Hey Mr. Math (J_B) -

[Peter_Puget]

I was looking through a pile of papers for something I read to reference CBS' recent post and I came across this which reminded me of this - A link you posted not too long ago.

 

In the link is this: According to estimates by the economists Thomas Piketty and Emmanuel Saez--confirmed by data from the Congressional Budget Office--between 1973 and 2000 the average real income of the bottom 90 percent of American taxpayers actually fell by 7 percent. "

 

My quick review of the first link provides no supprt for the 7% claim made in second. You with your modestly claimed math skills can be of use here. Please show me where this claim is supported in the first link!

 

Help us ignorami!

 

Yours expectantly,

 

PP

[foraker]

The Nation article did not cite a specific reference, they were just talking about data so is this the right reference you should be looking at? I notice that they are talking about the top 10% of wage earners, not the bottom 90%. For example, they seem to be comparing the differences between between, say, the 90-100% group vs the 99.5-100% group. In that case, the 0-90% group is not covered there. I also don't see any of the other numbers quoted for the highest income wage earners (e.g. 599%). If nothing else, ask the authors.

[foraker]

mind you, i just took a quick squizz at the reference while I was here at work doing other things. :-P

[Loose_Brie]

Hey PP,

 

You are mixing apples and oranges here. Your study talks about wage and purchasing inequality between the top 10 and the bottom 90%. This is a relative measure. And there is no doubt that since the 70% this inequality has increased.

 

The real income Krugman talks about is an absolute measure. He indicates that the CBO study says real income has fallen. Not inconsistat at all.

 

In fact if you look at Figure XI on page 33 of your link you will see that it agrees perfectly with the CBO statment. Average wages have changed little if at all (I assume this is inflation adjusted) as shown by the flat line at the bottom of the graph labeled "Average wages". Since the Top 10% is factored into this number it may be that the Median wages have fallen. Though the graph neither supports of negates this fact.

[Peter_Puget]

I believe I cut and pasted that quote directly from the Nation Article.

 

Krugman and the B-week article seem to make very few absolute references. Words like"new survey" "classic 1978 study" are used. I call complete BS on the quote.

 

If my link isn't the source then let's find it. Let's email the Profs and ask them where and if they have ever made such a claim. I bet if you poke around the report you will find a 7% number that I believe is contorted and misrepresented thus I believe this is indeed the source - but I could be wrong.

 

Cheers,

 

PP

Edited April 20, 2004 by Peter_Puget

[j_b]

very simple, Thomas Piketty and Emmanuel Saez have done a number of studies on income distribution in recent years. the study mentioned in Krugman's piece covers the period 1973-2000 (published in 2002 but not available for free, also note that the list of publications on saez's site stops at 2001) whereas the link you located is a study covering the 1973-1998 period. I assume that the content of the later study mentioned in Krugman's piece is somewhat different. so you see, basic math skills is not all that is needed, a minimum sense of observation and cross-referencing comes in handy as well.

 

thanks for the link, i'll read it in due time. you should spring the few bucks to purchase the later study and we could clear it all up.

 

now i am going to help you out (a poisonous gift of course), it may be that krugman mistakenly used the 7% figure for the 90%ile instead of for the lower quintiles. here is what johnston says: "Those in the top 1 percent saw their average income, adjusted for inflation to 1999 dollars and after income taxes were paid, more than double from $234,700 in 1977 to $515,600 in 1999. Meanwhile, the 55 million Americans in the poorest fifth of the population lived in households whose average income fell from $10,000 in 1977 to $8,800 in 1999 [based on a cbpp analysis of cbo data]", which as you'll note (helped in this by basic math skills) amounts to a 12% loss in real income for the lower quintile over that period.

[Peter_Puget]

My Quote from teh Nation article: "According to estimates by the economists Thomas Piketty and Emmanuel Saez --confirmed by data from the Congressional Budget Office--between 1973 and 2000 the average real income of the bottom 90 percent of American taxpayers actually fell by 7 percent. "

 

 

 

 

Hey PP,

 

You are mixing apples and oranges here. Your study talks about wage and purchasing inequality between the top 10 and the bottom 90%. This is a relative measure. And there is no doubt that since the 70% this inequality has increased.

I am not mixing up anything. See my comments above

 

The real income Krugman talks about is an absolute measure. He indicates that the CBO study says real income has fallen. Not inconsistat at all.

 

See quote at top of this post. Again I am not saying something is inconsistant.

