Last reply to Matt Bruenig

Matt seems to have forgotten to take his meds, as his newest post is one of the silliest I’ve ever read.  Here’s an example:

War On Poverty Backtrack
You’ll recall Grandpa Sumner’s initial argument for why transfers don’t net reduce poverty went like this:

  1. Since the War On Poverty started, poverty hasn’t fallen at all. I know this because aint that what them dat gum progressive bloggers say?

  2. Because poverty hasn’t declined, then that means anti-poverty transfer incomes only crowd out market incomes. Else, you would have seen poverty decline.

  3. Therefore transfers don’t reduce poverty.

I was surprised to read this, because I believe exactly the opposite, that poverty has declined, and that transfers have reduced poverty, especially among the elderly.

So I looked for the passages where I made those claims, and all I could find is this:

In fact, we spent trillions on the War on Poverty.  Unfortunately, poverty won and we lost.  Don’t believe me?  Isn’t the blogosphere full of progressives complaining that the poverty rate is just as high as in 1967?  I’m actually more optimistic about the living standards of most poor people than the typical progressive. Their living standards have risen with the general population.  But if “non-market income” actually explains the gains made by the poor, then this suggests that non-market incomes have merely crowded out market incomes.

It’s absurd to claim that it’s “easy” to solve a problem like poverty.  Yes, it’s easy if you are dealing with a group of people for whom you don’t have to worry about work disincentives.  Obviously it’s easier to reduce poverty for the elderly, since they are mostly retired.  Nixon did that.  That would also be true of the disabled, if we could accurately measure disability.  (The fact that we cannot partly explains the huge surge in disability, even as Americans are healthier than ever before.)

I guess Matt doesn’t understand sarcasm, or the phrase: “I’m actually more optimistic about the living standards of most poor people than the typical progressive. Their living standards have risen with the general population.” Or “Nixon did that.”  Nor has he read my post entitled “The Amazing Decline in American Poverty.” I presume he didn’t understand the sarcasm in the last sentence of my first paragraph, which in context was referring to what must be true if the progressive claim about no decline in poverty since the late 1960s were true.  Then I found this:

Again and again, he has called wealth inequality data “nonsense on stilts” because it ignores the fact that wealth inequality is just a life-cycle phenomenon.

Did I really say it was just a life cycle phenomenon?  Only a fool would believe such a thing.  Wealth inequality reflects many factors.  I searched and searched and could not find where I had said that.  Matt didn’t help me, as he linked to posts that did NOT say that.  Conclusion; Matt just made it up.

And here he goes again:

It would be manifestly bizarre for progressives to have ever bombarded Grandpa Sumner with the argument that poverty fell rapidly from 1922 to 1967 because Mollie Orshanksy didn’t come up with the U.S. poverty metric until 1964, and the Current Population Survey’s good poverty data doesn’t stretch back further than 1967. There is a reason that magic year keeps coming up. In his senility (or motivated desire to manufacture nonsense), Sumner appears to be mixing up claims people make about middle-class incomes and claims people make about poverty. But who knows.

I guess the National Poverty Center at the University of Michigan is just as senile as Grandpa Sumner.  This is from their web site:

In the late 1950s, the poverty rate for all Americans was 22.4 percent, or 39.5 million individuals. These numbers declined steadily throughout the 1960s, reaching a low of 11.1 percent, or 22.9 million individuals, in 1973. Over the next decade, the poverty rate fluctuated between 11.1 and 12.6 percent, but it began to rise steadily again in 1980. By 1983, the number of poor individuals had risen to 35.3 million individuals, or 15.2 percent.

Screen Shot 2014-09-30 at 9.01.29 PM

As you can see, the poverty rate declined sharply from 1959 to 1969, and then basically went sideways.  Now of course if you include all sorts of benefit programs the numbers look better, and indeed I’ve done posts arguing that poverty on a consumption basis has fallen sharply in recent decades.  But that’s when I’m responding to thoughtful inequality foes, not poverty wackos like Matt.

