ‘dramatically worse’ which is a much stronger statement and one which isn’t really quite something I agree with (it all depends upon your own definition of ‘dramatic’ of course).
As Angry Bear points out (as have many others):
…consumption inequality grows less than proportionally as income
inequality grows, while wealth inequality grows more than
proportionally.
Now I assume that the argument over inequality is really about how much people have, yes? So it’s consumption inequality, if anything, that we should be worrying about.
But by far the best thing is this over at Think Progress.
Actually, Krugman is completely right: things are dramatically worse
now than 10 or 20 years ago. Here’s a chart from the Economic Policy
Institute that tracks the ratio of the wealthiest 1 percent of
Americans to median income in the United States, a standard measure of income inequality:
So, in attacking a Fox News guy Judd makes a schoolboy howler. He doesn’t even get the name of the chart right, which is The ratio of the wealthiest 1% to median wealth in the United States.
Repeat after me. Wealth is a stock, income a flow.
Leftoid economics, don’tcha just love it?
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