 

In fact if you look at Figure XI on page 33 of your link you will see that it agrees perfectly with the CBO statment. (I assume this is inflation adjusted) as shown by the flat line at the bottom of the graph labeled "Average wages". Since the Top 10% is factored into this number it may be that the Median wages have fallen. Though the graph neither supports of negates this fact.

 

I would only add that you are correct when you write that this graph proves nothing. You are incorrect when you attribute a 7% real decline to the CBO. At this point this is merely an unproven claim by Krugman. But go find the data.

[foraker]

I think, and I believe most economists might agree, that focusing on a single statistic is a bit sketchy. It's simply inflation adjusted income and not an indication of people's quality of life (I make no comments about whether those indicators are up or down). However, I do find it more shocking that the real income (sans capital gains) for the top wage earners has so far outstripped everyone else. I can't believe the 'marginal utility' of the top wage earners is that great, if the executives I've met are any indication.

[Loose_Brie]

Granted these statistcs are v ery old, but

 

Average weekly earnings of nonsupervisory workers, total private industry, 1982 dollars. U.S. Bureau of Labor Statistics, Bulletin 2445, and Employment and Earnings, monthly, June and March issues.

 

1965 $290

1970 297

1973 315 (Peak)

1975 292

1976 297

1977 299

1978 301

1979 291

1980 274

1981 271

1982 267

1983 272

1984 274

1985 271

1986 271

1987 269

1988 266

1989 263

1990 259

1991 255

1992 255 (Nadir)

[Peter_Puget]

very simple, Thomas Piketty and Emmanuel Saez have done a number of studies on income distribution in recent years. the study mentioned in Krugman's piece covers the period 1973-2000 (published in 2002 but not available for free, also note that the list of publications on saez's site stops at 2001) whereas the link you located is a study covering the 1973-1998 period. I assume that the content of the later study mentioned in Krugman's piece is somewhat different. so you see, basic math skills is not all that is needed, a minimum sense of observation and cross-referencing comes in handy as well. [Edit: See my note comment below! ]

 

thanks for the link, i'll read it in due time. you should spring the few bucks to purchase the later study and we could clear it all up.

 

now i am going to help you out (a poisonous gift of course), it may be that krugman mistakenly used the 7% figure for the 90%ile instead of for the lower quintiles. here is what johnston says: "Those in the top 1 percent saw their average income, adjusted for inflation to 1999 dollars and after income taxes were paid, more than double from $234,700 in 1977 to $515,600 in 1999. Meanwhile, the 55 million Americans in the poorest fifth of the population lived in households whose average income fell from $10,000 in 1977 to $8,800 in 1999 [based on a cbpp analysis of cbo data]", which as you'll note (helped in this by basic math skills) amounts to a 12% loss in real income for the lower quintile over that period.

 

 

Check this out: Seaz's site

 

Now scroll down until you find my link. read. Dig this comment right of the site: (All Tables and Figures Updated to year 2000.)

 

J_B - Please read your quote above and explain how you made such an error. Was is purposeful?

 

You crack me up. BTW - Thanks for the gift.

 

I do note how you are moving close to agreement with my claim of BS on the quote. (See blue highlight above)

 

PP

[Peter_Puget]

LB Please restrict your data search to one of the sources listed. ALso please make your data comparable.

 

PP

[Peter_Puget]

I asked J_B for some specific help. I do not really care if the claim is true or not. I want to see if the reference supports the claim. J_B responded with non-related data and a misleading/incorrect bit of information from Seaz's site. J_B the info is there, so I ask again please help.

[foraker]

I received the following from Prof Saez asking for a reference for The Nation article quote:

 

"Income Inequality in the United States, 1913-1998" with Thomas Piketty,

Quarterly Journal of Economics, 118, 2003, 1-39 (Longer NBER Working Paper

No. 8467 version

 

all available on my webpage.

 

Keep in mind that we are looking only at market income (which does not

include transfers from the government

and those transfers have increased substantially since 1973)

and that real incomes are quite sensitive to the price deflator (and

there's a lot of controversy about how to estimate

those). Using the New CPI research series instead of the official CPI

series would give you an increase of 8%

instead of a fall by 7 percent.

What is clear however is that incomes at the top have increased much faster

than the average (this is really what

our work is all about).

[Peter_Puget]

Thankyou.

[j_b]

Now scroll down until you find my link. read. Dig this comment right of the site: (All Tables and Figures Updated to year 2000.)

 

J_B - Please read your quote above and explain how you made such an error. Was is purposeful?

 

You crack me up. BTW - Thanks for the gift.