Matt wants you to believe that we don’t know what happened to poverty between the Warren Harding administration and what Paul Krugman considers the Golden Age of equality, the 1950s and 1960s, because we don’t know anything unless there is Official Government Data to back it up.  I’m going to go out on a limb and claim that it is at least plausible to assume that poverty declined somewhat between 1922 and 1959.  Indeed here again Matt misrepresents my argument.  I never said we knew exactly what happened to poverty over the 45 years between 1922 and 1967, just that his arguments in favor of the War on Poverty made no sense unless we did know for a fact that it declined less during 1922-67 than during the 45 years after the War on Poverty began.  And that seems exceedingly unlikely, give the data we do have, and what we all (should) know about what life was like in 1922.

The rest of his post is an exercise in changing the subject.  He defines poverty as making less than 60% of median income.  Then he argues there’s more poverty in countries with less redistribution.  What a shock!  So let’s see, if Cambodia does so much redistribution that the incentive to produce food falls to zero, and median per capita income falls to 25% above starvation level, then by definition Cambodia would have no poverty.  After all, you would starve with only 60% of the median income, so the poor would not exist.  Pol Pot produced one of the world’s most effective anti-poverty programs!  According to Matt’s graph, the US has more poverty than Greece or Portugal (in 2005).  If instead you look at actual living standards (square footage of living space for the poor, car ownership, home appliances, Medicaid, free public education, etc.), then the poor in the US don’t do so bad, even when compared to the richer European welfare states.  But the poverty experts don’t want to eliminate poverty—what would they do then?

I’ll give Matt the last word:

Cleaving off some distribution and calling it “market” or “pre-tax” is just conceptually incoherent.

Couldn’t have said it better.

 


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55 Responses to “Last reply to Matt Bruenig”

  1. Gravatar of Paul Zrimsek Paul Zrimsek
    30. September 2014 at 19:00

    As far as I can tell it was I who introduced the idea of wealth being subject to life-cycle influences, in the comments to the “Nonsense on stilts” post, which earned an “Excellent point that I forgot to mention” from Sumner. Of course no one ever said or suggested that wealth inequality was “just a life-cycle phenomenon”– Bruenig came up with that one in his haste to find a reason to think ill of people who disagree with him.

  2. Gravatar of Steven Kopits Steven Kopits
    30. September 2014 at 19:20

    Poverty may not have declined much between 1929 and 1940. Given that the US economy more or less doubled during WWII, it’s hard not to believe that poverty fell quite a bit then, and well into the 1960s.

  3. Gravatar of Steven Kopits Steven Kopits
    30. September 2014 at 19:20

    I argue the case that the illegal immigrant population is falling quite quickly, here:

    http://www.prienga.com/blog/2014/9/30/oils-the-reason-the-illegal-immigrant-population-is-declining

  4. Gravatar of Brett Brett
    30. September 2014 at 19:21

    As you can see, the poverty rate declined sharply from 1959 to 1969, and then basically went sideways.

    It’s a little hard to tell with that chart, but it looks like the steep drop-off from the 20+% poverty rate happened after the Great Society went into effect. There was also a strong economic boom in the late 1960s/early 1970s, which is why I always point to the relatively low poverty rate (compared to today) in the middle of the bad mid-1970s downturn.

  5. Gravatar of joe joe
    30. September 2014 at 19:29

    “2. It’s all about the life cycle. For years I’ve been arguing that income inequality and wealth inequality data is almost meaningless, for all sorts of reasons. One is life-cycle effects. Arnold Kling has an excellent article that discusses a recent study that shows that while only 67% of Americans own homes at the moment, 89% have purchased homes by age 55. Very few Americans go through life without being homeowners”

  6. Gravatar of Lorenzo from Oz Lorenzo from Oz
    30. September 2014 at 19:29

    Perhaps also people should be a little more sceptical of “let’s create a large government program employing lots of people whose jobs go away if they actually solve the problem”. That’s far from all that’s going on, but it’s something of what is going on. “Let’s create a massive stream of income none of whose employed recipients get rewarded for making things better” is not a solution-oriented arrangement.

  7. Gravatar of marris marris
    30. September 2014 at 19:51

    I wouldn’t take anyone too seriously who writes “The economy is a government program.”

    By that reasoning, the following are also government programs: the Great Leap Forward, climate change, the ebola outbreak, American Idol, every Youtube video ever posted, and this blog.

  8. Gravatar of dtoh dtoh
    30. September 2014 at 20:04

    I wouldn’t take seriously people who rely on ad-hominem arguments either.

  9. Gravatar of Brian Donohue Brian Donohue
    30. September 2014 at 20:14

    Scott,

    Don’t allow this clown to continue to bait you. Further volleys in this vein can only diminish you and elevate him. moveon.org.

