Justus For All

I have mentioned before a few times that I was concerned concerned about income inequality and wage stagnation.  I still have a few concerns about the former, although my thinking on it has changed slightly, but as for the later, my concerns have been assuaged.  In exchange, I am now pissed that I, and everyone else, has been convincingly lied to by certain economic pundits and supposedly reputable researchers.

The reason for this change?  I have now finished about half of Income and Wealth by Alan Reynolds (thanks to a suggestion by Steve Conover, you can read his review here.)  The book is a bit pricey, but it is chock full of concise explanations of how so much economic news is simply based upon incorrect data.  The book explains how the misleading data is derived, and also explains WHY those metrics are the wrong ones, and provides much better data, from easily checked sources, that explain what is really going on.

Far more important though than telling us what the most accurate economic statistics tell us about income and wealth, it shows us how to figure them out for ourselves and provides the tools for critical analysis of future claims along these lines.  It is an invaluable resource, and one that I plan to keep close at hand for when I encounter claims of this type in the future.

I suppose a more charitable conclusion would be that those who publicize this data didn’t intend to decieve, the reserchers include, often in footnotes apparently, explanations of what their misleading statitistics actually measure, and if pundits and reports misunderstand that, it could be argued that that is hardly their fault.  As for the pundits, the obscure footnotes coupled with perhaps only a passing familiarity with statistics and the data combine to confuse them and lead them to present a less then factual picture.  That would be a charitable interpretation, but I am not inclined in this case to be that charitable.  The studies seem to me to be designed to allow plausible misinterpretation and the pundits publizing this data are (such as Paul Krugman) supposed to be experts in their own right.  Added to that, is that much of it clearly supports a particular anti-corporate and pro-redistribution ideology and I can conclude that this is nothing less than a willful intent to decieve.

Some will probably conclude, without reading the book, that Alan Reynolds is simply a conservative ideologue.  Obviously most of the myths he debunks in this book are deeply held by liberals, and publicized by the New York Times, but he also catches various conservatives in sloppy thinking and bad math.  More to the point, the methods he uses of clearly explaining the hows and whys of these economic statistics make it impossible for him to be giving us anything but the best picture he can about what really is going on.

I highly recommend this book to anyone.  It doesn’t necessarily provide any answers to the various social problems we face, but it does provide the tools to ask the right questions.