 

aw come on, PP, stop the obfuscation, it's tiresome. a) the updated figure is for the average real income (i.e. it does not differentiate into quintiles) b) the text was not updated. I haven't read the paper you referenced yet but the later paper is based on an expanded data set and, moreover, nothing indicates that it does not include different analysis of the data. i, sometimes, wonder if you are just being a simpleton or you are being duplicitous but i invariably conclude the later.

[Peter_Puget]

Now scroll down until you find my link. read. Dig this comment right of the site: (All Tables and Figures Updated to year 2000.)

 

J_B - Please read your quote above and explain how you made such an error. Was is purposeful?

 

You crack me up. BTW - Thanks for the gift.

 

aw come on, PP, stop the obfuscation, it's tiresome. a) the updated figure is for the average real income (i.e. it does not differentiate into quintiles) b) the text was not updated. I haven't read the paper you referenced yet but the later paper is based on an expanded data set and, moreover, nothing indicates that it does not include different analysis of the data. i, sometimes, wonder if you are just being a simpleton or you are being duplicitous but i invariably conclude the later.

 

You are such a goofball! Have you no shame?!?!?! For starters did I ever make any claims about quintiles? Look the quote in the Krugman piece was obvioulsy BS from inspection. Forawker appears to support this whith his recent post. Check out the reference. I simply thought someone should point out the crap you constantly link here.

 

Cheers mate!

 

PP

Edited April 20, 2004 by Peter_Puget

[Peter_Puget]

Ill beat J_B to the punch!

 

PP you are a simpleton. Or you are a liar! Or maybe perhaps a Limbaugh fan! Wait I got it you are all three!

 

[Jim]

Ill beat J_B to the punch!

 

PP you are a simpleton. Or you are a liar! Or maybe perhaps a Limbaugh fan! Wait I got it you are all three!

 

 

Dude - no logic thread here. try again.

[Peter_Puget]

Now scroll down until you find my link. read. Dig this comment right of the site: (All Tables and Figures Updated to year 2000.)

 

J_B - Please read your quote above and explain how you made such an error. Was is purposeful?

 

You crack me up. BTW - Thanks for the gift.

 

aw come on, PP, stop the obfuscation, it's tiresome. a) the updated figure is for the average real income (i.e. it does not differentiate into quintiles) b) the text was not updated. I haven't read the paper you referenced yet but the later paper is based on an expanded data set and, moreover, nothing indicates that it does not include different analysis of the data. i, sometimes, wonder if you are just being a simpleton or you are being duplicitous but i invariably conclude the later.

 

OK interested readers please press here.

 

Is J_B correct? Was I being duplicitous? Please check all the tabs.

 

PP

[j_b]

Now scroll down until you find my link. read. Dig this comment right of the site: (All Tables and Figures Updated to year 2000.)

 

J_B - Please read your quote above and explain how you made such an error. Was is purposeful?

 

You crack me up. BTW - Thanks for the gift.

 

aw come on, PP, stop the obfuscation, it's tiresome. a) the updated figure is for the average real income (i.e. it does not differentiate into quintiles) b) the text was not updated. I haven't read the paper you referenced yet but the later paper is based on an expanded data set and, moreover, nothing indicates that it does not include different analysis of the data. i, sometimes, wonder if you are just being a simpleton or you are being duplicitous but i invariably conclude the later.

 

You are such a goofball! Have you no shame?!?!?! For starters did I ever make any claims about quintiles?

 

when i said that the paper you referenced was earlier than the paper Krugman referenced, you claimed that the site included updated figures as if they contained information relevant to discriminating income trends between different fractions of the population. it obviously didn't so i don't really understand your motive except for the usual spin. how can you use a 2000 (or whatever) paper to deduce what is to be found in the later paper? do you even know whether they changed methods? dude, you are so sloppy that i am not surprised that your thinking is so twisted.

 

 

Look the quote in the Krugman piece was obvioulsy BS from inspection.

 

considering that the cbpp finds a 12% decrease in real income for the lower quintile i am not sure how your proceed to arrive at such conclusion just by inspection.

 

Forawker appears to support this whith his recent post.

 

appears to you. why don't you support it factually then? why don't you describe the arguments about the cpi?

[Peter_Puget]

 

when i said that the paper you referenced was earlier than the paper Krugman referenced, you claimed that the site included updated figures as if they contained information relevant to discriminating income trends between different fractions of the population. it obviously didn't so i don't really understand your motive except for the usual spin. how can you use a 2000 (or whatever) paper to deduce what is to be found in the later paper? do you even know whether they changed methods? dude, you are so sloppy that i am not surprised that your thinking is so twisted.