  10. Gravatar of Mike Sax Mike Sax
    30. September 2014 at 20:22

    I see you can’t stop debating Pol Pot though you admit that no one has ever run on his policies. So if no one is saying ‘we should try Pol Pot’s policies’ why do you keep debating them?

    Brian give Scott some credit. He doesn’t need anyone’s help in diminishing himself. He does it every time he crows about winning some phantom bet with Krugman

  11. Gravatar of Major.Freedom Major.Freedom
    30. September 2014 at 20:42

    A Realistic Libertarianism

  12. Gravatar of Michael T Michael T
    30. September 2014 at 22:01

    I’m sorry Scott. It looks like you’ve found yourself in a lose-lose situation. If you keep responding, Matt will keep insulting you personally and attributing arguments to you that you never made. If you fail to respond, he’ll claim victory from exhaustion. This is trolling and it was infuriating to see in a supposedly intellectual discussion.

    Look how your argument started as an attack on his ridiculous assumption that a person’s incentives would not change in the absence of welfare. Now you’re making late night posts defending yourself against arguments you never made and never would make(poverty rate didn’t change since the WOP, property rights follow from the NAP). Great tactic on his part. Its a shame that people who use every logical fallacy in the book (by far not just a progressive thing) can be called intellectuals.

  13. Gravatar of Vivian Darkbloom Vivian Darkbloom
    30. September 2014 at 23:51

    “He defines poverty as making less than 60 percent of median income”.

    As I pointed out in a comment to the earlier post on this subject, this is more a rhetorical war on definitions than a War on Poverty. Bruenig has here changed this to a war on inequality. Did he really think no one would notice?

  14. Gravatar of Damien Damien
    1. October 2014 at 02:03

    In the original article, his focus on social security weakens his point. It’s well known in the literature (see the OECD 2008 report on inequality, for instance) that using market income tends to overstate poverty/inequality reduction when dealing with public pensions. This income is not considered market income, unlike private pensions. This means that people can go overnight from being middle class to being in abject poverty just because of how the retirement system is structured and how market income is defined.

    Old age pensions, including social security, primarily redistribute income across life cycles rather than from rich to poor. It’s quite problematic when your poster program that “lifts the elderly out of poverty” does very little of that, except as an accounting artifact. See e.g. http://www.nber.org/papers/w15070 or the OECD report. Would people say “mandatory savings accounts have lifted me out of poverty”?

  15. Gravatar of Luis Pedro Coelho Luis Pedro Coelho
    1. October 2014 at 02:05

    “He defines poverty as making less than 60 percent of median income”

    This is a pretty standard definition. It’s, in fact, the official EU definition. The definition is by country.

    Words just mean what we accept them to mean.

    Yet, progressives in Portugal got all upset when poverty fell in Portugal because the median fell enough to bring in most minimum wage earners above 60% (it actually depends on the composition of the household). So, now the EU is publishing both the official poverty measures and unofficial “poverty at constant 2008 median” rates.

    *

    A comment on the previous post

    There’s a joke in cancer research: “if you’re a mouse with cancer, we can cure you; we’re still working on the humans”. The equivalent welfare state joke is “if you’re a Swede, you won’t be poor no matter the welfare system; we’re still working on everybody else.”

    The work rates of non-ethnic Swedes in Sweden are abysmal. Sometimes, this is seen as a mark of how racist Sweden is beneath the veneer of tolerance; but maybe it’s just proof that you cannot have a generous welfare system without the Scandinavian work-ethic.

    It’s the complementary Friedman quip: there are no poor Swedes in the US, but racial minorities in Sweden don’t do better than they would in the States either. So, Sweden may be a good example for the negative effects of the welfare state on non-Swedes.

  16. Gravatar of Nick Nick
    1. October 2014 at 03:45

    OT
    A different blogger named Matt (among others) has recently extolled the value of a chart on inequality that I thought was a bit of an abuse of data.
    I liked this response:
    http://www.economics21.org/commentary/no-rich-are-not-taking-all-economic-pie-Pavlina-Tcherneva

  17. Gravatar of ssumner ssumner
    1. October 2014 at 05:54

    Everyone, lots of good comments, just time today for a few responses.

    Paul, I used to focus on the effect on income, perhaps you were the first to mention the effects on wealth in this blog.

