Breaking news: The Wall Street Journal editorial page is full of it.
OK, that's not really news. But an unusually flagrant example of the WSJ editorial page's hogwash artistry caught the world's eye on Thursday, when New York Times columnist Paul Krugman pointed out several big problems with a column published this week by the WSJ's Bret Stephens. Krugman cited an earlier blog post from economist Miles Kimball, who first noted what he called the WSJs "analytical errors."
Stephens, who won the 2013 Pulitzer Prize for commentary, on Monday declared that the United States does not have an income inequality problem, but rather an envy problem. In other words, all of us Poors and Middles are merely jealous of those Riches who are constantly straining their trapezius muscles from nodding too vigorously when reading Stephens' columns. 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. It's the top 20% that take in just over half of aggregate income, according to the Census Bureau, not the top 10%. 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% of aggregate income.
Besides which, so what? In 1979 the mean household income of the bottom 20% was $4,006. By 2012, it was $11,490. That's an increase of 186%. For the middle class, the increase was 211%. For the top fifth it's 320%. 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.
As James Taylor might also say, the bullshitting man bullshits.
For one thing, when declaring that the average income of the bottom 20 percent had risen 186 percent since 1979, Stephens was not adjusting that income for inflation.
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 five percent is up nearly 64 percent. There's your income inequality right there.
"It is hard to read the 186% figure in this passage in any way that is not egregiously misleading," University of Michigan economist Kimball wrote on Tuesday. "Even on the editorial page, a major newspaper such as the Wall Street Journal has the responsibility to screen out clear analytical errors."
Even on the editorial page!
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, Krugman noted.
"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 wrote. "In the process he leaves his readers more ignorant than they were before."
That last point is maybe the most important takeaway here. Though most everybody knows the WSJ editorial page is full of bunk, some of the page's columnists are nevertheless taken seriously by the "serious" people who help make policy in this country. Those columnists include Holman Jenkins and the Pulitzer-winning Stephens.
When such columnists write such garbage, they help convince our ruling elites that rising inequality is no big deal -- some kind of myth, in fact. They reinforce the long-standing bias among "serious" people that complaining about inequality is just unseemly wealth envy. Shut up and pull yourself up by your damn bootstraps already!
At some point, of course, the problem will get bad enough that it finally makes even the elites believe it. But in the meantime, their ignorance, reinforced by people like Stephens, helps make sure the problem gets worse and worse.