Another liberal house of cards on the verge of collapse

The Leftist understanding of economics basically boils down to three principles:

1) Wealth is based on a limited supply of scarce resources.

2) The rich get richer while the poor get poorer.

3) It is the moral duty of government to ensure the fair distribution of wealth by taking it from the rich and giving it to the poor.

Earlier this year, a French economist named Thomas Piketty published a lengthy tome entitled “Capital In The Twenty First Century” that was literally a dream come true for redistributionists.  From his research, Piketty noted that the disruptive nature of the twentieth century produced the most equitable distribution of wealth between the oligarchy and working class in modern history.  However, he concluded that the world was now headed backward into a situation where economic growth was stalling and wealth was once again becoming concentrated in the hands of only a privileged few.

Piketty believes that only two things can stop this trend: another massive economic expansion similar to the technology boom of the 1990′s, or a deliberate, proactive approach by government to begin taxing accumulated wealth and redistributing it to the poor and working class.  As I said, this book was a dream come true for liberals.

And it appeared to be legit.  Paul Krugman boasted on his blog, “If you think you’ve found an obvious hole, empirical or logical, in Piketty, you’re very probably wrong. He’s done his homework!”  Piketty’s book featured an extensive amount of research using historical data, as well as an online technical annex and spreadsheets containing the sources.  Therein, unfortunately, lies the problem.

Two writers from the Financial Times, Chris Giles and Ferdinando Giugliano, just finished an exhaustive review of Piketty’s numbers, and the results are troubling.  (Financial Times links require registration.)

An investigation by the Financial Times … has revealed many unexplained data entries and errors in the figures underlying some of the book’s key charts.

These are sufficiently serious to undermine Prof Piketty’s claim that the share of wealth owned by the richest in society has been rising and “the reason why wealth today is not as unequally distributed as in the past is simply that not enough time has passed since 1945”.

After referring back to the original data sources, the investigation found numerous mistakes in Prof Piketty’s work: simple fat-finger errors of transcription; suboptimal averaging techniques; multiple unexplained adjustments to the numbers; data entries with no sourcing, unexplained use of different time periods and inconsistent uses of source data.

Together, the flawed data produce long historical trends on wealth inequality that appear more comprehensive than the source data allows, providing spurious support to Prof Piketty’s conclusion that the “central contradiction of capitalism” is the inexorable concentration of wealth among the richest individuals.

Once the data are cleaned and simplified the European results do not show any tendency towards rising wealth inequality after 1970.

These are serious errors, repeated in multiple steps, and finally integrated into the data he uses to support his theoretical assumptions.  Blogger Pejman Yousefzadeh concludes:

The charges are devastating, and there is plenty to back them up. And again, let’s be abundantly clear: The Financial Times is accusing Thomas Piketty of dishonesty, of making up his arguments, of actively trying to mislead readers and actively trying to mischaracterize inequality trends. This mischaracterization leads to policy prescriptions on Piketty’s part that are both entirely unrealistic in their design and implementation, and, more importantly, are wholly unsupported by the actual data on inequality. The main thrust of Thomas Piketty’s book is entirely undermined, and his arguments and conclusions are annihilated. It is hard to imagine a more comprehensive refutation. (emphasis in original)

Is anyone else seeing a pattern here?  The Left is desperate for a “people’s revolution” and world-wide income redistribution.  So they continually invent crises of epic proportions, whose only “obvious” solutions are based on the concentration of political power in the hands of elites and the large-scale redistribution of wealth from the First World to the Third World (or some such equivalent.)  But under scrutiny, the data supporting these claims generally seems to be full of holes (e.g. the global warming “hockey stick,” and now the work of Piketty) or else the dire predictions made by the crisis drum-bangers prove to be embarrassingly wrong (e.g. The Population Bomb and Limits To Growth).

In other words, you may safely hold your breath while waiting for another world-wide crisis.  The next one will be along any time now.

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  • Retired military

    “3) It is the moral duty of government to ensure the fair distribution of wealth by taking it from the rich and giving it to the poor.”

    You left off some. Let me fix it for you.

    3) It is the moral duty of government to ensure the fair distribution of wealth by taking it from the rich and giving it to the poor with the liberal elite staying rich, not holding their conduct to the same standards as others and picking winners and losers.

  • jim_m

    Let’s have that revolution they want and let’s not leave a single one of them standing, heck, it’s not like these idiots have guns.

    Counterrevolution’s a bitch.