    Brett, No, the WOP didn’t start until about 1967, by which time most of the decline in poverty had occurred.

    Joe, Exactly, And notice he didn’t quote me because it would have showed he was lying. I can’t imagine any economist disagree with the claim that lifecycle effects were one of many factors affecting inequality.

    Brian, But it’s so much fun to shoot ducks in a barrel, especially annoying ducks.

    Luis, You said:

    “This is a pretty standard definition. It’s, in fact, the official EU definition. The definition is by country.”

    And thus my Cambodian example. But yes, people can have words mean whatever they like. Our job is to show they are talking gibberish.

    You said:

    “The work rates of non-ethnic Swedes in Sweden are abysmal. Sometimes, this is seen as a mark of how racist Sweden is beneath the veneer of tolerance; but maybe it’s just proof that you cannot have a generous welfare system without the Scandinavian work-ethic.”

    Yes, it’s it’s my impression that most economists in Europe understand this, but America’s very different history blinds many progressives over here to this issue.

  18. Gravatar of John Becker John Becker
    1. October 2014 at 06:06

    Don’t get drawn too far into the mud slinging. Bruning’s analysis and immature tone speak for themselves. There’s no reason to put him down further. If you want something to attack, how about Thomas Piketty’s horrific interview on Econtalk?

  19. Gravatar of Doug M Doug M
    1. October 2014 at 07:42

    Oh, irony, we don’t get that here.

  20. Gravatar of TallDave TallDave
    1. October 2014 at 09:24

    Defining “poverty” as essentially the same thing as “income inequality” is just an exercise in propaganda.

    The big disconnect for progressives seems to be that the vast majority of new wealth is created, and while incomes don’t always reflect value (the wealthy political class are mainly professional rentseekers, Jimmy Wales is not a billionaire) they are not arbitrarily uncorrelated, either, at least where free exchange is still a relevant concept. Many have remarked on Piketty’s lacking a theory of growth, but perhaps he just knows his audience.

  21. Gravatar of Jason Jason
    1. October 2014 at 09:45

    Scott, what do you say in response to another post of Bruenig on life cycle effects of wealth distribution? http://www.demos.org/blog/9/8/14/wealth-distributed-extremely-unevenly-within-every-age-group

  22. Gravatar of Paul Zrimsek Paul Zrimsek
    1. October 2014 at 10:46

    The first two graphs at Jason’s link appear to bear out what Sumner said in “Are Americans Maoists?”:

    If every single America had EXACTLY the same wealth at each age (i.e. all 20 year olds had identical wealth, as did all 55 year olds) then wealth inequality would still exceed the figures that Americans supposedly prefer, purely due to life cycle effects.

    The remainder is Bruenig flailing away at the same old strawman. Who is it, exactly, that’s supposed to be saying “wealth inequality is really just about age and the life-cycle”?

  23. Gravatar of TravisV TravisV
    1. October 2014 at 12:07

    Nick,

    Thanks for the reply to the chart from Yglesias and Pavlina Tcherneva!

  24. Gravatar of TravisV TravisV
    1. October 2014 at 12:36

    Why does the market value Bill Gross so highly (despite his huge analytical shortcomings)?

  25. Gravatar of Major.Freedom Major.Freedom
    1. October 2014 at 16:12

    TravisV:

    It’s not analytical shortcomings, it’s empirical anticipation shortcomings. But he has a history of making lots of money for his clients.

  26. Gravatar of Decisive Victory in the Grandpa Sumner Saga | MattBruenig | Politics Decisive Victory in the Grandpa Sumner Saga | MattBruenig | Politics
    1. October 2014 at 16:25

    […] never seen someone get as thumped as Sumner in this weird exchange (him, me, him, me, him). It’s gotten a bit complicated now, as he’s shifted his position so many times. So […]

  27. Gravatar of ssumner ssumner
    1. October 2014 at 17:17

    Jason, You asked:

    “Scott, what do you say in response to another post of Bruenig on life cycle effects of wealth distribution?”

    I think it’s pretty clear now that Matt is not qualified to even discuss this topic. That’s my response.

