Ed defeats the IQ2 Motion: “Income Inequality Impairs the American Dream of Upward Mobility.”

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  Despite a highly partisan crowd of voters, Ed defeated the IQ2 Motion: “Income Inequality Impairs the American Dream of Upward Mobility.” Thirty percent of the voters moved to Ed’s side of the motion—one of the largest swings in the history of IQ2. Opening Statement: If income inequality truly impaired mobility, there would be telltale signs: Growing [...]

Krugman Ignores Buyers Surplus and the Motivational Value of Status


In today’s “The Showoff Society” Paul Krugman continues to blame the drive for status among America’s most successful workers for abundant waste that yielded stagnant wage growth. Yesterday, he failed to recognize the drive for status fuels investment, risk-taking and innovation that helped spur U.S. job growth to twice the rate of Europe and three [...]

Does Rat Race Waste Resources? Krugman and I disagree


Paul Krugman demonstrates a laughable misunderstanding of economics in his blog post “Having It and Flaunting It” yesterday. He mistakenly claims “status competition…is a zero-sum game … where a lot of our economic growth has simply been wasted, doing nothing but accelerating the pace of the upper-income rat race.” The drive for status and the [...]

Tax Inversion Primer w/ Simon Constable on WSJ Live


Brookings Study Indicates Education and Parents’ Marital Status Have Large Impact on Mobility


Brookings recently published a they-owe-the-public-better report on income inequality. One of the report’s headline conclusions shows, without any qualification, that growing up African American and poor (bottom quintile of earnings) is worse, from an expected earnings perspective, than growing up white and poor. See the chart below.     While that may be true, a [...]

Data Show Pay Increased for Middle Class Workers Since 2000


An op-ed by David Cay Johnson points out that people earning between $100,000 and $400,000 per year captured “an astonishing” 75 percent of all (real) pay increases between 2000 and 2012. Twenty-two of those 75 percentage points stem from the fact that these workers earned 22 percent of the pay in 2000. So, all things [...]

Social Security Significantly Impacts Distribution of Wealth

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In a post  about a survey released this month showing Americans are much less concerned about income inequality than Europeans, despite similar perceptions about the distribution of income in their countries, Paul Krugman described Americans as “delusional.” He sees this delusion stemming from racism that results in a “unique suspicion of and hostility to social insurance [...]

Americans Much Less Concerned about Inequality than Europeans

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A survey released this month by the Cologne Institute for Economic Research finds Americans are much less concerned about income inequality than Europeans. Despite similar perceptions about the distribution of income as the Germans and French, only 30 percent of Americans believe “differences in income in [their country] are too large” versus 50 percent of [...]

America Spends 25 Percent More per Capita on Social Welfare than Any Other County


Despite popular misconceptions, Organisation for Economic Cooperation and Development (OECD) data confirms America spends more on social welfare than any other country—$13,500 per capita in 2009. This is nearly 25 percent more per capita than the second largest spender, France, and 35 percent more than Germany, Sweden, and other high-spending Scandinavian countries. Several factors obscure [...]

Studies Debunk Evidence that Higher Minimum Wages Don’t Hurt Low-skilled Employment


An op-ed in today’s WSJ debunks shoddy evidence used by President Obama to claim that raising minimum wages increases growth. If raising wages truly stimulated demand, then larger increases should produce more growth. The research found the opposite: Of “the 13 states that raised their minimum wage in January [the states used as evidence by [...]

Does Economics 101 Apply to Immigration?

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Robert VerBruggen, a writer for RealClearPolicy, has written a pithy summary of Harvard labor economist’s, George Borjas’, recently published tough-minded book, Immigration Economics. VerBruggen writes: “[Borjas] lays out evidence that [immigration] undermines the employment prospects of the Americans who need decent jobs the most. … High-school dropouts — about 10 percent of the native U.S. [...]

New IMF Study Casts Doubts on the Value of Increased Infrastructure Spending


A study published recently by the International Monetary Fund, “Public Investment as an Engine of Growth,” examines the impact of accelerated infrastructure investment on growth and productivity in “126 lower- and middle-income countries.” It finds “no robust evidence that the investment booms exerted a long-term positive impact on the level of GDP.” It does find [...]