    • Brucehenry

      Ooooh, you’re so manly. Tough guy. Ready for anything, Mr Survivalist lol.

      Googling “has Piketty been discredited?” I find, among many other links, these:

      http://www.mahablog.com/2014/05/24/the-campaign-to-discredit-piketty/

      http://www.nytimes.com/2014/05/25/upshot/a-new-critique-of-piketty-has-its-own-shortcomings.html?rref=upshot&_r=0

      http://blogs.ft.com/money-supply/2014/05/23/piketty-response-to-ft-data-concerns/

      Piketty’s work is apparently not as debunked as you guys think it is. What a surprise.

      • jim_m

        Piketty has been discredited. Don’t expect the NYT to ever accept this. They still refuse to return Duranty’s Pulitzer so there denial of reality is not as impressive as you would like to think. The NYT defends their lies long after the bodies are cold in the ground.

        Go and dig into the stories about the evidence. Piketty made his spreadsheets available and they are rife with arbitrary, undocumented adjustments that are always in favor of his conclusions. This is clear, concrete evidence of fraud. This is every bit as bad as Bellesiles and you and the rest of the left have fallen for it hook, line and sinker.

        I don’t expect you to admit that you are a freaking moron. Let’s just say that you have already admitted to lacking anything like the education necessary to understand the arguments as to why Piketty is discredited. Stop defending what you cannot possibly understand.

        • Brucehenry

          So, didn’t read the links I posted, huh, Killer?

          Dude, if you think you upset me with your jibes at my lack of schooling you are mistaken. I figure it this way:

          Your parents spent the equivalent in today’s money, say, $100,000 to buy your education in a private university. Yet you can’t fucking read as I have demonstrated over and over through the years. Your education apparently taught you to jump to the most outlandish conclusions at the merest whiff of any evidence that might possibly lead you to those conclusions — conclusions you already want to see! Whether discussing economics or what Michelle Obama said to an audience of children, your education failed to teach you to discern truth from speculation, fact from innuendo, criticism of detail from debunked conclusions. And again, $100K later, it failed to teach you to read only the words in front of you and not the words you speciously claim an argument “boils down to.” You don’t know a straw man from a straw hat. I at least learned that much in Logic 101 at Daytona Beach Community College (where, sorry, Warner, I got laid a lot.)

          If I saved a hundred grand and kept myself from the grievous errors of logic and a lifetime of angry political paranoia at the same time I’m glad I didn’t borrow the money.

          An educated fool is still a fool.

          • jim_m

            You are both uneducated AND a fool. And obviously, my jibes get under your skin because you are offering up large posts to defend yourself.

          • Brucehenry

            Ok sure Killer. And when the counter revolution comes you won’t leave a single one of them standing. Lol.

          • jim_m

            Hey I’ve promised not to spit on your grave. Be happy.

            This is where you would say, “some of these are jokes”.

          • zipity

            Sorry Charlie…

            I wouldn’t cross the street with a full bladder if you were spontaneously combusting on the other side….

          • http://www.harlemghost.blogspot.com/ HarlemGhost

            don’t be so hard on yourself … you are at least educated …

          • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

            Indoctrinated certainly…

      • jim_m

        Dude, you just claimed that Krugman is no more accurate than Warner. I think it is time to stop with the NYT references when talking about economics.

      • jim_m

        Reviewing the book this month, Lord Mervyn King, former governor of the Bank of England, said, “the principal weakness of the book is that the carefully assembled data do not live up to Piketty’s rhetoric about the nature of capitalism”.

        Better yet let’s look at someone who has actually looked at the data:

        Professor Piketty cited a figure showing the top 10 per cent of British people held 71 per cent of total national wealth. The Office for National Statistics latest Wealth and Assets Survey put the figure at only 44 per cent.

        So Piketty lied about the data since the people who sourced that data say that it is otherwise. Read the whole thing. If you dare. (not that you will understand even simple math.)

        These are not the handful of errors that the leftists are claiming, and which explanation you accept without even looking at the criticism. These are systematic errors always in favor of his conclusions. These are errors that have no justification or rationale other than to make the data fit the curve that he wants it to. It is a clear cooking of the data to yield an ideological result.

      • jim_m

        Massively debunked:

        Erroneously ascribed data:

        It becomes less reasonable when, for example, Prof. Piketty uses data from 1935 Sweden for his 1930 datapoint, when 1930 data exists in his original source material. Nor is it clear why the UK source data for 1938 should equate to 1930 rather than 1940. Nor is it obvious why Swedish 2004 data should be used to represent 2000 (when a datapoint for 2000 exists in the original source), but 2005 data applies to 2010.