  28. Gravatar of Major.Freedom Major.Freedom
    1. October 2014 at 17:33

    A very, VERY insightful and helpful paper on understanding how progressives and other statists of all stripes think:

    The People’s Romance – Why People Love Government(as Much as They Do)

  29. Gravatar of Paul Zrimsek Paul Zrimsek
    1. October 2014 at 18:57

    Before we get off this, is anyone else completely baffled by Matt’s Fig. 5.1? He describes it as a plot of disposable-income (i.e., after transfers) poverty rates against social spending, but the poverty rate he’s plotted for the US is the 24% figure he claims for “market poverty” (i.e., before transfers). Even assuming he mis-spoke in the lead-up to the graph, and it’s actually a plot of “market poverty” against social spending, the regression line seems to encode the perverse result that a country’s level of social spending will be inversely proportional to the need for it. Are the Swedes really so scattershot as to spend 29% of their GDP in order to relieve the poverty of just 12% of their population?

  30. Gravatar of Nicolai Hähnle Nicolai Hähnle
    1. October 2014 at 21:43

    You make some good points. However, I take issue with this part in particular:

    I never said we knew exactly what happened to poverty over the 45 years between 1922 and 1967, just that his arguments in favor of the War on Poverty made no sense unless we did know for a fact that it declined less during 1922-67 than during the 45 years after the War on Poverty began. And that seems exceedingly unlikely, give the data we do have, and what we all (should) know about what life was like in 1922.

    Frankly, this is precisely the kind of side-stepping that Bruenig (rightfully, in this case!) accuses you of: “that seems exceedingly unlikely, give[n] the data we do have”.

    Which data? “Exceedingly unlikely”? This is hand-waving, and Wikipedia editors would call you out for using weasel words. Show the data and you might be more convincing.

  31. Gravatar of ssumner ssumner
    2. October 2014 at 05:01

    Nicolai:

    Yousaid:

    Frankly, this is precisely the kind of side-stepping that Bruenig (rightfully, in this case!) accuses you of: “that seems exceedingly unlikely, give[n] the data we do have”.

    Which data? “Exceedingly unlikely”? This is hand-waving, and Wikipedia editors would call you out for using weasel words. Show the data and you might be more convincing.”

    I did show the data in this post–poverty rates fell sharply after 1959. In any case, the burden of proof is on Matt; he’s the one that made the claim about the War on Poverty being successful. Pointing to a fall in the poverty rate between 1967 and 2014 is not at all helpful, unless contrasted with data on how fast poverty fell before the War began. Poverty’s been falling for hundreds of years, that’s what economic growth is all about. He thinks it’s fallen fast since 1967. His progressive friends don’t agree. I’m actually somewhere in the middle, as I said the the post that Matt lied about.

  32. Gravatar of Steve Roth Steve Roth
    2. October 2014 at 06:40

    No Cambodias here:

    http://www.demos.org/sites/default/files/imce/1_2.png

    http://www.demos.org/sites/default/files/imce/4_0.png

    http://www.demos.org/sites/default/files/imce/2_2.png

    http://www.demos.org/sites/default/files/imce/3_1.png

  33. Gravatar of Nicolai Hähnle Nicolai Hähnle
    2. October 2014 at 06:47

    You show data for after 1959 instead of data for after 1922. Big difference, especially since 1959 was after WWII. (Note how in the part that I quoted, you specifically talk about the period starting in 1922.)

    I do agree that it would be nice to have a contrast between before-WWII and after-WWII poverty. Neither of you provide it, but at least Bruenig is intellectually honest about why he doesn’t provide it.

  34. Gravatar of Paul Zrimsek Paul Zrimsek
    2. October 2014 at 06:54

    Bruenig seems to be applying some much more stringent standard of acceptability when he rejects the pre-1967 poverty data than he does when waving away the problems others have noted with his “market poverty” measure. It’s the sort of thing we grandpas like to call “straining at gnats and swallowing camels”. Speaking of grandpas, should someone who claims that we don’t know much of anything about poverty before 1967 be quite so certain about how much Social Security has reduced senior poverty?

  35. Gravatar of ssumner ssumner
    2. October 2014 at 07:18

    Nicolai, You said:

    “You show data for after 1959 instead of data for after 1922.”

    Umm, isn’t that exactly what the phrase “given the data we do have” means?

