New York magazine writer Jonathan Chait, always a good read, apparently believes a) income inequality is exploding like a supernova, and b) the American middle-class is no better off today than it was 30 years ago.
In fact, he believes the evidence for those beliefs so incontrovertible/bullet-proof/ironclad, that anyone challenging them is a “denier” and should be shunned like someone contesting the Holocaust—or even global warming. In other words, you should pay absolutely no attention to the following uncomfortable evidence:
1. Research by Northwestern University professor Robert Gordon, generally a liberal fave, finds that “not only has the increase of inequality been exaggerated, but it has ceased. The excess growth of mean relative to median income reversed itself after 2000.” But maybe he is somehow saying just the opposite, that it has actually not ceased. Weird, that.
2. And Gordon—who, in all fairness, does think incomes are more unequal today than a generation ago—has this to say about supposedly stagnant middle-class wages: “Correcting the upward bias of the official [consumer price index] adds more than 1 percent per year to official estimates of the growth in median and mean wages. Cumulatively since 1977, my best estimate of the upward bias in the CPI cumulates to 38 percent between 1977 and 2006.”
3. In a blockbuster, the blog Political Calculations finds that “there has been absolutely no meaningful change in the inequality of individual income earners in the years from 1994 through 2010. … It would seem then that the real complaint of such people isn’t about rising income inequality, but rather, how people choose to group themselves together into their families and households.”
4. Brand-new research from University of Chicago’s Bruce Meyer and Notre Dame’s James Sullivan, who find that “median income and consumption both rose by more than 50 percent in real terms between 1980 and 2009.”
5. A 2008 paper by Christian Broda and John Romalis from the University of Chicago documents how traditional measures of inequality ignore how inflation affects the rich and poor differently: “Inflation of the richest 10 percent of American households has been 6 percentage points higher than that of the poorest 10 percent over the period 1994–2005. This means that real inequality in America, if you measure it correctly, has been roughly unchanged.”
Now that is a lot of information. Economics is hard! So much easier to lackadaisically regurgitate the findings of economists like Thomas Piketty and Emmanuel Saez or the Congressional Budget Office with absolutely no context, qualification, or nuance.