        This alone shows either epic incompetence or deliberate fraud.

        Fabricated data without justification:

        Because the sources are sketchy, Prof. Piketty often constructs his own data. One example is the data for the top 10 per cent wealth share in the US between 1910 and 1950. None of the sources Prof. Piketty uses contain these numbers, hence he assumes the top 10 per cent wealth share is his estimate for the top 1 per cent share plus 36 percentage points. However, there is no explanation for this number, nor why it should stay constant over time.

        This is direct evidence of fraud

        Piketty claims that his data come from the same types of sources and yet:

        But this does not seem to be true. For the US, he uses the mortality multiplier method until 1950 and it forms a basis for the 1970 numbers, while in 1960 and from 1980 he uses a wealth survey. For theUK, his choices are different. For 2000 and 2010, he bases his estimates on probate data even though the Office for National Statistics has produced a wealth and assets survey.

        This too is fraud as he specifically claims that the same types of sources are used and yet never notes that this is false. Even you, Bruce, should understand what a lie is.

        It goes on and on. These are not minor or isolated errors. These are huge errors and the fact that they all err in favor of his conclusions is not merely suspicious, it is damning.

        You can choose to ignore the truth, but that doesn’t make it less true. Following the NYT which has lied about mass murder in order to receive awards is not wise.

        • Brucehenry

          Well I admit it looks bad but it’s early days. Piketty is supposed to, I understand, offer a more formal defense soon, as opposed to the short response he offers here:

          http://blogs.ft.com/money-supply/2014/05/23/piketty-response-to-ft-data-concerns/

          My point in this kerfuffle was to call for cooler heads. If all the errors and discrepancies can’t be explained it’s possible enough of them can that his conclusions may still be valid.

          And whatever the fate of Piketty and his book, the fact is that there is such a thing as wealth inequality (of course), but if it is allowed to become TOO great it causes great harm. The question here is whether Piketty’s book demonstrates that it HAS become too great. If the book DOESN’T demonstrate that, then so be it.

          But as I remark in the other thread, the fact that of the top ten wealthiest Americans four are Waltons and two are Kochs demonstrates a problem of SOME degree.

          • jim_m

            Piketty can respond all he wants. He released his data so the criticisms are focused not on the conclusions but on the data and his manipulations of it and his nondisclosure of those manipulations.

            Much like Mann’s manipulations of the data to produce the hockey stick, it isn’t the conclusion that people are objecting to, it is the dishonest means of reaching it.

            And in the past you would have complained about Rockefellers, Carnegies, and Vanderbilts. Having rich people is not a problem especially when those rich people have gained their wealth through producing something that people valued. If people gain their wealth because they know someone else or use political corruption to achieve it (Harry Reid), THAT is a problem.

            But back to the issue, it really doesn’t matter what Piketty’s response is. His conclusions are not supported by the data. Merely claiming that future data will exonerate him (as I have seen in one place) is not much of a defense and does not excuse his fraud.

            I will give him this much: He let others see his data (unlike Mann and Bellesiles). This leads me to conclude that while he committed fraud he did so ‘innocently’ by making ideologically biased decisions as opposed to the others whose actions to conceal their fraud demonstrate that they did so with malice aforethought(ie deliberately cooking the data to get the necessary result believing that the result was more important than honesty. essentially they wanted “fake but accurate”).

          • Brucehenry

            Having rich people is not a problem, I agree. But there used to be an expression “obscenely wealthy” that has fallen out of fashion since the Reagan Revolution. Unfortunately I think.

            Krugman’s response to the FT piece is along the same lines as my thoughts on the matter. Great minds think alike, I guess, me and Krugman and you and Warner Todd Huston. Lol.

            http://krugman.blogs.nytimes.com/2014/05/24/is-piketty-all-wrong/?src=twrhp

          • jim_m

            Krugman is an idiot. If he says anything that corresponds to reality it is by accident. A stopped watch is right more often than he is.

            Krugman has demonstrated that he no longer understands economics as his columns are purely ideological in nature. While Krugman’s mendacity is exceeded by a few of his fellow journalists (yes, he is a journalist and not an economist) there are only a few.

          • Brucehenry

            So spake Jim.

          • jim_m

            I prefer Also Sprach Jim.