    If someone asks me whether Britain has more poverty in 1967 than 1867, I don’t need statistics to answer the question, I can read Charles Dickens. I guess there are some people so narrow-minded and obsessed with math that they think that unless it’s in the official government data they assume we have no information on anything. I’m not one of those people. As I said, I do NOT know how much poverty fell between 1922 and 1967, but think it very likely that it did fall substantially. I have read American history, and know something about how people used to live. In 1967 there were lots of blacks making cars in Michigan who in 1922 would have been sharecroppers in Mississippi. Unless someone can prove me wrong, Matt’s post-1967 data proves nothing. The burden is on them to show that poverty reduction accelerated.

  36. Gravatar of ssumner ssumner
    2. October 2014 at 07:23

    Steve, Yup, exactly my point.

  37. Gravatar of Kevin Erdmann Kevin Erdmann
    2. October 2014 at 09:34

    Bruenig seems to be treating Social Security as a pure transfer. I assume he doesn’t treat private defined benefit pensions this way. Strange.

  38. Gravatar of TravisV TravisV
    2. October 2014 at 10:34

    Yglesias wrote a reply to Scott Winship:

    http://www.vox.com/2014/10/2/6889147/winship-tcherneva-inequality-debate

  39. Gravatar of ssumner ssumner
    2. October 2014 at 12:01

    Nicolai, You said:

    “Bruenig is intellectually honest”

    Aren’t you embarrassed to put all these words into the same sentence, given his posts on my views.

    Kevin. Yes, and without Social Security people obviously would not save anything, that’s why savings rates are so low in China.

    Thanks Travis.

  40. Gravatar of Steve Roth Steve Roth
    2. October 2014 at 12:12

    Scott:

    “exactly my point”

    Not sure which of these you’re saying:

    1. These graphs show that the many-country correlation plot is bunk.

    2. These graphs are bunk because Scandanavian countries have lower GDP/cap.

    Or other?

    ??

  41. Gravatar of Anthony McNease Anthony McNease
    2. October 2014 at 12:29

    I saw that Matt writes for Salon and American Prospect. I doubt he’s as interested in being an economist as he is in being a progressive missionary. I imagine he’d wholeheartedly agree with the President when asked why he supported raising cap gains taxes despite everyone knowing this hurts both the economy and tax revenue he responded “Because of fairness.” (I’m paraphrasing).

    He’s just trying to cover his fervent beliefs in a thin patina of “economics.”

  42. Gravatar of ssumner ssumner
    2. October 2014 at 12:58

    Steve, You said:

    “No Cambodias here” I said yes, as none of those countries follow Cambodian-style policies. Or maybe I missed your point.

    Anthony, I thought Salon and the American Prospect were supposed to be respected liberal publications.

  43. Gravatar of Kevin Erdmann Kevin Erdmann
    2. October 2014 at 13:10

    Anthony,

    For progressives, it’s about good guys and bad guys. That is the core principle. If you’re associated with capital (bad guys), they consider it a virtue to shut you up. See: Citizens United.

  44. Gravatar of Anthony McNease Anthony McNease
    2. October 2014 at 13:24

    Scott, I would go to neither Salon nor AP for economic analysis, but that’s just me maybe. My opinion is that they are respectable progressive media outlets, but I’ll paraphrase a quote by Harvey Mansfield about Public economics. He said basically that to be considered a legitimate Public economist one must conclude that liberal/progressive economic policies are best……at which point they cease to be valid economists.

  45. Gravatar of Steve Roth Steve Roth
    2. October 2014 at 14:23

    My point:

    Yes, the Cambodia thought-experiment throws the value of relative-poverty measures into question, but only when comparing countries of greatly differing prosperity.

    But those graphs, not having anything like Cambodia in them, show that those measures can be quite valid and informative about well-being in different countries. They tell us, for instance:

    Only 50% of American children in single-mother families live above the poverty line.

    85-90% of Scandanavian children in single-mother families live above the poverty line.

    Now you can say that that poverty line is opulent because everyone has running water, but really: which country is a better country for children to live in? The one with more widely prosperous lives for children, or less prosperous lives for children?

    The pre- and post-T&T graph sure makes it look like we could have a similarly better country for children to live in if we…directed more money to poor people. We’ve chosen this.

    You know that greater redistribution doesn’t correlate with slower growth, so that’s not a problem. Why shouldn’t we do it?

  46. Gravatar of TravisV TravisV
    2. October 2014 at 14:49

    “Draghi didn’t give any detail as to the size of the potential asset purchases from the ECB, and European stocks paid the price, especially Italy, which saw shares fall more than 3.5% on Thursday.”

