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Krugman-Style Reporting Takes Hold At The Times

Last week in a parting shot across the bow of New York Times columnist Paul Krugman, public editor Daniel Okrent commented on his habit of "shaping, slicing and selectively citing numbers." You can get more information on that story at QandO, JustOneMinute, and National Review Online.

Krugman-style "shaping, slicing and selectively citing numbers" isn't just reserved for the op-ed page as the current installment of a 10-part series in the Times, Class Matters, Richest Are Leaving Even the Rich Far Behind, demonstrates. Just a little ways into the report this paragraph pops up.

"The Bush administration tax cuts stand to widen the gap between the hyper-rich and the rest of America. The merely rich, making hundreds of thousands of dollars a year, will shoulder a disproportionate share of the tax burden."
Times reporter David Cay Johnson makes the Krugman-esqe leap into into the concept of socialized wealth by suggesting tax cuts are responsible for income disparities. Income is responsible for income disparities. Some people make more than others, and even at the individual level incomes varies substantially from year to year. Tiger Woods didn't join the top 400 taxpayers by Bush's tax cut nor will the cuts in future years be responsible for the gap between his earnings and a corporate attorney earning $250,000 a year.

The story is riddled with spun statistics and ominously worded assertions which gloss over the data. Even when they try big picture stats they fail to give context. For example, Johnson reports that 53% of the cuts in coming years will go to the top 10% of taxpayers (which begins at the hardly fabulously rich income of $117,000/yr) while failing note that from the associated charts that group makes 45% of the nations income.

To close out the article Johnson tosses in a line he's smart enough to offer no citations for.

"But in fact, economic mobility - moving from one income group to another over a lifetime - has actually stopped rising in the United States, researchers say. Some recent studies suggest it has even declined over the last generation."
"Some studies?" Which studies would those be?

Last September I took the Washington Post to task for stretching seriously to try to find a negative spin for the documented growth in those making $75K or more per year (inflation adjusted). The graph alone shows that income mobility is doing anything but declinining...

Update: I meant to add this graphic from the associated charts.

The good news is that the system is only mildly progressive (in aggregate) while the top earning citizens are paying their share. If you look at the chart (and ignore the top 400 taxpayer column) you see that even in those making $10M or more a year they are still paying their share (or more). Those in the 0.1% of incomes who earn 8% of the nations income pay 10.8% of the nations taxes. True this is at the low end of what others in the top 10% are paying, but much of that difference is explained by the Alternative Minimum Tax (AMT), the income ceiling for Social Security taxes, and the likelihood that the taxpayer has retained professional accounting, legal, and tax planners working to legally minimize their exposure. The data show that those who can afford top-tier tax representation can lower their taxes aren't exactly gaming the system - their tax burden is only 2% to 5% lower.

More on the story from Mickey Kaus and Kevin Drum.

Update 2:: The author of the piece, David Cay Johnston, notes links to material supporting his last claim, so I was wrong in saying he didn't offer support for the claim. Of course I'm also gratified to see him entering the discussion, as I do believe that any article or series based on statistic is hard to pull off and open to criticism from all sides.

That said, I'm hardly bowled over by the statistics the Times cites for income mobility. The mobility trends study shows a 5% increase (between 1970 through 1990) in the number of families that do not move quintiles over 20 year period. In light of the Washington Post graphic it would be easy to argue that the heralded "economic mobility" statistic not rising could be a good thing. If people move to and stay in a higher quintile (as some of the evidence suggests) that would put them in that 5% increase in "immobility". Trying to spin that as a negative is a tough sell, especially when the study numbers don't indicate the direction of mobility. Just look at the graphic from the Washington Post data to see that the march in quintiles over the period is upward.

Comments (9)

Here's a thought I'd like t... (Below threshold)

Here's a thought I'd like to see someone do research on...

The disparity in wealth from the "rich" to the "poor" is a completly useless metric. It's a statistic looking for a problem. I think it is fundamentally flawed in that it assumes a fixed amount of wealth.

As Penn and Teller would say....Bullshit. Strawman argument at best.

Ummm...I want to examine cl... (Below threshold)
Steve L.:

Ummm...I want to examine closely the relationship between income and tax cuts as it pertains to the Times' piece. After careful consideration, I have concluded that:


Income is income whether you pay 0% taxes or 100% taxes. DISPOSABLE income is that income that is available after taxes. Your income level can't rise as the result of a tax cut. Sure, you could use that money saved in taxes to invest in some money-making proposition and create income that way, but it is not a direct result of the tax cuts.

