Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

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Wednesday, July 28, 2010

Paul Krugman Hits Me Upside The Head With A 2 By 4

 Through the medium of the printed word, Paul Krugman reaches across space and time to smack some sense into me.

Here and again here I talk about income mobility, and how it is misleading relative to personal and generational wealth.  It's actually far worse than I thought.

The data from The Tax Foundation, cited in the second link above, is based on the income mobility of tax payers.   Let that sink in for a minute, because the very same Tax Foundation - pushing quite a different agenda this time - tells us that in 2006, an estimated 41% of the population payed no income tax, including 15 million households or individuals who didn't even need to file a return.  

So - they are basing their conclusions about income mobility on a data set that specifically excludes a large sub-set of the population.  And who are these people?  Let's ask the Tax Foundation.

Why do many single filers face zero tax liability? One reason is that single filers tend to be younger and earn lower incomes than married filers—especially single parents who file as head-of-household. As a result, married taxpayers pay roughly 75 percent of all federal income taxes, despite filing only 40 percent of returns.

Oh, I see - low income head-of-household folks.   It takes no great stretch of the imagination to realize that these are the people most deeply  mired in poverty, and the least likely to ever find their way out of it.

So - basing a study of income mobility on tax payer data introduces an enormous bias.  This methodology is inherently flawed, and leads to a wildly erroneous conclusion about economic disparity.

I will not consider for even a microsecond the possibility that The Tax Foundation did this in honest ignorance. They are a group with an agenda, and to support that agenda they present this misleading study.  This also illustrates how propagandists can mislead without actually telling lies.  They just cherry-pick or select an inherently biased data set, and draw conclusions as if they had considered the entire population.

Wow.  This is disgusting!

You might be wondering what any of this has to do with Krugman.  I wouldn't have thought about any of this, except I'm reading his 1999  book, The Accidental Theorist, a collection of essays originally published in various locations.  In a chapter called An Uneven Exchange, in a section called Right-Wing Wrongs, Krugman tells about something from right-wing asshat lair Dick Armey's 1995 book, The Freedom Revolution.

Armey used a data set over a different time period, but exactly the same methodology to promote the canard that Reagan's economic policies were successful, and the middle class is alive and well.  We'll let Krugman take over (emphasis his.)

Again, he doesn't cite the source, but these are familiar numbers. They come from a botched 1992 Bush administration study, a study that was immediately ridiculed and that its authors would just as soon forget,

This is why: The study tracked the number of people who had paid income taxes in each of the years from 1979 to 1988.  Since only about half the working population actually paid taxes over the entire period, this meant that the study was already biased toward tracking the relatively successful.  And then these earners were then compared to the population at large.

There are two sources of error here: the part of the population paying taxes in a given year, and the even lower part paying taxes over every year of the referenced time period.  These are not mistakes.  With Armey and The Tax Foundation they are deliberate misrepresentations, told to make you believe that the American economy is vibrant and dynamic, the middle class is healthy, and rags-to-riches stories are common in America.  The Tax Foundation study is inexcusable.  Their methodology was proven to be flawed, misleading, and agenda-driven years before they did their study.  They had to know this.

The truth is, the rich are grabbing it all, and you and I are losing ground, every second of every day.

Meanwhile, the regressive liars keep on lying.

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