    That seems to be the biggest story today……

  47. Gravatar of Gimlet Gimlet
    3. October 2014 at 13:44

    I’ve interacted with Matt on Twitter and on his website before. This is just one man’s opinion, but I think that for someone so steeped in philosophy, he would better keep in mind Socratic Ignorance; just another example (of many) of someone whose education outran his intelligence.

  48. Gravatar of Gimlet Gimlet
    3. October 2014 at 13:49

    And Winship has responded to Yglesias’ response. http://www.forbes.com/sites/scottwinship/2014/10/03/the-inequality-non-explainer-explained/

  49. Gravatar of Steve Roth Steve Roth
    4. October 2014 at 06:43

    Maybe we should drive around Scandanavia and America, eyeballing the consumption baskets of single-mother children.

  50. Gravatar of ssumner ssumner
    4. October 2014 at 13:15

    Steve Roth, You said:

    “But those graphs, not having anything like Cambodia in them, show that those measures can be quite valid and informative about well-being in different countries. They tell us, for instance:

    Only 50% of American children in single-mother families live above the poverty line.

    85-90% of Scandanavian children in single-mother families live above the poverty line.”

    I totally agree, but they tell us NOTHING AT ALL about the effect of policies on those outcomes. Don’t believe me? Then consider that the outcomes in Scandinavia for the immigrant community has been dramatically worse than for the native Swedes. Try comparing the welfare of Arab immigrants to America, with Arab immigrants to Sweden. I bet the Arabs in America come out ahead.

    You said:

    ” You know that greater redistribution doesn’t correlate with slower growth, so that’s not a problem. Why shouldn’t we do it?”

    Growth isn’t the issue, North Korea probably grows faster than America. It’s levels that matter. And redistribution does lower levels.

    Look, Switzerland has much lower levels of spending and taxes than America, and some of the best outcomes in the world on social indicators. If I said we should lower US taxes to Swiss levels so that the South Bronx will magically transform into Zurich or Geneva, would you believe me? Of course not. So why should you expect Swedish outcomes if we had their tax and transfer regime?

  51. Gravatar of TallDave TallDave
    7. October 2014 at 09:31

    I’ll bet 85-90% of Scandanavian-American children in single-mother families live above the poverty line, too.

  52. Gravatar of Steve Roth Steve Roth
    11. October 2014 at 07:11

    “Try comparing the welfare of Arab immigrants to America, with Arab immigrants to Sweden. I bet the Arabs in America come out ahead.”

    Sounds like an interesting comparative measure. I have no idea what the results would be. Would you be so kind?

    “Switzerland has much lower levels of spending and taxes than America”

    ????

    On taxes at least, both the OECD and The Heritage Foundation disagree:

    http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP

    http://www.asymptosis.com/wp-content/uploads/2011/07/OECD-govt-revnues.png

    What measure were you looking at to arrive at that conclusion?

    (Every economic assertion should be preceded with the words “by this measure.”)

  53. Gravatar of ssumner ssumner
    13. October 2014 at 15:06

    Steve, Yes, data can be a problem. Wikipedia says government spending is 8% points higher in the US than Switzerland. (41.6% vs. 33.8%) That is obviously the data point than matters for my argument. I simply assumed that that was true of taxes as well, since our deficit is about 4% of GDP. But they list the US budget deficit as 16.5% of GDP, so obviously my data source is flawed.

    In any case Switzerland shows you can get Swedish-like results with much lower public spending than in the US.

    http://en.wikipedia.org/wiki/Government_spending

  54. Gravatar of ssumner ssumner
    13. October 2014 at 15:41

    Steve, I don’t have time to compare the two, but hopefully someone will do so. I do recall reading that Arabs in America had done surprisingly well. But Arab immigrants in Sweden had done poorly. That’s actually all I know, but it would be interesting to get data on average incomes.

    This site says Arab Americans earn 22% more than average Americans. Pretty sure Arabs in Sweden do much worse.

    http://www.arabamerica.com/arabamericans.php

  55. Gravatar of TravisV TravisV
    22. October 2014 at 07:13

    Matt Bruenig on October 1st:

    “Decisive Victory in the Grandpa Sumner Saga”

    http://mattbruenig.com/2014/10/01/decisive-victory-in-the-grandpa-sumner-saga

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