Times. Morons.

To Faith + 1:The Tim... (Below threshold)

To Faith + 1:
The Times piece was noting the CHANGE in the income of the rich compared to everyone else that happened over the last 50 years. To wit: "From 1950 to 1970, for example, for every additional dollar earned by the bottom 90 percent, those in the top 0.01 percent earned an additional $162, according to the Times analysis. From 1990 to 2002, for every extra dollar earned by those in the bottom 90 percent, each taxpayer at the top brought in an extra $18,000."

To Steve L:
What an unenlightening nit pick YOU are! Where's your outrage when your President, as noted in the Times piece, lies to the nation about who benefits most from his tax cuts. Get real.

Doug,OK, so they w... (Below threshold)


OK, so they were arguing a different irrelevent statistic. The whole article implies that somehow those in the top 0.1% gained at the expense of the lower 90%.

If everybody gained then there is no problem. The fact some gained faster might be a cause for envy but not for punishment. Be willing to bet they earned $162 more per dollar by incurring more than 162/dollar more risk.

There is no comparison or statistic showing how many those top % employ either. Someone who is a working stiff represents income generation of one individual whereas a top % earner is almost certainly employing thousands....yet that isn't factored.

You can find lots of cases where the disaprity between the wealthy and the rest isn't very high. We usually call that the Third World.

P.S. I've yet to see where the President lied--unless you so contort the facts about taxes and how and who pays them.

Nitpick?The articl... (Below threshold)
Steve L.:


The article said that rich people's income grew and it was because of the President's tax cuts. I was pointing out that income is BEFORE taxes, therefore tax cuts have little influence on that outside of possible returns on investment, but that incurs risk, so it should be rewarded.

Steve,No, the articl... (Below threshold)

No, the article did not say rich people's income grew because of the Bush tax cuts. In fact, it states quite clearly the rich are richer because of a "remarkable transformation of the American economy characterized by, among other things, the creation of a more global marketplace, new technology and investment spurred partly by tax cuts. The stock market soared; so did pay in the highest ranks of business."

Wage discrepancy is a function of personal risk taking? What a crock! So today's top earners deserve what they get because they're risking over 100 times what yesterday's top wage earners did ($18,000 divided by $162). Yeah, right.

Where the President lied--it's in the times article (did you guys read it?)--"President Bush said during the third election debate last October that most of the tax cuts went to low- and middle-income Americans. In fact, most - 53 percent - will go to people with incomes in the top 10 percent over the first 15 years of the cuts, which began in 2001 and would have to be reauthorized in 2010. And more than 15 percent will go just to the top 0.1 percent, those 145,000 taxpayers."

Ergo, Bush lied.

Hi. I am David Cay Johnston... (Below threshold)
David Cay Johnston:

Hi. I am David Cay Johnston, the reporter whose story is discussed above. The original post states that ''the article Johnson (sic)tosses in a line he's smart enough to offer no citations for" on income mobility -- Sources for this were in the first part of the series, as were links to readings on what research is showing.

The original mobility articles are at:



The readings lists is at:

I also think some of the posters may not have quite grasped the new facts in my article about income and the distribution of tax burdens. The sharp rise in income shares at the very top began long before Presiudent Bush was in office, as you can see by clicking on "Not Snce the 20S Roared" at: http://www.nytimes.com/indexes/2005/06/05/national/class/index.html

The original source data for all of the charts that ran with my article are also at http://nytimes.com/class.

[Kevin adds: I added hyperlinks the citations in the comment.]

Doug, I read the article. T... (Below threshold)

Doug, I read the article. They are calculating based on phoney data that ahs been debunked numerous times in numerous other articles...but rejecting facts and making up new ones isn't exactly new to the left...


I didn't say risk-taking was THE cause...but it is a factor and discounting is wrong. Period. What I am saying is that wage discrepency is completely, totally irrelevent as an indicator of a nation's financial wealth.

It's a statistic used by socialist to try and justify the flawed concept of wealth re-distribution. Period. That's all it's ever been.

Faith's post is factuall... (Below threshold)
David Cay Johnston:

Faith's post is factually wrong in asserting that my article is "based on phoney data."

It is based on official govermment data -- tax return records back to 1920, Fed Reserve data and on a computer model at the Tax Policy Center that the administration says is reasonable, reliable and that produced results the administration finds UNsurprising.

BTW, since Congress sets all sorts of rules, the distribution of income is influenced by government policy and the distribution of tax burdens is government policy.






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