            Also, as evidence of Krugman’s economic genius I offer his signature achievement in the real world of finance and economics: Adviser to Enron.

          • Brucehenry

            As you wish

          • jim_m

            Thank you Westley.

          • zipity

            And Krugman pointed to the VA Hospital system as a shining, efficient, and brilliant example of the system Obamacare would bring us.

            So, he was half right. It appears our healthcare system is well on the way to performing as “well” as the VA thanks to Obamacare.

          • zipity

            “Unfortunately I think.”:

            Yes, it does appear to be unfortunate that you “think”.

          • http://www.harlemghost.blogspot.com/ HarlemGhost

            nice try to pull Reagan into this … maybe it went out of fashion because most of the new obscenely wealthy are liberals ?

          • http://www.harlemghost.blogspot.com/ HarlemGhost

            “demonstrates a problem of SOME degree.”

            no it demonstrates a lack of intelligence on your part and that is the only problem of any degree …

  • jim_m

    Warner, you left out “Arming America”, by Michael Bellesiles. That book was intended to be the rationale for a total gun ban in the US as it posed a (totally fraudulent) argument that guns were virtually non-existent in the colonial US and therefore the founders could never have meant for people to own guns themselves. A total gun ban would make imposing forced redistribution much easier.

    Leftist arguments are built on lies, intended to defraud people of their rights and property for the purpose of enriching the left.

  • Rick Caird

    It looks like Krugman did not do his homework. Quelle surprise.

  • GarandFan

    The lemmings ALWAYS need a crisis.

    • Brucehenry

      As opposed to the independent thinkers on the right, who quiver in fear at the prospect of imminent tyranny, Stalinism, Islamic terrorism, and an “other”-ish president shoving it all down their throats, right after he confiscates all their guns?

      • jim_m

        By your own confession you haven’t even looked at the evidence. You have also said that rather than look at the evidence you are waiting for Piketty to make his defense.

        Now who is the mindless ideologue?

        • Brucehenry

          Where did I confess to anything?

          • http://www.harlemghost.blogspot.com/ HarlemGhost

            your silence on the matter is your confession …

  • Commander_Chico

    The fact remains that unless you have the cognitive skills to be an entrepreneur, engineer, IT geek, manager, accountant, skilled tradesman, or legal or medical professional, you are screwed in America today. Unless you win the lottery or are a pro athlete.

    No jobs at livable wages for people outside those groups.
    .

    • jim_m

      Not true. You are screwed in today’s America if you lack dem political connections. obama and his criminal admin have made it clear that they will se the power of the federal government to harass and destroy anyone ouside their circle and that the government is merely a vehicle to divert wealth into their own pockets.

      I suggest that you take a look at the lifestyle that our poor lead and compare that to, I don’t know, Mexico City. I’d wager that the US comes off pretty damned good by comparison. That’s why we have so many people streaming over the border.

      • Brucehenry

        Yes you and your overlords won’t be happy until poor people in the US are as miserable as poor people in the Third World.

        Patriots.

        • jim_m

          Ass. It is you and your masters on the left that want to make everyone poor. Name anyone other than the politicians that every became rich under communism? Income equality is just another name for universal poverty. That is what YOU want. Quit projecting it on everyone else. Fascist.

          • Brucehenry

            $100,000 later you can’t fucking read.

          • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

            Thus spake the hemorrhoid.

          • Brucehenry

            Yes we’re back to your obsession with men’s anuses again. I do understand, though, that hemorrhoids are a common affliction of those of your orientation, so understandable, I guess.

          • twmon9816

            You’re an irrational idiot and jim and rod made you look the fool you are. Give it up pajama boy.

          • Brucehenry

            Says whothefuckareyou. At least I had something to say and didn’t just appear out of nowhere to attack a stranger. Dipshit.

            EDIT: Just looked at your comment profile. Seems this is all you ever do. No substance, just insults and name calling. What a tool.

          • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

            A hemorrhoid would know…

          • Brucehenry

            And you would know about hemorrhoids, as I have pointed out.

        • http://www.harlemghost.blogspot.com/ HarlemGhost

          it is your ilk that wishes that for all Americans …

    • Brett Buck

      The result of the policies pursued by the people you have voted for, time after time.

    • Retired military

      Gee Chico
      Your heroes Obama, Pelosi, Reid, Bill and Hillary are none of those yet are worth millions.
      Thanks again for proving that you are an idiot who has no clue.

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