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Was feeling putting Mark Warner out of a job as my home state U.S. senator was pretty hopeless, until I saw this:
Sounds pretty bad for Warner (for McAuliffe more so). That's good, because I don't like their policies or their politics.
An excellent article debunking the pay gap myth.
The crux of the argument:
Interesting introductory article to the Pauls and their different approaches to Republican/libertarian integration.
Nicely written summary of why the inequality issue is dumb.
I thought this was a great paragraph:
If I had a nickel for every time some idiot used that "top 1 percent" line, I'd be in the top 1 percent.
This article came out today from the Washington Center for Equitable Growth, a left-wing think tank that reports on income inequality issues. It reports the findings of the Census Bureau's Income and Poverty in the United States: 2013 that came out earlier this month. It is packed with lies.
For example, the author Robert Lynch states this:
There are four measures in the report to do with annual household income inequality: (1) Gini index; (2) Mean logarithmic deviation of income; (3) Theil index; and (4) three Atkinson indexes. Mr. Lynch knows this--he explains these four measures in the paragraph prior to the two cited above. He also adds a fifth measure that the report includes separate from the other four: Household Income percentile ratios. Why did he add this one? Well, let's see.
Let's look at Mr. Lynch's assertion, "By every measure, income inequality in 2013 was higher than in previous years or equally as high as has ever been reported by the Census bureau since it started collecting these data in 1967." Actually, by every measure (except the fifth one he added), household income inequality in 2013 was lower than in 2012 and 2011! Gini was 0.476 in 2013 (0.477 in 2011 and 2012). MLDI was 0.578 (0.586 in 2012 and 0.585 in 2011). Theil was 0.415 (0.423 in 2012 and 0.422 in 2011). And Atkinson was lower in 2013 than in both 2011 and 2012 for all three indexes. The only measure which he can cite that supports his assertion is the measure that he added, that is not included as a "summary measure": the 90/10 ratio. Funny how that's the principal one that he illustrates with an example (the other one was the Gini, which had the most modest decline of the report's summary measures). If he exampled the data of any of the others, people wouldn't need to look at the report (as I did) to conclude he was a liar and stop reading.
Of course, in his defense he would say that the decreases in these measures are "small" or "not statistically significant". They are small, but no smaller than the typical change in these measures year-by-year. It is not like these measures have had steady increases and then just plateaued. They went down. All of them.
Actually, most Americans have experienced an increase in their earnings. Changes in society-wide averages don't reflect this because of a dynamic-slope effect: the composition of people in the average changes. And how can women have suffered disproportionately if there is a "reported improvement in the female-to-male earnings ratio, from 77 cents on the dollar in 2012 to 78 cents last year", as Lynch says earlier in his article? And how can "children" and "people of color" have suffered disproportionately if Lynch reports earlier in his article that "Almost the entire decline in poverty is attributable to a reduction in the poverty of children under the age of 18 alongside a reduction in the poverty rate of Hispanics."
The WCEG's mis-reporting of the facts is not just typical left-wing spin. It is lying.
The linked article was in the Washington Times yesterday.
This article caught my eye.
The author frames the situation well in the opening sentence:
The mean-income-is-higher-than-the-median is a well-known theoretical explanation for redistribution in public choice circles, but is also known as being simplistic. McElwee goes on to cite some pretty obscure reasons why the bottom half don't soak the top half:
Which brings us to the number one reason that the median voter, and people below the median, don't try to soak the rich. Morality.
No matter if their morality is deontological (taking from others is inherently bad) or utilitarian (taking from others produces bad results generally), enough people know that redistribution is wrong to counter-balance the median voter theorem whereby more people are below the average income than above it. If you consider that the self-interested voter hypothesis (whereby people vote instrumentally to enrich themselves) is widely discredited, it becomes clear that redistribution, at least the more naked forms of it, has little chance even in societies with great disparities in annual income.
Actually it is not that surprising that McElwee misses the moral angle, given the fact that he is advocating straight bare-naked redistribution. Such an idea may be theoretically interesting to public choice students (where it is referred to as "redistribution as taking"), but reflects the morality of a child who has yet to learn not to steal.
Another reason he misses is the golden-egg effect. Give voters credit for seeing beyond the immediate future. They have some sense that rich people will leave, or stop taking risks, or just work less if half their money is taxed to fund giveaways to people simply based on annual income. To continue to be able to tax the rich to fund important or justifiable programs is a reason not to kill the goose to just take the eggs once at a higher rate.
Some new criticisms of Piketty.
The linked article by Nick Bunker argues that we should take the Palma Index (which measures inequality as a ratio of the percent of income received by the top decile (10%) over the percent of income received by the two bottom quintiles (40%)) more seriously, and if not replace the Gini with it, make it an equal partner in explaining unequal outcomes. His reasoning:
You can see its appeal to the left. For those who bemoan the earnings of the "1%", chasing tails has been an obsession. But the Palma exposes their base motivation: they are only obsessed with one tail (the "rich"), not two, and are thus more occupied with envy than with sympathy for the poor. Why is it not 10%/10%? Or 40%/10%?
Another reason they like it is because total inequality, as the author admits, is just not that stunning. Tail inequality has more statistical backing for being an urgent concern, which means that middle inequality has actually improved.
The Palma Index gives four times as much weight to the top 10% as it gives to the bottom 40% and gives no weight at all to the middle five deciles. For a measure of inequality, propounded by supposed defenders of equality, it is a truly discriminate and unequal statistic.
MURPHY: On inequality - With any search for answers, it helps if people can first agree on the question
An excellent article.
Murphy identifies three definitional frames that discussions of income inequality must come to terms with before they start talking statistics:
1) Are we looking at inequality of households or individuals?
I won't go into the reasoning behind each one of these, but Murphy would appear to agree with me that household inequality is a bogus measure: unfairness if it happens is due to individuals' income, not their choice of who they live with. He would also agree that upon reflection, most people wouldn't care if there is vast inequality due exclusively to age: everybody will get his share if that is the case. The first two items are pretty close to being open-shut cases where the only two reasons for not looking at the right data is the absence of such data (which is certainly a concern, especially for getting lifetime income statistics) or the nefarious intentions of the researcher (which is a larger concern).
On the third item, it is more about what the purpose of the research is. If you are trying to assess how economic inequality really is, as exhibited by people's conspicuous consumption, then you should use post-government data. That would be the case 90% of the time. But if you are trying to assess how economic inequality would be, without some or all of the government interferences, you may need to use pre-government data, possibly in conjunction with post-government data. With that caveat out of the way, I agree with Murphy that in general researchers make the mistake/offense of using pre-tax, pre-benefit data all too often.
Then there is this big revelation:
Looking at the correct statistics, the supposed "rise in income inequality in recent years" is a sham. There is no rise in income inequality.
Some further questions for Murphy (and others) to consider, beyond the three he identifies:
1) Are we looking at inequality of (implicit) wages or of income regardless of work effort? Do people really feel it is unfair for someone working twice as many hours to get twice as much pay? Or is it just unfair if they are getting twice the (explicit or implicit) wage? Income inequality statistics almost never adjust for work effort. And if they did, would they include previous work effort to acquire skills and education?
Murphy finishes his article saying that the only real solution is equality of opportunity through better or more even-handed education. That may be where a middle-road political solution develops (though whether that means more or less state intervention is not pre-determined), but the improvement of education is an on-going battle anyways. With respect to economic inequality, the best policy is simply to ignore it.
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