Conventional wisdom and the Congressional Budget Office charts presented by the talking heads on MSNBC tell a horrific tale:In the past three decades (read: since the ascent of Ronald Reagan), middle class and poor households have lost real income. But not so for the rich, especially that damnable 1%.
"Repeat a lie often enough and becomes the truth," The Motley Monk was once told.
Those who promulgate that lie must possess little regard for a serious examination of the facts because that lie has been debunked by serious empirical studies. For example, Scott Winship has written about Cornell economist Richard Burkhauser and his colleagues who have found:
- From 1989 to 2007 (comparing peak years), the bottom fifth, middle fifth and top 5% of wage earners saw gains of 26% 20%, and 17%. This is nothing other than a decline in income inequality. (Yet, The Motley Monk would note, not for those who want to promote the myth of increased income inequality.
Honest analysis of these estimates indicates that they do not include income accruing from capital gains. Thus, the decrease in income inequality may be smaller but certainly isn't mitigated.
Or, so one would think.
However, Burkhauser and his colleagues did their homework and when when income estimates of all capital gains accrued by households during the past year--taxable or tax-exempt, realized or not--from investments in public companies and housing, guess what they found?
- From 1989 to 2007, the incomes of the bottom and middle fifth increased (by 13% and 6%, respectively), but the income of the top 5% declined by 5%.
The headline: "Income inequality--even between the top and everyone else--has declined."
Without any paid research staff, if The Motley Monk can unearth these empirical studies which demonstrate that inequality between the bottom and middle has not grown since the 1980s, then why is it that conventional wisdom and MSNBC can't do the same and report the facts?
Pass some Kool Aid, please.
Let the discussion begin...
To read Scott Winship's article, click on the following link:
"Has Income Inequality Really Risen?"