 

Ah my dear boy. Let's review. I said I could find no support for Krugmans claim in the referenced study. The author of the study agrees that I was referencing the correct study and that Krugman's assertion was incorrect. You claimed that I was in error when I referenced the study because the data did not extend to 2000. I pointed out that on the site the data did extend to 2000. You came back with an incorrect assertion regarding what that data even was.

 

THanks for the laughs!

[Jim]

PP - as usual your arguments tend towards rearranging deck chairs on the Titanic and ignoring the iceberg. Even if you were correct on this minor point - which you've not made clear - the other information in the sources simply backs up the general assertion. Your tendencies to defend the BMW sect that you run in is, well, amusing anyway.

[j_b]

Ah my dear boy. Let's review. I said I could find no support for Krugmans claim in the referenced study.

 

the study was done prior to the later paper that krugman mentioned. the study you referenced was subsquently updated but not with respect to determining income trends for all quintiles. how does it help you to assess was is to be found in the later paper?

 

in fact you'll find the data for the later paper here: http://www.nber.org/data-appendix/w8467/w8467-app.pdf

 

you'll note that the data for the later paper differentiates for the 0-90% and the 99-100% fractions (notably in table A6) whereas the data for the previous paper as found on saez's site does not. so there .... here is the proof of your sloppiness.

 

The author of the study agrees that I was referencing the correct study and that Krugman's assertion was incorrect.

 

if you are talking about the mail that foraker received, the author does no such thing. he does not say that Krugman was wrong, in fact on the contrary he acknowledges that using the official cpi series shows an income decrease of 7%, which is exactly the number quoted by krugman.

 

You claimed that I was in error when I referenced the study because the data did not extend to 2000. I pointed out that on the site the data did extend to 2000. You came back with an incorrect assertion regarding what that data even was.

 

i claimed that you were not very observant because the krugman piece was based on a later paper which used a longer data series. whether they updated the study found to on saez's site with data that do not pertain to assessing trends for all quintiles is irrelevant to what is to be found in the later study.

 

i am done here.

[j_b]

allright, i may have been mistaken. insofar, it appears there may be only one study that was updated at a later date. still, it is not clear why the data set shown on saez's site is considerably shorter than the one found at nber.org (http://papers.nber.org/papers/W8467) and as noted earlier the nber data include incomes for all earners (versus only the upper 10% on saez's site). this raises the question of why one would include data that is not going to be used in the paper. in brief, we can't rule out that there may be different writeups of the work.

 

however, at worse, it is a misattribution of one aspect of the analysis on krugman's part. a possibility which i mentioned in an earlier post. the lowering of the income of the lower 90% by 7% is not picked out of thin air but has solid backing (as shown by foraker's mail when saez says that the income lowered by 7% if one uses the offical cpi). Moreover, as noted earlier the real income of the lower quintile was lowered by 12% according to the cbpp analysis.

 

in short, i'd say it is typical of PP to focus on one procedurial aspect of the story in an attempt to deny what the data shows.

 

i am really done this time.

[Peter_Puget]

J-B -

 

You are correct it was not picked out of thin air. But specifically chosen to mislead. I would note how quickly Saez brought up the new CPI series. I suggest you go learn the reasons why. Plus note that he specifically states that transfer payments are not included. He goes out of his way to keep his distance from Krugman and his 7% decline. In short he claims at the very least that since transfer payments are excluded Krugman is wrong! [/color] If the more appropriate deflator is used he is doubly wrong. This paper simply does not support Krugman's assertion.

 

YOU want to believe so bad you will not look at this objectively.

 

Check this out from the Nation article:

 

During the 1930s and '40s, however, America experienced what the economic historians Claudia Goldin and Robert Margo have dubbed the Great Compression: a drastic narrowing of income gaps, probably as a result of New Deal policies."

 

Notice he hedges his bet but don't you think something called the Great Depression or even WW2 is worthy of mention? Again polemics not honesty.

 

Krugman mentions several other surveys that are for some reason secret! In the Business week article there is survey not mentioned by Krugman. Note that it does not support Krugman's shocking assertion of decreased mobility. This study does end in 1998. Had it continued during the remaining boom years I bet it would have shown no change in mobility for the past three decades.

 

 

 

 

Saez's email for reference:

Keep in mind that we are looking only at market income (which does not

include transfers from the government

and those transfers have increased substantially since 1973)

and that real incomes are quite sensitive to the price deflator (and

there's a lot of controversy about how to estimate

those). Using the New CPI research series instead of the official CPI

series would give you an increase of 8%

instead of a fall by 7 percent.

What is clear however is that incomes at the top have increased much faster

than the average (this is really what

our work is all about).