Friday, June 17, 2005

Lies and Statistics from Krugman

A while back I noted this about NY Times "economist" Paul Krugman. The other day Krugman tried to claim that the middle class has not benefited from the last 30 years of economic growth, mainly because evil Republicans have given all the money to the rich. The response below puts this foolish notion in bold relief.

Power Line:

This, in turn, reminds me of my deconstruction of a silly article in the New York Times by one of our premier Chicken Littles, Paul Krugman, and the response I received from Dafydd ab Hugh, who pointed out that I had not articulated anything like the real scale of the improved standard of living over the past thirty years:

I think you missed an even more basic critique of the Krugman opinion piece.

You wrote that "the Census Bureau data show that for the category "Married-Couple Families," median income went from $46,723 in 1973 to $62,281 in 2003. (All numbers are in constant 2003 dollars.) That's a hefty 33% increase in real income."

With all due respect, Hindrocket, that's bullpuckey. The increase in "real income" would be hundreds of times that 33%, once you take into account the value of what you can now buy. Riddle me this:

* In 1973, how many households could afford a desktop computer with hundreds of megabytes of RAM? Ans: none.

* How many could afford a portable telephone that fits in a pocket? Or for that matter, how about a portable computer terminal? Ans: none.

* How many could afford to have genetic diseases in their children repaired by gene therapy? Ans: none.

* How many childless couples could afford in-vitro fertilization? Ans: none.

* How many could afford to have diseases diagnosed with Positron Emission Tomography or treated by laser surgery? How many could afford to have Lasik corrective eye surgery? How many could afford to have depression or anxiety cured or controlled by selective serotonin reuptake inhibitors (SSRIs) like Prozac, Zoloft, Paxil, Luvox or Celexa? How many could afford to have their teeth repaired by composite resin fillings? How many could afford laser microsurgery, radio-telemetry surgery, foetal-abnormality surgery, minimally-invasive surgery, robotic surgery, or "beating heart" cardiac surgery? Ans: none.

* How many could afford to start their own "magazines" that could be read by tens or hundreds of thousands of people each week without even being distributed? Ans: none.

* How many could afford a luxury family vehicle suitable for offroading adventures? Ans: none.

* How many breadwinners could afford to telecommute? Ans: none.

* How many could afford a Mint Mocha Chip Frappuccino? How many could buy fat-free potato chips? How many could afford NutraSweet? How about lactose-free milk? How many could afford to go out routinely for Pad Thai, Japanese sushi, Armenian khorovatz, Ethiopian aleecha, Chorizo Argentino, Lebanese hummus and shawarma, or even a nice, simple blueberry bagel? Ans: none.

The point should be clear: it is impossible to legitimately compare buying power in 1973 with buying power today, for the simple reason that a huge proportion of what we buy today simply did not even exist thirty years ago. This is more obvious when you try to compare today's economy with the economy of the Middle Ages: the strides in technology and society are so staggering, they swamp any attempted calculation of monetary value: how many emperors in A.D. 750 could afford antibiotics?

Claiming that "working families have seen little if any progress over the past 30 years," as Krugman claimed, is so manifestly preposterous -- even before taking economics into account -- that I don't question his veracity so much as his sanity. Is he mentally ill?

On the last question: no comment.

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